M&T Bank

M &T   B A N K   C O R P O R AT I O N

2 0 1 6   A N N U A L   R E P O R T 

Cover Art: German photographers Bernd and Hilla Becher are known for their black-and-white photographs of industrial buildings  
and objects. Taken in 1982, this photograph captures the industrial spirit that was key to Buffalo’s rise in the nineteenth century  

and that has been rekindled in recent years. Buffalo’s rebirth seeks not only to embrace what once made the city a hub of commerce, 

industry and life, but also to reinvent it, including the grain elevators that grace Buffalo’s Outer Harbor.

Grain Elevator, Buffalo, New York, USA, 1982 is one of 15 gelatin silver prints from the Bechers that are housed in the Albright-Knox  

Art Gallery’s collection as part of the typology Industrial Facades, 1970–1992.  

The divider pages also exhibit some of Buffalo’s grain elevators, photographed by Jay W. Baxtresser, who was an employee of the  

Albright Art Gallery, as it was called at the time of his employment. His photographs were featured in a 1940 exhibition at the gallery 

that celebrated Buffalo’s rich architectural and planning heritage.

Founded in 1862 as the Buffalo Fine Arts Academy, the gallery has grown and expanded into the world-renowned institution celebrated 

today. For more than 30 years, M&T Bank has been a proud supporter of the Albright-Knox Art Gallery, its programs and exhibitions. 

This is the latest in the series of annual reports to feature works from artists and galleries with strong connections to the communities 

served by M&T Bank.

Bernd and Hilla Becher (German, established 1959 [Bernd Becher, 1931–2007; Hilla Becher, 1934–2015]). Grain Elevator, Buffalo, New York, USA, 1982.  
Black-and-white photograph. Gelatin silver print, edition 1/5, print: 22 5/8 × 19 5/8 inches (60 × 50 cm), framed: 36 × 29 inches (91.44 × 73.66 cm), BHB-268 (1). 
Collection Albright-Knox Art Gallery, Buffalo, New York; James S. Ely Fund, 1997 (P1997:17). 
©2017 Estate of Bernd and Hilla Becher. Photograph by Tom Loonan.  
Sonnabend Gallery, NY. © Estate Bernd & Hilla Becher.

M&T Bank Corporation

Contents

Financial Highlights   .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  . ii

Message to Shareholders  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  . iv

Officers and Directors  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  . xxxix

United States Securities and Exchange Commission (SEC) Form 10-K  .  .  .  .  .  .xlii

Annual Meeting

 The annual meeting of shareholders will take place at 11:00 a .m . on  

April 18, 2017 at One M&T Plaza in Buffalo .

Profile

 M&T Bank Corporation is a bank holding company headquartered in 

Buffalo, New York, which had assets of $123 .4 billion at December 31, 2016 . 

M&T Bank Corporation’s subsidiaries include M&T Bank and Wilmington  

Trust, National Association .

 M&T Bank has banking offices in New York State, Maryland, New Jersey, 

Pennsylvania, Delaware, Connecticut, Virginia, West Virginia and the 

District of Columbia . Major subsidiaries include:

 M&T Insurance Agency, Inc .

 M&T Securities, Inc . 

 M&T Real Estate Trust

 Wilmington Trust Company 

 M&T Realty Capital Corporation

 Wilmington Trust Investment Advisors, Inc . 

 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
M&T Bank Corporation and Subsidiaries

Financial Highlights

For the year

Performance 

Net income (thousands)  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .    $ 1,315,114 
Net income available to common  
    shareholders — diluted (thousands)  .  .  .  .     1,223,481 
Return on
    Average assets    .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .    
    Average common equity  .  .  .  .  .  .  .  .  .  .  .  .  .  .    
Net interest margin .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .    
Net charge-offs/average loans .  .  .  .  .  .  .  .  .  .  .    

1 .06% 
8 .16% 
3 .11 % 
 .18% 

2016 

2015 

Change

$ 1,079,667 

+  22%

987,724 

+  24%

1 .06%
8 .32%
3 .14%
 .19%

$ 7 .22 

7 .18 

2 .80 

+  8%
+  8%
      —  

+  18%

Per common share data 

Basic earnings   .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .     

$ 7 .80 

Diluted earnings   .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .    

Cash dividends .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .    

7 .78 

2 .80 

Net operating  
(tangible) results(a) 

Net operating income (thousands)   .  .  .  .  .  .    $ 1,362,692 

$ 1,156,637 

Diluted net operating earnings  

    per common share  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .    

8 .08 

7 .74 

+  4%

Net operating return on

    Average tangible assets  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .    

1 .14% 

    Average tangible common equity  .  .  .  .  .  .    
Efficiency ratio(b)  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .    

12 .25% 

56 .10% 

1 .18%

13 .00%

57 .98%

At December 31

Balance sheet data (millions)  Loans and leases, 

    net of unearned discount  .  .  .  .  .  .  .  .  .  .  .  .  .     $ 90,853 
123,449 
Total assets  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .    
95,494 
Deposits  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .    
16,487 
Total shareholders’ equity   .  .  .  .  .  .  .  .  .  .  .  .  .  .    
15,252 
Common shareholders’ equity   .  .  .  .  .  .  .  .  .  .    

Loan quality 

Allowance for credit losses to total loans     

Nonaccrual loans ratio .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .    

1 .09% 

1 .01% 

Capital 

Common equity Tier 1 ratio  .  .  .  .  .  .  .  .  .  .  .  .  .    

10 .70% 

Tier 1 risk-based capital ratio   .  .  .  .  .  .  .  .  .  .  .    

11 .92% 

Total risk-based capital ratio  .  .  .  .  .  .  .  .  .  .  .  .    

14 .09%  

Leverage ratio   .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .    

9 .99% 

Total equity/total assets   .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .    

13 .35% 

Common equity (book value) per share  .  .    

$ 97 .64 

Tangible common equity per share  .  .  .  .  .  .    

67 .85 

Market price per share

    Closing  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .    

156 .43 

    High  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .    

158 .35 

    Low  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .    

100 .08 

+  4%
+ 
1%
+  4%
+  2% 
+  2%

+  4%
+  6%

+  29%

$ 87,489 
122,788 
91,958 
16,173 
14,939 

1 .09%

 .91%

11 .08%

12 .68% 

14 .92% 

10 .89% 

13 .17%

$ 93 .60 

64 .28 

121 .18 

134 .00

111 .50 

(a) Excludes amortization and balances related to goodwill and core deposit and other intangible assets and merger-related expenses 
which, except in the calculation of the efficiency ratio, are net of applicable income tax effects. A reconciliation of net income and 
net operating income appears in Item 7, Table 2 in Form 10-K.

(b) Excludes impact of merger-related expenses and net securities gains or losses.

ii

 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
   
DILUTED EARNINGS
PER COMMON SHARE

SHAREHOLDERS’ EQUITY
PER COMMON SHARE AT YEAR-END

  2012 

2013 

2014 

2015 

2016

  2012 

2013 

2014 

2015 

2016 

$7.88 
$7.54 

$8.48 
$8.20 

$7.57 
$7.42 

$7.74 
$7.18 

$8.08
$7.78

$72.73  $79.81  $83.88  $93.60  $97.64
$44.61  $52.45  $57.06  $64.28  $67.85

Diluted net operating(a)
Diluted

Shareholders’ equity per common share 
 at year-end

 Tangible shareholders’ equity per common 
share at year-end

NET INCOME
In millions

RETURN ON AVERAGE COMMON
SHAREHOLDERS’ EQUITY

  2012 

2013 

2014 

2015 

2016

  2012 

2013 

2014 

2015 

2016

$1,072.5  $1,174.6  $1,086.9  $1,156.6  $1,362.7
$1,029.5  $1,138.5  $1,066.2  $1,079.7  $1,315.1

Net operating income(a)
Net income

19.42%  17.79%  13.76%  13.00%  12.25%
 8.16%
  9.08% 
10.96% 

 10.93% 

   8.32% 

Net operating return on average tangible  
common shareholders’ equity(a)
Return on average common shareholders’ 
equity

(a) Excludes merger-related gains and expenses and amortization of intangible assets, net of applicable  
income tax effects. A reconciliation of net operating (tangible) results with net income is included  
in Item 7, Table 2 in Form 10-K.

iii

   
  
  
Message to Shareholders

Dellwood Warehouse & Elevator Company . Image courtesy of the Albright-Knox Art Gallery G. Robert Strauss, Jr. Memorial Library, Digital Assets Collection and Archives. 
Photograph by Jay W. Baxtresser. ©2017 Albright-Knox Art Gallery, Buffalo, New York.

iv

    O

 urs is a company that has consistently sought steady improvement 

in earnings, reliable returns to shareholders, and the provision of credit 

and financial advice to our communities through both times of prosperity 

and times of uncertainty . The past year was among the more uncertain 

and eventful in recent memory . Political change, both domestically and 

internationally, buffeted equity and bond markets, with implications for 

monetary policy . No bank can be insulated from such volatility . But neither 

can a prudent bank overreact to such gyrations . As we have throughout 

our history, we at M&T sought, this year past, to resist the temptation to 

respond to events in haste, and instead based our decisions on what we 

believed was best over the long term .

The U .S . equity markets, as measured by the Dow Jones Industrial 

Average, began 2016 by dropping as much as 10 .1%, only to recover fully by 

the middle of March . The “Brexit” vote in June shocked world markets, 

sending long-term U .S . Treasury yields downward to historically low levels 

before recovering at year end . The U .S . presidential election triggered still 

more volatility in the financial markets, most notably in the banking sector .

In no instance did we rush toward action . Instead, we sought to 

maintain a consistent focus on long-term returns . The results that follow 

reflect continued improvement at M&T, even as we dealt with our particular 

challenges . Here are the specifics . 

v

 
 
 
Net income under generally accepted accounting principles 

(“GAAP”) totaled $1 .32 billion in 2016, improving 22% from $1 .08 billion in 

2015 . Results reflect a full year of operations acquired in our merger with 

Hudson City Bancorp, Inc . (“Hudson City”), versus just two months in 

the prior year . Diluted earnings per common share amounted to $7 .78, or 

8% higher than $7 .18 in the previous year . The 2016 results, expressed as a 

percentage of average assets and average common equity, were 1 .06% and 

8 .16%, respectively .

Since 1998, M&T has provided its results to investors on a “net 

operating” or “tangible” basis, which have consistently excluded only the 

after-tax effect from any gains or expenses realized in connection with 

mergers and acquisitions as well as the impact from intangible assets 

recorded in those mergers . We believe that these figures give investors a 

better view of how merger activity affects our reported results on both the 

income statement and balance sheet . M&T recognized $22 million, after 

tax effect, of Hudson City merger-related expenses in 2016 . This compares 

with $61 million in 2015, when the merger was consummated .

Net operating income amounted to $1 .36 billion last year, an 

increase of 18% from the year prior . Net operating income per diluted 

common share increased to $8 .08, improved by 4% from $7 .74 in the previous 

year . The net operating results expressed as a percentage of average 

tangible assets were 1 .14% and expressed as a percentage of average 

tangible common equity were 12 .25% . The net operating results highlight 

the value of the Hudson City transaction and the accretive nature of  

that combination .

vi

 
 
 
Net interest income—interest collected on loans, securities, 

and other investments, less interest paid on deposits and borrowings, 

expressed on a taxable-equivalent basis—totaled $3 .50 billion in 2016, 

representing an increase of 22% from $2 .87 billion in the previous year . 

Average loans increased by 25% to $88 .6 billion last year, reflecting the 

full-year impact of the loans acquired with Hudson City as well as the 

increase from those originated across our footprint . Average earning 

assets increased by 23% to $112 .6 billion . Slightly offsetting the growth in 

balances was a decrease in the net interest margin, or taxable-equivalent 

net interest income divided by average earning assets, to 3 .11%, a decrease 

of three basis points from 3 .14% in 2015 . The net interest margin has 

been continuously pressured by the low interest rate environment that 

prevailed over the past decade and competitors’ response to the same .

Credit performance in 2016 essentially mirrored the results seen 

in 2015 and 2014 . Net charge-offs, which represent loan balances written 

off as uncollectible, less recoveries of amounts previously written-off, 

totaled $157 million in 2016 . Notably, net charge-offs expressed as a 

percentage of average loans equaled 0 .18% in the past year, compared with 

0 .19% in each of 2014 and 2015 . These credit metrics reflect consistent, 

yet slow, economic growth as well as the results of prudent underwriting . 

Credit losses remain at a level about half of M&T’s long-term average 

loss rate of 0 .36% . The provision for loan losses was $190 million in 2016, 

exceeding net charge-offs by $33 million . The allowance for loan losses 

increased to $989 million, or 1 .09% of loans outstanding at year-end . 

Noninterest income, which represents fees for services and 

other revenues, amounted to $1 .83 billion this past year, unchanged from 

vii

 
 
 
the previous year . M&T’s three largest fee categories, namely, mortgage 

banking, trust income, and service charges on deposit accounts, were 

each little changed from 2015 . Over the past few years, significant strides 

have been made in growing businesses that complement existing banking 

activities and enhance overall returns . Mortgage banking, both commercial 

and residential, as well as the Wealth and Institutional Services Division, 

which generates trust income, are positioned to grow .

Noninterest expenses were $3 .05 billion for 2016, an 8% increase 

from $2 .82 billion in 2015 . The increase largely reflects the full-year cost of 

operating the acquired Hudson City branches, partially offset by the lower 

merger-related expenses previously mentioned . The efficiency ratio, which 

expresses noninterest operating expenses as a percentage of total revenues, 

and which reflects the cost to produce a dollar of revenue, was 56 .1% in 2016, 

improved by nearly two percentage points from 58 .0% in 2015 . Investments 

continue to be made in new technology, risk management infrastructure,  

and new business development, including growth in New Jersey . 

M&T’s performance during 2016 enabled the company to grow 

both its capital base and tangible book value, while also returning a greater 

amount of capital to shareholders . Common shareholders’ equity at the end 

of 2016 increased by $313 million from the prior year end to $15 .3 billion . 

The ratio of tangible common equity to tangible assets increased from 

8 .69% at year-end 2015 to 8 .92% at year-end 2016 . Tangible book value per 

share ended 2016 at $67 .85, up $3 .57 from the prior year, representing an 

increase of more than 5% . During the year, M&T also returned an aggregate 

$1 .08 billion of capital to shareholders through common stock dividends 

viii

 
 
and the repurchase of 5 .6 million shares of its common stock at an average 

price of $114 .37 per share . Prudent use of shareholder capital remains  

our most important priority, as we seek growth opportunities that enhance 

returns while also looking to distribute excess capital to shareholders .

One is justified, then, in counting 2016 as a productive year for M&T .  

Despite the ups and downs of the financial markets, we are well-positioned 

and poised for growth .

2016: A PRODUCTIVE YEAR

Performance during our 160th year provides ample cause for optimism . 

The year past saw the full integration of the recently-acquired Hudson 

City, through which we added $37 billion in assets, 217,707 consumer 

households, and 135 branches in New Jersey, Connecticut, and New York . 

We continue to believe that this is an acquisition both prudent and 

promising, one which, like others we have undertaken, builds upon our 

historic presence in contiguous markets . Dealing successfully with the 

logistics of such a merger could not be taken for granted . Experience has 

taught us the rigor with which these tasks should be embarked upon . 

After years of planning and preparation, 1,070 dedicated M&T bankers 

went to work, integrating Hudson City’s systems and welcoming new 

colleagues . Doing so required the commitment of a brigade drawn from 

many divisions and geographies throughout M&T, completing work over 

and above what would ordinarily have been asked of them . Converting a 

thrift into a commercial bank is a process measured in years, not weeks, 

but early results are encouraging . M&T knows New Jersey, and now  

New Jersey knows M&T .

ix

 
We also made continued crucial progress in another multi-year 

project: building out our risk management infrastructure . Such ongoing 

investments will do more, however, than meet regulatory requirements; 

they will help lay the groundwork for securing and increasing our market 

share in our growing footprint . It should be a source of satisfaction to 

M&T colleagues and shareholders that we were able to accomplish these 

sorts of crucial but not flashy projects while maintaining healthy earnings 

per share and low net loan charge-offs, even as commercial real estate, 

commercial, and consumer lending all grew .

Optimism, in other words, is altogether justified . We are mindful, 

however, that the year past could just as well be characterized as good—

but not-quite-great . We continued to outperform our peers but the bar for 

doing so remains low . Perhaps it is only to be expected that bank earnings 

would be increasing slowly at a time of tepid economic performance . But 

the specific reasons why our growth has been relatively constrained matter . 

These same factors have also worked to the detriment of the consumers, 

businesses, and communities we serve . 

A TIME FOR REFLECTION: This is an unsettled and, for some, an unsettling 

time . There is no doubt, however, that the U .S . is poised for significant policy 

adjustments, with important effects on key levers impacting the economy . 

Understanding past constraints is worthwhile as new political leadership 

contemplates change . With that in mind, this is not the time to focus this 

Message to Shareholders narrowly on the prospects and accomplishments 

of M&T, as proud and as optimistic as we are about them . Rather, the goal of 

what follows is to put our own situation in a broader context . It is, all told,  

a picture that one wishes were brighter .

x

 
 
One could address a wide range of economic indicators and 

policies, but in recent years, two far-reaching forces—monetary policy 

and business regulation—stand out in their importance . Both have a 

self-evident relationship with bank revenues and expenses . Ultra-low 

interest rates, of course, make it more difficult to realize traditional rates 

of return on bank lending and investment . Banks have seen exactly these 

effects upon measures such as their net interest margins, and in the 

buildup of liquidity to levels well above historical norms . Furthermore, 

the raft of new financial industry regulation—embodied in the Dodd-

Frank Wall Street Reform and Consumer Protection Act (“Dodd-Frank”) 

but not limited to it—has necessitated that banks hold much higher levels 

of capital, while pushing compliance costs to record levels . It has not 

only become more costly, but taken an increasing number of forms that 

require reporting to an increasing number of regulatory bodies . Banks 

are now called upon to undertake such varied tasks as monitoring the 

activities of vendors that we do not control, systematically collecting 

and sharing information regarding certain customer transactions with 

law enforcement authorities, and ensuring that our mortgage products 

and services meet a range of complex standards specified by numerous 

agencies that do not always work in coordination . 

But the focus of concern about the effects of policy should not,  

first or foremost, be on banks and banking—but, rather, on consumers  

and communities . And it is therein that recent “results” are alarming .  

The markets that M&T serves are, in the main, those of historically  

middle class communities with historically vibrant local economies,  

often manufacturing-based . Economic and survey data, as it pertains  

xi

 
 
to them, are concerning . On so many measures of economic well-being and  

security, the so-called middle class has been losing ground for many years . 

Since 1973, total median household income from all sources, including 

wages, which comprise more than 80% of income for middle class families, 

has increased only 13% . In fact, earnings for the typical family actually 

peaked in 1999 . Even as the overall economy, as measured by GDP growth, 

has approached recovery to a pre-recession level, the typical family has yet  

to make up the earnings lost in both the 2001 and 2008 recessions . It is no 

wonder that a declining share of households even consider themselves to 

be part of the middle class; 63% did so in 2001 . By 2015, that number  

had fallen to just 51% . 

Numbers alone cannot fully convey the effects of such stagnation, 

effects our colleagues observe among their neighbors and in the communities 

surrounding our branches—whether in college enrollment foregone, 

retirement postponed, even modest vacations put off . It is worth considering 

what effects the macroeconomic policies that impact banking referenced 

above might also have on the hopes and plans of families, workers, and small 

business owners . 

MONETARY POLICY AND THE PROLONGED LOW RATE ENVIRONMENT

To appreciate fully the current state of the economy, it is important to 

understand the events that led to this point . Recall, the Great Recession, as 

it has come to be known, was, unlike prior recessions, precipitated by the 

aftermath of a broad-based credit bubble spurred by excessive housing-

related debt . The severity and unique nature of this downturn necessitated 

policy responses not previously employed—the effects of which were 

xii

 
not well understood . While these responses proved effective early on 

at stabilizing the economy, their lingering effects continue to weigh on 

middle class households and communities .

The standard playbook in a normal recession calls for government 

to pursue structural expansion in fiscal support—elevated government 

spending and investment coupled with tax relief—while also reducing 

interest rates . These responses would work in concert to stimulate the 

economy and reverse its decline, to the advantage of businesses and 

consumers generally .

In December of 2007, a nearly twenty-year period characterized  

by generally consistent economic growth ended abruptly, and the 

economy began to suffer to an extent not experienced in any prior post-

World War II recession . The loss of confidence in the financial system 

led to a state of near-panic . The unprecedented problems posed by this 

recession demanded unprecedented solutions—bold and drastic action 

was needed . Unconventional policy responses were implemented, while 

other heretofore standard responses were not . The government’s most 

significant fiscal measures were structured not as a general stimulus, but 

programs specifically aimed at the parts of the economy under the greatest 

duress . In particular, enormous sums were spent on providing temporary 

liquidity and capital to rescue key institutions that were at risk of failure, 

in hopes of limiting collateral damage to the rest of the economy . Such 

measures were to the direct benefit of large banks, insurance companies, 

and auto manufacturers—the failure of which could have spurred broader, 

catastrophic effects . 

xiii

 
 
With comparatively limited support from the usual fiscal  

measures that would follow a recession, monetary policy bore the  

burden of stimulating the economy, necessitating a series of measures  

that were extraordinary and untested . Policymakers were compelled 

to reduce rates time and again, ultimately reaching a practical limit as 

short-term rates approached zero, the lowest level ever in the U .S ., and 

remained there for more than seven years . The march into uncharted 

territory continued . To address the crisis and its aftermath, the Federal 

Reserve directly infused cash into the economy by purchasing more  

than $3 trillion of securities, equivalent to nearly a year of federal 

government spending . This unparalleled use of monetary policy helped  

to avert a depression .

The responses in the years following the worst of the crisis were 

also unconventional . Rather than spending to promote growth, the 

government instead enacted legislation and regulation that in practice 

restricted it—effectively, a form of negative fiscal policy . Put forth in the 

name of preventing a recurrence of the circumstances that led to the 

financial crisis, the plethora of new regulations intended to limit taxpayer 

risk have ultimately proved a drag on growth . Regulation took many shapes 

and forms across all sectors of the economy, affecting not only the financial 

sector but also industries as diverse as energy, healthcare, housing, and 

construction . Businesses were no longer willing or able to take the prudent 

risks that even moderate growth expectations demand . 

With the benefit of hindsight, it appears the economy in recent 

years has fallen out of balance—overly reliant on monetary policy not 

xiv

 
 
 
accompanied by traditional fiscal stimulus . Policies designed to benefit 

the majority have perversely only benefited a few . The impacts of these 

decisions or non-decisions are real . In particular, the middle class and 

small businesses are losing ground . So, too, are their communities . The 

details that follow illuminate trends that should be of concern to all .

This extended period of ultra-low interest rates no longer benefits 

the average U .S . household . The majority of the wealth of the typical M&T 

customer, like that of most Americans, takes the form of equity in their 

homes, retirement savings, bank deposits and, to a lesser extent, stock 

market investments . Low rates initially provided middle class households 

with relief both by lowering monthly mortgage payments and supporting 

a recovery in home values . However, the investments of these same 

families have suffered . Indeed, many middle class families, frightened by 

the precipitous market decline of 2008, responded by pulling out of the 

market . Only half of these households today hold any stocks or mutual 

fund shares; before the crisis, fully 72% did so . Crucially, without stocks 

and the growth in value and dividends they can provide, most households 

must rely on interest from their investments to save for college, a down 

payment on a home, or to prepare for and navigate retirement . It is here 

that they have felt the sting of near-zero interest rates . 

Interest income for households has declined sharply in the 

aggregate . In 2014, it had, compared to 2005, fallen by some $64 billion . 

This disproportionately affected households with an income less than 

$100,000; their interest income declined by $44 billion, or 68% of the total 

decrease for all households . There are, to be sure, some who can take such 

xv

 
 
a drop in stride—those, for instance, fortunate enough to hold dividend-

paying stocks . Dividend income in 2014 was, in fact, $162 billion higher 

than it had been in 2005 . But 95% of that increase in dividend income has 

accrued to households whose income was greater than $100,000 . Indeed, 

only $9 billion of the $162 billion increase in total dividend income has 

found its way to households with annual earnings under $100,000—not 

enough to offset the lost interest income . 

Investments managed on behalf of the typical American family 

are not immune to these economic trends . At the heart of the issue is the 

declining rate of return on investments—particularly secure investments 

like bonds . The practical implications for the alternatives through 

which typical households preserve and grow wealth, such as insurance, 

retirement accounts, and pensions, are troubling .

Indicative of what has happened in the marketplace, insurers that 

have traditionally invested premiums in safe, long-term instruments such as 

government securities and high-quality corporate bonds have come under 

pressure . The average yield on 10-year U .S . Treasury bonds since 2010 has, 

unfortunately, declined to a level 274 basis points, or 53%, below the 30-year 

average . Insurers ultimately have limited options to offset sustained low 

yields on their investments . Should rates remain low, it will eventually be 

necessary to raise prices or invest in assets that offer higher returns but also 

carry higher risk . Neither outcome would benefit middle class families .

Pension plans sponsored by employers, long a pillar of retirement 

savings for many workers, face similar pressures . Low rates that pension 

funds earn on investments mean either that businesses and governments 

xvi

 
 
 
must set aside more to ensure future benefits, or put those benefits at risk 

by under-funding them . The trend is disconcerting . Although, at the end of 

2007, corporate pension plans showed a modest surplus, they had, by the end 

of 2016, developed a $408 billion deficit . Not even public sector employees 

can remain confident in the health of their pension plans, as some major 

state pension funds reduce their estimated rates of return and contemplate 

reductions in benefits . To offset the impact of low returns and still deliver 

on their promises to consumers, investment professionals are increasingly 

turning to alternative investments such as hedge funds and private equity 

that offer the potential for higher returns, but come with more risk .

Given these costs and challenges, many businesses have responded 

by transitioning away from offering pensions altogether, instead sponsoring 

programs such as 401(k) accounts through which employees largely bear 

responsibility for determining the amount they save and the manner in 

which they invest . Workers then confront the same difficult choices as 

investment managers, weighing the tradeoff between accepting low returns 

or undertaking greater risk with their hard-earned savings . 

No wage growth . No investment earnings growth . No wonder 

families are stretched and stressed . We should hardly be surprised, then, 

to see a sharply increased rate of savings—fully 1 .5 percentage points 

higher than that in 2000-2004 . Accompanied by lower interest income, 

this has led middle class families to spend less, dampening economic 

growth . Simple math suggests that a 1 .5 percentage point increase in 

the savings rate equated to nearly $200 billion in consumer spending—

spending that did not occur as families instead saved more to make up  

xvii

 
 
for their lost income . Monetary policy was intended to act as an accelerant 

for an economy in recession, and did in fact accomplish that goal early on; 

however, its benefits have waned, if not reversed, over time . 

BIG BUSINESS AND SMALL: CRUCIAL DIFFERENCES

Similar to the experience of American families, the response to the 

financial crisis has contributed to a dichotomy between the performance 

of the largest American firms and the smaller businesses that form the 

backbone of the communities we serve .

By many measures, the performance of large businesses following 

the recession has been impressive . Between 2007 and 2012, the receipts  

of firms with 500 or more employees increased, in real terms, at an annual 

rate of 2 .4% . Employment levels for such firms have fully rebounded from 

the Great Recession and then some; as a group, they employed 2 .4 million 

more workers in 2014 than in 2007 . So, too, we saw the profit margins of 

the corporations in the S&P 500, the nation’s largest public companies, 

exceed pre-recession levels and reach their highest level in the past three 

decades, increasing from less than 6% near the end of the Great Recession 

to 9 .2% in 2014 . 

This recovery in the fortunes of large businesses is not all that 

it seems, however, when one looks more closely at its underpinnings . 

In effect, the largest firms—and their shareholders—have benefited 

disproportionately from a recovery fueled by monetary policy based  

on inexpensive access to financing and historically low interest rates .  

Large businesses have taken full advantage of the availability of credit  

at low cost, which, for such firms, has never been more favorable .  

xviii

 
 
Highly-rated corporations issued more than $1 .2 trillion of debt in 

2016 alone, the highest level ever recorded . Indeed, the level of debt 

as compared to earnings before interest, taxes, depreciation, and 

amortization has reached its highest level since 1980 . 

It is also instructive to examine what large firms are doing with  

this tsunami of cheap capital . One would hope, of course, that the 

debt issued would be used to support the sort of investment in tools, 

technologies, and research and development that has historically improved 

labor productivity and consequently created well-paying jobs for middle 

class families . That, however, has not been the case . Unfortunately, due 

to the stagnant economy, firms are left with no choice but to return their 

earnings to their shareholders, few of whom are middle class families . 

Indeed, in 2015, S&P 500 companies returned $978 billion of their earnings 

to shareholders through dividends and share buybacks, exceeding the $923 

billion they invested in capital goods and research and development of the 

sort that would lay the foundation for future growth .

These large firms have also taken advantage of low interest rates 

and their own appreciating share prices to acquire smaller competitors . 

The average valuation of the large firms in the S&P 500 has increased 

by 37% from 12 .9 times annual earnings in 2011 to 17 .7 times in 2016, 

providing them with a strong currency to fund acquisitions . During 2015, 

the S&P 500 companies alone spent more than $400 billion on such 

acquisitions . This is all the more concerning because, to the extent that we 

have seen job growth, it has come on the payrolls of the largest firms . Job 

growth that is bought, not hired, is not net job growth for the community .

xix

 
 
Implicit in the story of how larger businesses and their shareholders 

have benefited from economic policy is the less-than-happy but related 

tale of how small businesses have not . By small businesses, we mean the 

5 .7 million firms employing fewer than 100, the types of businesses we 

customarily serve at M&T—small and start-up manufacturers, car dealers, 

construction firms, and retailers, among others .

Historically, small business has been the engine of new job  

creation and, indeed, even the womb in which new American industrial 

sectors were incubated . However, over the past four decades, the role of 

such enterprises has been steadily diminishing, to the nation’s detriment . 

While U .S . businesses have added more than 44 million jobs since 1980, 

small businesses accounted for less than 12 million jobs, or just 26%,  

of this growth . The severity of the Great Recession and its aftermath only 

exacerbated this trend . Where large businesses have seen employment grow 

by 2 .4 million since 2007, small business employment is down by 1 .9 million 

over the same period . Payrolls in real dollars have retreated by $85 billion 

at small businesses but are up $245 billion at their larger counterparts . As 

the number of large businesses has grown, the ranks of smaller firms have 

declined by 224,000 since 2007 . We have seen small business growth wither 

and its independence threatened, with implications for communities and 

the overall economy . 

Small businesses, like their larger brethren, are reluctant to  

invest and expand despite the historically low interest rates . There is 

more to this story than just the stagnant economy . At M&T, we surveyed 

our small and medium-sized business clients in an effort to understand 

xx

 
 
 
the challenges they face . One might expect them to express traditional 

concerns—such as the cost of materials or the pressure of competition . 

Instead, 55% cited the cost of employee healthcare benefits as their 

greatest hurdle, while 36% cited the not-unrelated challenge of complying 

with government regulation . To underscore: notwithstanding the slow-

growth environment of the post-recession economy, our own business 

clients view regulation as a greater concern than sales growth, the 

lifeblood of any business . As we have found in our own markets, so has 

a national survey conducted by the National Federation of Independent 

Business (“NFIB”) . Indeed, since 2009, that survey has cited regulation  

as the single greatest challenge facing small businesses across the country . 

This suggests that their core problem is not a lack of opportunity, but 

government-imposed obstacles that limit their ability to capitalize on the 

opportunities they identify .

If concern over new regulation seems justified and plausible, the 

record confirms this . It shows that a bloom of regulation and regulators 

has accelerated since the 2008 recession . The extent of the growth in 

regulation is both impressive and staggering . Since 2010, the average 

number of pages of new regulations issued has exceeded 25,000 annually, 

up nearly 60% from the level of the 1980s . The total length of the Federal 

Register, the official repository of federal rules, reached 178,277 pages 

in 2015, up from some 151,973 ten years earlier and just 71,224 in 1975 . 

The cost to the private sector of the regulations promulgated in 2015 

alone has been estimated by the regulators themselves at $23 billion . The 

estimated annual cost of rules enacted since 2009 exceeds $108 billion, or 

fully 0 .6% of U .S . gross domestic product . The scope of regulation facing 

xxi

 
the businesses we serve has dampened and diverted their energies . It is 

very much uncertain whether the benefits of the ever-growing volume of 

regulation outweigh its drag on economic growth .

One especially worrisome insight from a 2012 NFIB study: 55% of 

small business owners would not again choose to open shop . The declining 

rate of small business formation reflects this growing caution on the part of 

would-be entrepreneurs . The number of new small businesses has declined 

from an annual average of 529,055 during the period 2003-2007 to 399,483 

during 2010-2014—a 25% decline . Even more worrisome is the fact that 

the average number of new jobs created annually by new small businesses 

decreased from 2 .8 million during 2003-2007 to 2 .0 million during 2010-

2014—a 26% decline .

To make matters worse, many of the smaller companies that we 

serve have capitulated, selling to distant investors and larger competitors 

with the scale to withstand the onslaught of regulation . Private equity 

firms in particular have been aggressively consolidating industries, buoyed 

by capital from pension funds and insurers and leveraged by low-cost 

financing . During 2015 alone, private equity firms acquired more than 

4,100 businesses at a cost of $737 billion, surpassing even the number 

of such acquisitions in the boom years preceding the financial crisis . 

Nationally, the number of businesses owned by private equity funds 

has increased by 46% since 2009 . The pace of growth in private equity 

acquisitions has only stabilized in the past two years as a different type of 

buyer surged—larger publicly-traded firms . This is not the kind of data one 

associates with healthy, long-term economic growth, nor an economy that 

xxii

 
 
can pull discouraged workers back into the labor force or encourage  

them to improve their skills . 

HUMAN CAPITAL AND THE SKILLED LABOR GAP

Employment and economic growth have been held back not just by 

regulation and monetary policy but by what the economists would call 

human capital deficits—a shortage of qualified potential employees to fill 

available jobs in healthy industries . Nearly 30% of small businesses, for 

instance, report that they have been unable to fill open positions, double 

the rate of five years earlier . The number of positions across the country 

that remain unfilled has grown from less than 2 .2 million in the depths  

of the financial crisis to more than 5 .5 million today .

This is not an abstract point to us at M&T . It is one made 

regularly by perplexed and frustrated business owners with whom we 

meet, whether in western New York, central Pennsylvania, New Jersey, 

or Maryland . These are firms that would like to hire—but cannot find 

the right kind of employee . Somehow, the combination of primary and 

secondary education systems, and post-graduate training, is failing both 

employers and their potential employees . Our own survey found that 61% 

of all small businesses reported difficulty in hiring qualified entry-level 

employees . The picture is most bleak in the construction industry, where 

we found that 64% of small business owners had difficulty finding skilled 

labor . Indeed, the number of open positions in the construction industry 

relative to overall industry employment continues to increase and now 

exceeds its pre-recession peak . In our own markets, we hear reports that 

upstate New York construction firms must look as far away as California 

xxiii

 
to find qualified applicants . This is, without doubt, a problem that goes 

beyond M&T’s markets . In a national survey, fully 44% of businesses 

seeking to hire reported that they could not find employees with the skills 

needed . At a time when elected officials signal the prospect of a major 

national investment in infrastructure construction and reconstruction,  

a lack of skilled tradesmen must be viewed as a pressing concern . 

CHANGE AND CHALLENGE IN OUR COMMUNITIES

The effects of slow economic growth, a shortage of qualified labor, and 

the growing regulatory burden can express themselves in ways that 

transcend specific firms and business sectors . These impediments cloud the 

prospects of entire communities . Locales with long traditions of industry 

and industriousness, innovation and livability, have found themselves 

buffeted by a perfect storm of business regulation, business takeovers, and 

subsequent exits . Left in its wake, these communities face a lower tax base 

but greater social service needs, at the same time the business and corporate 

philanthropy that was once a bedrock of local charity has shriveled .

This is a downward spiral that starts with what has happened to 

many small and middle market firms we find in our footprint—whether 

in central or western New York, central Pennsylvania, or Delaware . It 

is tempting to believe that the shuttering of once-thriving independent 

middle market businesses in so-called Rust Belt communities is an 

inevitable side effect of much larger economic factors . We do not subscribe 

to this view . Policy matters . The cost and complexity of regulation helps 

to make these communities and their smaller employers vulnerable to 

xxiv

 
takeover by outsiders, both public and private, with the scale necessary  

to prosper in the face of ever-greater regulation . Following such takeovers, 

headquarters offices depart, and local employment—and, quite possibly, 

technological innovation—withers . Local tax revenues of all types—

whether based on home values or business offices—decline . Ancillary 

businesses, whether lunch counters or parts manufacturers, are at risk as 

well . This is how communities with great histories, a willing workforce, 

and affordable housing are passed by and hollowed out . 

The effect in our own communities has been both substantial 

and concerning . Consider some specifics . M&T surveyed the impact 

of business acquisitions by non-local investors in Syracuse . Like so 

many of the markets we serve, this city has historically been a hub of 

manufacturing, home to dozens of firms in industries such as specialty 

steel, fasteners, and custom machining . Such are the firms that are being 

shuttered or diminished . We found that, since 2004, at least 55 small 

and middle market firms in the Syracuse area alone were acquired by 

firms headquartered outside the region . After being acquired, these firms 

subsequently reduced employment by 40%, or 7,687 jobs . The jobs lost 

just by these firms represent 2 .4% of all jobs in the Syracuse area . This is 

no isolated case . Across our markets from upstate New York to Maryland, 

we identified at least 407 local businesses that were sold to buyers 

headquartered elsewhere—employment at these businesses later declined 

by an average of 25% . 

Beyond the jobs and families directly affected, we looked at the 

impact of this loss of local companies upon some of the largest charities 

xxv

 
 
in our mid-sized markets . In city after city, from Buffalo to Syracuse, from 

Rochester to Harrisburg, the same pattern emerged . Research showed that, 

for local companies that were acquired by out-of-town firms, associated 

corporate and employee donations have declined by 59% to 89% . This is 

in contrast to the trends for companies that preserved local ownership, 

where philanthropic giving remained essentially flat or, in some instances, 

modestly increased . Membership of business leaders on not-for-profit 

boards declined—robbing the community of not just dollars but advice and 

expertise . Such local businesses have not only created new jobs but also 

groomed generation after generation of leaders for their communities, 

a critical role that distant acquirers cannot easily fill . So it is that we see 

the sinews of healthy communities atrophying, the quality of life for their 

citizens deteriorating .

No single factor is to blame . The tides of change cannot altogether 

be held back, to be sure—nor should they be . But the policy decisions  

made in the aftermath of the Great Recession also matter—and have made 

crucial differences . The growing weight of regulation and the low interest 

rate environment that has outlived its usefulness have added impetus to 

this wave of takeovers . In their own way, they have held the economic 

recovery in check .

REGULATION AND ITS RISKS

Beyond these detrimental effects upon the businesses and communities 

that we serve, the scope of regulation has, in many respects, reshaped 

entire sectors of the economy . Consider just a few key industries that 

have been disproportionately affected by regulation . Energy, healthcare, 

xxvi

 
housing, and finance, which in combination contribute 29% of U .S . 

economic output, have together faced a total of 7,260 new regulations just 

since the beginning of 2009 . The effects of such regulation are sweeping 

and often severe—its deployment invariably well-intentioned, yet its 

implications often unappreciated or misunderstood . As just one example, 

a recent survey suggests that, on average, regulation adds nearly $85,000 

to the cost of developing and constructing a new home . Perhaps not 

coincidentally, fewer new homes were sold in 2016 than in 1973, a time 

when the U .S . was one-third less populous than today . It is instructive to 

consider the ways in which regulation has transformed the industry with 

which we are most familiar—our own .

Regulation, more than any economic force in memory, has 

changed the face of banking . And because the fates of banks and the 

communities they serve are so intertwined, the regulatory impacts borne 

by regional banks are inextricably linked to the repercussions experienced 

by their customers . When oversight efforts made in good faith to alleviate 

one perceived problem inadvertently create another, the consequences, 

unintended as they may be, are tangible and far-reaching .

In the wake of the financial crisis, legislators and regulators 

imposed a wide array of new laws and regulations, ostensibly to instill 

confidence in the U .S . financial system by limiting the amount and type 

of risks the largest financial institutions could undertake . So cataclysmic 

was the crisis, lawmakers felt pressured to react swiftly . It was decided, 

abruptly and arbitrarily, that banks whose assets exceeded a $50 billion 

threshold would be subjected to the most demanding requirements of the 

xxvii

 
 
subsequently enacted Dodd-Frank legislation, regardless of an individual 

bank’s complexity or the nature of its business activities .

Of course, not all banks are of equal size and complexity and not 

all companies that would call themselves banks are actually in the business 

of traditional banking—taking deposits and making loans to support 

community growth . Nonetheless, regional banks such as M&T find that 

they must meet the same onerous requirements as the largest global 

systemically important banks or “G-SIBs”—essentially those banks that 

have been deemed too big to fail . Significantly, these large banks generate  

a substantial portion of their revenue both through trading activities  

and lending to some of the largest companies in the world . To wit, just  

five of these large banks account for 90% of the industry’s total trading 

revenue with total notional derivatives exceeding $200 trillion, or more 

than 11 times U .S . GDP—a mix of business that differs drastically from  

the community-focused approach employed by regional banks .

The differences between the largest banks and their regional 

counterparts extend not just to their business models but also to the 

ways in which they are executed . Indeed, there is compelling evidence to 

suggest that the regulators themselves would concur with such assertions, 

as evidenced by the sheer volume of regulatory sanctions and fines that 

these large firms have distinguished themselves by incurring . Particularly 

concerning are the instances where institutions or their employees placed 

their interests before those of their own customers . In the past decade, 

five large banks alone were subject to at least 187 legal settlements and 

fines totaling $158 billion, with at least another 89 investigations and 

lawsuits currently pending . The magnitude and frequency of these events 

xxviii

 
 
have brought the wrath of the public upon the entire industry, creating a 

perceived necessity for more regulation . Leadership has an obligation to 

set a moral tone .

What’s more, regional banks pursuing straightforward, 

traditional business models have been determined to pose low levels of 

risk, as measured by the scorecard designed by the Basel Committee on 

Banking Supervision to assess the risk that any given bank poses . This 

measure considers a host of factors including a bank’s size, complexity, 

interconnectedness, and international exposures . The commendable  

marks for regional banks stand in stark contrast to those of the largest 

banks, which operate across the globe and have much higher risk scores . 

If M&T and our 10 regional bank peers that individually have total assets 

between $50 billion and $500 billion were combined into a single institution 

spanning the country, the systemic risk score of that entity would not be 

nearly as large as that of any one of these five large banks . 

But despite the fundamentally lower risk that regional banks pose 

to the financial system as judged by the regulators’ own yardstick, they 

are still subject to nearly the same number of regulators and volume and 

character of regulations that rightly apply to their much larger and far 

more complicated brethren, with all of the attendant costs . 

One-size-fits-all rulemaking has thus created an uneven playing 

field, to the particular disadvantage of regional banks . The largest banks 

can bring their vast resources to bear in addressing these new measures 

of oversight, while the smallest banks escape many of the most punitive 

regulations altogether . This arbitrary approach confers, as well, a distinct 

xxix

 
 
 
benefit on an emerging class of non-bank lenders—a group indirectly 

empowered by regulation that has ensnared traditional banks . These 

lenders have subsequently capitalized fully on the cost advantage resulting 

from their lesser regulatory burden . Such firms participate in many facets 

of banking . To understand the damage, consider mortgage banking, where 

non-banks originate more than half of new U .S . residential mortgage loans, 

compared to just 9% seven years ago . 

Regional banks are penalized at the starting line, paying dearly 

to try to narrow the gap but not always succeeding . At M&T, our own 

estimated cost of complying with regulation has increased from $90 

million in 2010 to $440 million in 2016, representing nearly 15% of our 

total operating expenses .

These monetary costs are exacerbated by the toll they take on 

our human capital . Hundreds of M&T colleagues have logged tens of 

thousands of hours navigating an ever more entangled web of concurrent 

examinations from an expanding roster of regulators . During 2016 alone, 

M&T faced 27 different examinations from six regulatory agencies . 

Examinations were ongoing during 50 of the 52 weeks of the year, with 

as many as six exams occurring simultaneously . In advance of these 

reviews, M&T received more than 1,200 distinct requests for information, 

and provided more than 225,000 pages of documentation in response . 

The onsite visits themselves were accompanied by an additional, often 

duplicative, 2,500 requests that required more than 100,000 pages to 

fulfill—a level of industry that, beyond being exhausting, inhibits our  

ability to invest in our franchise and meet the needs of our customers .

xxx

 
 
The sheer magnitude of this cost and requisite management 

focus diverted to compliance with expanding regulations overextends 

traditional banks’ finite resources—thereby hindering their ability to 

introduce new products and technologies, or pursue other projects that 

might be in the best of interests of their shareholders, customers, and 

communities . But as substantial as the compliance cost burden may be, 

regulatory consequences extend far beyond mere dollars and hours . 

Regulation has altered the fundamental underpinnings of traditional 

banking activities, including prudent decision-making regarding lending 

and, ultimately, the efficient allocation of capital .

A STRESSED ECONOMY: Perhaps the most notable and intrusive 

regulation is the Comprehensive Capital Analysis and Review (CCAR) 

“stress test” exercise, an annual activity in which regulators forecast 

whether a bank is capable of withstanding an economic downturn more 

severe than the Great Recession of a decade ago . Results of these tests are 

widely publicized—giving banks a compelling incentive to pass and avoid 

the potential reputational damage that might accompany a failing grade .

The stress test considers many types of risk, but for regional banks, 

which focus on lending rather than trading, credit risk (the risk that borrowers 

will not be able to repay their loans) is the most salient . Its inclusion in the 

vitally important stress test calculus has forced a fundamental change in the 

way that lending decisions are made, reshaping the historically symbiotic 

relationship between regional banks and businesses . 

To understand the nature of the change wrought by regulation, 

one must understand the traditional loan underwriting process . Regional 

xxxi

 
 
 
banks base decisions to grant loans not just on such empirical (and 

universally available) factors as credit scores, but on local and personal 

knowledge, as well: the established reputation or known character of the 

applicant, or on the unquantifiable value that business owners bring to 

the table through their proven experience or entrepreneurial expertise . 

Yet the regulators’ models do not acknowledge the full range of valuable 

skills and local market knowledge that banks have long used in prudently 

determining whether to extend loans to worthy borrowers . Instead, banks 

are forced into a regulator’s Procrustean bed, called upon to follow an 

altogether formulaic process for reporting the characteristics of each loan . 

Regulators then evaluate the potential risk of default for each transaction 

using only financial models that use a prescribed set of variables, including 

the borrower’s credit score, the age of the business, and the type of lending 

product in question . Banks are not called upon to provide, and presumably 

the stress test models cannot consider, other pertinent information that 

reflects the true risk of individual small businesses . Such information 

would provide a more accurate and meaningful picture—the tale that a  

set of one-dimensional numbers cannot possibly tell . 

The implications of these regulatory shortcomings are not 

inconsequential . Forced to compete on an already skewed playing field, 

regional banks are diverging from what they do best by making lending 

decisions based not on their wealth of local knowledge and experience, but 

primarily through the narrow lens of the factors considered in the regulators’ 

models . Ever-looming stress test consequences have forced traditional 

banks to deploy a cold and calculated rubric that fails to comprehensively 

evaluate the ineffable quality of loans they make to small businesses .  

xxxii

 
A recent industry analysis demonstrates the extent to which the stress test 

may distort the allocation of capital . The study suggests that, in the context 

of the stress test, banks must effectively hold as much as 140% more capital 

for a small business loan than for a loan to a larger firm—remarkably, small 

business loans are actually treated more punitively than even the potentially 

risky trading assets predominantly held by the largest banks .

Deprived of their competitive advantage, regional banks must 

reconsider whether to make otherwise prudent loans that might face even 

the possibility of running afoul of the stress test models . The effect was all 

but inevitable: small business loan originations by regional banks subject 

to the stress test have not grown at all since 2009 . 

The stress test process has wrested decisions regarding the 

allocation of capital from regional banks that have a vested interest in 

the health of their communities and placed them in the hands of distant 

regulators . A small business owner’s experience and the informed 

perspective of a bank have been discounted to the detriment of all involved . 

A CAPITAL BIND: While stress tests have hindered banks’ ability to 

properly serve their customers, they are hardly unique in inflicting 

collateral damage in the name of mitigating risk to the U .S . financial 

system . Heightened liquidity requirements have also constrained 

deployment of capital that might otherwise help expand the economy . 

Once again, in the name of risk mitigation, these provisos require banks 

to use the funds entrusted to them by their customers to purchase 

government securities classified as “liquid .” In other words, banks are 

effectively mandated to use deposits to fund the needs of government 

rather than those of businesses and consumers . 

xxxiii

 
 
Banks typically prefer to use the vast majority of the deposits they 

gather to support new loan growth . The total deposits of M&T and our  

10 regional bank peers that individually have total assets between $50 billion 

and $500 billion increased by $733 billion during the past decade . Of these 

monies, $308 billion, or more than 42%, were diverted to purchase securities 

such as government bonds or simply stored at the Federal Reserve rather 

than being deployed in the community as loans .  

Worse still, liquidity regulations do not treat all deposits equally . 

Deposits by consumers are considered to be “sticky” and are preferred to those 

emanating from businesses large and small, which are in turn preferred  

to deposits of governments or other financial institutions . As a result, the 

largest banks have begun to aggressively compete for consumer deposits—

often in markets where they had not previously been active—because they 

allow the bank to hold a lower percentage of government securities in offset .

The largest banks have used technology and advertising to increase 

their market share in these communities . During 2016 alone, three of the 

largest banks grew their combined deposits by more than twice as much 

as M&T has grown its deposits during its entire 160-year history, including 

through 24 acquisitions in the last 30 years . Again we bear witness to 

an all-too-common theme: large banks gaining ground at the particular 

expense of community-focused institutions . 

Other regulations such as the so-called living will, a mechanism 

intended to assist regulators in coping with the potential failure of one  

of the largest global banks, have also been inappropriately applied to 

regional banks with simpler business models . Such a rule may be sensible 

for the largest institutions; just five of these large banks each have, on 

xxxiv

 
 
 
 
average, 1,977 subsidiaries . In contrast, at M&T, in a structure more  

typical of regional banks, the total number of such entities is only 41 .  

But despite their comparative simplicity, the limited degree to which they 

change year-over-year, and the much lesser degree of risk they pose to the 

financial system, regional banks are subject to the same costly living will 

preparation process as the larger banks .

FORWARD OVER LOST GROUND: We have directly observed the 

fundamental changes that regulation, as presently structured, has  

wrought upon our own industry, whether to the competitive balance 

between large and small banks or the nature of the relationships between 

banks and our customers . To the extent that our experience is mirrored 

across the many other industries impacted by regulation, it is no surprise 

that the performance of the economy and the sentiment of businesses 

and families has, until recently, remained subdued . Innovation has been 

stifled . The rewards of entrepreneurship may, in many instances, no 

longer outweigh its risks and its higher costs . 

With the crisis long past, the time for meaningful change—call it 

reform of the reforms—has arrived . Policies implemented over the past 

decade have needlessly impaired the ability of businesses of all stripes to 

perform their core function . Regulation meant to protect Americans has 

unwittingly inflicted unintended consequences across the country—the 

profound impacts of which are only now coming to be fully appreciated  

by the public and understood by the legislators themselves . 

Our own core function as a regional bank has long been to lend 

the deposits entrusted to us to support productive investments by families 

and businesses, which ultimately create not just jobs, but a better standard 

xxxv

 
 
of living for our citizens . Thoughtful reform would help us to better fulfill 

this important role . For instance, communities throughout America could 

benefit if legislators reconsidered the undiscriminating manner in which 

capital and liquidity regulations have been applied to banks with little 

regard to their regional scope or the limited risk that they truly pose to the 

financial system . This is not to suggest that one should ignore the pain that 

the Great Recession inflicted on so many, nor to assume that some measure 

of change has not been beneficial . However, a more tailored approach 

to regulation would benefit both regional banks and their communities, 

helping to recover the ground lost over the last decade . 

We welcome some of the recent trends in that regard—those that 

recognize the lesser degree of systemic risk that regional banks pose, 

such as the elimination of the qualitative objection to the stress test for 

regional banks and the increased differentiation in capital and liquidity 

requirements for the largest banks that truly pose systemic risk . At the 

same time, we also recognize that, in practice, the tailoring of regulations 

implemented to date has not significantly alleviated the burden borne by 

M&T and banks of a similar ilk . 

More can be done . Consumers, small businesses and, ultimately,  

our communities will be the better for it . Change was needed but now 

change is needed again .

REFLECTIONS AND LOOKING FORWARD

I cannot conclude my recollections of the past year without pausing to 

acknowledge the passing of two members of our Board of Directors, men  

who we considered more than business colleagues . They were like family .

xxxvi

 
 
Richard G . King joined the boards of both M&T and M&T Bank in 

2000, following M&T’s acquisition of Keystone Financial . Rick brought a 

wealth of knowledge gained through his diverse leadership experience . His 

business acumen was often prescient and always helpful . So much of what  

we know about our Pennsylvania communities comes via the relationships  

he cultivated . 

Patrick W .E . Hodgson was among the longest-tenured directors 

of M&T, having joined the board of M&T Bank in 1984 . A man of great 

integrity, his quiet dignity and sound judgment helped ensure that we 

never lost our way . Much of our culture and character can be traced back 

to Pat . His guidance and experience were invaluable over three decades  

of growth and change at M&T . 

We will greatly miss their counsel, contributions, and their 

friendship . These are men I am proud to have known .

This is now my 35th year in a management role at M&T . In many 

ways, I marvel at the pace and character of change that has occurred—not 

only at the bank but in banking itself . What was once community and 

regional competition has increasingly become national and international . 

Products and services once offered only by specialists are now provided 

by a broad array of firms . Just as many one-time competitors have fallen 

by the wayside, so, too, new ones have emerged—often enabled by new 

technology . Yet I remain convinced that the hallmarks of the M&T way of 

doing business will continue to be relevant and successful . We worry today 

about robots and algorithms replacing humans the same way we worried 

yesterday about ATMs and the Internet . Time has taught us that technology 

xxxvii

 
 
 
 
and humans are complements, not substitutes . Time has also taught us that 

successful underwriting and investment require sound, non-predictable, 

non-formulaic judgment—an essential element of the M&T culture . 

Without question, the results we’ve achieved in decades past and 

the progress we hope to make in those to come would not be possible 

without the tireless efforts of the 16,972 M&T bankers I’m proud to call  

my colleagues . It’s a group whose character and commitment to customers 

and to one another is without peer . From Jamestown to Ocean City and 

Watertown to Richmond, these employees are the heart and soul of our 

bank . In recent years, these faces have grown increasingly diverse—

reflective of our changing communities . We are stronger for their many 

and varied perspectives—not just welcoming, but embracing the value and 

contribution of each of our colleagues .

I well understand that, every year—indeed, every day—the relevance 

of this traditional approach, complemented by new technologies, will be 

tested . Still, I remain confident that M&T’s people and culture position us 

not merely to endure but to prosper in the face of new challenges .

Robert G . Wilmers 
Chairman of the Board 
and Chief Executive Officer

February 22, 2017

xxxviii

 
 
MARK J. CZARNECKI: FRIEND AND COLLEAGUE

It was just as this Message went to print that, after a long illness, we  

lost Mark Czarnecki, our President and Chief Operating Officer . We mourn  

him as colleague, friend, family man, mentor and community leader . 

In many ways, Mark personified both the roots and growth of  

the bank . A Western New York native, he joined M&T 40 years ago—

when we had but 61 banking offices in and around Buffalo . His own career 

followed—and enabled—our subsequent growth . As a young graduate  

of the State University of New York at Buffalo he began at M&T as a  

“platform assistant” at what was then our Main Tupper branch—the first  

of 24 positions he would hold . From his next post as assistant branch 

manager he would ultimately go on to become President and COO, along 

the way serving as a branch manager, business banker, commercial lender 

and head of the investment group . He could understand—and mentor,  

as he loved to do—both colleagues and newcomers throughout the bank 

because he had been in their shoes . 

To understand Mark’s career is to understand his character .  

For Mark, no detail was too small and no job was too large . He related 

easily to everyone, whether a teller at his local branch, business  

leaders on a community board or presidents of other banks . His humble, 

approachable style made others feel cared about and comfortable .  

Mark knew how to bring the right people together and teach them the 

skills to succeed, not just in their current job, but in the one they could 

have tomorrow . He never stopped cultivating talent and that legacy  

will last longer than his storied career .

xxxviii (a) 

 
 
Mark set an example as a community leader in the town where  

he was born—pointing the way for those in the many towns and cities  

we serve today . Nothing animated or inspired him more than his work  

as chairman of the Westminster Community Charter School . He was  

not the businessman who just showed up for meetings; he aspired to help 

build a better school for Buffalo’s disadvantaged and went the extra 

mile—in raising funds and recruiting talent—to help make that happen . 

Throughout Buffalo, there are many whose lives were changed and 

enriched by Mark Czarnecki .  

Mark’s influence on the community is surpassed only by the 

inheritance of love he left as a husband and father . My deepest sympathies  

go out to his wife, Elizabeth, his sons, Christopher and Gregory, and  

their entire family . We’re grateful to them for sharing Mark with us .  

May his memory be a blessing to them .

Throughout the bank and our community, Mark’s success felt  

like our own—and showed what we all might do . It’s only seven tenths  

of a mile from the Main Tupper branch to headquarters, but Mark’s  

path inspired the hopes and dreams of many . Others may assume his  

duties but he will never be replaced .

Thanks for everything . Rest in peace, dear friend .

xxxviii (b)

 
 
 
  
Denis J . Salamone 
Former Chairman and  
Chief Executive Officer  
Hudson City Bancorp, Inc.

Herbert L . Washington 
President 
H.L.W. Fast Track, Inc.

M&T Bank Corporation

Officers and Directors

OFFICERS

DIRECTORS

Robert G . Wilmers 
Chairman of the Board  
and Chief Executive Officer

Robert G . Wilmers 
Chairman of the Board  
and Chief Executive Officer

Mark J . Czarnecki 
President and Chief  
Operating Officer

Robert J . Bojdak 
Executive Vice President  
and Chief Credit Officer

Janet M . Coletti 
Executive Vice President

William J . Farrell II 
Executive Vice President

Richard S . Gold 
Executive Vice President  
and Chief Risk Officer

Brian E . Hickey 
Executive Vice President

René F . Jones 
Executive Vice President 

Darren J . King 
Executive Vice President 
and Chief Financial Officer

Gino A . Martocci
Executive Vice President

Doris P . Meister 
Executive Vice President

Kevin J . Pearson 
Executive Vice President 

Michael J . Todaro 
Executive Vice President

Michele D . Trolli 
Executive Vice President and  
Chief Information Officer

D . Scott N . Warman 
Executive Vice President 
and Treasurer

John L . D’Angelo 
Senior Vice President  
and General Auditor

Michael R . Spychala 
Senior Vice President  
and Controller

Robert T . Brady 
Vice Chairman of the Board 
Former Chairman of the Board 
and Chief Executive Officer 
Moog Inc. 

Edward G . Amoroso  
Chief Executive Officer 
TAG Cyber LLC

Brent D . Baird 
Private Investor

C . Angela Bontempo 
Former President and  
Chief Executive Officer 
Saint Vincent Health System

T . Jefferson Cunningham III 
Former Chairman of the Board 
and Chief Executive Officer 
Premier National Bancorp, Inc.

Mark J . Czarnecki 
President and Chief  
Operating Officer

Gary N . Geisel 
Former Chairman of the Board 
and Chief Executive Officer 
Provident Bankshares 
Corporation

Richard A . Grossi 
Former Senior Vice President 
and Chief Financial Officer 
Johns Hopkins Medicine

John D . Hawke, Jr . 
Senior Counsel 
Arnold & Porter LLP

Newton P .S . Merrill 
Former Senior  
Executive Vice President  
The Bank of New York

Melinda R . Rich 
Vice Chairman 
Rich Products Corporation  
and President  
Rich Entertainment Group

Robert E . Sadler, Jr . 
Former President and  
Chief Executive Officer 
M&T Bank Corporation

xxxix

Denis J . Salamone 
Former Chairman and  
Chief Executive Officer 
Hudson City Bancorp, Inc.

Herbert L . Washington 
President 
H.L.W. Fast Track, Inc.

M&T Bank 

Officers and Directors

OFFICERS

Robert G . Wilmers 
Chairman of the Board  
and Chief Executive Officer

Mark J . Czarnecki 
President and Chief  
Operating Officer

Vice Chairmen

Richard S . Gold  
René F . Jones 
Kevin J . Pearson

Executive Vice Presidents

Robert J . Bojdak 
Janet M . Coletti 
Atwood Collins III 
John F . Cook 
William J . Farrell II  
Mark A . Graham 
Brian E . Hickey 
Darren J . King 
Gino A . Martocci 
Doris P . Meister 
Michael J . Todaro 
Michele D . Trolli  
D . Scott N . Warman

Senior Vice Presidents

John M . Beeson, Jr . 
Keith M . Belanger 
Deborah A . Bennett 
Peter M . Black 
Daniel M . Boscarino 
Ira A . Brown 
Christina A . Brozyna 
Daniel J . Burns 
Nicholas L . Buscaglia 
Noel Carroll 
Mark I . Cartwright 
David K . Chamberlain 
August J . Chiasera 
Jerome W . Collier 
Frank Conway 
Cynthia L . Corliss 
R . Joe Crosswhite 
John L . D’Angelo 
Peter G . D’Arcy 
Carol A . Dalton 
Ayan DasGupta 
Shelley C . Drake 
Michael A . Drury 
Gary D . Dudish 
Peter J . Eliopoulos 
Ralph W . Emerson, Jr . 
Jeffrey A . Evershed 
Eric B . Feldstein 
Tari L . Flannery 
James M . Frank 
Timothy E . Gillespie 
Lawrence E . Gore 

xl

DIRECTORS

Robert G . Wilmers 
Chairman of the Board 
and Chief Executive Officer

Edward G . Amoroso  
Chief Executive Officer 
TAG Cyber LLC

Brent D . Baird 
Private Investor

C . Angela Bontempo 
Former President and  
Chief Executive Officer 
Saint Vincent Health System

Robert T . Brady 
Former Chairman of the Board  
and Chief Executive Officer 
Moog Inc.

T . Jefferson Cunningham III 
Former Chairman of the Board  
and Chief Executive Officer 
Premier National Bancorp, Inc.

Mark J . Czarnecki 
President and Chief  
Operating Officer

Gary N . Geisel 
Former Chairman of the Board 
and Chief Executive Officer 
Provident Bankshares Corporation

Richard A . Grossi 
Former Senior Vice President  
and Chief Financial Officer  
Johns Hopkins Medicine

John D . Hawke, Jr . 
Senior Counsel 
Arnold & Porter LLP

Newton P .S . Merrill 
Former Senior  
Executive Vice President  
The Bank of New York

Melinda R . Rich 
Vice Chairman  
Rich Products Corporation  
and President 
Rich Entertainment Group 

Robert E . Sadler, Jr . 
Former President and  
Chief Executive Officer 
M&T Bank Corporation

Robert S . Graber 
Sam Guerrieri, Jr . 
Cecilia A . Hodges 
Harish A . Holla 
Neil Hosty 
Gregory Imm 
Carl W . Jordan 
Michael T . Keegan 
Nicholas P . Lambrow 
Michele V . Langdon 
Yakov Lantsman 
Lon P . LeClair 
Joe A . Lombardo 
Robert G . Loughrey 
Alfred F . Luhr III 
Christopher R . Madel 
Paula Mandell 
Louis P . Mathews, Jr . 
Richard J . McCarthy 
William McKenna 
Mark J . Mendel 
Frank P . Micalizzi 
Christopher R . Morphew 
Michael S . Murchie 
Allen J . Naples 
Peter G . Newman 
Peter J . Olsen 
Anabel Pichler 
Eileen M . Pirson 
Paul T . Pitman 
Michael J . Quinlivan 
Christopher D . Randall 
Rajiv Ranjan 
Dave N . Richardson 
Daniel J . Ripienski 
Paris F . Roselli 
M . Julieta Ross 
Anthony M . Roth 
John P . Rumschik 
Allison L . Sagraves 
Mahesh Sankaran 
Jack D . Sawyer 
Jean-Christophe Schroeder 
Susan F . Sciarra 
Eugene J . Sheehy 
Douglas A . Sheline 
William M . Shickluna 
Sabeth Siddique 
Glenn R . Small 
Philip M . Smith 
Michael R . Spychala 
David W . Stender 
Douglas R . Stevens 
Kemp C . Stickney 
John R . Taylor 
Christopher E . Tolomeo 
Patrick M . Trainor 
Scott B . Vahue 
Linda J . Weinberg 
Jeffrey A . Wellington 
Tracy S . Woodrow 
Brian R . Yoshida 
Viktor Ziskin

M&T Bank 

Regional Management and Directors Advisory Councils

AREA EXECUTIVES

R . Joe Crosswhite 
Peter G . D’Arcy 
Michael T . Keegan 
Paula Mandell 
Michael S . Murchie 
Jeffrey A . Wellington

REGIONAL PRESIDENTS

Jeffrey A . Wellington 
Western New York
Allen J . Naples 
Central New York
Stephen A . Foreman 
Central/Western Pennsylvania
Nicholas P . Lambrow 
Delaware
August J . Chiasera 
Baltimore and Chesapeake
Peter M . Black
Greater Washington and 
Central Virginia
Michael T . Keegan
Albany/Hudson Valley North 
Peter G . D’Arcy 
New York City/Long Island
Philip H . Johnson 
Northern Pennsylvania 
Ira A . Brown 
Philadelphia/Southern  
New Jersey 
Daniel J . Burns 
Rochester
Peter G . Newman 
Southern New York
Thomas C . Koppmann 
Southeast Pennsylvania 
Thomas H . Comiskey 
New Jersey
Frank P . Micalizzi 
Tarrytown /Connecticut

DIRECTORS 
ADVISORY COUNCILS

NEW YORK STATE

Albany Division
Kevin M . Bette
Nancy E . Carey Cassidy
Richard A . Fuerst
Michael Joyce
William Lia, Jr .
Christopher Madden
Lisa M . Marello
Michael C . McPartlon
Lauren Van Dermark

Central New York Division
James V . Breuer
Carl V . Byrne 
Mara Charlamb 
Richard W . Cook 
James A . Fox
Richard R . Griffith
Robert L . Lewis  
Robert H . Linn

Margaret O’Connell 
Richard J . Zick

Hudson Valley Division
Elizabeth P . Allen
T . Jefferson Cunningham III 
John K . Gifford
Michael H . Graham
William Murphy 
Patrick Paul
Andrea L . Reynolds
Lewis J . Ruge
Albert K . Smiley
Thomas G . Struzzieri
Charles C . Tallardy III
Peter Van Kleeck
Alan Yassky

Jamestown Division
Sebastian A . Baggiano
John R . Churchill 
Steven A . Godfrey
Joseph C . Johnson
Stan Lundine 
Michael D . Metzger
Kim Peterson
Allen Short 
Michael J . Wellman

New York City/Long Island 
Division
Earle S . Altman
Jay I . Anderson
Brent D . Baird
Louis Brause 
Martin Seth Burger
Patrick J . Callan
Anthony J . Dowd
Lloyd M . Goldman
Peter Hauspurg 
Leslie Wohlman Himmel
Gary Jacob 
Mickey Rabina 
Don M . Randel
Michael D . Sullivan
Alair A . Townsend

Rochester Division
Marlene Bessette  
William A . Buckingham 
Christopher Czarnecki 
R . Carlos Carballada
Timothy D . Fournier 
Jocelyn Goldberg-Schaible 
Marc L . Iacona, Sr . 
Laurence Kessler
Anne M . Kress 
Jett Mehta 
Mark S . Peterson 
Ronald S . Ricotta
Victor E . Salerno
Derace L . Schaffer 
Kevin R . Wilmot

NEW JERSEY / PENNSYLVANIA /
DELAWARE / MARYLAND / 
VIRGINIA /WEST VIRGINIA

Baltimore-Washington Division
Thomas S . Bozzuto 
Daniel J . Canzoniero 
Jeffrey S . Detwiler 
Scott E . Dorsey 
Steve Dubin 
Kevin R . Dunbar 
Gary N . Geisel 
Richard A . Grossi 
John F . Jaeger 
John H . Phelps 
Marc B . Terrill 
Ernie Vaile

Central Pennsylvania Division
Mark X . DiSanto 
Rolen E . Ferris
Ronald M . Leitzel
John P . Massimilla 
Craig J . Nitterhouse 
Ivo V . Otto III  
William F . Rothman
Lynn C . Rotz  
Herbert E . Sandifer 
Michael J . Schwab
John D . Sheridan 
Glen R . Sponaugle 
Daniel K . Sunderland 
Sondra Wolfe Elias

Central Virginia Division
Toni R . Ardabell 
Otis L . Brown 
Robert J . Clark 
Daniel Loftis 
Bart H . Mitchell 
Robert Wayne Ohly, Jr . 
Robert H . Newton, Jr . 
Michael Patrick
Charles W . Payne, Jr . 
Brian R . Pitney 
Frank L . Robinson
Katheryn E . Surface Burks 
Debbie L . Sydow

Chesapeake Upper  
Shore Division
Richard Bernstein
Hugh E . Grunden
William W . McAllister, Jr .
Lee McMahan

Chesapeake Lower  
Shore Division
Michael G . Abercrombie, Jr .
John H . Harrison
John M . McClellan
James F . Morris
John M . Stern

Southern New York Division
George Akel, Jr .
Lee P . Bearsch
Richard J . Cole 
Joseph W . Donze 
Albert Nocciolino
Robert R . Sprole III 
Frank H . Suits, Jr .
Terry R . Wood

Eastern Pennsylvania Division
Paul J . Datte
Steven I . Field
Roy A . Heim
Joseph H . Jones, Jr .
David C . Laudeman
Eric M . Mika
Jeanne Boyer Porter
Larry A . Wittig

New Jersey Division
Michael W . Azzara 
William G . Bardel 
Scott A . Belair 
Victoria H . Bruni 
Cornelius E . Golding 
L . Robert Lieb
Donald O . Quest 
Joseph G . Sponholz

Northeast  
Mid-Atlantic Division
Richard Alter
Clarence C . Boyle, Jr .
Nicole A . Funk 
Stephanie Novak Hau
Thomas C . Mottley
Paul T . Muddiman
John D . Pursell, Jr .
John Thomas Sadowski, Jr .
Kimberly L . Wagner
Craig A . Ward

Northeastern  
Pennsylvania Division
Richard S . Bishop
Christopher L . Borton
Maureen M . Bufalino
Stephen N . Clemente
Robert Gill
Thomas F . Torbik
Murray Ufberg

Northern  
Pennsylvania Division
Sherwin O . Albert, Jr .
Jeffrey A . Cerminaro
James E . Douthat
Charlene A . Friedman
Steven P . Johnson
Kenneth R . Levitzky
Robert E . More
John D . Rinehart
J . David Smith
Donald E . Stringfellow

Philadelphia Division
Edward M . D’Alba 
Linda Ann Galante 
Ruth S . Gehring 
Eli A . Kahn 
Mark Nicoletti
Robert N . Reeves, Jr .
Robert W . Sorrell
Steven L . Sugarman
Christina Wagoner

Western  
Pennsylvania Division
Jodi L . Cessna
Paul I . Detweiler III
Philip E . Devorris
Michael A . Fiore
Joseph A . Grappone
Daniel R . Lawruk
Gerald E . Murray
Robert F . Pennington
Joseph S . Sheetz
William T . Ward
J . Douglas Wolf 

xli

SEC Form 10-K

Evans Elevator . Image courtesy of the Albright-Knox Art Gallery G. Robert Strauss, Jr. Memorial Library, Digital Assets Collection and Archives. Photograph by Jay W. Baxtresser. 
©2017 Albright-Knox Art Gallery, Buffalo, New York.

xlii

UNITED STATES  
SECURITIES AND EXCHANGE COMMISSION 
Washington, D.C. 20549  

Form 10-K  

☒  ANNUAL REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE 

ACT OF 1934  

For the fiscal year ended December 31, 2016 
or  
  TRANSITION  REPORT  PURSUANT  TO  SECTION  13  OR  15(d)  OF  THE  SECURITIES 

EXCHANGE ACT OF 1934  

Commission file number 1-9861  

M&T BANK CORPORATION  

(Exact name of registrant as specified in its charter)  

New York 
(State of incorporation) 
One M&T Plaza, Buffalo, New York 
(Address of principal executive offices) 

16-0968385 
(I.R.S. Employer Identification No.) 
14203 
(Zip Code) 

Registrant’s telephone number, including area code:  
716-635-4000  
Securities registered pursuant to Section 12(b) of the Act:  

Title of Each Class 
Common Stock, $.50 par value 
6.375% Cumulative Perpetual Preferred Stock, 
Series A, $1,000 liquidation preference per share 
6.375% Cumulative Perpetual Preferred Stock, 
Series C, $1,000 liquidation preference per share 
Warrants to purchase shares of Common Stock 
(expiring December 23, 2018) 

Name of Each Exchange on Which Registered
New York Stock Exchange 
New York Stock Exchange 

New York Stock Exchange 

New York Stock Exchange 

Indicate by check mark if the registrant is a well-known seasoned issuer, as defined in Rule 405 of the Securities Act.    Yes  ☒    No    

Indicate by check mark if the registrant is not required to file reports pursuant to Section 13 or Section 15(d) of the Act.    Yes      No  ☒  

Indicate by check mark whether the registrant (1) has filed all reports required to be filed by Section 13 or 15(d) of the Securities Exchange Act of 

1934 during the preceding 12 months, and (2) has been subject to such filing requirements for the past 90 days.    Yes  ☒    No    

Indicate by check mark whether the registrant has submitted electronically and posted on its corporate Web site, if any, every  Interactive  Data File 
required to be submitted and posted pursuant to Rule 405 of Regulation S-T during the preceding 12 months (or for such shorter period that the registrant was 
required to submit and post such files).    Yes  ☒    No    

Indicate by check mark if disclosure of delinquent filers pursuant to Item 405 of Regulation S-K is not contained herein, and will not be contained, to 
the best of registrant’s knowledge, in definitive proxy or information statements incorporated by reference in Part III of this Form 10-K or any amendment to 
this Form 10-K.    

Indicate by check mark whether the registrant is a large accelerated filer, an accelerated filer, a non-accelerated filer, or a smaller reporting company. 

See the definitions of “large accelerated filer,” “accelerated filer,” and “smaller reporting company” in Rule 12b-2 of the Exchange Act. (Check one):  

Large accelerated filer 
Non-accelerated filer 

☒ 
 

(Do not check if a smaller reporting company) 

Accelerated filer 
Smaller reporting company 




Indicate by check mark whether the registrant is a shell company (as defined in Rule 12b-2 of the Act).    Yes      No  ☒  

Aggregate market value of the Common Stock, $0.50 par value, held by non-affiliates of the registrant, computed by reference to the closing price as 

of the close of business on June 30, 2016: $16,919,525,595.  

Number of shares of the Common Stock, $0.50 par value, outstanding as of the close of business on February 17, 2017: 154,172,084 shares.  

(1) Portions of the Proxy Statement for the 2017 Annual Meeting of Shareholders of M&T Bank Corporation in Parts II and III.  

Documents Incorporated By Reference:  

 
 
 
 
 
  
  
 
  
 
 
 
 
M&T BANK CORPORATION 
Form 10-K for the year ended December 31, 2016 
CROSS-REFERENCE SHEET 

PART I

Item 1.  Business ...................................................................................................   
Statistical disclosure pursuant to Guide 3 

I. 

Distribution of assets, liabilities, and shareholders’ equity; interest 

rates and interest differential 

A. Average balance sheets ........................................................................  
B. Interest income/expense and resulting yield or rate on average 

interest-earning assets (including non-accrual loans) and 
interest-bearing liabilities ................................................................
C. Rate/volume variances .........................................................................  
Investment portfolio 
A. Year-end balances ...............................................................................  
B. Maturity schedule and weighted average yield ...................................  
C. Aggregate carrying value of securities that exceed ten percent of 

II. 

Form 10-K 
Page 

4 

55 

55 
26 

24,127 
92 

shareholders’ equity ........................................................................

128 

III.  Loan portfolio 

A. Year-end balances ...............................................................................  
B. Maturities and sensitivities to changes in interest rates .......................  
C. Risk elements 
   Nonaccrual, past due and renegotiated loans.......................................  
   Actual and pro forma interest on certain loans ....................................  
   Nonaccrual policy ................................................................................  
   Loan concentrations .............................................................................  

IV.  Summary of loan loss experience 

A. Analysis of the allowance for loan losses ............................................  
   Factors influencing management’s judgment concerning the 

24,131 
90 

70,133-138 
134,143 
118-119 
80 

67,139-146 

adequacy of the allowance and provision........................................

66-80,120,139-146
B. Allocation of the allowance for loan losses .........................................79,139-140,144-146

   V.  Deposits 

A. Average balances and rates..................................................................  
B. Maturity schedule of domestic time deposits with balances of 

$100,000 or more ............................................................................

55 

93 

   VI.  Return on equity and assets .....................................................................    26,49,96-97,100 
   VII.  Short-term borrowings ............................................................................   
Item 1A.  Risk Factors .............................................................................................   
Item 1B.  Unresolved Staff Comments ...................................................................   
Item 2.  Properties .................................................................................................   
Item 3.  Legal Proceedings ...................................................................................   
Item 4.  Mine Safety Disclosures ..........................................................................   
Executive Officers of the Registrant .......................................................   

150 
27-38 
39 
39 
39-41 
41 
41-43 

Item 5.  Market for Registrant’s Common Equity, Related Stockholder 

PART II

Matters and Issuer Purchases of Equity Securities ............................. 
A. Principal market ...................................................................................  
   Market prices .......................................................................................  
B. Approximate number of holders at year-end .......................................  

44-46 
44 
107 
24 

2 

2

 
  
 
 
 
  
 
  
  
  
  
 
  
  
  
 
  
  
  
  
  
  
 
  
 
  
  
  
  
  
  
 
  
  
  
  
  
  
  
  
  
 
  
  
  
  
 
  
  
 
  
  
  
  
 
  
 
  
  
  
C. Frequency and amount of dividends declared .....................................   25-26,107,116 
D. Restrictions on dividends ....................................................................  
E. Securities authorized for issuance under equity 

8-9 

Form 10-K 
Page 

compensation plans .........................................................................
F.  Performance graph ...............................................................................  
G. Repurchases of common stock ............................................................  
Item 6.  Selected Financial Data ...........................................................................   
A. Selected consolidated year-end balances ............................................   
B.  Consolidated earnings, etc. .................................................................   

Item 7.  Management’s Discussion and Analysis of Financial Condition 

and Results of Operations ................................................................... 
Item 7A.  Quantitative and Qualitative Disclosures About Market Risk ................   
Item 8.  Financial Statements and Supplementary Data .......................................   
A. Report on Internal Control Over Financial Reporting .........................  
B. Report of Independent Registered Public Accounting Firm ...............  
C. Consolidated Balance Sheet — December 31, 2016 and 2015 ...........  
D. Consolidated Statement of Income — Years ended December 31, 

2016, 2015 and 2014 .......................................................................

E. Consolidated Statement of Comprehensive Income — Years 

ended December 31, 2016, 2015 and 2014 .....................................

F.  Consolidated Statement of Cash Flows — Years ended 

December 31, 2016, 2015 and 2014 ....................................................

G. Consolidated Statement of Changes in Shareholders’ Equity — 

Years ended December 31, 2016, 2015 and 2014 ...........................
H. Notes to Financial Statements .............................................................  
I.  Quarterly Trends ..................................................................................  

Item 9.  Changes in and Disagreements with Accountants on Accounting 

and Financial Disclosure ..................................................................... 
Item 9A.  Controls and Procedures ..........................................................................   

A. Conclusions of principal executive officer and principal financial 

officer regarding disclosure controls and procedures ......................

B. Management’s annual report on internal control over financial 

reporting ...............................................................................................
C. Attestation report of the registered public accounting firm .................  
D. Changes in internal control over financial reporting ...........................  
Item 9B.  Other Information ....................................................................................   

PART III

Item 10.  Directors, Executive Officers and Corporate Governance ......................   
Item 11.  Executive Compensation .........................................................................   
Item 12.  Security Ownership of Certain Beneficial Owners and Management 

and Related Stockholder Matters ........................................................ 

Item 13.  Certain Relationships and Related Transactions, and Director 

Independence ........................................................................................... 
Item 14.  Principal Accountant Fees and Services .................................................   

PART IV

44-45 
45 
46 
46 
24 
25 

46-108 
109 
109 
110 
111 
112 

113 

114 

115 

116 
117-201 
107 

202 
202 

202 

202 
202 
202 
202 

202 
203 

203 

203 
203 

Item 15.  Exhibits and Financial Statement Schedules ...........................................   
Item 16.  Form 10-K Summary ..............................................................................   
SIGNATURES ........................................................................................................   
EXHIBIT INDEX ...................................................................................................   

203 
203 
204-205 
206-208 

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PART I 

Item 1.  Business. 

M&T Bank Corporation (“Registrant” or “M&T”) is a New York business corporation which is 
registered as a financial holding company under the Bank Holding Company Act of 1956, as 
amended (“BHCA”) and as a bank holding company (“BHC”) under Article III-A of the New York 
Banking Law (“Banking Law”). The principal executive offices of M&T are located at One M&T 
Plaza, Buffalo, New York 14203. M&T was incorporated in November 1969. M&T and its direct and 
indirect subsidiaries are collectively referred to herein as the “Company.” As of December 31, 2016 
the Company had consolidated total assets of $123.4 billion, deposits of $95.5 billion and 
shareholders’ equity of $16.5 billion. The Company had 16,000 full-time and 973 part-time 
employees as of December 31, 2016. 

At December 31, 2016, M&T had two wholly owned bank subsidiaries: Manufacturers and 
Traders Trust Company (“M&T Bank”) and Wilmington Trust, National Association (“Wilmington 
Trust, N.A.”). The banks collectively offer a wide range of retail and commercial banking, trust and 
wealth management, and investment services to their customers. At December 31, 2016, M&T Bank 
represented 99% of consolidated assets of the Company. 

The Company from time to time considers acquiring banks, thrift institutions, branch offices of 
banks or thrift institutions, or other businesses within markets currently served by the Company or in 
other locations that would complement the Company’s business or its geographic reach. The 
Company has pursued acquisition opportunities in the past, continues to review different 
opportunities, including the possibility of major acquisitions, and intends to continue this practice. 

Subsidiaries 
M&T Bank is a banking corporation that is incorporated under the laws of the State of New York. 
M&T Bank is a member of the Federal Reserve System and the Federal Home Loan Bank System, 
and its deposits are insured by the Federal Deposit Insurance Corporation (“FDIC”) up to applicable 
limits. M&T acquired all of the issued and outstanding shares of the capital stock of M&T Bank in 
December 1969. The stock of M&T Bank represents a major asset of M&T. M&T Bank operates 
under a charter granted by the State of New York in 1892, and the continuity of its banking business 
is traced to the organization of the Manufacturers and Traders Bank in 1856. The principal executive 
offices of M&T Bank are located at One M&T Plaza, Buffalo, New York 14203. As of December 31, 
2016, M&T Bank had 799 domestic banking offices located in New York State, Maryland, New 
Jersey, Pennsylvania, Delaware, Connecticut, Virginia, West Virginia, and the District of Columbia, 
a full-service commercial banking office in Ontario, Canada, and an office in George Town, Cayman 
Islands. As of December 31, 2016, M&T Bank had consolidated total assets of $122.6 billion, 
deposits of $97.3 billion and shareholder’s equity of $14.5 billion. The deposit liabilities of M&T 
Bank are insured by the FDIC through its Deposit Insurance Fund (“DIF”). As a commercial bank, 
M&T Bank offers a broad range of financial services to a diverse base of consumers, businesses, 
professional clients, governmental entities and financial institutions located in its markets. Lending is 
largely focused on consumers residing in New York State, Maryland, New Jersey, Pennsylvania, 
Delaware, Connecticut, Virginia, West Virginia, and Washington, D.C., and on small and medium-
size businesses based in those areas, although loans are originated through offices in other states and 
in Ontario, Canada. In addition, the Company conducts lending activities in various states through 
other subsidiaries. Trust and other fiduciary services are offered by M&T Bank and through its 
wholly owned subsidiary, Wilmington Trust Company. M&T Bank and certain of its subsidiaries 
also offer commercial mortgage loans secured by income producing properties or properties used by 
borrowers in a trade or business. Additional financial services are provided through other operating 
subsidiaries of the Company. 

4 

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Wilmington Trust, N.A., a national banking association and a member of the Federal Reserve 

System and the FDIC, commenced operations on October 2, 1995. The deposit liabilities of 
Wilmington Trust, N.A. are insured by the FDIC through the DIF. The main office of Wilmington 
Trust, N.A. is located at 1100 North Market Street, Wilmington, Delaware 19890. Wilmington Trust, 
N.A. offers various trust and wealth management services. Historically, Wilmington Trust, N.A. 
offered selected deposit and loan products on a nationwide basis, through direct mail, telephone 
marketing techniques and the Internet. As of December 31, 2016, Wilmington Trust, N.A. had total 
assets of $3.7 billion, deposits of $3.2 billion and shareholder’s equity of $496 million. 

Wilmington Trust Company, a wholly owned subsidiary of M&T Bank, was incorporated as a 
Delaware bank and trust company in March 1901 and amended its charter in July 2011 to become a 
nondepository trust company. Wilmington Trust Company provides a variety of Delaware based 
trust, fiduciary and custodial services to its clients. As of December 31, 2016, Wilmington Trust 
Company had total assets of $1.3 billion and shareholder’s equity of $554 million. Revenues of 
Wilmington Trust Company were $121 million in 2016. The headquarters of Wilmington Trust 
Company are located at 1100 North Market Street, Wilmington, Delaware 19890. 

M&T Insurance Agency, Inc. (“M&T Insurance Agency”), a wholly owned insurance agency 

subsidiary of M&T Bank, was incorporated as a New York corporation in March 1955. M&T 
Insurance Agency provides insurance agency services principally to the commercial market. As of 
December 31, 2016, M&T Insurance Agency had assets of $35 million and shareholder’s equity of 
$18 million. M&T Insurance Agency recorded revenues of $31 million during 2016. The 
headquarters of M&T Insurance Agency are located at 285 Delaware Avenue, Buffalo, New York 
14202. 

M&T Real Estate Trust (“M&T Real Estate”) is a Maryland Real Estate Investment Trust that 

traces its origin to the incorporation of M&T Real Estate, Inc. in July 1995. M&T Real Estate 
engages in commercial real estate lending and provides loan servicing to M&T Bank. As of 
December 31, 2016, M&T Real Estate had assets of $22.9 billion, common shareholder’s equity of 
$22.0 billion, and preferred shareholders’ equity, consisting of 9% fixed-rate preferred stock (par 
value $1,000), of $1 million. All of the outstanding common stock and 89% of the preferred stock of 
M&T Real Estate is owned by M&T Bank. The remaining 11% of M&T Real Estate’s outstanding 
preferred stock is owned by officers or former officers of the Company. M&T Real Estate recorded 
$852 million of revenue in 2016. The headquarters of M&T Real Estate are located at M&T Center, 
One Fountain Plaza, Buffalo, New York 14203. 

M&T Realty Capital Corporation (“M&T Realty Capital”), a wholly owned subsidiary of M&T 
Bank, was incorporated as a Maryland corporation in October 1973. M&T Realty Capital engages in 
multifamily commercial real estate lending and provides loan servicing to purchasers of the loans it 
originates. As of December 31, 2016, M&T Realty Capital serviced $11.8 billion of commercial 
mortgage loans for non-affiliates and had assets of $1.2 billion and shareholder’s equity of $119 
million. M&T Realty Capital recorded revenues of $139 million in 2016. The headquarters of M&T 
Realty Capital are located at 25 South Charles Street, Baltimore, Maryland 21202. 

M&T Securities, Inc. (“M&T Securities”) is a wholly owned subsidiary of M&T Bank that was 
incorporated as a New York business corporation in November 1985. M&T Securities is registered as 
a broker/dealer under the Securities Exchange Act of 1934, as amended, and as an investment advisor 
under the Investment Advisors Act of 1940, as amended (the “Investment Advisors Act”). M&T 
Securities is licensed as a life insurance agent in each state where M&T Bank operates branch offices 
and in a number of other states. It provides securities brokerage, investment advisory and insurance 
services. As of December 31, 2016, M&T Securities had assets of $51 million and shareholder’s 
equity of $41 million. M&T Securities recorded $99 million of revenue during 2016. The 
headquarters of M&T Securities are located at One M&T Plaza, Buffalo, New York 14203. 

5 

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Wilmington Trust Investment Advisors, Inc. (“WT Investment Advisors”), a wholly owned 

subsidiary of M&T Bank, was incorporated as a Maryland corporation on June 30, 1995. WT 
Investment Advisors, a registered investment advisor under the Investment Advisors Act, serves as 
an investment advisor to the Wilmington Funds, a family of proprietary mutual funds, and 
institutional clients. As of December 31, 2016, WT Investment Advisors had assets of $47 million 
and shareholder’s equity of $40 million. WT Investment Advisors recorded revenues of $39 million 
in 2016. The headquarters of WT Investment Advisors are located at 100 East Pratt Street, Baltimore, 
Maryland 21202. 

Wilmington Funds Management Corporation (“Wilmington Funds Management”) is a wholly 

owned subsidiary of M&T that was incorporated in September 1981 as a Delaware corporation. 
Wilmington Funds Management is registered as an investment advisor under the Investment Advisors 
Act and serves as an investment advisor to the Wilmington Funds. Wilmington Funds Management had 
assets of $29 million and shareholder’s equity of $28 million as of December 31, 2016. Wilmington 
Funds Management recorded revenues of $27 million in 2016. The headquarters of Wilmington Funds 
Management are located at 1100 North Market Street, Wilmington, Delaware 19890. 

Wilmington Trust Investment Management, LLC (“WTIM”) is a wholly owned subsidiary of 
M&T and was incorporated in December 2001 as a Georgia limited liability company. WTIM is a 
registered investment advisor under the Investment Advisors Act and provides investment 
management services to clients, including certain private funds. As of December 31, 2016, WTIM 
has assets and shareholder’s equity of $26 million each. WTIM recorded revenues of $2 million in 
2016. WTIM’s headquarters is located at Terminus 27th Floor, 3280 Peachtree Road N.E., Atlanta, 
Georgia 30305. 

The Registrant and its banking subsidiaries have a number of other special-purpose or inactive 

subsidiaries. These other subsidiaries did not represent, individually and collectively, a significant 
portion of the Company’s consolidated assets, net income and shareholders’ equity at December 31, 
2016. 

Segment Information, Principal Products/Services and Foreign Operations 
Information about the Registrant’s business segments is included in note 22 of Notes to Financial 
Statements filed herewith in Part II, Item 8, “Financial Statements and Supplementary Data” and is 
further discussed in Part II, Item 7, “Management’s Discussion and Analysis of Financial Condition 
and Results of Operations.” The Registrant’s reportable segments have been determined based upon 
its internal profitability reporting system, which is organized by strategic business unit. Certain 
strategic business units have been combined for segment information reporting purposes where the 
nature of the products and services, the type of customer and the distribution of those products and 
services are similar. The reportable segments are Business Banking, Commercial Banking, 
Commercial Real Estate, Discretionary Portfolio, Residential Mortgage Banking and Retail Banking. 
The Company’s international activities are discussed in note 17 of Notes to Financial Statements 
filed herewith in Part II, Item 8, “Financial Statements and Supplementary Data.” 

The only activities that, as a class, contributed 10% or more of the sum of consolidated interest 

income and other income in any of the last three years were interest on loans and trust income. The 
amount of income from such sources during those years is set forth on the Company’s Consolidated 
Statement of Income filed herewith in Part II, Item 8, “Financial Statements and Supplementary Data.” 

Supervision and Regulation of the Company 
M&T and its subsidiaries are subject to the comprehensive regulatory framework applicable to bank 
and financial holding companies and their subsidiaries. Regulation of financial institutions such as 
M&T and its subsidiaries is intended primarily for the protection of depositors, the FDIC’s Deposit 

6 

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Insurance Fund and the banking and financial system as a whole, and generally is not intended for 
the protection of shareholders, investors or creditors other than insured depositors. 

Proposals to change the applicable regulatory framework may be introduced in the United 
States Congress and state legislatures, as well as by regulatory agencies. Such initiatives may include 
proposals to expand or contract the powers of bank holding companies and depository institutions or 
proposals to substantially change the financial institution regulatory system. Such legislation could 
change banking statutes and the operating environment of the Company in substantial and 
unpredictable ways. If enacted, such legislation could increase or decrease the cost of doing business, 
limit or expand permissible activities or affect the competitive balance among banks, savings 
associations, credit unions, and other financial institutions. A change in statutes, regulations or 
regulatory policies applicable to M&T or any of its subsidiaries could have a material effect on the 
business, financial condition or results of operations of the Company. 

Significant changes in this regulatory scheme arising from the 2010 Dodd-Frank Wall Street 

Reform and Consumer Protection Act (“Dodd-Frank Act”) have affected the lending, deposit, 
investment, trading and operating activities of financial institutions and their holding companies, and 
the system of regulatory oversight of the Company. As required by the Dodd-Frank Act, various 
federal regulatory agencies have proposed or adopted a broad range of implementing rules and 
regulations and have prepared numerous studies and reports for Congress. However, given that many 
of these regulatory changes are highly complex and are not fully implemented, the full impact of the 
Dodd-Frank Act regulatory reform will not be known until the rules are implemented and market 
practices develop under the final regulations. Furthermore, recent political developments, including 
the change in administration in the United States, have added uncertainty to the implementation, 
scope and timing of regulatory reforms, including those relating to the implementation of the Dodd-
Frank Act.   

Described below are material elements of selected laws and regulations applicable to M&T and 
its subsidiaries. The descriptions are not intended to be complete and are qualified in their entirety by 
reference to the full text of the statutes and regulations described. 

Overview 
M&T is registered with the Board of Governors of the Federal Reserve System (“Federal Reserve”) 
as a BHC under the BHCA. As such, M&T and its subsidiaries are subject to the supervision, 
examination and reporting requirements of the BHCA and the regulations of the Federal Reserve. Its 
investment advisor subsidiaries are subject to SEC regulation. 

In general, the BHCA limits the business of a BHC to banking, managing or controlling banks, 
and other activities that the Federal Reserve has determined to be so closely related to banking as to 
be a proper incident thereto. In addition, bank holding companies are to serve as a managerial and 
financial source of strength to their subsidiary depository institutions, including committing 
resources to support its subsidiary banks. This support may be required at times when M&T may not 
be inclined or able to provide it. In addition, any capital loans by a BHC to a subsidiary bank are 
subordinate in right of payment to deposits and to certain other indebtedness of such subsidiary bank. 
In the event of a BHC’s bankruptcy, any commitment by the BHC to a federal bank regulatory 
agency to maintain the capital of a subsidiary bank will be assumed by the bankruptcy trustee and 
entitled to a priority of payment. 

Bank holding companies that qualify and elect to be financial holding companies may engage in 

any activity, or acquire and retain the shares of a company engaged in any activity, that is either 
(i) financial in nature or incidental to such financial activity (as determined by the Federal Reserve, 
by regulation or order, in consultation with the Secretary of the Treasury) or (ii) complementary to a 
financial activity and does not pose a substantial risk to the safety and soundness of depository 

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institutions or the financial system generally (as solely determined by the Federal Reserve). 
Activities that are financial in nature include securities underwriting and dealing, insurance 
underwriting and making merchant banking investments. In order for a financial holding company to 
commence any new activity or to acquire a company engaged in any activity pursuant to the financial 
holding company provisions of the BHCA, each insured depository institution subsidiary of the 
financial holding company also must have at least a “satisfactory” rating under the Community 
Reinvestment Act of 1977 (the “CRA”). See the section captioned “Community Reinvestment Act” 
included elsewhere in this item. 

M&T became a financial holding company on March 1, 2011. To maintain financial holding 
company status, a financial holding company and all of its depository institution subsidiaries must be 
“well capitalized” and “well managed.” The failure to meet such requirements could result in 
material restrictions on the activities of M&T and may also adversely affect the Company’s ability to 
enter into certain transactions or obtain necessary approvals in connection therewith, as well as loss 
of financial holding company status. 

Current federal law also establishes a system of functional regulation under which, in addition 

to the broad supervisory authority that the Federal Reserve has over both the banking and non-
banking activities of bank holding companies, the federal banking agencies regulate the banking 
activities of bank holding companies, banks and savings associations and subsidiaries of the 
foregoing, the U.S. Securities and Exchange Commission (“SEC”) regulates their securities 
activities, and state insurance regulators regulate their insurance activities. 

M&T Bank is a New York chartered bank and a member of the Federal Reserve Bank of New 
York. As a result, it is subject to extensive regulation, examination and oversight by the New York 
State Department of Financial Services (“NYSDFS”) and the Federal Reserve. New York laws and 
regulations govern many aspects of M&T Bank’s operations, including branching, dividends, 
subsidiary activities, fiduciary activities, lending, and deposit taking. M&T Bank is also subject to 
Federal Reserve regulations and guidance, including oversight of capital levels. Its deposits are 
insured by the FDIC to $250,000 per depositor, which also exercises regulatory oversight over 
certain aspects of M&T Bank’s operations. Certain subsidiaries of M&T Bank are subject to 
regulation by other federal and state regulators as well. For example, M&T Securities is regulated by 
the SEC, the Financial Industry Regulatory Authority and state securities regulators, and WT 
Investment Advisors is also subject to SEC regulation. 

Wilmington Trust, N.A. is a national bank with operations that include fiduciary and related 

activities with some limited lending and deposit business. It is subject to extensive regulation, 
examination and oversight by the Office of the Comptroller of the Currency (“OCC”), which governs 
many aspects of the operations, including fiduciary activities, capital levels, office locations, 
dividends and subsidiary activities. Its deposits are insured by the FDIC to $250,000 per depositor, 
which also exercises regulatory oversight over certain aspects of the operations of Wilmington Trust, 
N.A.  

The Dodd-Frank Act broadened the base for FDIC insurance assessments which are based on 

average consolidated total assets less average Tier 1 capital and certain allowable deductions of a 
financial institution. The Dodd-Frank Act also permanently increased the maximum amount of 
deposit insurance for banks, savings institutions and credit unions. 

Dividends 
M&T is a legal entity separate and distinct from its banking and other subsidiaries. Historically, the 
majority of M&T’s revenue has been from dividends paid to M&T by its subsidiary banks. M&T 
Bank and Wilmington Trust, N.A. are subject to laws and regulations imposing restrictions on the 
amount of dividends they may declare and pay. Future dividend payments to M&T by its subsidiary 

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banks will be dependent on a number of factors, including the earnings and financial condition of 
each such bank, and are subject to the limitations referred to in note 23 of Notes to Financial 
Statements filed herewith in Part II, Item 8, “Financial Statements and Supplementary Data,” and to 
other statutory powers of bank regulatory agencies. 

An insured depository institution is prohibited from making any capital distribution to its 
owner, including any dividend, if, after making such distribution, the depository institution fails to 
meet the required minimum level for any relevant capital measure, including the risk-based capital 
adequacy and leverage standards discussed herein. 

Dividend payments by M&T to its shareholders and stock repurchases by M&T are subject to 
the oversight of the Federal Reserve. As described below in this section under “Stress Testing and 
Capital Plan Review,” dividends and stock repurchases (net of any new stock issuances as per a 
capital plan) generally may only be paid or made under a capital plan as to which the Federal 
Reserve has not objected. 

Capital Requirements 
M&T and its subsidiary banks are required to comply with applicable capital adequacy standards 
established by the federal banking agencies. Beginning on January 1, 2015, M&T and its subsidiary 
banks became subject to a new comprehensive capital framework for U.S. banking organizations that 
was issued by the federal banking agencies in July 2013 (the “New Capital Rules”), subject to phase-
in periods for certain components and other provisions. 

The New Capital Rules generally implement the Basel Committee’s December 2010 final 

capital framework referred to as “Basel III” for strengthening international capital standards. The 
New Capital Rules substantially revised the risk-based capital requirements applicable to bank 
holding companies and their depository institution subsidiaries, including M&T, M&T Bank and 
Wilmington Trust, N.A., as compared to the U.S. general risk-based capital rules that were applicable 
to the Company through December 31, 2014. The New Capital Rules revised the definitions and the 
components of regulatory capital, as well as addressed other issues affecting the numerator in 
banking institutions’ regulatory capital ratios. The New Capital Rules also addressed asset risk 
weights and other matters affecting the denominator in banking institutions’ regulatory capital ratios. 
Among other matters, the New Capital Rules: (i) introduced a capital measure called “Common 

Equity Tier 1” (“CET1”) and related regulatory capital ratio of CET1 to risk-weighted assets; 
(ii) specify that Tier 1 capital consists of CET1 and “Additional Tier 1 capital” instruments meeting 
certain revised requirements; (iii) mandate that most deductions/adjustments to regulatory capital 
measures be made to CET1 and not to the other components of capital; and (iv) expand the scope of 
the deductions from and adjustments to capital as compared to the previous regulations. Under the 
New Capital Rules, for most banking organizations, including M&T, the most common form of 
Additional Tier 1 capital is non-cumulative perpetual preferred stock and the most common forms of 
Tier 2 capital are subordinated notes and a portion of the allowance for loan and lease losses, in each 
case, subject to the New Capital Rules’ specific requirements. 

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Pursuant to the New Capital Rules, the minimum capital ratios are as follows: 
 
 
 
 

4.5% CET1 to risk-weighted assets; 
6.0% Tier 1 capital (that is, CET1 plus Additional Tier 1 capital) to risk-weighted assets; 
8.0% Total capital (that is, Tier 1 capital plus Tier 2 capital) to risk-weighted assets; and 
4.0% Tier 1 capital to average consolidated assets as reported on consolidated financial 
statements (known as the “leverage ratio”). 

In calculating regulatory capital ratios M&T must assign risk weights to the Company’s assets 
and off-balance sheet items. M&T has an ongoing process to review data elements associated with 
certain assets that from time to time may affect how specific assets are classified and could lead to 
increases or decreases of the regulatory risk weights assigned to such assets. In connection with this 
process, in February 2017 M&T revised the risk weights assigned to certain commercial real estate 
construction loans as of December 31, 2016 pending completion of a review to compare loan system 
data elements with underlying loan documentation. That revision increased risk-weighted assets as of 
December 31, 2016 by 2% and thereby lowered the corresponding CET1 ratio by 26 basis points to 
10.70% from an estimate of that ratio which had been previously disclosed by M&T in January 2017.  
The New Capital Rules also introduce a new “capital conservation buffer,” composed entirely 

of CET1, on top of these minimum risk-weighted asset ratios. The capital conservation buffer is 
designed to absorb losses during periods of economic stress. Banking institutions with a ratio of 
CET1 to risk-weighted assets above the minimum but below the capital conservation buffer will face 
constraints on dividends, equity and other capital instrument repurchases and compensation based on 
the amount of the shortfall. Thus, when fully phased-in on January 1, 2019, the capital standards 
applicable to M&T will include an additional capital conservation buffer of 2.5% of CET1, 
effectively resulting in minimum ratios inclusive of the capital conservation buffer of (i) CET1 to 
risk-weighted assets of at least 7%, (ii) Tier 1 capital to risk-weighted assets of at least 8.5%; 
(iii) Total capital to risk-weighted assets of at least 10.5% and (iv) a minimum leverage ratio of 4%, 
calculated as the ratio of Tier 1 capital to average assets. In addition, M&T is also subject to the 
Federal Reserve’s capital plan rule and supervisory Comprehensive Capital Analysis and Review 
(“CCAR”) process, pursuant to which its ability to make capital distributions and repurchase or 
redeem capital securities may be limited unless M&T is able to demonstrate its ability to meet 
applicable minimum capital ratios and currently a 5% minimum Tier 1 common equity ratio, as well 
as other requirements, over a nine quarter planning horizon under a “severely adverse” 
macroeconomic scenario generated yearly by the federal bank regulators. See “Stress Testing and 
Capital Plan Review” below. 

The New Capital Rules provide for a number of deductions from and adjustments to CET1. 

These include, for example, the requirement that mortgage servicing rights, deferred tax assets 
arising from temporary differences that could not be realized through net operating loss carrybacks, 
and significant investments in non-consolidated financial entities be deducted from CET1 to the 
extent that any one such category exceeds 10% of CET1 or all such items, in the aggregate, exceed 
15% of CET1. 

In addition, under the risk-based capital rules applicable to the Company through December 31, 

2014, the effects of accumulated other comprehensive income or loss (“AOCI”) items included in 
shareholders’ equity (for example, unrealized gains and losses on securities held in the available-for-
sale portfolio) under U.S. GAAP were reversed for the purposes of determining regulatory capital 
ratios. Pursuant to the New Capital Rules, the effects of certain AOCI items are not excluded; 
however, non-advanced approaches banking organizations, including M&T, may make a one-time 
permanent election to continue to exclude these items. M&T made such election in 2015. The New 
Capital Rules also preclude certain hybrid securities, such as trust preferred securities, from inclusion 

10 

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in bank holding companies’ Tier 1 capital, subject to phase-out in the case of bank holding 
companies, such as M&T, that had $15 billion or more in total consolidated assets as of 
December 31, 2009. As a result, beginning in 2015, 25% of M&T’s trust preferred securities were 
includable in Tier 1 capital, and beginning in 2016, none of M&T’s trust preferred securities were 
includable in Tier 1 capital. Trust preferred securities no longer included in M&T’s Tier 1 capital 
may nonetheless be included as a component of Tier 2 capital on a permanent basis without phase-
out and irrespective of whether such securities otherwise meet the revised definition of Tier 2 capital 
set forth in the New Capital Rules. Management believes that M&T is in compliance with the 
targeted capital ratios. M&T’s regulatory capital ratios are presented in note 23 of Notes to Financial 
Statements filed herewith in Part II, Item 8, “Financial Statements and Supplementary Data.” 

Stress Testing and Capital Plan Review 
As part of the enhanced prudential requirements applicable to systemically important financial 
institutions, the Federal Reserve conducts annual analyses of bank holding companies with at least 
$50 billion in assets, such as M&T, to determine whether the companies have sufficient capital on a 
consolidated basis necessary to absorb losses in three economic and financial scenarios generated by 
the Federal Reserve: baseline, adverse and severely adverse scenarios. M&T is also required to 
conduct its own semi-annual stress analysis (together with the Federal Reserve’s stress analysis, the 
“stress tests”) to assess the potential impact on M&T of the economic and financial conditions used 
as part of the Federal Reserve’s annual stress analysis. The Federal Reserve may also use, and 
require companies to use, additional components in the adverse and severely adverse scenarios or 
additional or more complex scenarios designed to capture salient risks to specific business groups. 
M&T Bank is also required to conduct annual stress testing using the same economic and financial 
scenarios as M&T and report the results to the Federal Reserve. A summary of results of the Federal 
Reserve’s analysis under the adverse and severely adverse stress scenarios are publicly disclosed, and 
bank holding companies subject to the rules, including M&T, must disclose a summary of the 
company-run severely adverse stress test results. M&T is required to include in its disclosure a 
summary of the severely adverse scenario stress test conducted by M&T Bank. 

In addition, bank holding companies with total consolidated assets of $50 billion or more, such 

as M&T, must submit annual capital plans for approval as part of the Federal Reserve’s CCAR 
process. Covered bank holding companies may execute capital actions, such as paying dividends and 
repurchasing stock, only in accordance with a capital plan that has been reviewed and approved by 
the Federal Reserve (or any approved amendments to such plan). The comprehensive capital plans 
include a view of capital adequacy under four scenarios — a BHC-defined baseline scenario, a 
baseline scenario provided by the Federal Reserve, at least one BHC-defined stress scenario, and a 
stress scenario provided by the Federal Reserve. The CCAR process is intended to help ensure that 
these bank holding companies have robust, forward-looking capital planning processes that account 
for each company’s unique risks and that permit continued operations during times of economic and 
financial stress. Each of the bank holding companies participating in the CCAR process is also 
required to collect and report certain related data to the Federal Reserve on a quarterly basis to allow 
the Federal Reserve to monitor progress against the approved capital plans. Each capital plan must 
include a view of capital adequacy under the stress test scenarios described above. The Federal 
Reserve may object to a capital plan if the plan does not show that the covered BHC will maintain a 
Tier 1 common equity ratio of at least 5% on a pro forma basis under expected and stressful 
conditions throughout the nine-quarter planning horizon covered by the capital plan. Even if such 
quantitative thresholds are met, the Federal Reserve could object to a capital plan for qualitative 
reasons, including inadequate assumptions in the plan, other unresolved supervisory issues or an 
insufficiently robust capital adequacy process, or if the capital plan would otherwise constitute an 

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unsafe or unsound practice or violate law. The rules also provide that a covered BHC may not make a 
capital distribution unless after giving effect to the distribution it will meet all minimum regulatory 
capital ratios and have a ratio of Tier 1 common equity to risk-weighted assets of at least 5%. The 
CCAR rules, consistent with prior Federal Reserve guidance, also provide that capital plans 
contemplating dividend payout ratios exceeding 30% of net income will receive particularly close 
scrutiny. M&T’s annual CCAR capital plan is due in April each year and the Federal Reserve will 
publish the results of its supervisory CCAR review of M&T’s capital plan by June 30 of each year. 
The Federal Reserve generally limits a BHC’s ability to make quarterly capital distributions – 

that is, dividends and share repurchases, if the amount of the BHC’s actual cumulative quarterly 
capital issuances of instruments that qualify as regulatory capital are less than the BHC had indicated 
in its submitted capital plan as to which it received a non-objection from the Federal Reserve. For 
example, if the BHC issued a smaller amount of additional common stock than it had stated in its 
capital plan, it would be required to reduce common dividends and/or the amount of common stock 
repurchases so that the dollar amount of capital distributions, net of the dollar amount of additional 
common stock issued (“net distributions”), is no greater than the dollar amount of net distributions 
relating to its common stock included in its capital plan, as measured on an aggregate basis beginning 
in the third quarter of the nine-quarter planning horizon through the end of the then current quarter. 
However, not raising sufficient amounts of common stock as planned would not affect distributions 
related to Additional Tier 1 Capital instruments and/ or Tier 2 Capital. These limitations also contain 
several important qualifications and exceptions, including that scheduled dividend payments on (as 
opposed to repurchases of) a BHC’s Additional Tier 1 Capital and Tier 2 Capital instruments are not 
restricted if the BHC fails to issue a sufficient amount of such instruments as planned, as well as 
provisions for certain de minimis excess distributions. 

Liquidity 
Historically, regulation and monitoring of bank and BHC liquidity has been addressed as a 
supervisory matter, both in the U.S. and internationally, without required formulaic measures. 
However, in January 2016 M&T became subject to final rules adopted by the Federal Reserve and 
other banking regulators (“Final LCR Rule”) implementing a U.S. version of the Basel Committee’s 
Liquidity Coverage Ratio (“LCR”) requirement. The LCR requirement is intended to ensure that 
banks hold sufficient amounts of so-called “high quality liquid assets” (“HQLA”) to cover the 
anticipated net cash outflows during a hypothetical acute 30-day stress scenario. The LCR is the ratio 
of an institution’s amount of HQLA (the numerator) over projected net cash out-flows over the 30-
day horizon (the denominator), in each case, as calculated pursuant to the Final LCR Rule. The Final 
LCR Rule requires a subject institution to maintain an LCR equal to at least 100% in order to satisfy 
this regulatory requirement. Only specific classes of assets, including U.S. Treasury securities, other 
U.S. government obligations and agency mortgaged-backed securities, qualify under the rule as 
HQLA, with classes of assets deemed relatively less liquid and/or subject to greater degree of credit 
risk subject to certain haircuts and caps for purposes of calculating the numerator under the Final 
LCR Rule. The total net cash outflows amount is determined under the rule by applying certain 
hypothetical outflow and inflow rates, which reflect certain standardized stressed assumptions, 
against the balances of the banking organization’s funding sources, obligations, transactions and 
assets over the 30-day stress period. Inflows that can be included to offset outflows are limited to 
75% of outflows (which effectively means that banking organizations must hold high-quality liquid 
assets equal to 25% of outflows even if outflows perfectly match inflows over the stress period). The 
total net cash outflow amount for the modified LCR applicable to M&T was capped at 70% of the 
outflow rate that applies to the full LCR. As of January 1, 2017, the Final LCR Rule has been fully 
phased-in. 

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The Basel III framework also included a second standard, referred to as the net stable funding 

ratio (“NSFR”), which is designed to promote more medium-and long-term funding of the assets and 
activities of banks over a one-year time horizon. In May 2016, the Federal Reserve and other federal 
banking regulators issued a proposed rule that would implement the NSFR for large U.S. banking 
organizations.  Under the proposed rule, the most stringent requirements would apply to bank 
holding companies with $250 billion or more in total consolidated assets or $10 billion or more in 
on-balance sheet foreign exposure, and would require such organizations to maintain a minimum 
NSFR of 1.0 on an ongoing basis, calculated by dividing the organization’s available stable funding 
(“ASF”) by its required stable funding (“RSF”).  Bank holding companies with less than $250 
billion, but more than $50 billion, in total consolidated assets and less than $10 billion in on-balance 
sheet foreign exposure, such as M&T, would be subject to a modified NSFR requirement which 
would require such bank holding companies to maintain a minimum NSFR of 0.7 on an ongoing 
basis.  Under the proposed rule, a banking organization’s ASF would be calculated by applying 
specified standard weightings to its equity and liabilities based on their expected stability over a one-
year time horizon and its RSF would be calculated by applying specified standardized weightings to 
its assets, derivative exposures and commitments based on their liquidity characteristics over the 
same one-year time horizon.  If implemented, the proposed rule would take effect on January 1, 
2018. 

Cross-Guarantee Provisions 
Each insured depository institution “controlled” (as defined in the BHCA) by the same BHC can be 
held liable to the FDIC for any loss incurred, or reasonably expected to be incurred, by the FDIC due 
to the default of any other insured depository institution controlled by that BHC and for any 
assistance provided by the FDIC to any of those banks that are in danger of default. The FDIC’s 
claim under the cross-guarantee provisions is superior to claims of shareholders of the insured 
depository institution or its BHC and to most claims arising out of obligations or liabilities owed to 
affiliates of the institution, but is subordinate to claims of depositors, secured creditors and holders of 
subordinated debt (other than affiliates) of the commonly controlled insured depository institution. 
The FDIC may decline to enforce the cross-guarantee provisions if it determines that a waiver is in 
the best interest of the DIF. 

Enhanced Supervision and Prudential Standards 
The Dodd-Frank Act directed the Federal Reserve to enact enhanced prudential standards applicable 
to foreign banking organizations and bank holding companies with total consolidated assets of $50 
billion or more, such as M&T. The Federal Reserve adopted amendments to Regulation YY to 
implement certain of the required enhanced prudential standards. Those amendments, which are 
intended to help increase the resiliency of the operations of these organizations, include liquidity 
requirements, requirements for overall risk management (including establishing a risk committee), 
and a 15-to-1 debt-to-equity limit for companies that the Financial Stability Oversight Council has 
determined pose a grave threat to financial stability. The liquidity requirements and risk management 
requirements became effective as to M&T on January 1, 2015. In March 2016, the Federal Reserve 
issued a revised proposal regarding single counterparty credit limits, which would impose a limit on 
credit exposure to any counterparty. 

Volcker Rule 
On December 10, 2013, the federal banking regulators and the SEC adopted the so-called Volcker 
Rule to implement the provisions of the Dodd-Frank Act limiting proprietary trading and investing in 

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and sponsoring certain hedge funds and private equity funds (defined as covered funds in the Volcker 
Rule). The Company does not engage in any significant amount of proprietary trading as defined in 
the Volcker Rule and has implemented the required procedures for those areas in which trading does 
occur. The covered funds limits are imposed through a conformance period that is expected to end in 
July 2017. To comply with requirements of the Volcker Rule, during 2016, the Company sold the 
collateralized debt obligations that had been held in the available-for-sale investment securities 
portfolio.  

Safety and Soundness Standards 
Guidelines adopted by the federal bank regulatory agencies pursuant to the Federal Deposit Insurance 
Act, as amended (the “FDIA”), establish general standards relating to internal controls, information 
systems, internal audit systems, loan documentation, credit underwriting, interest rate exposure, asset 
growth, compensation, fees and benefits. In general, these guidelines require, among other things, 
appropriate systems and practices to identify and manage the risk and exposures specified in the 
guidelines. Additionally, the agencies adopted regulations that authorize, but do not require, an 
agency to order an institution that has been given notice by an agency that it is not satisfying any of 
such safety and soundness standards to submit a compliance plan. If, after being so notified, an 
institution fails to submit an acceptable compliance plan or fails in any material respect to implement 
an acceptable compliance plan, the agency must issue an order directing action to correct the 
deficiency and may issue an order directing other actions of the types to which an undercapitalized 
institution is subject. If an institution fails to comply with such an order, the agency may seek to 
enforce such order in judicial proceedings and to impose civil money penalties. 

Limits on Undercapitalized Depository Institutions 
The FDIA establishes a system of regulatory remedies to resolve the problems of undercapitalized 
institutions, referred to as the prompt corrective action. The federal banking regulators have 
established five capital categories (“well-capitalized,” “adequately capitalized,” “undercapitalized,” 
“significantly undercapitalized” and “critically undercapitalized”) and must take certain mandatory 
supervisory actions, and are authorized to take other discretionary actions, with respect to institutions 
which are undercapitalized, significantly undercapitalized or critically undercapitalized. The severity 
of these mandatory and discretionary supervisory actions depends upon the capital category in which 
the institution is placed. Generally, subject to a narrow exception, the FDIA requires the banking 
regulator to appoint a receiver or conservator for an institution that is critically undercapitalized. The 
FDIC has specified by regulation the relevant capital levels for each category. The Federal Reserve 
and the OCC have specified the same or similar levels for each category. Effective January 1, 2015, 
the New Capital Rules created new prompt corrective action requirements by (i) introducing a CET1 
ratio requirement at each level (other than critically undercapitalized), with the required CET1 ratio 
being 6.5% for well-capitalized status; (ii) increasing the minimum Tier 1 capital ratio requirement 
for each category (other than critically undercapitalized), with the minimum Tier 1 capital ratio for 
well-capitalized status being 8%; and (iii) eliminating the provision that provided that a bank with a 
composite supervisory rating of 1 may have a 3% leverage ratio and still be adequately capitalized. 
An institution that is classified as well-capitalized based on its capital levels may be classified 
as adequately capitalized, and an institution that is adequately capitalized or undercapitalized based 
upon its capital levels may be treated as though it were undercapitalized or significantly 
undercapitalized, respectively, if the appropriate federal banking agency, after notice and opportunity 
for hearing, determines that an unsafe or unsound condition or an unsafe or unsound practice 
warrants such treatment. 

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An institution that is categorized as undercapitalized, significantly undercapitalized or critically 
undercapitalized is required to submit an acceptable capital restoration plan to its appropriate federal 
banking regulator. Under the FDIA, in order for the capital restoration plan to be accepted by the 
appropriate federal banking agency, a BHC must guarantee that a subsidiary depository institution 
will comply with its capital restoration plan, subject to certain limitations. The BHC must also 
provide appropriate assurances of performance. The obligation of a controlling BHC under the FDIA 
to fund a capital restoration plan is limited to the lesser of 5.0% of an undercapitalized subsidiary’s 
assets or the amount required to meet regulatory capital requirements. An undercapitalized institution 
is also generally prohibited from increasing its average total assets, making acquisitions, establishing 
any branches or engaging in any new line of business, except in accordance with an accepted capital 
restoration plan or with the approval of the FDIC. Institutions that are significantly undercapitalized 
or undercapitalized and either fail to submit an acceptable capital restoration plan or fail to 
implement an approved capital restoration plan may be subject to a number of requirements and 
restrictions, including orders to sell sufficient voting stock to become adequately capitalized, 
requirements to reduce total assets and cessation of receipt of deposits from correspondent banks. 
Critically undercapitalized depository institutions failing to submit or implement an acceptable 
capital restoration plan are subject to appointment of a receiver or conservator. 

Transactions with Affiliates 
There are various legal restrictions on the extent to which M&T and its non-bank subsidiaries may 
borrow or otherwise obtain funding from M&T Bank and Wilmington Trust, N.A. In general, 
Sections 23A and 23B of the Federal Reserve Act and Federal Reserve Regulation W require that 
any “covered transaction” by M&T Bank and Wilmington Trust, N.A. (or any of their respective 
subsidiaries) with an affiliate must in certain cases be secured by designated amounts of specified 
collateral and must be limited as follows: (a) in the case of any single such affiliate, the aggregate 
amount of covered transactions of the insured depository institution and its subsidiaries may not 
exceed 10% of the capital stock and surplus of such insured depository institution, and (b) in the case 
of all affiliates, the aggregate amount of covered transactions of an insured depository institution and 
its subsidiaries may not exceed 20% of the capital stock and surplus of such insured depository 
institution. The Dodd-Frank Act significantly expanded the coverage and scope of the limitations on 
affiliate transactions within a banking organization, including for example, the requirement that the 
10% of capital limit on covered transactions begin to apply to financial subsidiaries. “Covered 
transactions” are defined by statute to include, among other things, a loan or extension of credit, as 
well as a purchase of securities issued by an affiliate, a purchase of assets (unless otherwise 
exempted by the Federal Reserve) from the affiliate, certain derivative transactions that create a 
credit exposure to an affiliate, the acceptance of securities issued by the affiliate as collateral for a 
loan, and the issuance of a guarantee, acceptance or letter of credit on behalf of an affiliate. All 
covered transactions, including certain additional transactions (such as transactions with a third party 
in which an affiliate has a financial interest), must be conducted on market terms. 

FDIC Insurance Assessments 
Deposit Insurance Assessments. M&T Bank and Wilmington Trust, N.A. pay deposit insurance 
premiums to the FDIC based on an assessment rate established by the FDIC. Deposit insurance 
assessments are based on average total assets minus average tangible equity. For larger institutions, 
such as M&T Bank, the FDIC uses a performance score and a loss-severity score that are used to 
calculate an initial assessment rate. In calculating these scores, the FDIC uses a bank’s capital level 
and supervisory ratings and certain financial measures to assess an institution’s ability to withstand 
asset-related stress and funding-related stress. The FDIC has the ability to make discretionary 

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adjustments to the total score based upon significant risk factors that are not adequately captured in 
the calculations. 

In its DIF restoration plan, the FDIC designated that the DIF reserve ratio should be 1.35% by 

September 2020. In March 2016, the FDIC adopted a final rule that imposes a surcharge on the 
assessments of depository institutions with $10 billion or more in assets, including M&T Bank, 
beginning in the quarter following the quarter that the DIF surpasses 1.15% and continuing through 
the earlier of the quarter that the reserve ratio first reaches or exceeds 1.35% or December 31, 2018.  
In August 2016, the FDIC announced that the DIF reserve ratio had surpassed 1.15% as of June 

30, 2016.  As a result, beginning in the third quarter of 2016, the range of initial assessment ranges 
for all institutions were adjusted downward such that the initial base deposit insurance assessment 
rate ranges from 3 to 30 basis points on an annualized basis.  After the effect of potential base-rate 
adjustments, the total base assessment rate could range from 1.5 to 40 basis points on an annualized 
basis. Nevertheless, at the same time depository institutions with $10 billion or more in assets, 
including M&T Bank, became subject to the surcharge referred to in the preceding paragraph. 
Additionally, an institution must pay an additional premium equal to 50 basis points on every dollar 
(above 3% of an institution’s Tier 1 capital) of long-term, unsecured debt held that was issued by 
another insured depository institution.  M&T Bank recognized $98 million of expense related to its 
FDIC assessment and large bank surcharge and Wilmington Trust, N.A. recognized $417 thousand of 
FDIC insurance expense in 2016. 

Under the FDIA, insurance of deposits may be terminated by the FDIC upon a finding that the 

institution has engaged in unsafe and unsound practices, is in an unsafe or unsound condition to 
continue operations, or has violated any applicable law, regulation, rule, order or condition imposed 
by the FDIC. 

FICO Assessments. In addition, the Deposit Insurance Funds Act of 1996 authorized the 
Financing Corporation (“FICO”) to impose assessments on DIF applicable deposits in order to 
service the interest on FICO’s bond obligations from deposit insurance fund assessments. The 
amount assessed on individual institutions by FICO is in addition to the amount, if any, paid for 
deposit insurance according to the FDIC’s risk-related assessment rate schedules. FICO assessment 
rates may be adjusted quarterly to reflect a change in assessment base. M&T Bank recognized $6 
million of expense related to its FICO assessments and Wilmington Trust, N.A. recognized $53 
thousand of such expense in 2016. 

Acquisitions 
The BHCA requires every BHC to obtain the prior approval of the Federal Reserve before: (1) it may 
acquire direct or indirect ownership or control of any voting shares of any bank or savings and loan 
association, if after such acquisition, the BHC will directly or indirectly own or control 5% or more 
of the voting shares of the institution; (2) it or any of its subsidiaries, other than a bank, may acquire 
all or substantially all of the assets of any bank or savings and loan association; or (3) it may merge 
or consolidate with any other BHC. Since July 2011, financial holding companies and bank holding 
companies with consolidated assets exceeding $50 billion, such as M&T, have been required to 
(i) obtain prior approval from the Federal Reserve before acquiring certain nonbank financial 
companies with assets exceeding $10 billion and (ii) provide prior written notice to the Federal 
Reserve before acquiring direct or indirect ownership or control of any voting shares of any company 
having consolidated assets of $10 billion or more. 

The BHCA further provides that the Federal Reserve may not approve any transaction that 

would result in a monopoly or would be in furtherance of any combination or conspiracy to 
monopolize or attempt to monopolize the business of banking in any section of the United States, or 
the effect of which may be substantially to lessen competition or to tend to create a monopoly in any 
section of the country, or that in any other manner would be in restraint of trade, unless the 
anticompetitive effects of the proposed transaction are clearly outweighed by the public interest in 

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meeting the convenience and needs of the community to be served. The Federal Reserve is also 
required to consider the financial and managerial resources and future prospects of the bank holding 
companies and banks concerned and the convenience and needs of the community to be served. 
Consideration of financial resources generally focuses on capital adequacy, and consideration of 
convenience and needs issues includes the parties’ performance under the CRA and compliance with 
consumer protection laws. The Federal Reserve must take into account the institutions’ effectiveness 
in combating money laundering. In addition, pursuant to the Dodd-Frank Act, the BHCA was 
amended to require the Federal Reserve, when evaluating a proposed transaction, to consider the 
extent to which the transaction would result in greater or more concentrated risks to the stability of 
the United States banking or financial system. 

Executive and Incentive Compensation 
Guidelines adopted by the federal banking agencies prohibit excessive compensation as an unsafe 
and unsound practice and describe compensation as excessive when the amounts paid are 
unreasonable or disproportionate to the services performed by an executive officer, employee, 
director or principal stockholder. The Federal Reserve has issued comprehensive guidance on 
incentive compensation policies (the “Incentive Compensation Guidance”) intended to ensure that 
the incentive compensation policies of banking organizations do not undermine the safety and 
soundness of such organizations by encouraging excessive risk-taking. The Incentive Compensation 
Guidance, which covers all employees that have the ability to materially affect the risk profile of an 
organization, either individually or as part of a group, is based upon the key principles that a banking 
organization’s incentive compensation arrangements should (i) provide incentives that do not 
encourage risk-taking beyond the organization’s ability to effectively identify and manage risks, 
(ii) be compatible with effective internal controls and risk management, and (iii) be supported by 
strong corporate governance, including active and effective oversight by the organization’s board of 
directors. These three principles are incorporated into the proposed joint compensation regulations 
under the Dodd-Frank Act, discussed below. Any deficiencies in compensation practices that are 
identified may be incorporated into the organization’s supervisory ratings, which can affect its ability 
to make acquisitions or perform other actions. The Incentive Compensation Guidance provides that 
enforcement actions may be taken against a banking organization if its incentive compensation 
arrangements or related risk-management control or governance processes pose a risk to the 
organization’s safety and soundness and the organization is not taking prompt and effective measures 
to correct the deficiencies. 

The Dodd-Frank Act requires the federal bank regulatory agencies and the SEC to establish 

joint regulations or guidelines prohibiting incentive-based payment arrangements at specified 
regulated entities having at least $1 billion in total assets, such as M&T and M&T Bank. The 
agencies proposed initial regulations in April 2011 and proposed revised regulations during the 
second quarter of 2016 that would establish general qualitative requirements applicable to all covered 
entities, additional specific requirements for entities with total consolidated assets of at least $50 
billion, such as M&T, and further, more stringent requirements for those with total consolidated 
assets of at least $250 billion. The general qualitative requirements include (i) prohibiting incentive 
arrangements that encourage inappropriate risks by providing excessive compensation; (ii) 
prohibiting incentive arrangements that encourage inappropriate risks that could lead to a material 
financial loss; (iii) establishing requirements for performance measures to appropriately balance risk 
and reward; (iv) requiring board of director oversight of incentive arrangements; and (v) mandating 
appropriate record-keeping. For larger financial institutions, including M&T, the proposed revised 
regulations would also introduce additional requirements applicable only to “senior executive 
officers” and “significant risk-takers” (as defined in the proposed regulations), including (i) limits on 
performance measures and leverage relating to performance targets; (ii) minimum deferral periods; 

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and (iii) subjecting incentive compensation to possible downward adjustment, forfeiture and 
clawback. If the final regulations are adopted in the form proposed, they will impose limitations on 
the manner in which M&T may structure compensation for its executives. 

In October 2016, the NYDFS issued guidance emphasizing that its regulated banking 

institutions, including M&T Bank, must ensure that any incentive compensation arrangements tied to 
employee performance indicators are subject to effective risk management, oversight and control. 
The scope and content of the banking regulators’ policies on incentive compensation are 

continuing to develop and are likely to continue evolving in the future. It cannot be determined at this 
time whether compliance with such policies will adversely affect the ability of M&T and its 
subsidiaries to hire, retain and motivate their key employees. 

Resolution Planning 
Bank holding companies with consolidated assets of $50 billion or more, such as M&T, are required 
to report periodically to regulators a resolution plan for their rapid and orderly resolution in the event 
of material financial distress or failure. M&T’s resolution plan must, among other things, ensure that 
its depository institution subsidiaries are adequately protected from risks arising from its other 
subsidiaries. The regulation adopted by the Federal Reserve and FDIC sets specific standards for the 
resolution plans, including requiring a strategic analysis of the plan’s components, a description of 
the range of specific actions the company proposes to take in resolution, and a description of the 
company’s organizational structure, material entities, interconnections and interdependencies, and 
management information systems, among other elements. In addition, insured depository institutions 
with $50 billion or more in total assets, such as M&T Bank, are required to submit to the FDIC 
periodic plans for resolution in the event of the institution’s failure. M&T and M&T Bank most 
recently submitted resolution plans in December 2015, as required.  The next resolution plans that 
M&T and M&T Bank will be required to file must be submitted by December 31, 2017. 

Insolvency of an Insured Depository Institution or a Bank Holding Company 
If the FDIC is appointed as conservator or receiver for an insured depository institution such as M&T 
Bank or Wilmington Trust, N.A., upon its insolvency or in certain other events, the FDIC has the 
power: 
 

to transfer any of the depository institution’s assets and liabilities to a new obligor, 
including a newly formed “bridge” bank without the approval of the depository 
institution’s creditors; 
to enforce the terms of the depository institution’s contracts pursuant to their terms 
without regard to any provisions triggered by the appointment of the FDIC in that 
capacity; or 
to repudiate or disaffirm any contract or lease to which the depository institution is a party, 
the performance of which is determined by the FDIC to be burdensome and the 
disaffirmance or repudiation of which is determined by the FDIC to promote the orderly 
administration of the depository institution. 

 

 

In addition, under federal law, the claims of holders of domestic deposit liabilities and certain 

claims for administrative expenses against an insured depository institution would be afforded a 
priority over other general unsecured claims against such an institution, including claims of debt 
holders of the institution, in the “liquidation or other resolution” of such an institution by any 
receiver. As a result, whether or not the FDIC ever sought to repudiate any debt obligations of M&T 
Bank or Wilmington Trust, N.A., the debt holders would be treated differently from, and could 
receive, if anything, substantially less than, the depositors of the bank. The Dodd-Frank Act created a 

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new resolution regime (known as “orderly liquidation authority”) for systemically important financial 
companies, including bank holding companies and their affiliates. Under the orderly liquidation 
authority, the FDIC may be appointed as receiver for the systemically important institution, and its 
failed subsidiaries, for purposes of liquidating the entity if, among other conditions, it is determined 
at the time of the institution’s failure that it is in default or in danger of default and the failure poses a 
risk to the stability of the U.S. financial system. 

If the FDIC is appointed as receiver under the orderly liquidation authority, then the powers of 

the receiver, and the rights and obligations of creditors and other parties who have dealt with the 
institution, would be determined under the Dodd-Frank Act provisions, and not under the insolvency 
law that would otherwise apply. The powers of the receiver under the orderly liquidation authority 
were based on the powers of the FDIC as receiver for depository institutions under the FDIA. 
However, the provisions governing the rights of creditors under the orderly liquidation authority 
were modified in certain respects to reduce disparities with the treatment of creditors’ claims under 
the U.S. Bankruptcy Code as compared to the treatment of those claims under the new authority. 
Nonetheless, substantial differences in the rights of creditors exist as between these two regimes, 
including the right of the FDIC to disregard the strict priority of creditor claims in some 
circumstances, the use of an administrative claims procedure to determine creditors’ claims (as 
opposed to the judicial procedure utilized in bankruptcy proceedings), and the right of the FDIC to 
transfer claims to a “bridge” entity. 

An orderly liquidation fund will fund such liquidation proceedings through borrowings from the 

Treasury Department and risk-based assessments made, first, on entities that received more in the 
resolution than they would have received in liquidation to the extent of such excess, and second, if 
necessary, on bank holding companies with total consolidated assets of $50 billion or more, such as 
M&T. If an orderly liquidation is triggered, M&T could face assessments for the orderly liquidation 
fund. 

The FDIC has developed a strategy under the orderly liquidation authority referred to as the 

“single point of entry” strategy, under which the FDIC would resolve a failed financial holding 
company by transferring its assets (including shares of its operating subsidiaries) and, potentially, 
very limited liabilities to a “bridge” holding company; utilize the resources of the failed financial 
holding company to recapitalize the operating subsidiaries; and satisfy the claims of unsecured 
creditors of the failed financial holding company and other claimants in the receivership by 
delivering securities of one or more new financial companies that would emerge from the bridge 
holding company. Under this strategy, management of the failed financial holding company would be 
replaced and shareholders and creditors of the failed financial holding company would bear the 
losses resulting from the failure. 

Depositor Preference 
Under federal law, depositors and certain claims for administrative expenses and employee 
compensation against an insured depository institution would be afforded a priority over other 
general unsecured claims against such an institution in the “liquidation or other resolution” of such 
an institution by any receiver. If an insured depository institution fails, insured and uninsured 
depositors, along with the FDIC, will have priority in payment ahead of unsecured, non-deposit 
creditors, including depositors whose deposits are payable only outside of the United States and the 
parent BHC, with respect to any extensions of credit they have made to such insured depository 
institution. 

Financial Privacy and Cybersecurity 
The federal banking regulators have adopted rules that limit the ability of banks and other financial 
institutions to disclose non-public information about consumers to non-affiliated third parties. These 
limitations require disclosure of privacy policies to consumers and, in some circumstances, allow 

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consumers to prevent disclosure of certain personal information to a non-affiliated third party. These 
regulations affect how consumer information is transmitted through diversified financial companies 
and conveyed to outside vendors. In addition, consumers may also prevent disclosure of certain 
information among affiliated companies that is assembled or used to determine eligibility for a 
product or service, such as that shown on consumer credit reports and asset and income information 
from applications. Consumers also have the option to direct banks and other financial institutions not 
to share information about transactions and experiences with affiliated companies for the purpose of 
marketing products or services. Federal law makes it a criminal offense, except in limited 
circumstances, to obtain or attempt to obtain customer information of a financial nature by fraudulent 
or deceptive means. 

In October 2016, the federal banking regulators jointly issued an advance notice of proposed 

rulemaking on enhanced cyber risk management standards that are intended to increase the 
operational resilience of large and interconnected entities under their supervision. Once established, 
the enhanced cyber risk management standards would help to reduce the potential impact of a cyber-
attack or other cyber-related failure on the financial system. The advance notice of proposed 
rulemaking addresses five categories of cyber standards: (1) cyber risk governance; (2) cyber risk 
management; (3) internal dependency management; (4) external dependency management; and (5) 
incident response, cyber resilience, and situational awareness. In December 2016, the NYSDFS re-
proposed regulations that would require financial institutions regulated by the NYSDFS, including 
M&T Bank, to, among other things, (i) establish and maintain a cyber security program designed to 
ensure the confidentiality, integrity and availability of their information systems; (ii) implement and 
maintain a written cyber security policy setting forth policies and procedures for the protection of 
their information systems and nonpublic information; and (iii) designate a Chief Information Security 
Officer. 

Consumer Protection Laws and the Consumer Financial Protection Bureau Supervision 
In connection with their respective lending and leasing activities, M&T Bank, Wilmington Trust, 
N.A. and certain of their subsidiaries, are each subject to a number of federal and state laws designed 
to protect borrowers and promote lending to various sectors of the economy. These laws include the 
Equal Credit Opportunity Act, the Fair Credit Reporting Act, the Fair and Accurate Credit 
Transactions Act, the Truth in Lending Act, the Home Mortgage Disclosure Act, and the Real Estate 
Settlement Procedures Act, and various state law counterparts. They are also subject to consumer 
protection laws governing their deposit taking activities, as well securities and insurance laws 
governing certain aspects of their consolidated operations. Furthermore, the Bureau of Consumer 
Financial Protection (“CFPB”) has issued integrated disclosure requirements under the Truth-in-
Lending Act and the Real Estate Settlement Procedures Act that relate to the provision of disclosures 
to borrowers. 

The Dodd-Frank Act established the CFPB with broad powers to supervise and enforce most 
federal consumer protection laws. The CFPB has broad rule-making authority for a wide range of 
consumer protection laws that apply to all banks and savings institutions, including the authority to 
prohibit “unfair, deceptive or abusive” acts and practices. The CFPB has examination and 
enforcement authority over all banks and savings institutions with more than $10 billion in assets, 
including M&T Bank. 

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The CFPB has focused on: 
 

risks to consumers and compliance with the federal consumer financial laws, when it 
evaluates the policies and practices of a financial institution; 
the markets in which firms operate and risks to consumers posed by activities in those 
markets; 
depository institutions that offer a wide variety of consumer financial products and 
services; 
depository institutions with a more specialized focus; and 
non-depository companies that offer one or more consumer financial products or services. 

 

 

 
 

The Electronic Fund Transfer Act prohibits financial institutions from charging consumers fees 

for paying overdrafts on automated teller machines (“ATM”) and one-time debit card transactions, 
unless a consumer consents, or opts in, to the overdraft service for those type of transactions. If a 
consumer does not opt in, any ATM transaction or debit that overdraws the consumer’s account will 
be denied. Overdrafts on the payment of checks and regular electronic bill payments are not covered 
by this rule. Before opting in, the consumer must be provided a notice that explains the financial 
institution’s overdraft services, including the fees associated with the service, and the consumer’s 
choices. Financial institutions must provide consumers who do not opt in with the same account 
terms, conditions and features (including pricing) that they provide to consumers who do opt in. 

Community Reinvestment Act 
The CRA is intended to encourage depository institutions to help meet the credit needs of the 
communities in which they operate, including low- and moderate-income neighborhoods, consistent 
with safe and sound operations. CRA examinations are conducted by the federal agencies that are 
responsible for supervising depository institutions: the Federal Reserve, the FDIC and the OCC. A 
financial institution's performance in helping to meet the credit needs of its community is evaluated 
in the context of information about the institution (capacity, constraints and business strategies), its 
community (demographic and economic data, lending, investment, and service opportunities), and its 
competitors and peers. Upon completion of a CRA examination, an overall CRA Rating is assigned 
using a four-tiered rating system. These ratings are: “Outstanding,” “Satisfactory,” “Needs to 
Improve” and “Substantial Noncompliance.” The CRA evaluation is used in evaluating applications 
for future approval of bank activities including mergers, acquisitions, charters, branch openings and 
deposit facilities. M&T Bank has a rating of “Outstanding.” M&T Bank is also subject to New York 
State CRA examination and is assessed using a 1 to 4 scoring system.  M&T Bank has an 
“Outstanding” rating from the NYSDFS. Wilmington Trust, N.A. was subject to the CRA until 
March 3, 2016 when the OCC changed its designation of Wilmington Trust, N.A. to a special 
purpose trust company, which exempts Wilmington Trust, N.A. from the requirements of the CRA. 

Bank Secrecy and Anti-Money Laundering 
Federal laws and regulations impose obligations on U.S. financial institutions, including banks and 
broker/dealer subsidiaries, to implement and maintain appropriate policies, procedures and controls 
which are reasonably designed to prevent, detect and report instances of money laundering and the 
financing of terrorism and to verify the identity of their customers. In addition, these provisions 
require the federal financial institution regulatory agencies to consider the effectiveness of a financial 
institution’s anti-money laundering activities when reviewing bank mergers and BHC acquisitions. 
Failure of a financial institution to maintain and implement adequate programs to combat money 
laundering and terrorist financing could have serious legal and reputational consequences for the 
institution. As a result of an inspection by the Federal Reserve Bank of New York, on June 17, 2013 

21 

21

 
M&T and M&T Bank entered into a written agreement with the Federal Reserve Bank of New York 
related to M&T Bank’s Bank Secrecy Act/Anti-Money Laundering Program pursuant to which M&T 
and M&T Bank have implemented a BSA/AML program with significantly expanded scale and 
scope.  M&T and M&T Bank are continuing to work towards the resolution of all outstanding issues 
in the written agreement. 

Office of Foreign Assets Control Regulation 
The United States has imposed economic sanctions that affect transactions with designated foreign 
countries, nationals and others. These are typically known as the “OFAC” rules based on their 
administration by the U.S. Treasury Department Office of Foreign Assets Control (“OFAC”). The 
OFAC-administered sanctions targeting countries take many different forms. Generally, however, 
they contain one or more of the following elements: (i) restrictions on trade with or investment in a 
sanctioned country, including prohibitions against direct or indirect imports from and exports to a 
sanctioned country and prohibitions on “U.S. persons” engaging in financial transactions relating to 
making investments in, or providing investment-related advice or assistance to, a sanctioned country; 
and (ii) a blocking of assets in which the government or specially designated nationals of the 
sanctioned country have an interest, by prohibiting transfers of property subject to U.S. jurisdiction 
(including property in the possession or control of U.S. persons). Blocked assets (e.g. property and 
bank deposits) cannot be paid out, withdrawn, set off or transferred in any manner without a license 
from OFAC. Failure to comply with these sanctions could have serious legal and reputational 
consequences. 

Regulation of Insurers and Insurance Brokers 
The Company’s operations in the areas of insurance brokerage and reinsurance of credit life 
insurance are subject to regulation and supervision by various state insurance regulatory authorities. 
Although the scope of regulation and form of supervision may vary from state to state, insurance 
laws generally grant broad discretion to regulatory authorities in adopting regulations and 
supervising regulated activities. This supervision generally includes the licensing of insurance 
brokers and agents and the regulation of the handling of customer funds held in a fiduciary capacity. 
Certain of M&T’s insurance company subsidiaries are subject to extensive regulatory supervision 
and to insurance laws and regulations requiring, among other things, maintenance of capital, record 
keeping, reporting and examinations. 

Federal Reserve Policies 
The earnings of the Company are significantly affected by the monetary and fiscal policies of 
governmental authorities, including the Federal Reserve. Among the instruments of monetary policy used 
by the Federal Reserve are open-market operations in U.S. Government securities and federal funds, 
changes in the discount rate on member bank borrowings and changes in reserve requirements against 
member bank deposits. These instruments of monetary policy are used in varying combinations to 
influence the overall level of bank loans, investments and deposits, and the interest rates charged on loans 
and paid for deposits. The Federal Reserve frequently uses these instruments of monetary policy, 
especially its open-market operations and the discount rate, to influence the level of interest rates and to 
affect the strength of the economy, the level of inflation or the price of the dollar in foreign exchange 
markets. The monetary policies of the Federal Reserve have had a significant effect on the operating 
results of banking institutions in the past and are expected to continue to do so in the future. It is not 
possible to predict the nature of future changes in monetary and fiscal policies or the effect which they 
may have on the Company’s business and earnings. 

22 

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Competition 
The Company competes in offering commercial and personal financial services with other banking 
institutions and with firms in a number of other industries, such as thrift institutions, credit unions, 
personal loan companies, sales finance companies, leasing companies, securities firms and insurance 
companies. Furthermore, diversified financial services companies are able to offer a combination of 
these services to their customers on a nationwide basis. The Company’s operations are significantly 
impacted by state and federal regulations applicable to the banking industry. Moreover, the 
provisions of the Gramm-Leach-Bliley Act of 1999, the Interstate Banking Act and the Banking Law 
have allowed for increased competition among diversified financial services providers. 

Other Information 
Through a link on the Investor Relations section of M&T’s website at www.mtb.com, copies of 
M&T’s Annual Reports on Form 10-K, Quarterly Reports on Form 10-Q and Current Reports on 
Form 8-K, and amendments to those reports filed or furnished pursuant to Section 13(a) or 15(d) of 
the Exchange Act, are made available, free of charge, as soon as reasonably practicable after 
electronically filing such material with, or furnishing it to, the SEC. Copies of such reports and other 
information are also available at no charge to any person who requests them or at www.sec.gov. Such 
requests may be directed to M&T Bank Corporation, Shareholder Relations Department, One M&T 
Plaza, 8th Floor, Buffalo, NY 14203-2399 (Telephone: (716) 842-5138). The public may read and 
copy any materials that M&T files with the SEC at the SEC’s Public Reference Room at 100 F 
Street, N.E., Washington D.C. 20549. The public may obtain information about the operation of the 
Public Reference Room by calling the SEC at 1-800-SEC-0330. 

Corporate Governance 
M&T’s Corporate Governance Standards and the following corporate governance documents are also 
available on M&T’s website at the Investor Relations link: Disclosure and Regulation FD Policy; 
Executive Committee Charter; Nomination, Compensation and Governance Committee Charter; 
Audit Committee Charter; Risk Committee Charter; Financial Reporting and Disclosure Controls and 
Procedures Policy; Code of Ethics for CEO and Senior Financial Officers; Code of Business Conduct 
and Ethics; Employee Complaint Procedures for Accounting and Auditing Matters; and Excessive or 
Luxury Expenditures Policy. Copies of such governance documents are also available, free of charge, 
to any person who requests them. Such requests may be directed to M&T Bank Corporation, 
Shareholder Relations Department, One M&T Plaza, 8th Floor, Buffalo, NY 14203-2399 
(Telephone: (716) 842-5138). 

Statistical Disclosure Pursuant to Guide 3 
See cross-reference sheet for disclosures incorporated elsewhere in this Annual Report on Form 10-
K. Additional information is included in the following tables. 

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Table 1 

SELECTED CONSOLIDATED YEAR-END BALANCES 

Interest-bearing deposits at banks ...............  $
Federal funds sold .......................................   
Trading account ..........................................   
Investment securities 

2016 

2015 

2014 

2013 

2012 

(In thousands) 

5,000,638  $
—   
323,867   

7,594,350  $ 6,470,867  $  1,651,138    $ 
99,573      
83,392    
376,131      
308,175    

—   
273,783   

129,945 
3,000 
488,966 

U.S. Treasury and federal agencies .......    15,090,578    14,540,237    12,042,390     7,770,767       4,007,725 
Obligations of states and political 
   subdivisions ........................................   
Other ......................................................   

203,004 
180,495      
845,235       1,863,632 
Total investment securities ..............    16,250,468    15,656,439    12,993,542     8,796,497       6,074,361 

64,499   
1,095,391   

157,159    
793,993    

124,459   
991,743   

Loans and leases 

8,066,756   

Commercial, financial, leasing, etc. ......    22,770,629    20,576,737    19,617,253    18,876,166      17,973,140 
Real estate — construction ....................   
5,716,994    5,061,269     4,457,650       3,772,413 
Real estate — mortgage ........................    48,134,198    49,841,156    31,250,968    30,711,440      33,494,359 
Consumer ..............................................    12,130,094    11,584,347    10,969,879    10,280,527      11,550,274 
Total loans and leases ......................    91,101,677    87,719,234    66,899,369    64,325,783      66,790,186 
(219,229)

Unearned discount .................................   
Loans and leases, net of unearned 
   discount .........................................    90,853,416    87,489,499    66,668,956    64,073,159      66,570,957 
(925,860)
Loans and leases, net........................    89,864,419    86,533,507    65,749,394    63,156,483      65,645,097 
Goodwill .....................................................   
4,593,112    3,524,625     3,524,625       3,524,625 
Core deposit and other intangible assets .....   
115,763 
104,279 
Real estate and other assets owned .............   
Total assets .................................................    123,449,206    122,787,884    96,685,535    85,162,391      83,008,803 

4,593,112   
97,655   
139,206   

Allowance for credit losses ...................   

140,268   
195,085   

35,027    
63,635    

68,851      
66,875      

(230,413)   

(919,562)   

(252,624 )    

(916,676 )    

(248,261)  

(988,997)  

(229,735)  

(955,992)  

Noninterest-bearing deposits ......................    32,813,896    29,110,635    26,947,880    24,661,007      24,240,802 
Savings and interest-checking deposits ......    52,346,207    49,566,644    43,393,618    38,611,021      35,763,566 
Time deposits ..............................................    10,131,846    13,110,392    3,063,973     3,523,838       4,562,366 
322,746       1,044,519 
Deposits at Cayman Islands office ..............   
Total deposits ...................................    95,493,876    91,957,841    73,582,053    67,118,612      65,611,253 
260,455       1,074,482 
Short-term borrowings ................................   
Long-term borrowings ................................   
9,493,835    10,653,858    9,006,959     5,108,870       4,607,758 
Total liabilities ............................................    106,962,584    106,614,595    84,349,639    73,856,859      72,806,210 
Shareholders’ equity ...................................    16,486,622    16,173,289    12,335,896    11,305,532      10,202,593  

2,132,182   

176,582    

192,676    

201,927   

163,442   

170,170   

Table 2 

SHAREHOLDERS, EMPLOYEES AND OFFICES 

Number at Year-End 

2016 

2015 

2014 

2013 

2012 

Shareholders ...................................................     19,802      20,693      14,551        15,015       15,623 
Employees ......................................................     16,973      17,476      15,782        15,893       14,943 
799  
Offices ............................................................    

766       

855     

796      

863     

24 

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Table 3 

CONSOLIDATED EARNINGS 

Interest income 
Loans and leases, including fees ........................................   $ 3,485,050    $ 2,778,151    $ 2,596,586     $ 2,734,708     $ 2,704,156 
Investment securities 

2016 

2015 

2014 
(In thousands) 

2013 

2012 

Fully taxable ................................................................    
Exempt from federal taxes ...........................................    
Deposits at banks ...............................................................    
Other ..................................................................................    

227,116 
8,045 
1,221 
1,147 
Total interest income ....................................................     3,895,871      3,170,844      2,956,877        2,957,334       2,941,685 

340,391        209,244      
6,802      
5,201      
1,379      

372,162     
4,263     
15,252     
1,016     

361,494     
2,606     
45,516     
1,205     

5,356       
13,361       
1,183       

46,869       
15,515       
699       
101       

87,704     
102,841     
797     
3,625     
231,017     
425,984     

46,140     
27,059     
615     
1,677     
252,766     
328,257     

56,235      
26,439      
1,018      
430      
217,247        199,983      
280,431        284,105      

Interest expense 
Savings and interest-checking deposits ..............................    
Time deposits .....................................................................    
Deposits at Cayman Islands office .....................................    
Short-term borrowings .......................................................    
Long-term borrowings .......................................................    
Total interest expense ..................................................    

69,354 
46,102 
1,130 
1,286 
225,297 
343,169 
Net interest income ..........................................................     3,469,887      2,842,587      2,676,446        2,673,229       2,598,516 
204,000 
Provision for credit losses ..................................................    
Net interest income after provision for credit losses ..........     3,279,887      2,672,587      2,552,446        2,488,229       2,394,516 
Other income 
Mortgage banking revenues ...............................................    
Service charges on deposit accounts ..................................    
Trust income ......................................................................    
Brokerage services income ................................................    
Trading account and foreign exchange gains .....................    
Gain (loss) on bank investment securities ..........................    
Total other-than-temporary impairment (“OTTI”) losses ..    
Portion of OTTI losses recognized in other 
   comprehensive income (before taxes) .............................    
Net OTTI losses recognized in earnings ............................    
Other revenues from operations .........................................    

(15,755)
(47,822)
352,776 
Total other income .......................................................     1,825,996      1,825,037      1,779,273        1,865,205       1,667,270 

362,912        331,265      
427,956        446,941      
508,258        496,008      
65,647      
40,828      
56,457      
(1,884 )    

375,738     
420,608     
470,640     
64,770     
30,577     
(130)    
—     

373,697     
419,102     
472,184     
63,423     
41,126     
30,314     
—     

(7,916 )    
(9,800 )    
383,061        437,859      

349,064 
446,698 
471,852 
59,059 
35,634 
9 
(32,067)

67,212       
29,874       
—       
—       

—     
—     
462,834     

—     
—     
426,150     

124,000        185,000      

—       
—       

170,000     

190,000     

Other expense 
Salaries and employee benefits ..........................................     1,623,600      1,549,530      1,404,950        1,355,178       1,314,540 
257,551 
Equipment and net occupancy ...........................................    
125,252 
Outside data processing and software ................................    
101,110 
FDIC assessments ..............................................................    
52,388 
Advertising and marketing .................................................    
41,929 
Printing, postage and supplies ............................................    
60,631 
Amortization of core deposit and other intangible assets ...    
516,350 
Other costs of operations....................................................    
Total other expense ......................................................     3,047,485      2,822,932      2,689,474        2,587,866       2,469,751 
Income before income taxes ..............................................     2,058,398      1,674,692      1,642,245        1,765,568       1,592,035 
Income taxes ......................................................................    
562,537 
Net income ........................................................................   $ 1,315,114    $ 1,079,667    $ 1,066,246     $ 1,138,480     $ 1,029,498 
Dividends declared 

269,299        264,327      
151,568        134,011      
69,584      
56,597      
39,557      
46,912      
688,990        621,700      

272,539     
164,133     
52,113     
59,227     
38,491     
26,424     
660,475     

295,141     
172,389     
105,045     
87,137     
39,546     
42,613     
682,014     

55,531       
47,111       
38,201       
33,824       

575,999        627,088      

595,025     

743,284     

Common ......................................................................   $ 441,765    $ 374,912    $ 371,137     $  365,171     $ 357,862 
53,450  
Preferred ......................................................................    

75,878       

81,270     

81,270     

53,450      

25 

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Table 4 

Per share 

Net income 

COMMON SHAREHOLDER DATA 

2016 

2015 

2014 

   2013 

2012 

Basic ............................................................................   $ 7.80   $ 7.22   $ 7.47     $  8.26    $ 7.57  
7.54  
Diluted .........................................................................  
Cash dividends declared ....................................................  
2.80  
Common shareholders’ equity at year-end ........................  
  72.73  
Tangible common shareholders’ equity at 
   year-end ..........................................................................  
Dividend payout ratio ........................................................  

  44.61  
  67.85  
  35.81%   37.56%   37.49 %     33.94 %   36.98%

7.42        8.20   
2.80        2.80   
  83.88        79.81   

7.78  
2.80  
  97.64  

7.18  
2.80  
  93.60  

  57.06        52.45   

  64.28  

Table 5 

CHANGES IN INTEREST INCOME AND EXPENSE(a) 

2016 Compared with 2015 

2015 Compared with 2014 

Resulting from 
Changes in:

Resulting from 
Changes in:

Total 
Change     Volume     

Rate 

Total 
Change       Volume     

Rate 

(Increase (decrease) in thousands) 

Interest income 
Loans and leases, including fees .......................   $710,191      703,099     
Deposits at banks ..............................................     30,264 
Federal funds sold and agreements to resell 
   securities ........................................................    
Trading account ................................................    
Investment securities 

(32)  
195     

(65)  
(31)    

  10,805 

7,092    $182,975       248,119       (65,144)
624 

1,891        1,267      

  19,459     

33     
226     

(29 )     
(134 )     

(48 )    
169      

19 
(303)

(3,947)     12,524      (16,471)     32,695        77,565       (44,870)

U.S. Treasury and federal agencies .............    
Obligations of states and political 
(2,552)    
   subdivisions ..............................................    
Other ............................................................    
(6,593)    
Total interest income ...................................   $727,526     

(2,251)    
(301)    
3,890      (10,483)    

(1,724 )      (1,052 )    
(20 )    

(886 )     
    $214,788       

(672)
(866)

Interest expense 
Interest-bearing deposits 

Savings and interest-checking deposits .......   $ 41,564      10,724 
Time deposits ..............................................     75,782      59,607 
182     
Deposits at Cayman Islands office ..............    
Short-term borrowings ......................................    
1,948     
Long-term borrowings ......................................     (21,749)    
Total interest expense ..................................   $ 97,727     

1,288 
857 

(53)  

  30,840    $
(729 )      3,031      
  16,175      11,544        7,356      
(273 )    
363      

(3,760)
4,188 
189 
1,213 
  (22,606)     35,519        71,014       (35,495)

(84 )     
1,576       

235     
660     

    $ 47,826       

(a) 

Interest income data are on a taxable-equivalent basis. The apportionment of changes resulting from the 
combined effect of both volume and rate was based on the separately determined volume and rate changes. 

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Item 1A.  Risk Factors. 

M&T and its subsidiaries could be adversely impacted by a number of risks and uncertainties that are 
difficult to predict.  As a financial institution certain risk elements are inherent in the ordinary course 
of the Company’s business activities and adverse experience with those risks could have a material 
impact on the Company’s business, financial condition and results of operations, as well as on the 
values of the Company’s financial instruments and M&T’s common stock.  The Company has 
developed a risk management process to identify, understand, mitigate and balance its exposure to 
significant risks. The following risk factors set forth some of the risks that could materially and 
adversely impact the Company. 

Market Risk 

Weakness in the economy has adversely affected the Company in the past and may adversely affect 
the Company in the future. 

Poor business and economic conditions in general or specifically in markets served by the Company 
could have one or more of the following adverse effects on the Company’s business: 

  A decrease in the demand for loans and other products and services offered by the 

Company. 

  A decrease in net interest income derived from the Company’s lending and deposit 

gathering activities. 

  A decrease in the value of the Company’s investment securities, loans held for sale or 

other assets secured by residential or commercial real estate. 

  Other-than-temporary impairment of investment securities in the Company’s investment 

securities portfolio. 

  A decrease in fees from the Company’s brokerage and trust businesses associated with 

declines or lack of growth in stock market prices. 
Potential higher FDIC assessments due to the DIF falling below minimum required levels. 

 
  An impairment of certain intangible assets, such as goodwill. 
  An increase in the number of customers and counterparties who become delinquent, file 
for protection under bankruptcy laws or default on their loans or other obligations to the 
Company. An increase in the number of delinquencies, bankruptcies or defaults could 
result in higher levels of nonperforming assets, net charge-offs, provision for credit losses 
and valuation adjustments on loans held for sale. 

The Company’s business and financial performance is impacted significantly by market interest rates 
and movements in those rates. The monetary, tax and other policies of governmental agencies, 
including the Federal Reserve, have a significant impact on interest rates and overall financial 
market performance over which the Company has no control and which the Company may not be 
able to anticipate adequately. 

As a result of the high percentage of the Company’s assets and liabilities that are in the form of 
interest-bearing or interest-related instruments, changes in interest rates, in the shape of the yield 
curve or in spreads between different market interest rates, can have a material effect on the 
Company’s business and profitability and the value of the Company’s assets and liabilities. For 
example: 

 

Changes in interest rates or interest rate spreads can affect the difference between the 
interest that the Company earns on assets and the interest that the Company pays on 

27 

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 

 

 

liabilities, which impacts the Company’s overall net interest income and profitability. 
Such changes can affect the ability of borrowers to meet obligations under variable or 
adjustable rate loans and other debt instruments, and can, in turn, affect the Company’s 
loss rates on those assets. 
Such changes may decrease the demand for interest rate based products and services, 
including loans and deposits. 
Such changes can also affect the Company’s ability to hedge various forms of market and 
interest rate risk and may decrease the profitability or protection or increase the risk or 
cost associated with such hedges. 

  Movements in interest rates also affect mortgage prepayment speeds and could result in 

the impairment of capitalized mortgage servicing assets, reduce the value of loans held for 
sale and increase the volatility of mortgage banking revenues, potentially adversely 
affecting the Company’s results of operations. 

The monetary, tax and other policies of the government and its agencies, including the Federal 
Reserve, have a significant impact on interest rates and overall financial market performance. These 
governmental policies can thus affect the activities and results of operations of banking companies 
such as the Company. An important function of the Federal Reserve is to regulate the national supply 
of bank credit and certain interest rates. The actions of the Federal Reserve influence the rates of 
interest that the Company charges on loans and that the Company pays on borrowings and interest-
bearing deposits and can also affect the value of the Company’s on-balance sheet and off-balance 
sheet financial instruments. Also, due to the impact on rates for short-term funding, the Federal 
Reserve’s policies also influence, to a significant extent, the Company’s cost of such funding. In 
addition, the Company is routinely subject to examinations from various governmental taxing 
authorities. Such examinations may result in challenges to the tax return treatment applied by the 
Company to specific transactions. Management believes that the assumptions and judgment used to 
record tax-related assets or liabilities have been appropriate. Should tax laws change or the tax 
authorities determine that management’s assumptions were inappropriate, the result and adjustments 
required could have a material effect on the Company’s results of operations. M&T cannot predict 
the nature or timing of future changes in monetary, tax and other policies or the effect that they may 
have on the Company’s business activities, financial condition and results of operations. 

The Company’s business and performance is vulnerable to the impact of volatility in debt and equity 
markets. 

As most of the Company’s assets and liabilities are financial in nature, the Company’s performance 
tends to be sensitive to the performance of the financial markets. Turmoil and volatility in U.S. and 
global financial markets can be a major contributory factor to overall weak economic conditions, 
leading to some of the risks discussed herein, including the impaired ability of borrowers and other 
counterparties to meet obligations to the Company. Financial market volatility also can have some of 
the following adverse effects on the Company and its business, including adversely affecting the 
Company’s financial condition and results of operations: 

 

 
 

It can affect the value or liquidity of the Company’s on-balance sheet and off-balance 
sheet financial instruments. 
It can affect the value of capitalized servicing assets. 
It can affect M&T’s ability to access capital markets to raise funds. Inability to access 
capital markets if needed, at cost effective rates, could adversely affect the Company’s 
liquidity and results of operations. 

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 

 

It can affect the value of the assets that the Company manages or otherwise administers or 
services for others. Although the Company is not directly impacted by changes in the 
value of such assets, decreases in the value of those assets would affect related fee income 
and could result in decreased demand for the Company’s services. 
In general, it can impact the nature, profitability or risk profile of the financial transactions 
in which the Company engages. 

Volatility in the markets for real estate and other assets commonly securing financial products 

has been and may continue to be a significant contributor to overall volatility in financial markets. 

The Company’s regional concentrations expose it to adverse economic conditions in its primary 
retail banking office footprint. 

The Company’s core banking business is largely concentrated within the Company’s retail banking 
office network footprint, located principally in New York, Maryland, New Jersey, Pennsylvania, 
Delaware, Connecticut, Virginia, West Virginia and the District of Columbia. Therefore, the 
Company is, or in the future may be, particularly vulnerable to adverse changes in economic 
conditions in the Northeast and Mid-Atlantic regions. 

Risks Relating to Compliance and the Regulatory Environment 

The Company is subject to extensive government regulation and supervision and this regulatory 
environment can be and has been significantly impacted by financial regulatory reform initiatives. 

The Company is subject to extensive federal and state regulation and supervision. Banking 
regulations are primarily intended to protect depositors’ funds, federal deposit insurance funds and 
the financial system as a whole, not stockholders. These regulations and supervisory guidance affect 
the Company’s lending practices, capital structure, amounts of capital, investment practices, dividend 
policy and growth, among other things. Failure to comply with laws, regulations, policies or 
supervisory guidance could result in civil or criminal penalties, including monetary penalties, the loss 
of FDIC insurance, the revocation of a banking charter, other sanctions by regulatory agencies, 
and/or reputation damage, which could have a material adverse effect on the Company’s business, 
financial condition and results of operations. In this regard, government authorities, including the 
bank regulatory agencies, are pursuing aggressive enforcement actions with respect to compliance 
and other legal matters involving financial activities, which heightens the risks associated with actual 
and perceived compliance failures and may also adversely affect the Company’s ability to enter into 
certain transactions or engage in certain activities, or obtain necessary regulatory approvals in 
connection therewith. 

The U.S. government and others have recently undertaken major reforms of the regulatory 
oversight structure of the financial services industry. M&T expects to face increased regulation of its 
industry as a result of current and possible future initiatives. M&T also expects more intense scrutiny 
in the examination process and more aggressive enforcement of regulations on both the federal and 
state levels. Compliance with these new regulations and supervisory initiatives will likely increase 
the Company’s costs, reduce its revenue and may limit its ability to pursue certain desirable business 
opportunities. 

Not all of the rules required or expected to be implemented under the Dodd-Frank Act have 
been proposed or adopted, and certain of the rules that have been proposed or adopted under the 
Dodd-Frank Act are subject to phase-in or transitional periods. Reforms, both under the Dodd-Frank 
Act and otherwise, will have a significant effect on the entire financial services industry. Although it 

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is difficult to predict the magnitude and extent of these effects, M&T believes compliance with new 
regulations and other initiatives will likely negatively impact revenue and increase the cost of doing 
business, both in terms of transition expenses and on an ongoing basis, and may also limit M&T’s 
ability to pursue certain desirable business opportunities. Any new regulatory requirements or 
changes to existing requirements could require changes to the Company’s businesses, result in 
increased compliance costs and affect the profitability of such businesses. Additionally, reform could 
affect the behaviors of third parties that the Company deals with in the course of its business, such as 
rating agencies, insurance companies and investors. Heightened regulatory practices, requirements or 
expectations could affect the Company in substantial and unpredictable ways, and, in turn, could 
have a material adverse effect on the Company’s business, financial condition and results of 
operations. While the change in administration in the U.S. may ultimately lead to the modification of 
certain of the regulations adopted since the financial crisis, uncertainty about the timing and scope of 
any such changes as well as the cost of complying with a new regulatory regime may negatively 
impact the Company’s businesses, at least in the short term, even if the long-term impact of any such 
changes may be positive for the Company’s businesses. 

Capital and liquidity standards adopted by the U.S. banking regulators have resulted in banks and 
bank holding companies needing to maintain more and higher quality capital and greater liquidity 
than has historically been the case. 

New capital standards, both as a result of the Dodd-Frank Act and the U.S. Basel III-based capital 
rules have had a significant effect on banks and bank holding companies, including M&T. The U.S. 
capital rules require bank holding companies and their bank subsidiaries to maintain substantially 
more capital, with a greater emphasis on common equity. For additional information, see “Capital 
Requirements” under Part I, Item 1 “Business.” 

The need to maintain more and higher quality capital, as well as greater liquidity, going forward 
than historically has been required, and generally increased regulatory scrutiny with respect to capital 
and liquidity levels, could limit the Company’s business activities, including lending, and its ability 
to expand, either organically or through acquisitions. It could also result in M&T being required to 
take steps to increase its regulatory capital that may be dilutive to shareholders or limit its ability to 
pay dividends or otherwise return capital to shareholders, or sell or refrain from acquiring assets, the 
capital requirements for which are not justified by the assets’ underlying risks. 

In addition, the U.S. Basel III-based liquidity coverage ratio requirement and the liquidity-

related provisions of the Federal Reserve’s liquidity-related enhanced prudential supervision 
requirements adopted pursuant to Section 165 of Dodd-Frank require the Company to hold increased 
levels of unencumbered highly liquid investments, thereby reducing the Company’s ability to invest 
in other longer-term assets even if deemed more desirable from a balance sheet management 
perspective. Moreover, U.S. federal banking agencies have been taking into account expectations 
regarding the ability of banks to meet these requirements, including under stressed conditions, in 
approving actions that represent uses of capital, such as dividend increases, share repurchases and 
acquisitions. 

M&T’s ability to return capital to shareholders and to pay dividends on common stock may be 
adversely affected by market and other factors outside of its control and will depend, in part, on a 
review of its capital plan by the Federal Reserve. 

Any decision by M&T to return capital to shareholders, whether through an increase in its common 
stock dividend or through a share repurchase program, requires the approval of the M&T Board of 
Directors and depends in large part on receiving regulatory approval, including through the Federal 

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Reserve’s CCAR process and the supervisory stress tests required under the Dodd-Frank Act 
whereby M&T’s financial position is tested under assumed severely adverse economic conditions. 
Prior to the public disclosure of a bank holding company’s CCAR results, the Federal Reserve will 
provide the BHC with the results of its supervisory stress test and will offer a one-time opportunity 
for the BHC to reduce planned capital distributions through the submission of a revised capital plan. 
The Federal Reserve may object to any capital plan in which a bank holding company’s regulatory 
capital ratios inclusive of adjustments to planned capital distributions, if any, would not meet the 
minimum requirements throughout a nine-quarter period under severely adverse stress conditions. In 
June 2016, the Federal Reserve announced that it did not object to M&T’s revised CCAR capital 
plan. In the future, if the Federal Reserve objects to M&T’s CCAR capital plan or raises concerns 
regarding the qualitative aspects of M&T’s capital planning process through its supervisory oversight 
of M&T, it could impose restrictions on M&T’s ability to return capital to shareholders, which in 
turn could negatively impact market and investor perceptions of M&T. 

In addition, Federal Reserve capital planning and stress testing rules generally limit a bank 

holding company’s ability to make quarterly capital distributions – that is, dividends and share 
repurchases – if the amount of actual cumulative quarterly capital issuances of instruments that 
qualify as regulatory capital are less than the BHC had indicated in its submitted capital plan as to 
which it received a non-objection from the Federal Reserve. Under these rules, for example, if a BHC 
issued a smaller amount of additional common stock than it had stated in its capital plan, it would be 
required to reduce common dividends and/or the amount of common stock repurchases so that the 
dollar amount of capital distributions, net of the dollar amount of additional common stock issued 
(“net distributions”), is no greater than the dollar amount of net distributions relating to its common 
stock included in its capital plan, as measured on an aggregate basis beginning in the third quarter of 
the nine-quarter planning horizon through the end of the then current quarter. As such, M&T’s ability 
to declare and pay dividends on its common stock, as well as the amount of such dividends, will 
depend, in part, on its ability to issue stock in accordance with its capital plan or to otherwise remain 
in compliance with its capital plan, which may be adversely affected by market and other factors 
outside of M&T’s control. 

The effect of resolution plan requirements may have a material adverse impact on M&T. 

Bank holding companies with consolidated assets of $50 billion or more, such as M&T, are required 
to report periodically to regulators a resolution plan for their rapid and orderly resolution in the event 
of material financial distress or failure. M&T’s resolution plan must, among other things, ensure that 
its depository institution subsidiaries are adequately protected from risks arising from its other 
subsidiaries. The regulation adopted by the Federal Reserve and FDIC sets specific standards for the 
resolution plans, including requiring a strategic analysis of the plan’s components, a description of 
the range of specific actions the Company proposes to take in resolution, and a description of the 
Company’s organizational structure, material entities, interconnections and interdependencies, and 
management information systems, among other elements. To address effectively any shortcomings in 
the Company’s resolution plan, the Federal Reserve and the FDIC could require the Company to 
change its business structure or dispose of businesses, which could have a material adverse effect on 
its liquidity and ability to pay dividends on its stock or interest and principal on its debt. 

If an orderly liquidation of a systemically important BHC or non-bank financial company were 
triggered, M&T could face assessments for the Orderly Liquidation Fund (“OLF”). 

The Dodd-Frank Act creates a new mechanism, the OLF, for liquidation of systemically important 
bank holding companies and non-bank financial companies. The OLF is administered by the FDIC 

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and is based on the FDIC’s bank resolution model. The Secretary of the U.S. Treasury may trigger a 
liquidation under this authority only after consultation with the President of the U.S. and after 
receiving a recommendation from the boards of the FDIC and the Federal Reserve upon a two-thirds 
vote. Liquidation proceedings will be funded by the OLF, which will borrow from the U.S. Treasury 
and impose risk-based assessments on covered financial companies. Risk-based assessments would 
be made, first, on entities that received more in the resolution than they would have received in the 
liquidation to the extent of such excess, and second, if necessary, on, among others, bank holding 
companies with total consolidated assets of $50 billion or more, such as M&T. Any such assessments 
may adversely affect the Company’s business, financial condition or results of operations. 

Credit Risk 

Deteriorating credit quality could adversely impact the Company. 

As a lender, the Company is exposed to the risk that customers will be unable to repay their loans in 
accordance with the terms of the agreements, and that any collateral securing the loans may be 
insufficient to assure full repayment. Credit losses are inherent in the business of making loans. 
Factors that influence the Company’s credit loss experience include overall economic 
conditions affecting businesses and consumers, generally, but also residential and commercial real 
estate valuations, in particular, given the size of the Company’s real estate loan portfolios. Factors 
that can influence the Company’s credit loss experience include: (i) the impact of residential real 
estate values on loans to residential real estate builders and developers and other loans secured by 
residential real estate; (ii) the concentrations of commercial real estate loans in the Company’s loan 
portfolio; (iii) the amount of commercial and industrial loans to businesses in areas of New York 
State outside of the New York City area and in central Pennsylvania that have historically 
experienced less economic growth and vitality than many other regions of the country; (iv) the 
repayment performance associated with first and second lien loans secured by residential real estate; 
and (v) the size of the Company’s portfolio of loans to individual consumers, which historically have 
experienced higher net charge-offs as a percentage of loans outstanding than loans to other types of 
borrowers. 

Commercial real estate valuations can be highly subjective as they are based upon many 
assumptions. Such valuations can be significantly affected over relatively short periods of time by 
changes in business climate, economic conditions, interest rates and, in many cases, the results of 
operations of businesses and other occupants of the real property. Similarly, residential real estate 
valuations can be impacted by housing trends, the availability of financing at reasonable interest 
rates, governmental policy regarding housing and housing finance, and general economic conditions 
affecting consumers. 

The Company maintains an allowance for credit losses which represents, in management’s 
judgment, the amount of losses inherent in the loan and lease portfolio. The allowance is determined 
by management’s evaluation of the loan and lease portfolio based on such factors as the differing 
economic risks associated with each loan category, the current financial condition of specific 
borrowers, the economic environment in which borrowers operate, the level of delinquent loans, the 
value of any collateral and, where applicable, the existence of any guarantees or indemnifications. 
The effects of probable decreases in expected principal cash flows on loans acquired at a discount are 
also considered in the establishment of the allowance for credit losses. 

Management believes that the allowance for credit losses appropriately reflects credit losses 
inherent in the loan and lease portfolio. However, there is no assurance that the allowance will be 
sufficient to cover such credit losses, particularly if housing and employment conditions worsen or 

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the economy experiences a downturn. In those cases, the Company may be required to increase the 
allowance through an increase in the provision for credit losses, which would reduce net income. 

The Company may be adversely affected by the soundness of other financial institutions. 

Financial services institutions are interrelated as a result of trading, clearing, counterparty, or other 
relationships.  The Company has exposure to many different industries and counterparties, and 
routinely executes transactions with counterparties in the financial services industry, including 
commercial banks, brokers and dealers, investment banks, and other institutional clients. Many of 
these transactions expose the Company to credit risk in the event of a default by a counterparty or 
client. In addition, the Company’s credit risk may be exacerbated when the collateral held by the 
Company cannot be realized or is liquidated at prices not sufficient to recover the full amount of the 
credit or derivative exposure due to the Company. Any such losses could have a material adverse 
effect on the Company’s financial condition and results of operations. 

Liquidity Risk 

The Company must maintain adequate sources of funding and liquidity. 

The Company must maintain adequate funding sources in the normal course of business to support its 
operations and fund outstanding liabilities, as well as meet regulatory expectations. The Company 
primarily relies on deposits to be a low cost and stable source of funding for the loans it makes and 
the operations of its business. Core customer deposits, which include noninterest-bearing deposits, 
interest-bearing transaction accounts, savings deposits and time deposits of $250,000 or less, have 
historically provided the Company with a sizeable source of relatively stable and low-cost funds. In 
addition to customer deposits, sources of liquidity include borrowings from third party banks, 
securities dealers, various Federal Home Loan Banks and the Federal Reserve Bank of New York. 

The Company’s liquidity and ability to fund and run the business could be materially adversely 
affected by a variety of conditions and factors, including financial and credit market disruptions and 
volatility or a lack of market or customer confidence in financial markets in general, which may 
result in a loss of customer deposits or outflows of cash or collateral and/or ability to access capital 
markets on favorable terms. Other conditions and factors that could materially adversely affect the 
Company’s liquidity and funding include a lack of market or customer confidence in, or negative 
news about, the Company or the financial services industry generally which also may result in a loss 
of deposits and/or negatively affect the ability to access the capital markets; the loss of customer 
deposits to alternative investments; inability to sell or securitize loans or other assets; and 
downgrades in one or more of the Company’s credit ratings. A downgrade in the Company’s credit 
ratings, which could result from general industry-wide or regulatory factors not solely related to the 
Company, could adversely affect the Company’s ability to borrow funds and raise the cost of 
borrowings substantially and could cause creditors and business counterparties to raise collateral 
requirements or take other actions that could adversely affect M&T’s ability to raise capital. Many of 
the above conditions and factors may be caused by events over which M&T has little or no control. 
There can be no assurance that significant disruption and volatility in the financial markets will not 
occur in the future. 

Recent regulatory changes relating to liquidity and risk management have also impacted the 

Company’s results of operations and competitive position. These regulations address, among other 
matters, liquidity stress testing, minimum liquidity requirements and restrictions on short-term debt 
issued by top-tier holding companies. 

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If the Company is unable to continue to fund assets through customer bank deposits or access 

funding sources on favorable terms or if the Company suffers an increase in borrowing costs or 
otherwise fails to manage liquidity effectively, the Company’s liquidity, operating margins, financial 
condition and results of operations may be materially adversely affected. 

M&T relies on dividends from its subsidiaries for its liquidity. 

M&T is a separate and distinct legal entity from its subsidiaries. M&T typically receives 
substantially all of its revenue from subsidiary dividends. These dividends are the principal source of 
funds to pay dividends on M&T stock and interest and principal on its debt. Various federal and/or 
state laws and regulations, as well as regulatory expectations, limit the amount of dividends that 
M&T’s banking subsidiaries and certain nonbank subsidiaries may pay. Regulatory scrutiny of 
capital levels at bank holding companies and insured depository institution subsidiaries has increased 
in recent years and has resulted in increased regulatory focus on all aspects of capital planning, 
including dividends and other distributions to shareholders of banks, such as parent bank holding 
companies. See “Item 1. Business — Dividends” for a discussion of regulatory and other restrictions 
on dividend declarations. Also, M&T’s right to participate in a distribution of assets upon a 
subsidiary’s liquidation or reorganization is subject to the prior claims of that subsidiary’s creditors. 
Limitations on M&T’s ability to receive dividends from its subsidiaries could have a material 
adverse effect on its liquidity and ability to pay dividends on its stock or interest and principal on its 
debt. 

Strategic Risk 

The financial services industry is highly competitive and creates competitive pressures that could 
adversely affect the Company’s revenue and profitability. 

The financial services industry in which the Company operates is highly competitive. The Company 
competes not only with commercial and other banks and thrifts, but also with insurance companies, 
mutual funds, hedge funds, securities brokerage firms and other companies offering financial 
services in the U.S., globally and over the Internet. Some of the Company’s non-bank competitors 
are not subject to the same extensive regulations the Company and its subsidiaries are, and may have 
greater flexibility in competing for business. In particular, the activity and prominence of so-called 
marketplace lenders and other technological financial services companies have grown significantly in 
recent years and is expected to continue growing.  The Company competes on the basis of several 
factors, including capital, access to capital, revenue generation, products, services, transaction 
execution, innovation, reputation and price. Over time, certain sectors of the financial services 
industry have become more concentrated, as institutions involved in a broad range of financial 
services have been acquired by or merged into other firms. These developments could result in the 
Company’s competitors gaining greater capital and other resources, such as a broader range of 
products and services and geographic diversity. The Company may experience pricing pressures as a 
result of these factors and as some of its competitors seek to increase market share by reducing prices 
or paying higher rates of interest on deposits. Finally, technological change is influencing how 
individuals and firms conduct their financial affairs and changing the delivery channels for financial 
services, with the result that the Company may have to contend with a broader range of competitors 
including many that are not located within the geographic footprint of its banking office network. 

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Operational Risk 

The Company is subject to operational risk which could adversely affect the Company’s business and 
reputation and create material legal and financial exposure. 

Like all businesses, the Company is subject to operational risk, which represents the risk of loss 
resulting from human error, inadequate or failed internal processes and systems, and external events. 
Operational risk also encompasses reputational risk and compliance and legal risk, which is the risk 
of loss from violations of, or noncompliance with, laws, rules, regulations, prescribed practices or 
ethical standards, as well as the risk of noncompliance with contractual and other obligations. The 
Company is also exposed to operational risk through outsourcing arrangements, and the effect that 
changes in circumstances or capabilities of its outsourcing vendors can have on the Company’s 
ability to continue to perform operational functions necessary to its business. In addition, along with 
other participants in the financial services industry, the Company frequently attempts to introduce 
new technology-driven products and services that are aimed at allowing the Company to better serve 
customers and to reduce costs. The Company may not be able to effectively implement new 
technology-driven products and services that allows it to remain competitive or be successful in 
marketing these products and services to its customers. Although the Company seeks to mitigate 
operational risk through a system of internal controls that are reviewed and updated, no system of 
controls, however well designed and maintained, is infallible. Control weaknesses or failures or other 
operational risks could result in charges, increased operational costs, harm to the Company’s 
reputation or foregone business opportunities. 

Changes in accounting standards could impact the Company’s financial condition and results of 
operations. 

The accounting standard setters, including the Financial Accounting Standards Board (“FASB”), the 
SEC and other regulatory bodies, periodically change the financial accounting and reporting 
standards that govern the preparation of the Company’s consolidated financial statements. These 
changes can be hard to predict and can materially impact how the Company records and reports its 
financial condition and results of operations. In some cases, the Company could be required to apply 
a new or revised standard retroactively, which would result in the restating of the Company’s prior 
period financial statements. 

M&T’s accounting policies and processes are critical to the reporting of the Company’s financial 
condition and results of operations. They require management to make estimates about matters that 
are uncertain. 

Accounting policies and processes are fundamental to the Company’s reported financial condition 
and results of operations. Some of these policies require use of estimates and assumptions that may 
affect the reported amounts of assets or liabilities and financial results. Several of M&T’s accounting 
policies are critical because they require management to make difficult, subjective and complex 
judgments about matters that are inherently uncertain and because it is likely that materially different 
amounts would be reported under different conditions or using different assumptions. Pursuant to 
generally accepted accounting principles, management is required to make certain assumptions and 
estimates in preparing the Company’s financial statements. If assumptions or estimates underlying 
the Company’s financial statements are incorrect, the Company may experience material losses. 

Management has identified certain accounting policies as being critical because they require 

management’s judgment to ascertain the valuations of assets, liabilities, commitments and 

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contingencies. A variety of factors could affect the ultimate value that is obtained either when 
earning income, recognizing an expense, recovering an asset, valuing an asset or liability, or 
recognizing or reducing a liability. M&T has established detailed policies and control procedures that 
are intended to ensure these critical accounting estimates and judgments are well controlled and 
applied consistently. In addition, the policies and procedures are intended to ensure that the process 
for changing methodologies occurs in an appropriate manner. Because of the uncertainty surrounding 
judgments and the estimates pertaining to these matters, M&T could be required to adjust accounting 
policies or restate prior period financial statements if those judgments and estimates prove to be 
incorrect. For additional information, see Part II, Item 7, Management’s Discussion and Analysis of 
Financial Condition and Results of Operations, “Critical Accounting Estimates” and Note 1, 
“Significant Accounting Policies,” of Notes to Financial Statements in Part II, Item 8. 

Difficulties in combining the operations of acquired entities with the Company’s own operations may 
prevent M&T from achieving the expected benefits from its acquisitions. 

M&T has expanded its business through past acquisitions and may do so in the future. Inherent 
uncertainties exist when integrating the operations of an acquired entity. M&T may not be able to 
fully achieve its strategic objectives and planned operating efficiencies in an acquisition. In addition, 
the markets and industries in which the Company and its actual or potential acquisition targets 
operate are highly competitive. The Company may lose customers or fail to retain the customers of 
acquired entities as a result of an acquisition. Acquisition and integration activities require M&T to 
devote substantial time and resources, and as a result M&T may not be able to pursue other business 
opportunities while integrating acquired entities with the Company. 

After completing an acquisition, the Company may not realize the expected benefits of the 
acquisition due to lower financial results pertaining to the acquired entity. For example, the Company 
could experience higher credit losses, incur higher operating expenses or realize less revenue than 
originally anticipated related to an acquired entity. 

M&T could suffer if it fails to attract and retain skilled personnel. 

M&T’s success depends, in large part, on its ability to attract and retain key individuals. Competition 
for qualified candidates in the activities and markets that the Company serves is significant and the 
Company may not be able to hire candidates and retain them. Growth in the Company’s business, 
including through acquisitions, may increase its need for additional qualified personnel. If the 
Company is not able to hire or retain these key individuals, it may be unable to execute its business 
strategies and may suffer adverse consequences to its business, financial condition and results of 
operations. 

The federal banking agencies have issued joint guidance on executive compensation designed to 

help ensure that a banking organization’s incentive compensation policies do not encourage 
imprudent risk taking and are consistent with the safety and soundness of the organization. In 
addition, the Dodd-Frank Act required those agencies, along with the SEC, to adopt rules to require 
reporting of incentive compensation and to prohibit certain compensation arrangements. If as a result 
of complying with such rules the Company is unable to attract and retain qualified employees, or do 
so at rates necessary to maintain its competitive position, or if the compensation costs required to 
attract and retain employees become more significant, the Company’s performance, including its 
competitive position, could be materially adversely affected. 

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Severe weather, natural disasters, acts of war or terrorism and other external events could 
significantly impact the Company’s business. 

Severe weather, natural disasters, acts of war or terrorism and other adverse external events could 
have a significant impact on the Company’s ability to conduct business. Such events could affect the 
stability of the Company’s deposit base, impair the ability of borrowers to repay outstanding loans, 
impair the value of collateral securing loans, cause significant property damage, result in loss of 
revenue and/or cause the Company to incur additional expenses. Although the Company has 
established disaster recovery plans and procedures, and monitors for significant environmental 
effects on its properties or its investments, the occurrence of any such event could have a material 
adverse effect on the Company. 

The Company’s information systems may experience interruptions or breaches in security. 

The Company relies heavily on communications and information systems to conduct its business. 
Any failure, interruption or breach in security of these systems could result in disruptions to its 
accounting, deposit, loan and other systems, and adversely affect the Company’s customer 
relationships. While the Company has policies and procedures designed to prevent or limit the effect 
of these possible events, there can be no assurance that any such failure, interruption or security 
breach will not occur or, if any does occur, that it can be sufficiently or timely remediated. 
Information security risks for large financial institutions such as M&T have increased 

significantly in recent years in part because of the proliferation of new technologies, such as Internet 
and mobile banking to conduct financial transactions, and the increased sophistication and activities 
of organized crime, hackers, terrorists, nation-states, activists and other external parties.  There have 
been increasing efforts on the part of third parties, including through cyber attacks, to breach data 
security at financial institutions or with respect to financial transactions. There have been several 
instances involving financial services and consumer-based companies reporting unauthorized access 
to and disclosure of client or customer information or the destruction or theft of corporate data, 
including by executive impersonation and third party vendors. There have also been several highly 
publicized cases where hackers have requested “ransom” payments in exchange for not disclosing 
customer information.  

As cyber threats continue to evolve, the Company may be required to expend significant 

additional resources to continue to modify or enhance its layers of defense or to investigate and 
remediate any information security vulnerabilities. The techniques used by cyber criminals change 
frequently, may not be recognized until launched and can be initiated from a variety of sources, 
including terrorist organizations and hostile foreign governments. These actors may attempt to 
fraudulently induce employees, customers or other users of the Company’s systems to disclose 
sensitive information in order to gain access to data or the Company’s systems. These risks may 
increase as the use of mobile payment and other Internet-based applications expands. 

The occurrence of any failure, interruption or security breach of the Company’s systems, 
particularly if widespread or resulting in financial losses to customers, could damage the Company’s 
reputation, result in a loss of customer business, subject it to additional regulatory scrutiny, or expose 
it to civil litigation and financial liability. 

The Company is or may become involved from time to time in suits, legal proceedings, information-
gathering requests, investigations and proceedings by governmental and self-regulatory agencies 
that may lead to adverse consequences. 

Many aspects of the Company’s business involve substantial risk of legal liability. M&T and/or its 
subsidiaries have been named or threatened to be named as defendants in various lawsuits arising 
from its or its subsidiaries’ business activities (and in some cases from the activities of companies 

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M&T has acquired). In addition, from time to time, M&T is, or may become, the subject of 
governmental and self-regulatory agency information-gathering requests, reviews, investigations and 
proceedings and other forms of regulatory inquiry, including by bank and other regulatory agencies, 
the SEC and law enforcement authorities. The SEC has announced a policy of seeking admissions of 
liability in certain settled cases, which could adversely impact the defense of private litigation. M&T 
is also at risk when it has agreed to indemnify others for losses related to legal proceedings, including 
for litigation and governmental investigations and inquiries, such as in connection with the purchase 
or sale of a business or assets. The results of such proceedings could lead to significant civil or 
criminal penalties, including monetary penalties, damages, adverse judgments, settlements, fines, 
injunctions, restrictions on the way in which the Company conducts its business, or reputational 
harm. 

Although the Company establishes accruals for legal proceedings when information related to 
the loss contingencies represented by those matters indicates both that a loss is probable and that the 
amount of loss can be reasonably estimated, the Company does not have accruals for all legal 
proceedings where it faces a risk of loss. In addition, due to the inherent subjectivity of the 
assessments and unpredictability of the outcome of legal proceedings, amounts accrued may not 
represent the ultimate loss to the Company from the legal proceedings in question. Thus, the 
Company’s ultimate losses may be higher, and possibly significantly so, than the amounts accrued 
for legal loss contingencies, which could adversely affect the Company’s financial condition and 
results of operations. 

M&T relies on other companies to provide key components of the Company’s business 
infrastructure. 

Third parties provide key components of the Company’s business infrastructure such as banking 
services, processing, and Internet connections and network access. Any disruption in such services 
provided by these third parties or any failure of these third parties to handle current or higher 
volumes of use could adversely affect the Company’s ability to deliver products and services to 
clients and otherwise to conduct business. Technological or financial difficulties of a third party 
service provider could adversely affect the Company’s business to the extent those difficulties result 
in the interruption or discontinuation of services provided by that party. The Company may not be 
insured against all types of losses as a result of third party failures and insurance coverage may be 
inadequate to cover all losses resulting from system failures or other disruptions. Failures in the 
Company’s business infrastructure could interrupt the operations or increase the costs of doing 
business. 

Detailed discussions of the specific risks outlined above and other risks facing the Company are 

included within this Annual Report on Form 10-K in Part I, Item 1 “Business,” and Part II, Item 7 
“Management’s Discussion and Analysis of Financial Condition and Results of Operations.” 
Furthermore, in Part II, Item 7 under the heading “Forward-Looking Statements” is included a 
description of certain risks, uncertainties and assumptions identified by management that are difficult 
to predict and that could materially affect the Company’s financial condition and results of 
operations, as well as the value of the Company’s financial instruments in general, and M&T 
common stock, in particular. 

In addition, the market price of M&T common stock may fluctuate significantly in response to a 
number of other factors, including changes in securities analysts’ estimates of financial performance, 
volatility of stock market prices and volumes, rumors or erroneous information, changes in market 
valuations of similar companies and changes in accounting policies or procedures as may be required 
by the FASB or other regulatory agencies. 

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Item 1B.  Unresolved Staff Comments. 

None. 

Item 2.  Properties. 

Both M&T and M&T Bank maintain their executive offices at One M&T Plaza in Buffalo, New 
York. This twenty-one story headquarters building, containing approximately 300,000 rentable 
square feet of space, is owned in fee by M&T Bank and was completed in 1967. M&T, M&T Bank 
and their subsidiaries occupy approximately 98% of the building and the remainder is leased to non-
affiliated tenants. At December 31, 2016, the cost of this property (including improvements 
subsequent to the initial construction), net of accumulated depreciation, was $10.2 million. 

M&T Bank owns and occupies an additional facility in Buffalo, New York (known as M&T 

Center) with approximately 395,000 rentable square feet of space.  At December 31, 2016, the cost 
of this building (including improvements subsequent to acquisition), net of accumulated depreciation, 
was $11.2 million. 

M&T Bank also owns and occupies three separate facilities in the Buffalo area which support 

certain back-office and operations functions of the Company. The total square footage of these 
facilities approximates 290,000 square feet and their combined cost (including improvements 
subsequent to acquisition), net of accumulated depreciation, was $27.6 million at December 31, 
2016. 

M&T Bank owns a facility in Syracuse, New York with approximately 160,000 rentable square 
feet of space. Approximately 46% of that facility is occupied by M&T Bank. At December 31, 2016, 
the cost of that building (including improvements subsequent to acquisition), net of accumulated 
depreciation, was $1.2 million. 

M&T Bank owns facilities in Wilmington, Delaware, with approximately 340,000 (known as 

Wilmington Center) and 295,000 (known as Wilmington Plaza) rentable square feet of space, 
respectively. M&T Bank occupies approximately 97% of Wilmington Center. Wilmington Plaza is 
100% occupied by a tenant. At December 31, 2016, the cost of these buildings (including 
improvements subsequent to acquisition), net of accumulated depreciation, was $41.9 million and 
$12.6 million, respectively. 

M&T Bank also owns facilities in Harrisburg, Pennsylvania and Millsboro, Delaware with 
approximately 220,000 and 325,000 rentable square feet of space, respectively. M&T Bank occupies 
approximately 29% and 89% of those facilities, respectively. At December 31, 2016, the cost of 
those buildings (including improvements subsequent to acquisition), net of accumulated depreciation, 
was $10.1 million and $9.2 million, respectively. 

No other properties owned by M&T Bank have more than 100,000 square feet of space. The 
cost, net of accumulated depreciation and amortization, of the Company’s premises and equipment is 
detailed in note 6 of Notes to Financial Statements filed herewith in Part II, Item 8, “Financial 
Statements and Supplementary Data.” 

Of the 801 domestic banking offices of M&T’s subsidiary banks at December 31, 2016, 316 are 

owned in fee and 485 are leased. 

Item 3.  Legal Proceedings. 

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 

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probable that the Company will incur losses and the amounts of the losses can be reasonably 
estimated, the Company records an expense and corresponding liability in its consolidated financial 
statements. To the extent the pending or threatened litigation could result in exposure in excess of 
that liability, the amount of such excess is not currently estimable. Although not considered probable, 
the range of reasonably possible losses for such matters in the aggregate, beyond the existing 
recorded liability, was between $0 and $40 million. Although the Company does not believe that the 
outcome of pending litigations will be material to the Company’s consolidated financial position, it 
cannot rule out the possibility that such outcomes will be material to the consolidated results of 
operations for a particular reporting period in the future. 

Wilmington Trust Corporation Investigative and Litigation Matters 

M&T’s Wilmington Trust Corporation subsidiary is the subject of certain governmental 
investigations arising from actions undertaken by Wilmington Trust Corporation prior to M&T’s 
acquisition of Wilmington Trust Corporation and its subsidiaries, as set forth below. 

DOJ Investigation (United States v. Wilmington Trust Corp., et al, District of Delaware, 

Crim.   No. 15-23-RGA): Prior to M&T’s acquisition of Wilmington Trust Corporation, the 
Department of Justice (“DOJ”) commenced an investigation of Wilmington Trust Corporation, 
relating to Wilmington Trust Corporation’s financial reporting and securities filings, as well as 
certain commercial real estate lending relationships involving its subsidiary bank, Wilmington Trust 
Company, all of which relate to filings and activities occurring prior to the acquisition of Wilmington 
Trust Corporation by M&T. On January 6, 2016, the U.S. Attorney for the District of Delaware 
obtained an indictment against Wilmington Trust Corporation relating to alleged conduct that 
occurred prior to M&T’s acquisition of Wilmington Trust Corporation in May 2011. M&T strongly 
believes that this unprecedented action is unjustified and Wilmington Trust Corporation will 
vigorously defend itself.  On August 26, 2016, the Court granted defendants joint motion for a 
continuance of the trial date.  Trial in this matter is now scheduled to begin on October 2, 
2017.  Wilmington Trust Corporation and its counsel are currently involved in pretrial discovery, 
motion practice and trial preparation. 

The indictment of Wilmington Trust Corporation could result in potential criminal remedies, or 

criminal or non-criminal resolutions or settlements, including, among other things, enforcement 
actions, potential statutory or regulatory restrictions on the ability to conduct certain businesses (for 
which waivers may or may not be available), fines, penalties, restitution, reputational damage or 
additional costs and expenses. 

In Re Wilmington Trust Securities Litigation (U.S. District Court, District of Delaware, Case 
No. 10-CV-0990-SLR): Beginning on November 18, 2010, a series of parties, purporting to be class 
representatives, commenced a putative class action lawsuit against Wilmington Trust Corporation, 
alleging that Wilmington Trust Corporation’s financial reporting and securities filings were in 
violation of securities laws. The cases were consolidated and Wilmington Trust Corporation moved 
to dismiss. The Court issued an order denying Wilmington Trust Corporation’s motion to dismiss on 
March 20, 2014. Fact discovery commenced. On April 13, 2016, the Court issued an order staying 
fact discovery in the case pending completion of the trial in U.S. v. Wilmington Trust Corp., et al. On 
September 19, 2016, the plaintiffs filed a motion to modify the stay of discovery in this matter to 
allow for additional, limited discovery. On December 19, 2016, the Court issued an order lifting the 
existing stay in its entirety, subject to appropriate protective orders to be determined by the Court.  
On January 24, 2017, the Court issued an order scheduling trial for June 18, 2018 and entering 
certain protective orders. 

Due to their complex nature, it is difficult to estimate when litigation and investigatory matters 

such as these may be resolved. As set forth in the introductory paragraph to this Item 3 — Legal 

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Proceedings, losses from current litigation and regulatory matters which the Company is subject to 
that are not currently considered probable are within a range of reasonably possible losses for such 
matters in the aggregate, beyond the existing recorded liability, and are included in the range of 
reasonably possible losses set forth above.   

Item 4.  Mine Safety Disclosures. 

Not applicable. 

Executive Officers of the Registrant 
Information concerning M&T’s executive officers is presented below as of February 22, 2017. The 
year the officer was first appointed to the indicated position with M&T or its subsidiaries is shown 
parenthetically. In the case of each entity noted below, officers’ terms run until the first meeting of 
the board of directors after such entity’s annual meeting, which in the case of M&T takes place 
immediately following the Annual Meeting of Shareholders, and until their successors are elected 
and qualified. 

Robert G. Wilmers, age 82, is chief executive officer (2007), chairman of the board (2000) and 

a director (1982) of M&T. From April 1998 until July 2000, he served as president and chief 
executive officer of M&T and from July 2000 until June 2005 he served as chairman, president 
(1988) and chief executive officer (1983). He is chief executive officer (2007), chairman of the board 
(2005) and a director (1982) of M&T Bank, and previously served as chairman of the board of M&T 
Bank from March 1983 until July 2003 and as president of M&T Bank from March 1984 until June 
1996. 

Mark J. Czarnecki, age 61, is president (2007), chief operating officer (2014) and a director 

(2007) of M&T and M&T Bank. He has responsibility for the day-to-day management of the 
Company. Previously, he was an executive vice president of M&T (1999) and M&T Bank (1997) 
and was responsible for the M&T Investment Group and the Company’s Retail Banking network. 
Mr. Czarnecki is chairman of the board, president and chief executive officer (2007) and a director 
(2005) of Wilmington Trust, N.A. 

Robert J. Bojdak, age 61, is an executive vice president and chief credit officer (2004) of M&T 

and M&T Bank, and is responsible for the Company’s Credit Risk Management Division. From 
April 2002 to April 2004, Mr. Bojdak served as senior vice president and credit deputy for M&T 
Bank. He is an executive vice president and a director (2004) of Wilmington Trust, N.A. 

Janet M. Coletti, age 53, is an executive vice president (2015) of M&T and M&T Bank, 
overseeing the Company’s Human Resources Division. Ms. Coletti previously served as senior vice 
president of M&T Bank, most recently responsible for the Business Banking Division, and has held a 
number of management positions within M&T Bank since 1985. 

William J. Farrell II, age 59, is an executive vice president (2011) of M&T and M&T Bank, and 

is responsible for managing administrative and business development functions of the Company’s 
Wealth and Institutional Services Division, which includes Institutional Client Services and M&T 
Insurance Agency. Mr. Farrell joined M&T through the Wilmington Trust Corporation acquisition. 
He joined Wilmington Trust Corporation in 1976, and held a number of senior management 
positions, most recently as executive vice president and head of the Corporate Client Services 
business. Mr. Farrell is president, chief executive officer and a director (2012) of Wilmington Trust 
Company, an executive vice president and a director (2011) of Wilmington Trust, N.A. and a director 
(2013) of M&T Securities. 

Richard S. Gold, age 56, is an executive vice president (2006) and chief risk officer (2014) of 

M&T. He is a vice chairman and chief risk officer (2014) of M&T Bank. Mr. Gold is responsible for 

41 

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overseeing the Company’s governance and strategy for risk management, as well as relationships 
with key regulators and supervisory agencies. Previously, Mr. Gold had management responsibilities 
for the Mortgage, Consumer Lending, Retail and Business Banking Divisions. He served as a senior 
vice president of M&T Bank from 2000 to 2006 and has held a number of management positions 
since he began his career with M&T Bank in 1989.  Mr. Gold is an executive vice president (2006) 
and chief risk officer (2014) of Wilmington Trust, N.A. 

Brian E. Hickey, age 64, is an executive vice president of M&T (1997) and M&T Bank (1996). 
He is a member of the Directors Advisory Council (1994) of the Rochester Division of M&T Bank. 
Mr. Hickey is responsible for co-managing with Mr. Martocci M&T Bank’s commercial banking 
lines of business and all of the non-retail banking segments in Upstate New York, Western New 
York and in the Northern, Central and Western Pennsylvania and Connecticut regions. Mr. Hickey is 
also responsible for the Dealer Commercial Services line of business. 

René F. Jones, age 52, is an executive vice president (2006) of M&T and a vice chairman 

(2014) of M&T Bank. Mr. Jones has overall responsibility for the Company’s Wealth and 
Institutional Services Division, Treasury Division, and Mortgage and Consumer Lending Divisions. 
Mr. Jones is an executive vice president (2005) and a director (2007) of Wilmington Trust, N.A., and 
he is chairman of the board, president (2009) and a trustee (2005) of M&T Real Estate. Mr. Jones is 
chairman of the board and a director (2014) of Wilmington Trust Investment Advisors, and is a 
director (2007) of M&T Insurance Agency. Mr. Jones is chairman of the board and a director (2014) 
of Wilmington Trust Company. Previously, Mr. Jones served as chief financial officer (2005) of 
M&T, M&T Bank and Wilmington Trust, N.A. and has held a number of management positions 
within M&T Bank’s Finance Division since 1992. 

Darren J. King, age 47, is an executive vice president (2010) and chief financial officer (2016) 

of M&T and executive vice president (2009) and chief financial officer (2016) of M&T Bank. Mr. 
King has responsibility for the overall financial management of the Company.  Prior to his current 
role, Mr. King was the Retail Banking executive with responsibility for overseeing Business 
Banking, Consumer Deposits, Consumer Lending and M&T Bank’s Marketing and Communications 
team. Mr. King previously served as senior vice president of M&T Bank and has held a number of 
management positions within M&T Bank since 2000. Mr. King is an executive vice president (2009) 
and chief financial officer (2016) of Wilmington Trust, N.A. 

Gino A. Martocci, age 51, is an executive vice president (2014) of M&T and M&T Bank, and is 

responsible for co-managing with Mr. Hickey M&T Bank’s commercial banking lines of business 
and all non-retail banking segments in the metropolitan New York City, New Jersey, Philadelphia, 
Delaware, Baltimore and Washington, D.C. markets.  He is also responsible for M&T Realty Capital. 
Mr. Martocci was a senior vice president of M&T Bank from 2002 to 2013, serving in a number of 
management positions. He is an executive vice president (2015) and a director (2009) of M&T 
Realty Capital, an executive vice president of M&T Real Estate, co-chairman of the Senior Loan 
Committee and a member of the New York City Mortgage Investment Committee. Mr. Martocci is 
also a member of the Directors Advisory Council of the New York City/Long Island (2013) and the 
New Jersey (2015) Divisions of M&T Bank. 

Doris P. Meister, age 61, is an executive vice president (2016) of M&T and M&T Bank, and is 
responsible for overseeing the Company’s wealth management business, including Wealth Advisory 
Services, M&T Securities and Wilmington Trust Investment Advisors. Ms. Meister is an executive 
vice president and a director (2016) of Wilmington Trust, N.A. and a director (2016) of M&T 
Securities. Prior to joining M&T in 2016, Ms. Meister served as President of U.S. Markets for BNY 
Mellon Wealth Management and was a Managing Director of the New York office of Bernstein 
Global Wealth Management.  

Kevin J. Pearson, age 55, is an executive vice president (2002) of M&T and is a vice chairman 

(2014) of M&T Bank. He is a member of the Directors Advisory Council (2006) of the New York 

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City/Long Island Division of M&T Bank. Mr. Pearson is responsible for M&T Bank’s Commercial 
Banking and Credit Divisions. Previously, Mr. Pearson served as senior vice president of M&T Bank 
from 2000 to 2002, and has held a number of management positions since he began his career with 
M&T Bank in 1989. He is an executive vice president (2003) and a trustee (2014) of M&T Real 
Estate, chairman of the board (2009) and a director (2003) of M&T Realty Capital, and an executive 
vice president and a director of Wilmington Trust, N.A. (2014).  

Michael J. Todaro, age 55, is an executive vice president (2015) of M&T and M&T Bank, and 

is responsible for the Mortgage, Consumer Lending and Customer Asset Management Divisions. Mr. 
Todaro previously served as senior vice president of M&T Bank and has held a number of 
management positions within M&T Bank’s Mortgage Division since 1995. He is an executive vice 
president (2015) of Wilmington Trust, N.A. 

Michele D. Trolli, age 55, is an executive vice president and chief information officer (2005) of 

M&T and M&T Bank. Ms. Trolli leads a wide range of the Company’s Technology and Banking 
Operations, which includes banking services, corporate services, digital and telephone banking, the 
enterprise data office, enterprise and cyber security, and enterprise technology.  

D. Scott N. Warman, age 51, is an executive vice president (2009) and treasurer (2008) of M&T 

and M&T Bank. He is responsible for managing the Company’s Treasury Division. Mr. Warman 
previously served as senior vice president of M&T Bank and has held a number of management 
positions within M&T Bank since 1995. He is an executive vice president and treasurer of 
Wilmington Trust, N.A. (2008), a trustee of M&T Real Estate (2009), and is treasurer of Wilmington 
Trust Company (2012). 

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PART II 

Item 5.  Market for Registrant’s Common Equity, Related Stockholder Matters and Issuer 

Purchases of Equity Securities. 

M&T’s common stock is traded under the symbol MTB on the New York Stock Exchange. See 
cross-reference sheet for disclosures incorporated elsewhere in this Annual Report on Form 10-K for 
market prices of M&T’s common stock, approximate number of common shareholders at year-end, 
frequency and amounts of dividends on common stock and restrictions on the payment of dividends. 
During the fourth quarter of 2016, M&T did not issue any shares of its common stock that were 

not registered under the Securities Act of 1933. 

Equity Compensation Plan Information 
The following table provides information as of December 31, 2016 with respect to shares of common 
stock that may be issued under M&T’s existing equity compensation plans. M&T’s existing equity 
compensation plans include the M&T Bank Corporation 2001 Stock Option Plan, the 2005 Incentive 
Compensation Plan, which replaced the 2001 Stock Option Plan, and the 2009 Equity Incentive 
Compensation Plan, each of which has been previously approved by shareholders, and the M&T 
Bank Corporation 2008 Directors’ Stock Plan and the M&T Bank Corporation Deferred Bonus Plan, 
each of which did not require shareholder approval. 

The table does not include information with respect to shares of common stock subject to 
outstanding options and rights assumed by M&T in connection with mergers and acquisitions of the 
companies that originally granted those options and rights. Footnote (1) to the table sets forth the 
total number of shares of common stock issuable upon the exercise of such assumed options and 
rights as of December 31, 2016, and their weighted-average exercise price. 

Plan Category 

Equity compensation plans approved 
   by security holders ........................................   
Equity compensation plans not approved 
   by security holders ........................................   
Total ......................................................   

Number of 
Securities 
to be Issued Upon 
Exercise of 
Outstanding 
Options or Rights
(A) 

Weighted-Average 
Exercise Price of 
Outstanding 
Options or Rights 
(B) 

Number of Securities 
Remaining Available 
for Future Issuance 
Under Equity 
Compensation Plans 
(Excluding Securities 
Reflected in Column A)  
(C) 

497,001    $

92.30        

3,667,800 

26,217     
523,218    $

78.75        
91.62        

53,256 
3,721,056  

(1)  As of December 31, 2016, a total of 1,106,805 shares of M&T common stock were issuable upon exercise of 
outstanding options or rights assumed by M&T in connection with merger and acquisition transactions. The 
weighted-average exercise price of those outstanding options or rights is $160.18 per common share. 

Equity compensation plans adopted without the approval of shareholders are described below: 

2008 Directors’ Stock Plan. M&T maintains a plan for non-employee members of the Board 

of Directors of M&T and the members of its Directors Advisory Council, and the non-employee 
members of the Board of Directors of M&T Bank and the members of its regional Directors 
Advisory Councils, which allows such directors, advisory directors and members of regional 
Directors Advisory Councils to receive all or a portion of their directorial compensation in shares of 
M&T common stock. 

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Deferred Bonus Plan. M&T maintains a deferred bonus plan which was frozen effective 
January 1, 2010 and did not allow any additional deferrals after that date. Prior to January 1, 2010, 
the plan allowed eligible officers of M&T and its subsidiaries to elect to defer all or a portion of their 
annual incentive compensation awards and allocate such awards to several investment options, 
including M&T common stock. At the time of the deferral election, participants also elected the 
timing of distributions from the plan. Such distributions are payable in cash, with the exception of 
balances allocated to M&T common stock which are distributable in the form of shares of common 
stock. 

Performance Graph 
The following graph contains a comparison of the cumulative shareholder return on M&T common 
stock against the cumulative total returns of the KBW Nasdaq Bank Index, compiled by Keefe, 
Bruyette & Woods, Inc., and the S&P 500 Index, compiled by Standard & Poor’s Corporation, for 
the five-year period beginning on December 31, 2011 and ending on December 31, 2016. The KBW 
Nasdaq Bank Index is a market capitalization index consisting of 24 banking stocks representing 
leading large U.S. national money centers, regional banks and thrift institutions. 

Comparison of Five-Year Cumulative Return* 

$300

$250

$200

$150

$100

$50

$0

2011

2012

2013

2014

2015

2016

M&T Bank Corporation

KBW Nasdaq Bank Index

S&P 500 Index

Shareholder Value at Year End* 

M&T Bank Corporation ................. $
KBW Nasdaq Bank Index ..............
S&P 500 Index ...............................

100
100
100

133
133
116

162
183
154

178     176      233
200     201      259
175     177      198  

2011

2012

2013

2014

2015 

2016

* Assumes a $100 investment on December 31, 2011 and reinvestment of all dividends. 

In accordance with and to the extent permitted by applicable law or regulation, the information 

set forth above under the heading “Performance Graph” shall not be incorporated by reference into 
any future filing under the Securities Act of 1933, as amended (the “Securities Act”), or the 

45 

45

 
 
 
 
  
 
  
 
Exchange Act and shall not be deemed to be “soliciting material” or to be “filed” with the SEC under 
the Securities Act or the Exchange Act. 

Issuer Purchases of Equity Securities 
On July 19, 2016, M&T announced that it had been authorized by its Board of Directors to purchase 
up to $1.15 billion of shares of its common stock through June 30, 2017. A repurchase program 
authorized in November 2015 by M&T’s Board of Directors was completed during 2016. In total, 
M&T repurchased 5,607,595 common shares for $641 million during 2016.  

During the fourth quarter of 2016, M&T purchased shares of its common stock as follows: 

Issuer Purchases of Equity Securities 

(c)Total 
Number of 
Shares 
(or Units) 
Purchased 
as Part of 
Publicly 
Announced 
Plans or 
Programs       

(d)Maximum 
Number (or 
Approximate 
Dollar Value) 
of Shares 
(or Units) 
that may yet 
be Purchased 
Under the 
Plans or 
Programs (2)

(a)Total 
Number 
of Shares 
(or Units) 
Purchased (1)

(b)Average 
Price Paid 
per Share 
(or Unit)

Period 

 October 1 – October 31, 2016 ..........................     
—      $ 800,000,000 
 November 1 – November 30, 2016 ..................      336,833      125.02      300,000        762,666,000 
 December 1 – December 31, 2016 ...................     
—        762,666,000 
Total ..................................................................      355,672    $ 125.89      300,000        

11,439      153.81     

7,400    $ 122.03     

(1)  The total number of shares purchased during the periods indicated includes shares purchased 
as part of publicly announced programs and shares deemed to have been received from 
employees who exercised stock options by attesting to previously acquired common shares in 
satisfaction of the exercise price or shares received from employees upon the vesting of 
restricted stock awards in satisfaction of applicable tax withholding obligations, as is permitted 
under M&T’s stock-based compensation plans. 

(2)  On July 19, 2016, M&T announced a program to purchase up to $1.15 billion of its common 

stock through June 30, 2017. 

Item 6.  Selected Financial Data. 

See cross-reference sheet for disclosures incorporated elsewhere in this Annual Report on Form 10-K. 

Item 7.  Management’s Discussion and Analysis of Financial Condition and Results of 

Operations. 

Corporate Profile and Significant Developments 
M&T Bank Corporation (“M&T”) is a bank holding company headquartered in Buffalo, New York 
with consolidated assets of $123.4 billion at December 31, 2016. The consolidated financial 
information presented herein reflects M&T and all of its subsidiaries, which are referred to 
collectively as “the Company.” M&T’s wholly owned bank subsidiaries are M&T Bank and 
Wilmington Trust, National Association (“Wilmington Trust, N.A.”). 

M&T Bank, with total assets of $122.6 billion at December 31, 2016, is a New York-chartered 

commercial bank with 799 domestic banking offices in New York State, Maryland, New Jersey, 
Pennsylvania, Delaware, Connecticut, Virginia, West Virginia, and the District of Columbia, a full-

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service commercial banking office in Ontario, Canada, and an office in the Cayman Islands. M&T 
Bank and its subsidiaries offer a broad range of financial services to a diverse base of consumers, 
businesses, professional clients, governmental entities and financial institutions located in their 
markets. Lending is largely focused on consumers residing in the states noted above and on small and 
medium size businesses based in those areas, although loans are originated through offices in other 
states and in Ontario, Canada. Certain lending activities are also conducted in other states through 
various subsidiaries. Trust and other fiduciary services are offered by M&T Bank and through its 
wholly owned subsidiary, Wilmington Trust Company. Other subsidiaries of M&T Bank include: 
M&T Real Estate Trust, a commercial mortgage lender; M&T Realty Capital Corporation, a 
multifamily commercial mortgage lender; M&T Securities, Inc., which provides brokerage, 
investment advisory and insurance services; Wilmington Trust Investment Advisors, Inc., which 
serves as an investment advisor to the Wilmington Funds, a family of proprietary mutual funds, and 
other funds and institutional clients; and M&T Insurance Agency, Inc., an insurance agency. 

Wilmington Trust, N.A. is a national bank with total assets of $3.7 billion at December 31, 

2016. Wilmington Trust, N.A. and its subsidiaries offer various trust and wealth management 
services.  Wilmington Trust, N.A. also offered selected deposit and loan products on a nationwide 
basis, largely through telephone, Internet and direct mail marketing techniques. 

On November 1, 2015, M&T completed its acquisition of Hudson City Bancorp, Inc. (“Hudson 

City”). Immediately following completion of the merger, Hudson City Savings Bank merged with 
and into M&T Bank. Pursuant to the merger agreement, M&T paid cash consideration of $2.1 billion 
and issued 25,953,950 shares of M&T common stock in exchange for Hudson City shares 
outstanding at the time of acquisition.  Assets acquired totaled approximately $36.7 billion, including 
$19.0 billion of loans (predominantly residential real estate loans) and $7.9 billion of investment 
securities. Liabilities assumed aggregated $31.5 billion, including $17.9 billion of deposits and $13.2 
billion of borrowings. Immediately following the acquisition, the Company restructured its balance 
sheet by selling $5.8 billion of investment securities obtained in the acquisition and repaying $10.6 
billion of borrowings assumed in the transaction. The common stock issued added $3.1 billion to 
M&T’s common shareholders’ equity. In connection with the acquisition, the Company recorded 
$1.1 billion of goodwill and $132 million of core deposit intangible asset. The acquisition of Hudson 
City expanded the Company’s presence in New Jersey, Connecticut and New York. 

Net acquisition and integration-related expenses (included herein as merger-related expenses) 

associated with the Hudson City acquisition totaled $22 million after tax-effect, or $.14 of diluted 
earnings per common share during 2016 and $61 million after tax-effect, or $.44 of diluted earnings 
per common share in 2015. There were no merger-related expenses in 2014.  

Critical Accounting Estimates 
The Company’s significant accounting policies conform with generally accepted accounting 
principles (“GAAP”) and are described in note 1 of Notes to Financial Statements. In applying those 
accounting policies, management of the Company is required to exercise judgment in determining 
many of the methodologies, assumptions and estimates to be utilized. Certain of the critical 
accounting estimates are more dependent on such judgment and in some cases may contribute to 
volatility in the Company’s reported financial performance should the assumptions and estimates 
used change over time due to changes in circumstances. Some of the more significant areas in which 
management of the Company applies critical assumptions and estimates include the following: 

  Accounting for credit losses — The allowance for credit losses represents the amount that 
in management’s judgment appropriately reflects credit losses inherent in the loan and 
lease portfolio as of the balance sheet date. A provision for credit losses is recorded to 
adjust the level of the allowance as deemed necessary by management. In estimating 
losses inherent in the loan and lease portfolio, assumptions and judgment are applied to 
measure amounts and timing of expected future cash flows, collateral values and other 

47 

47

 
factors used to determine the borrowers’ abilities to repay obligations. Historical loss 
trends are also considered, as are economic conditions, industry trends, portfolio trends 
and borrower-specific financial data. In accounting for loans acquired at a discount that is, 
in part, attributable to credit quality which are initially recorded at fair value with no carry-
over of an acquired entity’s previously established allowance for credit losses, the cash 
flows expected at acquisition in excess of estimated fair value are recognized as interest 
income over the remaining lives of the loans. Subsequent decreases in the expected 
principal cash flows require the Company to evaluate the need for additions to the 
Company’s allowance for credit losses. Subsequent improvements in expected cash flows 
result first in the recovery of any applicable allowance for credit losses and then in the 
recognition of additional interest income over the remaining lives of the loans. Changes in 
the circumstances considered when determining management’s estimates and assumptions 
could result in changes in those estimates and assumptions, which may result in 
adjustment of the allowance or, in the case of loans acquired at a discount, increases in 
interest income in future periods. A detailed discussion of facts and circumstances 
considered by management in determining the allowance for credit losses is included 
herein under the heading “Provision for Credit Losses” and in note 5 of Notes to Financial 
Statements. 

  Valuation methodologies — Management of the Company applies various valuation 
methodologies to assets and liabilities which often involve a significant degree of 
judgment, particularly when liquid markets do not exist for the particular items being 
valued. Quoted market prices are referred to when estimating fair values for certain assets, 
such as trading assets, most investment securities, and residential real estate loans held for 
sale and related commitments. However, for those items for which an observable liquid 
market does not exist, management utilizes significant estimates and assumptions to value 
such items. Examples of these items include loans, deposits, borrowings, goodwill, core 
deposit and other intangible assets, other assets and liabilities obtained or assumed in 
business combinations, capitalized servicing assets, pension and other postretirement 
benefit obligations, estimated residual values of property associated with leases, and 
certain derivative and other financial instruments. These valuations require the use of 
various assumptions, including, among others, discount rates, rates of return on assets, 
repayment rates, cash flows, default rates, costs of servicing and liquidation values. The 
use of different assumptions could produce significantly different results, which could 
have material positive or negative effects on the Company’s results of operations, financial 
condition or disclosures of fair value information. 

In addition to valuation, the Company must assess whether there are any declines in value 
below the carrying value of assets that should be considered other than temporary or 
otherwise require an adjustment in carrying value and recognition of a loss in the 
consolidated statement of income. Examples include investment securities, other 
investments, mortgage servicing rights, goodwill, core deposit and other intangible assets, 
among others. Specific assumptions and estimates utilized by management are discussed 
in detail herein in management’s discussion and analysis of financial condition and results 
of operations and in notes 1, 3, 4, 7, 8, 12, 18, 19 and 20 of Notes to Financial Statements. 
Commitments, contingencies and off-balance sheet arrangements — Information 
regarding the Company’s commitments and contingencies, including guarantees and 
contingent liabilities arising from litigation, and their potential effects on the Company’s 
results of operations is included in note 21 of Notes to Financial Statements. In addition, 
the Company is routinely subject to examinations from various governmental taxing 
authorities. Such examinations may result in challenges to the tax return treatment applied 
by the Company to specific transactions. Management believes that the assumptions and 

 

48 

48

 
judgment used to record tax-related assets or liabilities have been appropriate. Should tax 
laws change or the tax authorities determine that management’s assumptions were 
inappropriate, the result and adjustments required could have a material effect on the 
Company’s results of operations. Information regarding the Company’s income taxes is 
presented in note 13 of Notes to Financial Statements. The recognition or de-recognition 
in the Company’s consolidated financial statements of assets and liabilities held by so-
called variable interest entities is subject to the interpretation and application of complex 
accounting pronouncements or interpretations that require management to estimate and 
assess the relative significance of the Company’s financial interests in those entities and 
the degree to which the Company can influence the most important activities of the 
entities. Information relating to the Company’s involvement in such entities and the 
accounting treatment afforded each such involvement is included in note 19 of Notes to 
Financial Statements. 

Overview 
The Company recorded net income during 2016 of $1.32 billion or $7.78 of diluted earnings per 
common share, up 22% and 8%, respectively, from $1.08 billion or $7.18 of diluted earnings per 
common share in 2015. Basic earnings per common share also increased 8% to $7.80 in 2016 from 
$7.22 in 2015. Net income in 2014 totaled $1.07 billion, while diluted and basic earnings per 
common share were $7.42 and $7.47, respectively. The after-tax impacts of merger-related expenses 
associated with the 2015 acquisition of Hudson City were $22 million ($36 million pre-tax) or $.14 
of diluted earnings per common share and $61 million ($97 million pre-tax) or $.44 of diluted 
earnings per common share in 2016 and 2015, respectively. There were no merger-related expenses 
in 2014. Expressed as a rate of return on average assets, net income in each of 2016 and 2015 was 
1.06%, compared with 1.16% in 2014. The return on average common shareholders’ equity was 
8.16% in 2016, 8.32% in 2015 and 9.08% in 2014.  

The Hudson City transaction was accounted for using the acquisition method of accounting and, 

accordingly, the results of operations acquired in such transaction have been included in the 
Company’s financial results for the final two months of 2015 and all twelve months of 2016. The 
acquired operations added to the Company’s average earning assets, net interest income and non-
interest expenses.  

Taxable-equivalent net interest income aggregated $3.50 billion in 2016, $2.87 billion in 2015 

and $2.70 billion in 2014. Average earning assets increased $21.4 billion, or 23%, in 2016 as 
compared with 2015 due predominantly to higher average balances of loans and leases of $17.8 
billion, principally due to the full-year impact of the Hudson City acquisition, and interest-bearing 
deposits at banks of $3.1 billion. Loans associated with Hudson City totaled $19.0 billion on the 
acquisition date, consisting of approximately $234 million of commercial real estate loans, $18.6 
billion of residential real estate loans and $162 million of consumer loans. Offsetting the impact of 
higher earning assets was a three basis point (hundredths of one percent) narrowing of the net interest 
margin, or taxable-equivalent net interest income expressed as a percentage of average earning 
assets, from 3.14% in 2015 to 3.11% in 2016. Lower yields on investment securities and an increase 
in rates on interest-bearing deposits, reflecting the impact of time deposits in the former Hudson City 
markets, led to that narrowing. Average earning assets grew $9.5 billion, or 12%, in 2015 as 
compared with 2014 due to higher balances of loans and leases of $6.2 billion and investment 
securities of $2.9 billion. Loans and investment securities obtained in the acquisition of Hudson City 
added approximately $3.1 billion and $409 million, respectively, to average earning assets in 2015. 
Offsetting the impact of higher earning assets was a 17 basis point narrowing of the net interest 
margin from 3.31% in 2014. Lower yields on investment securities and loans and leases outstanding 
led to that narrowing. 

49 

49

 
 
 
The provision for credit losses increased 12% to $190 million in 2016 from $170 million in 

2015. The provision in 2015 was 37% higher than $124 million in 2014. As of the acquisition date, 
the pre-merger Hudson City allowance for credit losses was eliminated in acquisition accounting and 
as provided for by GAAP, a $21 million provision for credit losses was recorded in 2015 for incurred 
credit losses in connection with the $18.3 billion of loans acquired at a premium that were not 
individually identifiable as impaired at the acquisition date. Net charge-offs were $157 million in 
2016, compared with $134 million in 2015 and $121 million in 2014. Net charge-offs as a percentage 
of average loans and leases were .18% in 2016 and .19% in each of 2015 and 2014. 

Other income totaled $1.83 billion in each of 2016 and 2015, compared with $1.78 billion in 

2014. Higher gains recognized on sales of investment securities and higher trading account and 
foreign exchange gains in 2016 were offset by a gain in 2015 on the sale of the Company’s trade 
processing business. During 2016, the Company sold all of its collateralized debt obligations with an 
amortized cost of $28 million held in the available-for-sale investment securities portfolio, resulting 
in a $30 million gain. Those securities, which had been obtained in previous acquisitions, were sold 
in response to the provisions of the Dodd-Frank Wall Street Reform and Consumer Protection Act 
(“Dodd-Frank Act”) commonly referred to as the “Volcker Rule.” There were no significant gains or 
losses on investment securities during 2015 or 2014. In 2015, the Company sold its trade processing 
business within the retirement services division of its Institutional Client Services business and 
recognized a $45 million gain. The Hudson City transaction did not have a significant impact on 
other income. The increase in other income in 2015 as compared with 2014 was largely due to higher 
commercial mortgage banking revenues, loan syndication fees and the gain on the sale of the trade 
processing business, partially offset by lower trust income associated with the divested business, 
decreased residential mortgage banking revenues and a decline in service charges on deposit 
accounts.  

Other expense increased 8% to $3.05 billion in 2016 from $2.82 billion in 2015. Other expense 

totaled $2.69 billion in 2014. Included in those amounts are expenses considered by M&T to be 
“nonoperating” in nature, consisting of amortization of core deposit and other intangible assets of 
$43 million, $26 million, and $34 million in 2016, 2015 and 2014, respectively, and merger-related 
expenses of $36 million and $76 million in 2016 and 2015, respectively. Exclusive of those 
nonoperating expenses, noninterest operating expenses aggregated $2.97 billion in 2016, compared 
with $2.72 billion in 2015 and $2.66 billion in 2014. The increase in such expenses in 2016 as 
compared with 2015 reflects the full-year impact of the Hudson City acquisition and higher costs for 
salaries and employee benefits and FDIC assessments. In addition to the impact of Hudson City, the 
increase in salaries and employee benefits expense was largely attributable to higher medical benefit 
plan expenses and annual merit increases for employees. The rise in noninterest operating expenses 
from 2014 to 2015 was largely due to higher costs for salaries and employee benefits and charitable 
contributions, partially offset by lower professional services costs. In addition to the impact of 
Hudson City, the increase in salaries and employee benefits was largely attributable to annual merit 
increases for employees and higher pension expense. Following the realized gains on sales of 
investment securities, the Company made cash contributions to The M&T Charitable Foundation of 
$30 million in 2016, while in 2015 the Company made cash contributions to that foundation of $46 
million following the realization of the gain on the sale of its trade processing business.  The 
Company also made cash contributions of $18 million to The M&T Charitable Foundation in 2014.  

The efficiency ratio measures the relationship of operating expenses to revenues. The 

Company’s efficiency ratio, or noninterest operating expenses (as previously defined) divided by the 
sum of taxable-equivalent net interest income and noninterest income (exclusive of gains and losses 
from bank investment securities), was 56.1% in 2016, compared with 58.0% and 59.3% in 2015 and 
2014, respectively. The calculations of the efficiency ratio are presented in table 2. 

50 

50

 
On June 29, 2016, M&T announced that the Federal Reserve did not object to M&T’s revised 

2016 Capital Plan. That capital plan includes the repurchase of up to $1.15 billion of common shares 
during the four-quarter period starting on July 1, 2016 and an increase in the quarterly common stock 
dividend in the first quarter of 2017 of up to $.05 per share to $.75 per share. M&T may also 
continue to pay dividends and interest on other equity and debt instruments included in regulatory 
capital, including preferred stock, trust preferred securities and subordinated debt that were 
outstanding at December 31, 2015, consistent with the contractual terms of those instruments. 
Dividends are subject to declaration by M&T’s Board of Directors. Furthermore, on July 19, 2016, 
M&T’s Board of Directors authorized a new stock repurchase program to repurchase up to $1.15 
billion of shares of M&T’s common stock subject to all applicable regulatory limitations, including 
those set forth in M&T’s 2016 Capital Plan. 

Table 1 

EARNINGS SUMMARY 
Dollars in millions 

Increase (Decrease)(a)             
2015 to 2016    2014 to 2015      
Amount    %    Amount     %      

  2016 

   2015 

   2014 

   2013 

     2012 

   2011 to 2016

Compound
Growth Rate
5 Years 

$  727.5      23    $  214.8        7    Interest income(b) ........................................   $3,922.8  $3,195.3  $2,980.5  $2,982.3     $ 2,968.1      
47.8       17    Interest expense ............................................    
284.1        343.2      
167.0        6    Net interest income(b) ..................................     3,496.8    2,867.0    2,700.1    2,698.2       2,624.9      
185.0        204.0      
46.0       37    Less: provision for credit losses ...................    

97.7      30    
   629.8      22    
20.0      12    

170.0   

328.3   

280.4   

124.0   

190.0   

426.0   

7%   
1  
8  
(7 ) 

30.4      —    
(29.4 )    (2 )  

—       —    

Gain (loss) on bank investment 
   securities(c) ...............................................    

30.3   

—    

—    

46.7       

45.8        3    Other income ................................................     1,795.7    1,825.1    1,779.3    1,818.5       1,715.1      

(47.8 )    —   
4  

    Less: 

74.1       5    
   150.5      12    
   386.2      23    

144.6       10    
(11.1)       (1 )  

Salaries and employee benefits ..............     1,623.6    1,549.5    1,405.0    1,355.2       1,314.6      
Other expense ........................................     1,423.8    1,273.4    1,284.5    1,232.7       1,155.2      
33.3        2    Income before income taxes .........................     2,085.4    1,699.2    1,665.9    1,790.5       1,618.4      

    Less: 

2.5      10    
   148.3      25    

.9        3    
19.0        3    

Taxable‐equivalent adjustment(b) ..........    
Income taxes ..........................................    

27.0   
743.3   

24.5   
595.0   

23.7   
576.0   

25.0      
26.4      
627.0        562.5      

6  
3  
10  

1  
13  

$  235.4      22    $ 

13.4        1    Net income ...................................................   $1,315.1  $1,079.7  $1,066.2  $1,138.5     $ 1,029.5      

9%   

(a)  Changes were calculated from unrounded amounts. 
(b) 

Interest income data are on a taxable-equivalent basis. The taxable-equivalent adjustment represents additional income 
taxes that would be due if all interest income were subject to income taxes. This adjustment, which is related to interest 
received on qualified municipal securities, industrial revenue financings and preferred equity securities, is based on a 
composite income tax rate of approximately 39%. 
Includes other-than-temporary impairment losses, if any. 

(c) 

Supplemental Reporting of Non-GAAP Results of Operations 
As a result of business combinations and other acquisitions, the Company had intangible assets 
consisting of goodwill and core deposit and other intangible assets totaling $4.7 billion at each of 
December 31, 2016 and 2015 and $3.6 billion at December 31, 2014. Included in such intangible 
assets was goodwill of $4.6 billion at each of December 31, 2016 and 2015 and $3.5 billion at 
December 31, 2014. Amortization of core deposit and other intangible assets, after tax effect, totaled 
$26 million, $16 million and $21 million during 2016, 2015 and 2014, respectively. 

M&T consistently provides supplemental reporting of its results on a “net operating” or 
“tangible” basis, from which M&T excludes the after-tax effect of amortization of core deposit and 

51 

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other intangible assets (and the related goodwill, core deposit intangible and other intangible asset 
balances, net of applicable deferred tax amounts) and gains and expenses associated with merging 
acquired operations into the Company, since such items are considered by management to be 
“nonoperating” in nature. Those merger-related expenses generally consist of professional services 
and other temporary help fees associated with the actual or planned conversion of systems and/or 
integration of operations; costs related to branch and office consolidations; costs related to 
termination of existing contractual arrangements to purchase various services; initial marketing and 
promotion expenses designed to introduce M&T Bank to its new customers; severance; incentive 
compensation costs; travel costs; and printing, supplies and other costs of completing the transactions 
and commencing operations in new markets and offices. Those expenses totaled $36 million ($22 
million after-tax) in 2016 and $76 million ($48 million after-tax) in 2015. Also considered as a 
merger-related expense in 2015 was a provision for credit losses of $21 million. GAAP provides that 
an allowance for credit losses associated with probable incurred losses on loans acquired at a 
premium be recognized. Given the recognition of such losses above and beyond the impact of 
forecasted losses used in determining the fair value of acquired loans, the Company considered that 
provision to be a merger-related expense. There were no merger-related expenses in 2014. Although 
“net operating income” as defined by M&T is not a GAAP measure, M&T’s management believes 
that this information helps investors understand the effect of acquisition activity in reported results. 

Net operating income was $1.36 billion in 2016, compared with $1.16 billion in 2015 and $1.09 
billion in 2014. Diluted net operating earnings per common share were $8.08 in 2016, $7.74 in 2015 
and $7.57 in 2014. 

Net operating income expressed as a rate of return on average tangible assets was 1.14% in 
2016, compared with 1.18% in 2015 and 1.23% in 2014. Net operating income represented a return 
on average tangible common equity of 12.25% in 2016, 13.00% in 2015 and 13.76% in 2014. 

Reconciliations of GAAP amounts with corresponding non-GAAP amounts are presented in 

table 2. 

52 

52

 
Table 2 

RECONCILIATION OF GAAP TO NON-GAAP MEASURES 

Income statement data 
Dollars in thousands, except per share 
Net income 
Net income ............................................................................................................................................................................    $
Amortization of core deposit and other intangible assets(a) ...................................................................................................     
Merger-related expenses(a) ...................................................................................................................................................     
Net operating income ....................................................................................................................................................    $

Earnings per common share 
Diluted earnings per common share .......................................................................................................................................    $
Amortization of core deposit and other intangible assets(a) ...................................................................................................     
Merger-related expenses(a) ...................................................................................................................................................     
Diluted net operating earnings per common share .........................................................................................................    $

2016 

2015 

2014 

1,315,114       $  1,079,667       $
16,150        
60,820        
1,362,692       $  1,156,637       $

25,893         
21,685         

1,066,246   
20,657   
—   
1,086,903   

7.78       $ 
.16         
.14         
8.08       $ 

7.18       $
.12        
.44        
7.74       $

7.42   
.15   
—   
7.57   

Other expense 
Other expense ........................................................................................................................................................................    $
Amortization of core deposit and other intangible assets .......................................................................................................     
Merger-related expenses ........................................................................................................................................................     
Noninterest operating expense .......................................................................................................................................    $

3,047,485       $  2,822,932       $
(26,424 )      
(75,976 )      
2,969,117       $  2,720,532       $

(42,613 )       
(35,755 )       

2,689,474   
(33,824 ) 
—   
2,655,650   

Merger-related expenses 
Salaries and employee benefits ..............................................................................................................................................    $
Equipment and net occupancy ...............................................................................................................................................     
Outside data processing and software ....................................................................................................................................     
Advertising and marketing ....................................................................................................................................................     
Printing, postage and supplies ...............................................................................................................................................     
Other costs of operations .......................................................................................................................................................     
Other expense................................................................................................................................................................     
Provision for credit losses ......................................................................................................................................................     
Total ..............................................................................................................................................................................    $

5,334       $ 
1,278         
1,067   
10,522         
1,482         
16,072         
35,755         
—         
35,755       $ 

51,287       $
3        

785   

79        
504        
23,318        
75,976        
21,000        
96,976       $

—   
—   
—   
—   
—   
—   
—   
—   
—   

Efficiency ratio 
Noninterest operating expense (numerator) ...........................................................................................................................    $

2,969,117       $  2,720,532       $

2,655,650   

Taxable-equivalent net interest income ..................................................................................................................................     
Other income .........................................................................................................................................................................     
Less: Gain (loss) on bank investment securities .....................................................................................................................     
Denominator .........................................................................................................................................................................    $

3,496,849         
1,825,996         
30,314         

2,867,050        
1,825,037        
(130 )      
5,292,531       $  4,692,217       $

2,700,088   
1,779,273   
—   
4,479,361   

Efficiency ratio ......................................................................................................................................................................     

56.10 %      

57.98 %     

59.29 %

Balance sheet data 
In millions 
Average assets 
Average assets .......................................................................................................................................................................    $
Goodwill ...............................................................................................................................................................................     
Core deposit and other intangible assets ................................................................................................................................     
Deferred taxes .......................................................................................................................................................................     
Average tangible assets .................................................................................................................................................    $

Average common equity 
Average total equity ..............................................................................................................................................................    $
Preferred stock ......................................................................................................................................................................     
Average common equity ...............................................................................................................................................     
Goodwill ...............................................................................................................................................................................     
Core deposit and other intangible assets ................................................................................................................................     
Deferred taxes .......................................................................................................................................................................     
Average tangible common equity ..................................................................................................................................    $

At end of year 
Total assets 
Total assets ............................................................................................................................................................................    $
Goodwill ...............................................................................................................................................................................     
Core deposit and other intangible assets ................................................................................................................................     
Deferred taxes .......................................................................................................................................................................     
Total tangible assets ......................................................................................................................................................    $

Total common equity 
Total equity ...........................................................................................................................................................................    $
Preferred stock ......................................................................................................................................................................     
Undeclared dividends — cumulative preferred stock .............................................................................................................     
Common equity, net of undeclared cumulative preferred dividends .......................................................................................     
Goodwill ...............................................................................................................................................................................     
Core deposit and other intangible assets ................................................................................................................................     
Deferred taxes .......................................................................................................................................................................     
Total tangible common equity .......................................................................................................................................    $

(a) 

After any related tax effect. 

124,340       $ 
(4,593 )       
(117 )       
46         
119,676       $ 

101,780       $
(3,694 )      
(45 )      
16        
98,057       $

16,419       $ 
(1,297 )       
15,122         
(4,593 )       
(117 )       
46         
10,458       $ 

13,228       $
(1,232 )      
11,996        
(3,694 )      
(45 )      
16        
8,273       $

123,449       $ 
(4,593 )       
(98 )       
39         
118,797       $ 

122,788       $
(4,593 )      
(140 )      
54        
118,109       $

16,487       $ 
(1,232 )       
(3 )       
15,252         
(4,593 )       
(98 )       
39      
10,600       $ 

16,173       $
(1,232 )      
(2 )      
14,939        
(4,593 )      
(140 )      
54      
10,260       $

92,143   
(3,525 ) 
(50 ) 
15   
88,583   

12,097   
(1,192 ) 
10,905   
(3,525 ) 
(50 ) 
15   
7,345   

96,686   
(3,525 ) 
(35 ) 
11   
93,137   

12,336   
(1,231 ) 
(3 ) 
11,102   
(3,525 ) 
(35 ) 
11   
7,553   

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Net Interest Income/Lending and Funding Activities 
Taxable-equivalent net interest income aggregated $3.50 billion in 2016, up 22% from $2.87 billion 
in 2015.   That growth was predominantly attributable to higher average earning assets in 2016, 
partially offset by a three basis point narrowing of the net interest margin to 3.11% in 2016 from 
3.14% in 2015. The higher level of average earning assets reflected the full-year impact of assets 
obtained in the acquisition of Hudson City on November 1, 2015. Average earning assets rose $21.4 
billion or 23% to $112.6 billion in 2016 reflecting higher average loans and leases of $17.8 billion. 
The narrowing of the margin reflected higher rates paid on interest-bearing deposits, including the 
impact of time deposits in the former Hudson City markets. 

Average loans and leases increased 25% to $88.6 billion in 2016 from $70.8 billion in 2015.  

The most significant factors contributing to that increase were the residential real estate loans 
obtained in the Hudson City acquisition and growth in the commercial real estate loan and 
commercial loan and lease portfolios.  Reflecting average balances of loans obtained in the Hudson 
City transaction of $16.3 billion in 2016 and $3.1 billion in 2015, average residential real estate loans 
increased $13.0 billion to $24.5 billion in 2016 from $11.5 billion in the previous year.  Included in 
average residential real estate loans were loans held for sale of $354 million in 2016 and $415 
million in 2015.  Average commercial loans and leases increased $1.5 billion or 8% to $21.4 billion 
in 2016 from $19.9 billion in 2015.  Commercial real estate loans averaged $30.9 billion in 2016, up 
9% or $2.6 billion from $28.3 billion in 2015.  Average consumer loans rose $638 million or 6% to 
$11.8 billion in 2016 from $11.2 billion in the prior year, predominantly due to growth in average 
automobile loan balances.  

Taxable-equivalent net interest income increased 6% to $2.87 billion in 2015 from $2.70 billion 

in 2014.  That improvement was the result of higher average earning assets in 2015, including $3.7 
billion of average earning assets obtained in the acquisition of Hudson City.  Average earning assets 
rose 12% to $91.2 billion in 2015 from $81.7 billion in 2014.  That growth, however, was partially 
offset by a 17 basis point narrowing of the net interest margin to 3.14% in 2015 from 3.31% in 2014.  
The narrowing reflected lower average yields on investment securities and loans and leases 
outstanding. 

Average loans and leases rose $6.2 billion or 10% to $70.8 billion in 2015 from $64.7 billion in 

2014, due in part to $3.1 billion of average loans obtained in the acquisition of Hudson City. 
Including the impact of the acquired loan balances, average balances of residential real estate loans 
increased 31% or $2.7 billion to $11.5 billion in 2015 from $8.7 billion in 2014.  Included in that 
portfolio were loans held for sale, which averaged $415 million in 2015 and $403 million 2014.  
Commercial loan and lease balances averaged $19.9 billion in 2015, $1.0 billion or 5% higher than 
$18.9 billion in 2014.  Average balances of commercial real estate loans increased 7% or $1.8 billion 
to $28.3 billion in 2015 from $26.5 billion in 2014.  Average consumer loans totaled $11.2 billion in 
2015, up $584 million or 6% from $10.6 billion in 2014, reflecting growth in average balances of 
automobile loans. 

54 

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Table 3 

Assets 
Earning assets 
Loans and leases, net of unearned discount(a) 

AVERAGE BALANCE SHEETS AND TAXABLE-EQUIVALENT RATES 

2016 

2015 

2014 

2013 

2012 

Average 
Balance     Interest 

Average
Rate

Average
Balance  

Interest   

Average
Rate

Average
Balance  

Interest     

Average
Rate

Average
Balance  

Interest   

Average
Rate

Average
Balance  

Interest   

Average
Rate

(Average balance in millions of dollars; interest in thousands of dollars) 

Commercial, financial, etc. ........................   $  21,397    $  736,240     
Real estate — commercial .........................      30,915      1,277,196     
Real estate — consumer ............................      24,463       958,521     
Consumer ..................................................      11,841       538,144     
Total loans and leases, net ..................      88,616      3,510,101     
45,516     

8,846      

3.44 %   
4.06   
3.92   
4.54   
3.96   
.51   

19,899     638,199     
28,276     1,193,271     
11,458     468,790     
11,203     499,650     
70,836     2,799,910     
15,252     

5,775    

3.21 %    18,867    
4.16   
4.09   
4.46   
3.95   
.26   

624,487      
   26,461     1,142,939      
368,632      
   8,719    
480,877      
   10,618    
   64,665     2,616,935      
13,361      
   5,342    

3.31 %    17,736    
4.26   
4.23   
4.53   
4.05   
.25   

628,154     
   26,083     1,198,400     
418,095     
   10,136    
510,962     
   11,098    
   65,053     2,755,611     
5,201     
   2,139    

3.54 %    16,336    
4.53   
4.12   
4.60   
4.24   
.24   

606,495     
   24,907     1,138,723     
421,516     
   9,727    
559,253     
   11,732    
   62,702     2,725,987     
1,221     

528    

3.71 %
4.50   
4.33   
4.77   
4.35   
.23   

—      
85      

3     
1,442     

.86   
1.71   

34    
86    

35     
1,247     

.10   
1.44   

89    
76    

64      
1,381      

.07   
1.81   

128    
78    

114     
1,482     

.09   
1.91   

4    
96    

21     
1,394     

.55   
1.45   

Interest-bearing deposits at banks ......................     
Federal funds sold and agreements to resell 
   securities ........................................................     
Trading account ................................................     
Investment securities(b) ....................................     

U.S. Treasury and federal agencies ............      14,025       332,926     
Obligations of states and political 
   subdivisions ............................................     
Other .........................................................     

3,839     
29,006     
Total investment securities .................      15,009       365,771     
Total earning assets ...........................     112,556      3,922,833     

90      
894      

2.37   

13,514     336,873     

2.49   

   10,543    

304,178      

2.88   

   5,123    

165,879     

3.24   

   4,538    

150,500     

3.32   

4.24   
3.24   
2.44   
3.49   

143    
799    

6,391     
35,599     
14,456     378,863     
91,187     3,195,307     

4.46   
4.45   
2.62   
3.50   

8,115      
166    
36,485      
800    
   11,509    
348,778      
   81,681     2,980,519      

4.89   
4.56   
3.03   
3.65   

9,999     
194    
44,019     
   1,298    
   6,615    
219,897     
   74,013     2,982,305     

5.15   
3.39   
3.32   
4.03   

11,638     
220    
77,315     
   2,211    
   6,969    
239,453     
   70,299     2,968,076     

5.29   
3.50   
3.44   
4.22   

(976 )    
Allowance for credit losses ...............................     
Cash and due from banks ..................................     
1,273      
Other assets .......................................................      11,487      
Total assets ........................................   $ 124,340      

Liabilities and Shareholders’ Equity 
Interest-bearing liabilities 
Interest-bearing deposits 

(935 )  
1,242    
10,286    
   101,780    

Savings and interest-checking deposits ......   $  52,194      
87,704     
Time deposits ............................................      12,253       102,841     
797     
Deposits at Cayman Islands office .............     
Total interest-bearing deposits ...........      64,646       191,342     
Short-term borrowings ......................................     
3,625     
Long-term borrowings ......................................      10,252       231,017     
Total interest-bearing liabilities .........      75,792       425,984     

894      

199      

Noninterest-bearing deposits .............................      30,160      
1,969      
Other liabilities .................................................     
Total liabilities ..........................................     107,921      
Shareholders’ equity .........................................      16,419      
Total liabilities and shareholders’ equity ...   $ 124,340      

.11   
.58   
.28   
.15   
.31   
2.47   
.55   

.17   
.84   
.40   
.30   
.41   
2.25   
.56   

43,885    
4,641    
216    
48,742    
548    

46,140     
27,059     
615     
73,814     
1,677     
10,217     252,766     
59,507     328,257     
27,324    
1,721    
88,552    
13,228    
   101,780    

(923 )  
   1,277    
   10,108    
   92,143    

   41,508    
   3,290    
327    
   45,125    
215    
   7,492    
   52,832    
   25,715    
   1,499    
   80,046    
   12,097    
   92,143    

46,869      
15,515      
699      
63,083      
101      
217,247      
280,431      

.11   
.47   
.21   
.14   
.05   
2.90   
.53   

(932 )  
   1,380    
   9,201    
   83,662    

   37,662    
   4,045    
496    
   42,203    
390    
   4,941    
   47,534    
   23,721    
   1,685    
   72,940    
   10,722    
   83,662    

56,235     
26,439     
1,018     
83,692     
430     
199,983     
284,105     

.15   
.65   
.21   
.20   
.11   
4.05   
.60   

(922 )  
   1,384    
   9,222    
   79,983    

   34,254    
   5,347    
605    
   40,206    
839    
   5,527    
   46,572    
   21,761    
   1,947    
   70,280    
   9,703    
   79,983    

69,354     
46,102     
1,130     
116,586     
1,286     
225,297     
343,169     

.20   
.86   
.19   
.29   
.15   
4.08   
.74   

Net interest spread .............................................     
Contribution of interest-free funds ....................     
Net interest income/margin on earning assets ....     

    $ 3,496,849     

2.93   
.18   
3.11 %   

    2,867,050     

2.95   
.19   
3.14 %   

    2,700,088      

3.12   
.19   
3.31 %   

    2,698,200     

3.43   
.22   
3.65 %   

    2,624,907     

3.48   
.25   
3.73 %

5
5

(a) 
(b) 

Includes nonaccrual loans. 
Includes available-for-sale investment securities at amortized cost. 

5
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Table 4 summarizes average loans and leases outstanding in 2016 and percentage changes in the 

major components of the portfolio over the past two years. 

Table 4 

AVERAGE LOANS AND LEASES 
(Net of unearned discount) 

Percent Increase 
(Decrease) from 

2016 
  (In millions)    

   2015 to 2016 

   2014 to 2015

Commercial, financial, etc. ..................................................  
Real estate – commercial .....................................................  
Real estate – consumer .........................................................  
Consumer 

Automobile ......................................................................  
Home equity lines and loans ...........................................  
Other ................................................................................  
Total consumer ...........................................................  
Total .......................................................................  

  $ 21,397
    30,915
    24,463

2,740
5,788
3,313
    11,841
  $ 88,616

8 % 
9   
  114   

   24   
(2 ) 
8   
6   
   25 % 

5%
7  
31  

32  
(2) 
7  
6  
10%

Commercial loans and leases, excluding loans secured by real estate, totaled $22.6 billion at 
December 31, 2016, representing 25% of total loans and leases. Table 5 presents information on 
commercial loans and leases as of December 31, 2016 relating to geographic area, size, borrower 
industry and whether the loans are secured by collateral or unsecured. Of the $22.6 billion of 
commercial loans and leases outstanding at the end of 2016, approximately $20.0 billion, or 88%, 
were secured, while 40%, 25% and 23% were granted to businesses in New York State, Pennsylvania 
and the Mid-Atlantic area (which includes Delaware, Maryland, New Jersey, Virginia, West Virginia 
and the District of Columbia), respectively. The Company provides financing for leases to 
commercial customers, primarily for equipment. Commercial leases included in total commercial 
loans and leases at December 31, 2016 aggregated $1.3 billion, of which 48% were secured by 
collateral located in New York State, 16% were secured by collateral in Pennsylvania and another 
15% were secured by collateral in the Mid-Atlantic area. 

56 

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Table 5 

COMMERCIAL LOANS AND LEASES, NET OF UNEARNED DISCOUNT 
(Excludes Loans Secured by Real Estate) 

December 31, 2016 

  New York 

  Pennsylvania 

Mid- 
  Atlantic(a)

Other 

Total 

Total 

   Percent of 

Automobile dealerships ....................      $ 1,684  
Manufacturing...................................        1,735  
Services .............................................        1,297  
Wholesale .........................................         964  
Health services ..................................         562  
Financial and insurance ....................         675  
Real estate investors .........................         736  
Transportation, communications, 
   utilities ...........................................  
     338  
Retail .................................................         255  
Construction ......................................         386  
Public administration ........................         176  
Agriculture, forestry, fishing, etc. .....        
29  
Other .................................................         143  
Total ..................................................      $ 8,980  
Percent of total ..................................        
40%
Percent of dollars outstanding 
83%
Secured .............................................        
10  
Unsecured .........................................        
Leases ...............................................        
7  
Total ..................................................         100%
Percent of dollars outstanding by 
   size of loan 
23%
Less than $1 million ..........................        
24  
$1 million to $5 million ....................        
15  
$5 million to $10 million ..................        
16  
$10 million to $20 million ................        
8  
$20 million to $30 million ................        
7  
$30 million to $50 million ................        
7  
Greater than $50 million ...................        
Total ..................................................         100%

(Dollars in millions) 

 $ 567  
569  
   1,223  
494  
644  
318  
336  

304  
289  
247  
36  
49  
110  
 $5,186  

 $ 921  
525  
269  
164  
74  
200  
122  

317  
113  
54  
1  
   —  
4  
 $2,764  

     $  4,075   
        3,921   
        3,660   
        2,160   
        1,570   
        1,545   
        1,399   

        1,383   
975   
950   
281   
219   
472   
     $ 22,610   

    18% 
    17    
    16    
    10    
7    
7    
6    

6    
5    
4    
1    
1    
2    
    100% 

$
903  
  1,092  
871  
538  
290  
352  
205  

424  
318  
263  
68  
141  
215  
$ 5,680  

25%   

23%   

12%        

100 %  

80%   
16  
4  

100%   

86%   
10  
4  
100%   

78%        
12  
10  

100%        

82 %  
12   
6   
100 %  

18%   
22  
21  
17  
9  
6  
7  

100%   

25%   
19  
15  
19  
7  
8  
7  
100%   

8%        
21  
22  
22  
12  
10  
5  

100%        

20 %  
22   
17   
17   
9   
8   
7   
100 %  

(a) 

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

International loans included in commercial loans and leases totaled $228 million and $191 
million at December 31, 2016 and 2015, respectively. Included in such loans were $95 million and 
$64 million, respectively, of loans at M&T Bank’s commercial banking office in Ontario, Canada. 
The remaining international loans are predominantly to domestic companies with foreign operations. 
Loans secured by real estate, including outstanding balances of home equity loans and lines of 
credit which the Company classifies as consumer loans, represented approximately 69% of the loan 

57 

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and lease portfolio during 2016, compared with 64% in 2015 and 2014. At December 31, 2016, the 
Company held approximately $33.5 billion of commercial real estate loans, $22.6 billion of 
consumer real estate loans secured by one-to-four family residential properties (including $414 
million of loans originated for sale) and $5.6 billion of outstanding balances of home equity loans 
and lines of credit, compared with $29.2 billion, $26.3 billion and $6.0 billion, respectively, at 
December 31, 2015. The decrease in the residential real estate loans reflects pay downs of loans 
obtained in the Hudson City acquisition. Included in commercial real estate loans at December 31, 
2016 and 2015 were construction loans of $8.0 billion and $5.7 billion, respectively, including 
amounts due from builders and developers of residential real estate aggregating $1.9 billion and $1.6 
billion at December 31, 2016 and 2015, respectively. Commercial real estate loans also included 
loans held for sale totaling $643 million and $39 million at December 31, 2016 and 2015, 
respectively.  

Commercial real estate loans originated by the Company include fixed-rate instruments with 
monthly payments and a balloon payment of the remaining unpaid principal at maturity, in many 
cases five years after origination. For borrowers in good standing, the terms of such loans may be 
extended by the customer for an additional five years at the then-current market rate of interest. The 
Company also originates fixed-rate commercial real estate loans with maturities of greater than five 
years, generally having original maturity terms of approximately seven to ten years, and adjustable-
rate commercial real estate loans. Adjustable-rate commercial real estate loans represented 
approximately 72% of the commercial real estate loan portfolio at the 2016 year-end. Table 6 
presents commercial real estate loans by geographic area, type of collateral and size of the loans 
outstanding at December 31, 2016. New York City area commercial real estate loans totaled $9.4 
billion at December 31, 2016. The $8.0 billion of investor-owned commercial real estate loans in the 
New York City area were largely secured by multifamily residential properties, retail space and 
office space. The Company’s experience has been that office, retail and service-related properties 
tend to demonstrate more volatile fluctuations in value through economic cycles and changing 
economic conditions than do multifamily residential properties. Approximately 33% of the aggregate 
dollar amount of New York City area loans were for loans with outstanding balances of $10 million 
or less, while loans of more than $50 million made up approximately 17% of the total. 

58 

58

 
Table 6 

COMMERCIAL REAL ESTATE LOANS, NET OF UNEARNED DISCOUNT 

December 31, 2016 

Investor-owned 

Permanent finance by property 
   type 

     New York State 
   New York 
City 

  Other 

Penn- 
sylvania 

  Mid- 
  Atlantic(a)
(Dollars in millions) 

  Other 

   Percent of

Total 

Total 

Office ..............................................      $  1,406   
Apartments/Multifamily .................         1,707   
Retail/Service .................................         1,514   
848   
Hotel ...............................................        
231   
Industrial/Warehouse ......................        
43   
Health facilities ...............................        
205   
Other ...............................................        
   Total permanent ........................         5,954   

  $

906  
719  
550  
380  
219  
110  
35  
    2,919  

  $

568  
372  
448  
252  
357  
21  
14  
    2,032  

  $ 1,297  
772  
    1,059  
667  
252  
71  
24  
    4,142  

  $

438   
970   
468   
279   
315   
12   
15   
    2,497   

   $  4,615   
      4,540   
      4,039   
      2,426   
      1,374   
257   
293   
      17,544   

Construction/Development 

Commercial 

Construction ................................        
Land/Land development ..............        

935   
461   

Residential builder and 
   developer 

Construction ................................        
Land/Land development ..............        
   Total construction/ 
      development ..........................         2,067   
Total investor-owned .............................         8,021   
Owner-occupied by industry(b) 

662   
9   

Health services ................................        
Other services .................................        
Retail ..............................................        
Automobile dealerships ..................        
Wholesale .......................................        
Manufacturing ................................        
Real estate investors .......................        
Other ...............................................        

483   
211   
138   
178   
82   
71   
17   
157   
   Total owner-occupied ...............         1,337   
Total commercial real estate ..................      $  9,358   

647  
32  

1  
14  

603  
67  

    1,524  
185  

827   
88   

      4,536   
833   

106  
33  

198  
262  

386   
251   

      1,353   
569   

694  
    3,613  

809  
    2,841  

    2,169  
    6,311  

    1,552   
    4,049   

      7,291   
      24,835   

529  
460  
181  
175  
64  
218  
40  
180  
    1,847  
  $ 5,460  

486  
251  
228  
245  
142  
156  
24  
228  
    1,760  
  $ 4,601  

787  
795  
351  
179  
292  
155  
52  
351  
    2,962  
  $ 9,273  

327   
71   
96   
184   
52   
29   
2   
4   
765   
  $ 4,814   

      2,612   
      1,788   
994   
961   
632   
629   
135   
920   
      8,671   
   $ 33,506   

8%  
5  
3  
3  
2  
2  
       —  
3  
26%  
100%  

14%  
13  
12  
7  
4  
1  
1  
52%  

14%  
2  

4  
2  

22%  
74%  

Percent of total ......................................        

28 % 

16%    

14%    

28%    

14 %   

100 %        

Percent of dollars outstanding by 
   size of loan 
Less than $1 million ..............................        
$1 million to $5 million .........................        
$5 million to $10 million .......................        
$10 million to $30 million .....................        
$30 million to $50 million .....................        
$50 million to $100 million ...................        
Greater than $100 million ......................        
Total ......................................................        

3 % 

16   
14   
34   
16   
16   
1   
100 % 

17%    
31  
19  
27  
5  
1  
—  
100%    

15%    
26  
20  
26  
8  
5  
—   
100%    

11%    
21  
16  
29  
12  
11  
—   
100%    

10 %   
14   
17   
37   
10   
9   
3   
100 %   

10 %        
21   
17   
31   
11   
9   
1   

100 %        

(a) 
(b) 

Includes Delaware, Maryland, New Jersey, Virginia, West Virginia and the District of Columbia. 
Includes $727 million of construction loans 

59 

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Commercial real estate loans secured by properties located in other parts of New York State, 

Pennsylvania and the Mid-Atlantic area tend to have a greater diversity of collateral types and 
include a significant amount of lending to customers who use the mortgaged property in their trade or 
business (owner-occupied). Approximately 67% of the aggregate dollar amount of commercial real 
estate loans in New York State secured by properties located outside of the New York City area were 
for loans with outstanding balances of $10 million or less. Of the outstanding balances of commercial 
real estate loans in Pennsylvania and the Mid-Atlantic area, approximately 61% and 48%, 
respectively, were for loans with outstanding balances of $10 million or less. 

Commercial real estate loans secured by properties located outside of Pennsylvania, the Mid-

Atlantic area and New York State comprised 14% of total commercial real estate loans as of 
December 31, 2016. 

Commercial real estate construction and development loans made to investors presented in 
table 6 totaled $7.3 billion at December 31, 2016, or 8% of total loans and leases. Approximately 
95% of those construction loans had adjustable interest rates. Included in such loans at the 2016 year-
end were $1.9 billion of loans to builders and developers of residential real estate properties. 
Information about the credit performance of the Company’s loans to builders and developers of 
residential real estate properties is included herein under the heading “Provision For Credit Losses.” 
The remainder of the commercial real estate construction loan portfolio was comprised of loans made 
for various purposes, including the construction of office buildings, multifamily residential housing, 
retail space and other commercial development. 

M&T Realty Capital Corporation, a commercial real estate lending subsidiary of M&T Bank, 
participates in the Delegated Underwriting and Servicing (“DUS”) program of Fannie Mae, pursuant to 
which commercial real estate loans are originated in accordance with terms and conditions specified by 
Fannie Mae and sold. Under this program, loans are sold with partial credit recourse to M&T Realty 
Capital Corporation. The amount of recourse is generally limited to one-third of any credit loss incurred 
by the purchaser on an individual loan, although in some cases the recourse amount is less than one-
third of the outstanding principal balance. The Company’s maximum credit risk for recourse associated 
with sold commercial real estate loans was approximately $2.8 billion and $2.5 billion at December 31, 
2016 and 2015, respectively. There have been no material losses incurred as a result of those recourse 
arrangements. Commercial real estate loans held for sale at December 31, 2016 and 2015 aggregated 
$643 million and $39 million, respectively. At December 31, 2016 and 2015, commercial real estate 
loans serviced by the Company for other investors were $11.8 billion and $11.0 billion, respectively. 
Those serviced loans are not included in the Company’s consolidated balance sheet. In January 2017, 
M&T Realty Capital Corporation purchased commercial mortgage banking servicing rights and other 
assets which increased commercial real estate loans serviced for others by $2.7 billion. The purchase 
price and assets acquired were not material to the Company’s consolidated financial position.  

Real estate loans secured by one-to-four family residential properties were $22.6 billion at 
December 31, 2016, including approximately 34% secured by properties located in New York State, 
7% secured by properties located in Pennsylvania, 29% secured by properties in New Jersey and 
11% secured by properties located in other Mid-Atlantic areas. At December 31, 2016, $414 million 
of residential real estate loans had been originated for sale, compared with $353 million at 
December 31, 2015. The Company’s portfolio of alternative (“Alt-A”) residential real estate loans 
(referred to as “limited documentation loans”) held for investment decreased by $686 million to $3.6 
billion at December 31, 2016 from $4.3 billion at December 31, 2015. A portfolio of limited 
documentation loans was acquired with the Hudson City transaction which totaled $3.3 billion and 
$4.0 billion at December 31, 2016 and 2015, respectively. Alt-A loans represent loans that at 
origination typically included some form of limited borrower documentation requirements as 
compared with more traditional residential real estate loans. Hudson City loans that were eligible for 
limited documentation processing were available in amounts up to 65% of the lower of the appraised 

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value or purchase price of the property. Hudson City discontinued its limited documentation loan 
program in January 2014. Loans in the Company’s Alt-A portfolio prior to the Hudson City 
transaction were originated by the Company prior to 2008. Loans to individuals to finance the 
construction of one-to-four family residential properties totaled $21 million at December 31, 2016 
and $34 million at December 31, 2015, or less than .1% of total loans and leases at each of those 
dates. Information about the credit performance of the Company’s residential real estate loans is 
included herein under the heading “Provision For Credit Losses.” 

Consumer loans comprised approximately 13% of total loans and leases at each of 
December 31, 2016 and 2015. Outstanding balances of home equity loans and lines of credit 
represent the largest component of the consumer loan portfolio. Such balances represented 
approximately 6% of total loans and leases at December 31, 2016 and 7% at December 31, 2015. No 
other consumer loan product represented at least 4% of loans outstanding at December 31, 2016. 
Approximately 39% of home equity loans and lines of credit outstanding at December 31, 2016 were 
secured by properties in New York State, 26% in Maryland, 21% in Pennsylvania and 3% in New 
Jersey. Outstanding automobile loan balances rose to $2.9 billion at December 31, 2016 from $2.5 
billion at December 31, 2015. That increase reflects continued consumer demand for motor vehicles. 
Table 7 presents the composition of the Company’s loan and lease portfolio at the end of 2016, 

including outstanding balances to businesses and consumers in New York State, Pennsylvania, the 
Mid-Atlantic area and other states. Approximately 39% of total loans and leases at December 31, 
2016 were to New York State customers, while 16% and 30% were to Pennsylvania and the Mid-
Atlantic area customers, respectively. 

Table 7 

LOANS AND LEASES, NET OF UNEARNED DISCOUNT 

December 31, 2016 

    New 
  Outstandings     York 
   (In millions)      

Percent of Dollars Outstanding 

  Penn- 
  sylvania   Maryland

Mid-Atlantic 
   New 
   Jersey 

   Other(a)

  Other 

Real estate 

Residential .................................    $ 22,591
Commercial ...............................       33,506
Total real estate .....................       56,097
Commercial, financial, etc. ............       21,337
Consumer 

Home equity lines and loans .....      
Automobile ................................      
Other secured or guaranteed ......      
Other unsecured .........................      

5,641
2,944
2,842
719
Total consumer .....................       12,146
Total loans........................       89,580
1,273
Total loans and leases ......    $ 90,853

Commercial leases .........................      

34%    7% 
   14    
44  
40%    11% 
39%    26% 

6% 
   12    
   10% 
   13% 

  29 %         5 % 
   6           10     
  15 %         8 % 
   5 %         6 % 

39%    21% 
   21    
28  
21  
   11    
   22    
39  
32%    19% 
39%    16% 
48%    16% 
39%    16% 

   26% 
9    
7    
   24    
   17% 
   11% 
9% 
   11% 

   3 %        10 % 
   7           13     
   7            7     
   1           11     
   5 %        10 % 
  11 %         8 % 
   3 %         3 % 
  11 %         8 % 

 19%
 14  
 16%
 11%

  1%
 22  
 47  
  3  
 17%
 15%
 21%
 15%  

(a) 

Includes Delaware, Virginia, West Virginia and the District of Columbia. 

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The investment securities portfolio averaged $15.0 billion in 2016, up from $14.5 billion and 
$11.5 billion in 2015 and 2014, respectively. The investment securities portfolio is largely comprised 
of residential mortgage-backed securities, debt securities issued by municipalities, trust preferred 
securities issued by certain financial institutions, and shorter-term U.S. Treasury and federal agency 
notes. When purchasing investment securities, the Company considers its liquidity position and its 
overall interest-rate risk profile as well as the adequacy of expected returns relative to risks assumed, 
including prepayments. The Company manages its investment securities portfolio, in part, to satisfy 
the requirements of the Liquidity Coverage Ratio (“LCR”) that became effective in January 2016. In 
September 2014, various federal banking regulators adopted final rules (“Final LCR Rule”) 
implementing a U.S. version of the Basel Committee’s LCR including the modified version 
applicable to bank holding companies, including M&T, with $50 billion in total consolidated assets 
that are not “advanced approaches” institutions. The LCR is intended to ensure that banks hold a 
sufficient amount of “high quality liquid assets” to cover the anticipated net cash outflows during a 
hypothetical acute 30-day stress scenario. For additional information concerning the LCR rules, refer 
to Part I, Item 1 of this Form 10-K under the heading “Liquidity.” 

In managing its investment securities portfolio, the Company occasionally sells investment 
securities as a result of changes in interest rates and spreads, actual or anticipated prepayments, credit 
risk associated with a particular security, or as a result of restructuring its investment securities 
portfolio in connection with a business combination.  The Hudson City acquisition added 
approximately $7.9 billion to the investment securities portfolio on the November 1, 2015 acquisition 
date. As noted earlier, immediately following the acquisition, the Company restructured its balance 
sheet by selling $5.8 billion of those securities.  During the third and fourth quarters of 2016, the 
Company sold the collateralized debt obligations that had been held in the available-for-sale 
investment securities portfolio for a gain of approximately $30 million. Purchases of Fannie Mae, 
Freddie Mac and Ginnie Mae mortgage-backed securities totaled $1.8 billion in 2016, $3.5 billion in 
2015 and $5.2 billion in 2014. Purchases of U.S. Treasury notes totaled $1.7 billion in 2016, while 
purchases in 2015 or 2014 were not significant. The amounts of investment securities held by the 
Company are influenced by such factors as demand for loans, which generally yield more than 
investment securities, ongoing repayments, the levels of deposits, and management of liquidity 
(including the LCR) and balance sheet size and resulting capital ratios. 

The Company regularly reviews its investment securities for declines in value below amortized 

cost that might be characterized as “other than temporary.” There were no other-than-temporary 
impairment charges recognized in 2016, 2015 or 2014. Based on management’s assessment of future 
cash flows associated with individual investment securities as of December 31, 2016, the Company 
concluded that declines in value below amortized cost associated with the investment securities 
portfolio were temporary in nature. A further discussion of fair values of investment securities is 
included herein under the heading “Capital.” Additional information about the investment securities 
portfolio is included in notes 3 and 20 of Notes to Financial Statements. 

Other earning assets include interest-bearing deposits at the Federal Reserve Bank of New York 

and other banks, trading account assets and federal funds sold. Those other earning assets in the 
aggregate averaged $8.9 billion in 2016, $5.9 billion in 2015 and $5.5 billion in 2014. Interest-
bearing deposits at banks averaged $8.8 billion in 2016, compared with $5.8 billion and $5.3 billion 
in 2015 and 2014, respectively. The higher levels of average interest-bearing deposits at banks in 
2016 when compared with 2015 and 2014 resulted largely from the Company’s decision to maintain 
higher balances at the Federal Reserve Bank of New York rather than reinvesting in other highly 
liquid assets due to the interest rate environment.  

The most significant source of funding for the Company is core deposits. The Company 
considers noninterest-bearing deposits, interest-bearing transaction accounts, savings deposits and 
time deposits of $250,000 or less as core deposits. The Company’s branch network is its principal 
source of core deposits, which generally carry lower interest rates than wholesale funds of 

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comparable maturities. Average core deposits totaled $92.2 billion in 2016, up from $74.2 billion in 
2015 and $69.1 billion in 2014. The Hudson City acquisition added approximately $17.0 billion of 
core deposits on November 1, 2015, including $9.7 billion of time deposits, $6.6 billion of savings 
deposits and $691 million of noninterest-bearing deposits. The higher average core deposits in 2016 
as compared with 2015 and in 2015 as compared with 2014 were predominantly reflective of the 
impact of the merger with Hudson City. Funding provided by core deposits represented 82% of 
average earning assets in 2016, compared with 81% and 85% in 2015 and 2014, respectively. Table 8 
summarizes average core deposits in 2016 and percentage changes in the components of such 
deposits over the past two years. Core deposits totaled $93.1 billion and $89.3 billion at 
December 31, 2016 and 2015, respectively. 

Table 8 

AVERAGE CORE DEPOSITS 

Percent Increase 
(Decrease) from 

2016 
(In millions)     

2015 to 2016 

2014 to 2015 

Savings and interest-checking deposits ........................   
Time deposits ...............................................................   
Noninterest-bearing deposits ........................................   
Total ........................................................................ 

  $51,093       
    10,969       
    30,160       
  $92,222       

  19 %   
 167      
  10      
  24 %   

   6%  
   40     
   6     
   7%  

The Company also receives funding from other deposit sources, including branch-related time 

deposits over $250,000, deposits associated with the Company’s Cayman Islands office, and 
brokered deposits. Time deposits over $250,000, excluding brokered deposits, averaged $1.2 billion 
in 2016, $501 million in 2015 and $366 million in 2014. The higher level of such deposits in 2016 
was due to the full-year impact of deposits obtained in the acquisition of Hudson City. Cayman 
Islands office deposits averaged $199 million in 2016, $216 million in 2015 and $327 million in 
2014. Brokered time deposits averaged $59 million in 2016, compared with $37 million in 2015 and 
$4 million in 2014. The Company also had brokered savings and interest-bearing transaction 
accounts that averaged $1.1 billion in each of 2016, 2015 and 2014. Additional amounts of Cayman 
Islands office deposits or brokered deposits may be added in the future depending on market 
conditions, including demand by customers and other investors for those deposits, and the cost of 
funds available from alternative sources at the time. 

The Company also uses borrowings from banks, securities dealers, various Federal Home Loan 

Banks, the Federal Reserve Bank of New York and others as sources of funding. Short-term 
borrowings represent borrowing arrangements that at the time they were entered into had a 
contractual maturity of less than one year. Average short-term borrowings were $894 million in 
2016, $548 million in 2015 and $215 million in 2014. The higher levels of such borrowings in 2016 
and 2015 were predominantly due to short-term borrowings from the Federal Home Loan Bank 
(“FHLB”) of New York assumed in the Hudson City acquisition. Those short-term fixed-rate 
borrowings matured throughout 2016. There were no short-term borrowings from the Federal Home 
Loan Banks in 2014. Also included in short-term borrowings were unsecured federal funds 
borrowings, which generally mature on the next business day, that averaged $151 million, $138 
million and $156 million in 2016, 2015 and 2014, respectively. Overnight federal funds borrowings 
totaled $112 million at December 31, 2016 and $99 million at December 31, 2015. 

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Long-term borrowings averaged $10.3 billion in 2016, $10.2 billion in 2015 and $7.5 billion in 

2014. M&T Bank has a Bank Note Program whereby M&T Bank may offer unsecured senior and 
subordinated notes. Only unsecured senior notes have been issued under that program, of which $5.2 
billion and $5.5 billion were outstanding at December 31, 2016 and 2015, respectively. Average 
balances of outstanding notes issued under that program were $5.3 billion in each of 2016 and 2015, 
compared with $2.9 billion in 2014. During 2014, M&T Bank issued $550 million of three-year 
floating rate, $1.25 billion of three-year fixed rate and $1.4 billion of five-year fixed rate notes. 
During 2015, M&T Bank issued $1.5 billion of fixed rate notes of which $750 million mature in 
2020 and $750 million mature in 2025. During 2016, a $300 million floating rate note issued in 2013 
matured. There were no issuances of borrowings under the Bank Note Program in 2016. The 
proceeds from the issuances of borrowings under the Bank Note Program have been predominantly 
utilized to purchase high quality liquid assets that meet the requirements of the LCR. Also included 
in average long-term borrowings were amounts borrowed from the Federal Home Loan Banks of 
New York, Atlanta and Pittsburgh of $1.2 billion in each of 2016 and 2015 and $692 million in 2014, 
and subordinated capital notes of $1.5 billion in each of 2016 and 2015 and $1.6 billion in 2014. 
During 2014, M&T Bank borrowed approximately $1.1 billion from the FHLB of New York. Junior 
subordinated debentures associated with trust preferred securities that were included in average long-
term borrowings were $515 million in 2016, $605 million in 2015 and $889 million in 2014. In 
accordance with its 2015 capital plan, on April 15, 2015 M&T redeemed the junior subordinated 
debentures associated with the $310 million of trust preferred securities of M&T Capital Trusts I, II 
and III. Those borrowings had a weighted-average interest rate of 8.24%. Additional information 
regarding junior subordinated debentures, as well as information regarding contractual maturities of 
long-term borrowings, is provided in note 9 of Notes to Financial Statements. Also included in long-
term borrowings were agreements to repurchase securities, which averaged $1.8 billion in 2016, $1.5 
billion in 2015 and $1.4 billion during 2014.  Agreements to repurchase securities assumed in 
connection with the Hudson City acquisition totaled $6.9 billion at November 1, 2015. Immediately 
following the November 1, 2015 Hudson City acquisition date the balance sheet was restructured and 
$6.4 billion of the assumed repurchase agreements were repaid. During 2016, $800 million of 
repurchase agreements matured. The agreements held at December 31, 2016 totaled $1.1 billion and 
have various repurchase dates through 2020, however, the contractual maturities of the underlying 
securities extend beyond such repurchase dates. The Company has utilized interest rate swap 
agreements to modify the repricing characteristics of certain components of long-term debt. As of 
December 31, 2016, interest rate swap agreements were used to hedge approximately $900 million of 
outstanding fixed rate long-term borrowings. Further information on interest rate swap agreements is 
provided in note 18 of Notes to Financial Statements. 

Changes in the composition of the Company’s earning assets and interest-bearing liabilities, as 
discussed herein, as well as changes in interest rates and spreads, can impact net interest income. Net 
interest spread, or the difference between the taxable-equivalent yield on earning assets and the rate 
paid on interest-bearing liabilities, was 2.93% in 2016, compared with 2.95% in 2015 and 3.12% in 
2014. The yield on the Company’s earning assets declined one basis point to 3.49% in 2016 from 
3.50% in 2015, while the rate paid on interest-bearing liabilities increased one basis point to .56% in 
2016 from .55% in 2015. As compared with 2015, the narrowing of the net interest spread reflects 
the ongoing impact of the low interest rate environment on the yields earned on investment 
securities, higher rates paid on interest-bearing deposits (largely associated with time deposits 
obtained in the Hudson City acquisition) and higher amounts of relatively low yielding balances held 
at the Federal Reserve Bank of New York. The yield on earning assets declined 15 basis points in 
2015 from 3.65% in 2014, while the rate paid on interest-bearing liabilities increased two basis points 
in 2015 from .53% in 2014. The narrowing of the net interest spread in 2015 as compared with 2014 
also reflected the impact of the low interest rate environment on the yields earned on investment 

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securities and loans, higher average balances of investment securities and long-term borrowings, and 
the higher level of deposits held at the Federal Reserve Bank of New York. 

Net interest-free funds consist largely of noninterest-bearing demand deposits and shareholders’ 

equity, partially offset by bank owned life insurance and non-earning assets, including goodwill and 
core deposit and other intangible assets. Net interest-free funds averaged $36.8 billion in 2016, 
compared with $31.7 billion in 2015 and $28.8 billion in 2014. The increases in average net interest-
free funds in 2016 and 2015 reflect higher balances of noninterest-bearing deposits and shareholders’ 
equity. Noninterest-bearing deposits averaged $30.2 billion in 2016, $27.3 billion in 2015 and $25.7 
billion in 2014. In connection with the acquisition of Hudson City, the Company added noninterest-
bearing deposits of $691 million at the acquisition date. In addition to the impact of the Hudson City 
acquisition, growth in noninterest-bearing deposits in 2016 reflects an increase in commercial and 
trust customer deposits. The growth from 2014 to 2015 reflected an increase in commercial customer 
deposits. Shareholders’ equity averaged $16.4 billion, $13.2 billion and $12.1 billion in 2016, 2015 
and 2014, respectively. The rise in shareholders’ equity from 2014 to 2016 reflected $3.1 billion of 
common equity issued in connection with the acquisition of Hudson City, as well as net retained 
earnings. Goodwill and core deposit and other intangible assets averaged $4.7 billion in 2016, $3.7 
billion in 2015 and $3.6 billion in 2014. Goodwill of $1.1 billion and core deposit intangible of $132 
million resulted from the Hudson City acquisition. The cash surrender value of bank owned life 
insurance averaged $1.7 billion in each of 2016, 2015 and 2014. Increases in the cash surrender value 
of bank owned life insurance are not included in interest income, but rather are recorded in “other 
revenues from operations.” The contribution of net interest-free funds to net interest margin was 
.18% in 2016 and .19% in each of 2015 and 2014. 

Reflecting the changes to the net interest spread and the contribution of net interest-free funds 

as described herein, the Company’s net interest margin was 3.11% in 2016, 3.14% in 2015 and 
3.31% in 2014. Future changes in market interest rates or spreads, as well as changes in the 
composition of the Company’s portfolios of earning assets and interest-bearing liabilities that result 
in reductions in spreads, could adversely impact the Company’s net interest income and net interest 
margin. 

Management assesses the potential impact of future changes in interest rates and spreads by 
projecting net interest income under several interest rate scenarios. In managing interest rate risk, the 
Company has utilized interest rate swap agreements to modify the repricing characteristics of certain 
portions of its interest-bearing liabilities. Periodic settlement amounts arising from these agreements 
are reflected in the rates paid on interest-bearing liabilities. The notional amount of interest rate swap 
agreements entered into for interest rate risk management purposes was $900 million and $1.4 billion 
at December 31, 2016 and 2015, respectively. Under the terms of those interest rate swap 
agreements, the Company received payments based on the outstanding notional amount at fixed rates 
and made payments at variable rates. Those interest rate swap agreements were designated as fair 
value hedges of certain fixed rate long-term borrowings. The $500 million decline in the notional 
amount reflects the expiration of a hedge transaction upon conversion of $500 million of fixed rate 
long-term borrowings to a floating rate. There were no interest rate swap agreements designated as 
cash flow hedges at those respective dates. 

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In a fair value hedge, the fair value of the derivative (the interest rate swap agreement) and 
changes in the fair value of the hedged item are recorded in the Company’s consolidated balance 
sheet with the corresponding gain or loss recognized in current earnings. The difference between 
changes in the fair value of the interest rate swap agreements and the hedged items represents hedge 
ineffectiveness and is recorded in “other revenues from operations” in the Company’s consolidated 
statement of income. The amounts of hedge ineffectiveness recognized in 2016, 2015 and 2014 were 
not material to the Company’s consolidated results of operations. The estimated aggregate fair value 
of interest rate swap agreements designated as fair value hedges represented gains of approximately 
$12 million at December 31, 2016 and $44 million at December 31, 2015. The fair values of such 
interest rate swap agreements were substantially offset by changes in the fair values of the hedged 
items. The changes in the fair values of the interest rate swap agreements and the hedged items 
primarily result from the effects of changing interest rates and spreads. The Company’s credit 
exposure as of December 31, 2016 with respect to the estimated fair value of interest rate swap 
agreements used for managing interest rate risk has been substantially mitigated through master 
netting arrangements with trading account interest rate contracts with the same counterparty as well 
as counterparty postings of $5 million of collateral with the Company. Additional information about 
interest rate swap agreements and the items being hedged is included in note 18 of Notes to Financial 
Statements. The average notional amounts of interest rate swap agreements entered into for interest 
rate risk management purposes, the related effect on net interest income and margin, and the 
weighted-average interest rates paid or received on those swap agreements are presented in table 9. 

Table 9 

Increase (decrease) in: 

Interest income ...................    $ 
Interest expense ..................      
Net interest 
   income/margin .................    $ 

INTEREST RATE SWAP AGREEMENTS 

2016 

Year Ended December 31 
2015 

2014 

Amount 

    Rate(a)   

Amount 

    Rate(a)   

Amount 

    Rate(a)   

(Dollars in thousands) 

—      —%  $
(.05)     

(36,866)   

—      —%   $ 
(.07)      

(44,219)   

—       —%
(.09) 

(44,996 )   

36,866     
Average notional amount ........    $ 1,357,650     
Rate received(b) ......................      
Rate paid(b) .............................      

      4.39%   
      1.64%   

.04%  $

44,219     
     $1,412,340     

.04%   $ 

44,996      
     $ 1,400,000      

.06%

      4.42%     
      1.28%     

       4.42%
       1.19%

(a)  Computed as a percentage of average earning assets or interest-bearing liabilities. 
(b)  Weighted-average rate paid or received on interest rate swap agreements in effect during year. 

Provision for Credit Losses 
The Company maintains an allowance for credit losses that in management’s judgment appropriately 
reflects losses inherent in the loan and lease portfolio. A provision for credit losses is recorded to 
adjust the level of the allowance as deemed necessary by management. The provision for credit 
losses was $190 million in 2016, compared with $170 million in 2015 and $124 million in 2014. Net 
charge-offs of loans were $157 million in 2016, $134 million in 2015 and $121 million in 2014. Net 
charge-offs as a percentage of average loans and leases outstanding were .18% in 2016, compared 

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with .19% in each of 2015 and 2014. A summary of the Company’s loan charge-offs, provision and 
allowance for credit losses is presented in table 10 and in note 5 of Notes to Financial Statements. 

Table 10 

LOAN CHARGE-OFFS, PROVISION AND ALLOWANCE FOR CREDIT LOSSES 

Allowance for credit losses beginning 
   balance ................................................. $955,992   $919,562   $916,676   $ 925,860     $ 908,290  
Charge-offs during year 

2016 

2015 

2014 
(Dollars in thousands) 

2013 

2012 

Commercial, financial, leasing, etc. ...   59,244     60,983     58,943  
Real estate — construction .................  
1,882  
Real estate — mortgage .....................   30,801     26,382     33,527  
Consumer ...........................................   141,073     107,787     84,390  
Total charge-offs............................   231,255     198,373     178,742  

3,221    

137    

  109,329        41,148  
9,137        27,687  
   49,079        58,572  
   85,965       103,348  
  253,510       230,755  

Recoveries during year 

Commercial, financial, leasing, etc. ...   30,167     30,284     22,188  
6,308    
Real estate — construction .................  
4,725  
4,062    
Real estate — mortgage .....................   11,124    
7,626     14,640  
Consumer ...........................................   28,907     20,585     16,075  
Total recoveries .............................   74,260     64,803     57,628  
Net charge-offs ........................................   156,995     133,570     121,114  
Provision for credit losses .......................   190,000     170,000     124,000  
Allowance related to loans sold or 
   securitized ............................................  
Allowance for credit losses ending 
   balance ................................................. $988,997   $955,992   $919,562   $ 916,676     $ 925,860  
Net charge-offs as a percent of: 

   11,773        11,375  
3,693  
   18,800       
   13,718       
8,847  
   26,035        20,410  
   70,326        44,325  
  183,184       186,430  
  185,000       204,000  

   (11,000 )     

—    

—    

—  

—  

Provision for credit losses ..................  
Average loans and leases, net of 
   unearned discount ............................  

Allowance for credit losses as a percent 
   of loans and leases, net of unearned 
   discount, at year-end ............................  

82.63%  

78.57%  

97.67%   

99.02 %    

91.39%

.18%  

.19%  

.19%   

.28 %    

.30%

1.09%  

1.09%  

1.38%   

1.43 %    

1.39%

Loans acquired in connection with acquisition transactions subsequent to 2008 were recorded at 
fair value with no carry-over of any previously recorded allowance for credit losses. Determining the 
fair value of the acquired loans required estimating cash flows expected to be collected on the loans 
and discounting those cash flows at then-current interest rates. For acquired loans where fair value 
was less than outstanding principal as of the acquisition date and the resulting discount was due, at 
least in part, to credit deterioration, the excess of expected cash flows over the carrying value of the 
loans is recognized as interest income over the lives of the loans. The difference between 
contractually required payments and the cash flows expected to be collected is referred to as the 
nonaccretable balance and is not recorded on the consolidated balance sheet. The nonaccretable 
balance reflects estimated future credit losses and other contractually required payments that the 

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Company does not expect to collect. The Company regularly evaluates the reasonableness of its cash 
flow projections associated with such loans, including its estimates of lifetime principal losses. Any 
decreases to the expected cash flows require the Company to evaluate the need for an additional 
allowance for credit losses and could lead to charge-offs of loan balances. Any significant increases 
in expected cash flows result in additional interest income to be recognized over the then-remaining 
lives of the loans. The carrying amount of loans acquired at a discount subsequent to 2008 and 
accounted for based on expected cash flows was $1.8 billion and $2.5 billion at December 31, 2016 
and 2015, respectively. The decrease in such loans was largely attributable to payments received. The 
nonaccretable balance related to remaining principal losses associated with loans acquired at a 
discount as of December 31, 2016 and 2015 is presented in table 11. During each of the last three 
years, based largely on improving economic conditions and borrower repayment performance, the 
Company’s estimates of cash flows expected to be generated by loans acquired at a discount and 
accounted for based on expected cash flows improved, resulting in increases in the accretable yield. 
In 2016, estimated cash flows expected to be generated by acquired loans increased by $50 million, 
or approximately 2%. That improvement reflected a lowering of estimated principal losses by 
approximately $33 million, primarily due to a $19 million decrease in expected principal losses in the 
commercial real estate loan portfolios, as well as interest and other recoveries. In 2015, excluding 
expected cash flows on the purchased impaired loans acquired from Hudson City, estimated cash 
flows expected to be generated increased by $77 million, or approximately 3%. That improvement 
reflected a lowering of estimated principal losses by approximately $58 million, primarily due to a 
$42 million decrease in expected principal losses in the commercial real estate loan portfolios, as 
well as interest and other recoveries.  Similarly, in 2014 the estimates of cash flows expected to be 
generated increased by approximately 2%, or $98 million.  That improvement also reflected a 
lowering of estimated principal losses, largely driven by a $47 million decrease in expected principal 
losses that was predominantly in the acquired commercial real estate loan portfolios. 

Table 11 

NONACCRETABLE BALANCE — PRINCIPAL 

Remaining Balance 
  December 31,       December 31,  

2016 

2015 

(In thousands) 

Commercial, financial, leasing, etc. ...............................................................  $ 
Commercial real estate ...................................................................................   
Residential real estate .....................................................................................   
Consumer .......................................................................................................   

4,794      $ 10,806 
39,867         48,173 
59,657         113,478 
11,275         17,952 
Total ..........................................................................................................  $  115,593      $ 190,409  

For acquired loans where the fair value exceeded the outstanding principal balance, the 
resulting premium is recognized as a reduction of interest income over the lives of the loans. 
Immediately following the acquisition date and thereafter, an allowance for credit losses is recorded 
for incurred losses inherent in the portfolio, consistent with the accounting for originated loans and 
leases. The carrying amount of Hudson City loans acquired at a premium totaled $14.2 billion and 
$17.8 billion at December 31, 2016 and December 31, 2015, respectively. In addition to the impact 
of estimated credit losses included in the determination of fair value of those loans at the acquisition 
date, a $21 million provision for credit losses was recorded in the fourth quarter of 2015 for incurred 

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losses inherent in those loans at that time. GAAP does not allow the credit loss component of the net 
premium associated with those loans to be bifurcated and accounted for as a nonaccreting balance as 
is the case with purchased impaired loans and other loans acquired at a discount. Despite the fact that 
the determination of aggregate fair value reflects the impact of expected credit losses, GAAP 
provides that incurred losses in a portfolio of loans acquired at a premium be recognized even though 
in a relatively homogenous portfolio of residential mortgage loans the specific loans to which the 
losses relate cannot be individually identified at the acquisition date.  Subsequent to the acquisition 
date, incurred losses associated with those loans are evaluated using methods consistent with those 
applied to originated loans and such losses are considered by management in evaluating the 
Company’s allowance for credit losses. 

Nonaccrual loans aggregated $920 million at December 31, 2016, compared with $799 million 

at each of December 31, 2015 and 2014. As a percentage of total loans and leases outstanding, 
nonaccrual loans represented 1.01%, .91% and 1.20% at the end of 2016, 2015 and 2014, 
respectively. The increase in nonaccrual loans since the 2015 year-end reflected the normal migration 
of previously performing residential real estate loans obtained in the acquisition of Hudson City that 
subsequently became over 90 days past due in 2016 and, as such, were not identifiable as purchased 
impaired as of the acquisition date.  Those nonaccrual loans totaled $190 million at December 31, 
2016. Following the acquisition accounting provisions of GAAP, Hudson City-related loans 
classified as nonaccrual were not significant at December 31, 2015. 

Accruing loans past due 90 days or more (excluding loans acquired at a discount) totaled $301 

million or .33% of total loans and leases at December 31, 2016, compared with $317 million or .36% 
at December 31, 2015 and $245 million or .37% at December 31, 2014. Those amounts included 
loans guaranteed by government-related entities of $283 million, $276 million and $218 million at 
December 31, 2016, 2015 and 2014, respectively. Such guaranteed loans obtained in the acquisition 
of Hudson City aggregated $49 million and $44 million at December 31, 2016 and 2015, 
respectively. Guaranteed loans also included one-to-four family residential mortgage loans serviced 
by the Company that were repurchased to reduce associated servicing costs, including a requirement 
to advance principal and interest payments that had not been received from individual mortgagors. 
Despite the loans being purchased by the Company, the insurance or guarantee by the applicable 
government-related entity remains in force. The outstanding principal balances of the repurchased 
loans that are guaranteed by government-related entities totaled $224 million at December 31, 2016, 
$221 million at December 31, 2015 and $196 million at December 31, 2014. The remaining accruing 
loans past due 90 days or more not guaranteed by government-related entities were loans considered 
to be with creditworthy borrowers that were in the process of collection or renewal. A summary of 
nonperforming assets and certain past due, renegotiated and impaired loan data and credit quality 
ratios is presented in table 12. 

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Table 12 

NONPERFORMING ASSET AND PAST DUE, RENEGOTIATED AND IMPAIRED LOAN DATA 

December 31 

2016 

2015 

2014 
(Dollars in thousands) 

2013 

2012 

Nonaccrual loans .................................................. $ 920,015   $ 799,409   $799,151    $ 874,156     $ 1,013,176  
Real estate and other foreclosed assets .................  
  63,635       66,875        104,279  
139,206  
Total nonperforming assets ...................................  $1,059,221   $ 994,494   $862,786    $ 941,031     $ 1,117,455  

195,085  

Accruing loans past due 90 days or more(a) ......... $ 300,659   $ 317,441   $245,020    $ 368,510     $  358,397  
Government guaranteed loans included 
   in totals above: 

Nonaccrual loans .............................................  $
Accruing loans past due 90 days or more ........  

40,610   $

282,659  

276,285  

47,052   $ 69,095    $  63,647     $ 

57,420  
  217,822      297,918        316,403  

Renegotiated loans ................................................ $ 190,374   $ 182,865   $202,633    $ 257,092     $  271,971  
Accruing loans acquired at a discount past 
   due 90 days or more(b) ...................................... $
Purchased impaired loans(c): 

68,473   $110,367    $ 130,162     $  166,554  

61,144   $

Outstanding customer balance .........................  $ 927,446   $1,204,004   $369,080    $ 579,975     $  828,571  
  197,737      330,792        447,114  
Carrying amount ..............................................  

578,032  

768,329  

Nonaccrual loans to total loans and leases, 
   net of unearned discount ....................................  
Nonperforming assets to total net loans and 
   leases and real estate and other foreclosed 
   assets ..................................................................   
Accruing loans past due 90 days or more(a) to 
   total loans and leases, net of unearned 
   discount ..............................................................   

1.01%  

.91%  

1.20%    

1.36 %    

1.52%

1.16%  

1.13%  

1.29%    

1.47 %    

1.68%

.33%  

.36%  

.37%    

.58 %    

.54%

(a)  Excludes loans acquired at a discount. Predominantly residential real estate loans. 
(b)  Loans acquired at a discount that were recorded at fair value at acquisition date. This category does not 

include purchased impaired loans that are presented separately. 

(c)  Accruing loans acquired at a discount that were impaired at acquisition date and recorded at fair value. 

Purchased impaired loans are loans obtained in acquisition transactions subsequent to 2008 that 

as of the acquisition date were specifically identified as displaying signs of credit deterioration and 
for which the Company did not expect to collect all contractually required principal and interest 
payments. Those loans were impaired at the date of acquisition, were recorded at estimated fair value 
and were generally delinquent in payments, but, in accordance with GAAP, the Company continues 
to accrue interest income on such loans based on the estimated expected cash flows associated with 
the loans. The carrying amount of such loans aggregated $578 million at December 31, 2016, or .6% 
of total loans. Of that amount, $512 million related to the Hudson City acquisition. Purchased 
impaired loans totaled $768 million at December 31, 2015, of which $658 million related to the 
acquisition of Hudson City. 

Accruing loans acquired at a discount past due 90 days or more are loans that could not be 
specifically identified as impaired as of the acquisition date, but were recorded at estimated fair value 
as of such date. Such loans aggregated $61 million at December 31, 2016 and $68 million at 
December 31, 2015. 

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The Company modified the terms of select loans in an effort to assist borrowers. If the borrower 

was experiencing financial difficulty and a concession was granted, the Company considered such 
modifications as troubled debt restructurings. Loan modifications included such actions as the 
extension of loan maturity dates and the lowering of interest rates and monthly payments. The 
objective of the modifications was to increase loan repayments by customers and thereby reduce net 
charge-offs. In accordance with GAAP, the modified loans are included in impaired loans for 
purposes of determining the level of the allowance for credit losses. Information about modifications 
of loans that are considered troubled debt restructurings is included in note 4 of Notes to Financial 
Statements. 

Residential real estate loans modified under specified loss mitigation programs prescribed by 

government guarantors have not been included in renegotiated loans because the loan guarantee 
remains in full force and, accordingly, the Company has not granted a concession with respect to the 
ultimate collection of the original loan balance. Such loans totaled $171 million and $147 million at 
December 31, 2016 and December 31, 2015, respectively. 

Charge-offs of commercial loans and leases, net of recoveries, aggregated $29 million in 2016, 

$31 million in 2015 and $37 million in 2014.  Included in net charge-offs of commercial loans and 
leases in 2016 were $12 million of loans to a commercial maintenance services provider with 
operations in New Jersey and Pennsylvania, $12 million of loans to a multi-regional manufacturer of 
refractory brick and other castable products and recoveries of $7 million of a previously charged-off 
loan to an audio visual service provider.  In 2015, the Company recovered $10 million relating to a 
relationship with a motor vehicle-related parts wholesaler. Commercial loans and leases in 
nonaccrual status were $261 million at December 31, 2016, $242 million at December 31, 2015 and 
$177 million at December 31, 2014. The December 31, 2016 balances for the largest individual 
commercial loans placed in nonaccrual status during 2016 were $41 million with a provider of 
building facility services and other specialty services to clients located throughout the United States 
and $26 million with the manufacturer of refractory brick and other castable products noted above. 
The balances for the largest individual commercial loans placed in nonaccrual status during 2015 
were $22 million with the commercial maintenance service provider noted above and $15 million 
with a multi-regional automobile rental agency.  

Net recoveries of previously charged-off commercial real estate loans during 2016 were $2 
million, compared with net charge-offs of commercial real estate loans during 2015 and 2014 of $7 
million and $3 million, respectively. Reflected in those amounts were net recoveries of $4 million in 
2016 and $2 million in each of 2015 and 2014 of loans to residential real estate builders and 
developers. Commercial real estate loans classified as nonaccrual aggregated $211 million at 
December 31, 2016, compared with $224 million at December 31, 2015 and $239 million at 
December 31, 2014. The decrease in such nonaccrual loans since December 31, 2014 was due, in 
part, to improving economic conditions. Nonaccrual commercial real estate loans included 
construction-related loans of $35 million, $45 million and $97 million at the end of 2016, 2015 and 
2014, respectively. Those nonaccrual construction loans included loans to residential builders and 
developers of $17 million at December 31, 2016, $28 million at December 31, 2015 and $72 million 
at December 31, 2014. Information about the location of nonaccrual and charged-off loans to 
residential real estate builders and developers as of and for the year ended December 31, 2016 is 
presented in table 13. 

71 

71

 
Table 13 

RESIDENTIAL BUILDER AND DEVELOPER LOANS, NET OF UNEARNED DISCOUNT 

December 31, 2016 

Nonaccrual 

Outstanding 
Balances(b)

  Balances 

Percent of 
Outstanding 
Balances

Year Ended 
December 31, 2016 

  Net Charge-offs (Recoveries) 
Percent of 
Average 
Outstanding 
Balances

Balances 

(Dollars in thousands) 

1,557 
New York .......................................    $ 691,558    $
13,456 
Pennsylvania ..................................       141,675     
2,139 
Mid-Atlantic(a) ..............................       465,340     
Other ...............................................       636,973     
1,197 
Total ...............................................    $1,935,546    $ 18,349 

.23  %  $ 

    9.50 
.46 
.19 
.95  %  $ 

640         
(256 )       
(3,956 )       

.09  % 
(.19)
(.86)
—          — 

(3,572 )       

(.19)%  

(a) 

(b) 

Includes Delaware, Maryland, New Jersey, Virginia, West Virginia and the District of 
Columbia. 
Includes approximately $13 million of loans not secured by real estate, of which approximately 
$2 million are in nonaccrual status. 

Residential real estate loan net charge-offs totaled $18 million in 2016, $9 million in 2015 and 

$13 million in 2014. Residential real estate loans in nonaccrual status at December 31, 2016 were 
$336 million, compared with $215 million and $258 million at December 31, 2015 and 2014, 
respectively. The increase in residential real estate loans classified as nonaccrual in 2016 as 
compared with 2015 reflects the normal migration of previously performing loans obtained in the 
acquisition of Hudson City that subsequently became more than 90 days delinquent in 2016.  Such 
nonaccrual residential real estate loans aggregated $190 million at December 31, 2016. Those loans 
could not be identified as purchased impaired loans at the acquisition date because the borrowers 
were making loan payments at the time and the loans were not recorded at a discount. Following the 
acquisition accounting provisions of GAAP, Hudson City-related nonaccrual residential real estate 
loans were not significant at December 31, 2015. The decline in residential real estate loans classified 
as nonaccrual in 2015 as compared to 2014 reflected improved repayment performance by 
customers. Net charge-offs of limited documentation first mortgage loans aggregated $4 million in 
2016, $1 million in 2015 and $4 million in 2014. Nonaccrual limited documentation first mortgage 
loans were $107 million at December 31, 2016 (including $70 million obtained in the acquisition of 
Hudson City), compared with $62 million and $78 million at December 31, 2015 and 2014, 
respectively. Residential real estate loans past due 90 days or more and accruing interest (excluding 
loans acquired at a discount) totaled $281 million (including $49 million obtained in the acquisition 
of Hudson City) at December 31, 2016, $284 million (including $44 million obtained in the 
acquisition of Hudson City) at December 31, 2015 and $216 million at December 31, 2014. A 
substantial portion of such amounts related to guaranteed loans repurchased from government-related 
entities. Information about the location of nonaccrual and charged-off residential real estate loans as 
of and for the year ended December 31, 2016 is presented in table 14. 

72 

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Table 14 

SELECTED RESIDENTIAL REAL ESTATE-RELATED LOAN DATA 

December 31, 2016 

Nonaccrual 

Year Ended 
December 31, 2016 
Net Charge-offs 
(Recoveries) 

         Percent of
         Average 
         Outstanding

Residential mortgages: 

New York ......................................................................... 
Pennsylvania .................................................................... 
Maryland .......................................................................... 
New Jersey ....................................................................... 
Other Mid-Atlantic(a) ...................................................... 
Other ................................................................................ 
Total ................................................................................. 

Residential construction loans: 

New York ......................................................................... 
Pennsylvania .................................................................... 
Maryland .......................................................................... 
New Jersey ....................................................................... 
Other Mid-Atlantic(a) ...................................................... 
Other ................................................................................ 
Total ................................................................................. 

Limited documentation first mortgages: 

New York ......................................................................... 
Pennsylvania .................................................................... 
Maryland .......................................................................... 
New Jersey ....................................................................... 
Other Mid-Atlantic(a) ...................................................... 
Other ................................................................................ 
Total ................................................................................. 

First lien home equity loans and lines of credit: 

New York ......................................................................... 
Pennsylvania .................................................................... 
Maryland .......................................................................... 
New Jersey ....................................................................... 
Other Mid-Atlantic(a) ...................................................... 
Other ................................................................................ 
Total ................................................................................. 

Junior lien home equity loans and lines of credit: 

New York ......................................................................... 
Pennsylvania .................................................................... 
Maryland .......................................................................... 
New Jersey ....................................................................... 
Other Mid-Atlantic(a) ...................................................... 
Other ................................................................................ 
Total ................................................................................. 

Limited documentation junior lien: 

   Outstanding 

Balances 

   $ 6,217,663 
     1,607,986 
     1,255,781 
     5,148,844 
     1,070,176 
     3,695,680 
   $ 18,996,130 

   $

   $

6,041 
1,809 
1,981 
1,363 
3,226 
6,921 
21,341 

   $ 1,519,579 
76,104 
45,010 
     1,387,841 
39,131 
505,776 
   $ 3,573,441 

   $ 1,290,237 
828,004 
682,629 
45,460 
208,765 
20,808 
   $ 3,075,903 

   $

909,908 
364,548 
797,779 
128,782 
314,046 
41,864 
   $ 2,556,927 

New York ......................................................................... 
Pennsylvania .................................................................... 
Maryland .......................................................................... 
New Jersey ....................................................................... 
Other Mid-Atlantic(a) ...................................................... 
Other ................................................................................ 
Total ................................................................................. 

   $

   $

826 
334 
1,388 
385 
651 
4,735 
8,319 

  Balances 

   Balances 

    Percent of 
  Outstanding 
  Balances 
(Dollars in thousands) 

   $ 68,044 
     16,454 
     17,573 
     50,376 
     14,227 
     61,687 
   $ 228,361 

   $

   $

13 
376 
— 
— 
120 
372 
881 

   $ 36,048 
7,656 
2,942 
     31,938 
2,567 
     25,422 
   $ 106,573 

   $ 16,060 
9,714 
6,776 
573 
1,653 
1,401 
   $ 36,177 

   $ 25,022 
4,769 
9,435 
1,242 
3,054 
1,791 
   $ 45,313 

   $

   $

— 
— 
— 
— 
— 
325 
325 

1.09%  
1.02  
1.40  
.98  
1.33  
1.67  
1.20%  

    $  4,027   
       1,999   
       2,069   
       3,008   
652   
       2,108   
    $ 13,863   

.22%  

    $ 

20.79  
—  
—  
3.70  
5.38  
4.13%  

    $ 

4   
33   
—   
—   
—   
12   
49   

2.37%  

10.06  
6.54  
2.30  
6.56  
5.03  
2.98%  

    $  1,426   
120   
125   
293   
(221 ) 
       2,358   
    $  4,101   

1.24%  
1.17  
.99  
1.26  
.79  
6.73  
1.18%  

    $  2,109   
       1,263   
429   
—   
5   
1   
    $  3,807   

2.75%  
1.31  
1.18  
.96  
.97  
4.28  
1.77%  

    $  5,399   
       2,302   
       4,146   
718   
222   
574   
    $ 13,361   

—%  
—  
—  
—  
—  
6.86  
3.91%  

    $ 

    $ 

1   
—   
62   
(1 ) 
—   
85   
147   

(a) 

Includes Delaware, Virginia, West Virginia and the District of Columbia. 

   Balances 

.06%   
.11     
.16     
.05     
.06     
.05     
.07%   

.06%   
.96     
—     
—     
—     
.14     
.18%   

.09%   
.14     
.26     
.02     
(.52)    
.42     
.10%   

.16%   
.15     
.06     
—     
.01     
.01     
.12%   

.57%   
.60     
.48     
.58     
.07     
1.37     
.50%   

.15%   
—     
3.96     
(.32)    
—     
1.70     
1.66%   

73 

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Net charge-offs of consumer loans during 2016 aggregated $112 million, compared with $87 
million in 2015 and $68 million in 2014. During 2016, the Company accelerated the charge off of 
consumer loans associated with customers who were either deceased or had filed for bankruptcy that, 
in accordance with GAAP, had previously been considered when determining the level of the 
allowance for credit losses and were charged-off following the Company’s normal charge-off 
procedures to the extent the loans subsequently became delinquent. Charge-offs of such loans totaled 
$32 million in 2016 and included $22 million of loan balances with a current payment status at the 
time of charge-off. The increase from 2014 to 2015 reflected a $20 million charge-off of a single 
personal usage loan obtained in a previous acquisition. Included in net charge-offs of consumer loans 
were: automobile loans of $32 million in 2016, $12 million in 2015 and $14 million in 2014; 
recreational vehicle loans of $24 million, $12 million and $13 million during 2016, 2015 and 2014, 
respectively; and home equity loans and lines of credit secured by one-to-four family residential 
properties of $17 million in 2016, $15 million in 2015 and $19 million in 2014. Nonaccrual 
consumer loans were $112 million at December 31, 2016, compared with $118 million and $125 
million at December 31, 2015 and 2014, respectively. Included in nonaccrual consumer loans at the 
2016, 2015 and 2014 year-ends were: automobile loans of $19 million, $17 million and $18 million, 
respectively; recreational vehicle loans of $7 million, $9 million and $11 million, respectively; and 
outstanding balances of home equity loans and lines of credit of $82 million, $84 million and $89 
million, respectively. Information about the location of nonaccrual and charged-off home equity 
loans and lines of credit as of and for the year ended December 31, 2016 is presented in table 14. 
Information about past due and nonaccrual loans as of December 31, 2016 and 2015 is also 

included in note 4 of Notes to Financial Statements. 

Real estate and other foreclosed assets totaled $139 million at December 31, 2016, compared 

with $195 million at December 31, 2015 and $64 million at December 31, 2014. The higher levels of 
real estate and other foreclosed assets in 2016 and 2015 as compared with 2014 reflect residential 
real estate properties associated with the Hudson City acquisition, which aggregated $84 million and 
$126 million at December 31, 2016 and 2015, respectively. Gains or losses resulting from sales of 
real estate and other foreclosed assets were not material in 2016, 2015 or 2014. At December 31, 
2016, the Company’s holding of residential real estate-related properties comprised approximately 
93% of foreclosed assets. 

Management determined the allowance for credit losses by performing ongoing evaluations of the 

loan and lease portfolio, including such factors as the differing economic risks associated with each 
loan category, the financial condition of specific borrowers, the economic environment in which 
borrowers operate, the level of delinquent loans, the value of any collateral and, where applicable, the 
existence of any guarantees or indemnifications. Management evaluated the impact of changes in 
interest rates and overall economic conditions on the ability of borrowers to meet repayment 
obligations when quantifying the Company’s exposure to credit losses and the allowance for such 
losses as of each reporting date. Factors also considered by management when performing its 
assessment, in addition to general economic conditions and the other factors described above, included, 
but were not limited to: (i) the impact of residential real estate values on the Company’s portfolio of 
loans to residential real estate builders and developers and other loans secured by residential real estate; 
(ii) the concentrations of commercial real estate loans in the Company’s loan portfolio; (iii) the amount 
of commercial and industrial loans to businesses in areas of New York State outside of the New York 
City metropolitan area and in central Pennsylvania that have historically experienced less economic 
growth and vitality than the vast majority of other regions of the country; (iv) the expected repayment 
performance associated with the Company’s first and second lien loans secured by residential real 
estate, including loans obtained in the acquisition of Hudson City that were not classified as purchased 
impaired; and (v) the size of the Company’s portfolio of loans to individual consumers, which 
historically have experienced higher net charge-offs as a percentage of loans outstanding than other 
loan types. The level of the allowance is adjusted based on the results of management’s analysis. 

74 

74

 
Management cautiously and conservatively evaluated the allowance for credit losses as of 
December 31, 2016 in light of: (i) residential real estate values and the level of delinquencies of loans 
secured by residential real estate; (ii) economic conditions in the markets served by the Company; 
(iii) slower growth in private sector employment in upstate New York and central Pennsylvania than 
in other regions served by the Company and nationally; (iv) the significant subjectivity involved in 
commercial real estate valuations; and (v) the amount of loan growth experienced by the Company. 
While there has been general improvement in economic conditions, concerns continue to exist about 
the strength and sustainability of such improvements; the volatile nature of global commodity and 
export markets, including the impact international economic conditions could have on the U.S. 
economy; Federal Reserve positioning of monetary policy; and continued stagnant population growth 
in the upstate New York and central Pennsylvania regions (approximately 55% of the Company’s 
loans and leases are to customers in New York State and Pennsylvania). 

The Company utilizes a loan grading system which is applied to all commercial loans and 

commercial real estate loans. Loan grades are utilized to differentiate risk within the portfolio and 
consider the expectations of default for each loan. Commercial loans and commercial real estate 
loans with a lower expectation of default are assigned one of ten possible “pass” loan grades and are 
generally ascribed lower loss factors when determining the allowance for credit losses. Loans with an 
elevated level of credit risk are classified as “criticized” and are ascribed a higher loss factor when 
determining the allowance for credit losses. Criticized loans may be classified as “nonaccrual” if the 
Company no longer expects to collect all amounts according to the contractual terms of the loan 
agreement or the loan is delinquent 90 days or more. Criticized commercial loans and commercial 
real estate loans totaled $2.4 billion at December 31, 2016 and $2.1 billion at December 31, 2015. 
Largely reflecting loans to manufacturers and vehicle dealers, increases in criticized loan balances 
since December 31, 2015 included approximately $66 million of commercial real estate loans and 
$231 million of commercial loans. Approximately 98% of loan balances added to the criticized 
category during 2016 were less than 90 days past due and 97% had a current payment status. Given 
payment performance, amount of supporting collateral, and, in certain instances, the existence of loan 
guarantees, the Company still expects to collect the full outstanding principal balance on most of 
these loans. 

Loan officers in different geographic locations with the support of the Company’s credit 
department personnel are responsible to continuously review and reassign loan grades to pass and 
criticized loans 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. At least 
annually, updated financial information is obtained from commercial borrowers associated with pass 
grade loans and additional analysis is performed. On a quarterly basis, the Company’s centralized 
credit department reviews all criticized commercial loans and commercial real estate loans greater 
than $1 million to determine the appropriateness of the assigned loan grade, including whether the 
loan should be reported as accruing or nonaccruing. For criticized nonaccrual loans, additional 
meetings are held with loan officers and their managers, workout specialists and senior management 
to discuss each of the relationships. In analyzing criticized loans, borrower-specific information is 
reviewed, including operating results, future cash flows, recent developments and the borrower’s 
outlook, and other pertinent data. The timing and extent of potential losses, considering collateral 
valuation and other factors, and the Company’s potential courses of action are reviewed. To the 
extent that these loans are collateral-dependent, they are evaluated based on the fair value of the 
loan’s collateral as estimated at or near the financial statement date. As the quality of a loan 
deteriorates to the point of classifying the loan as “criticized,” the process of obtaining updated 
collateral valuation information is usually initiated, unless it is not considered warranted given 
factors such as the relative size of the loan, the characteristics of the collateral or the age of the last 
valuation. In those cases where current appraisals may not yet be available, prior appraisals are 

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utilized with adjustments, as deemed necessary, for estimates of subsequent declines in value as 
determined by line of business and/or loan workout personnel in the respective geographic regions. 
Those adjustments are reviewed and assessed for reasonableness by the Company’s credit 
department. Accordingly, for real estate collateral securing larger commercial loans and commercial 
real estate loans, estimated collateral values are based on current appraisals and estimates of value. 
For non-real estate loans, collateral is assigned a discounted estimated liquidation value and, 
depending on the nature of the collateral, is verified through field exams or other procedures. In 
assessing collateral, real estate and non-real estate values are reduced by an estimate of selling costs. 
With regard to residential real estate loans, the Company’s loss identification and estimation 
techniques make reference to loan performance and house price data in specific areas of the country 
where collateral securing the Company’s residential real estate loans is located. For residential real 
estate-related loans, including home equity loans and lines of credit, the excess of the loan balance 
over the net realizable value of the property collateralizing the loan is charged-off when the loan 
becomes 150 days delinquent. That charge-off is based on recent indications of value from external 
parties that are generally obtained shortly after a loan becomes nonaccrual. Loans to consumers that 
file for bankruptcy are generally charged off to estimated net collateral value shortly after the 
Company is notified of such filings.  At December 31, 2016, approximately 55% of the Company’s 
home equity portfolio consisted of first lien loans and lines of credit. Of the remaining junior lien 
loans in the portfolio, approximately 70% (or approximately 32% of the aggregate home equity 
portfolio) consisted of junior lien loans that were behind a first lien mortgage loan that was not 
owned or serviced by the Company. To the extent known by the Company, if a senior lien loan 
would be on nonaccrual status because of payment delinquency, even if such senior lien loan was not 
owned by the Company, the junior lien loan or line that is owned by the Company is placed on 
nonaccrual status. At December 31, 2016, the balance of junior lien loans and lines that were in 
nonaccrual status solely as a result of first lien loan performance was $12 million, compared with $22 
million at December 31, 2015. In monitoring the credit quality of its home equity portfolio for 
purposes of determining the allowance for credit losses, the Company reviews delinquency and 
nonaccrual information and considers recent charge-off experience. When evaluating individual 
home equity loans and lines of credit for charge off, if the Company does not know the amount of the 
remaining first lien mortgage loan (typically because the Company does not own or service the first 
lien loan), the Company assumes that the first lien mortgage loan has had no principal amortization 
since the origination of the junior lien loan. Similarly, data used in estimating incurred losses for 
purposes of determining the allowance for credit losses also assumes no reductions in outstanding 
principal of first lien loans since the origination of the junior lien loan. Home equity line of credit 
terms vary but such lines are generally originated with an open draw period of ten years followed by 
an amortization period of up to twenty years. At December 31, 2016, approximately 84% of all 
outstanding balances of home equity lines of credit related to lines that were still in the draw period, 
the weighted-average remaining draw periods were approximately five years, and approximately 
19% were making contractually allowed payments that do not include any repayment of principal. 
Factors that influence the Company’s credit loss experience include overall economic 
conditions affecting businesses and consumers, generally, but also residential and commercial real 
estate valuations, in particular, given the size of the Company’s real estate loan portfolios. 
Commercial real estate valuations can be highly subjective, as they are based upon many 
assumptions. Such valuations can be significantly affected over relatively short periods of time by 
changes in business climate, economic conditions, interest rates, and, in many cases, the results of 
operations of businesses and other occupants of the real property. Similarly, residential real estate 
valuations can be impacted by housing trends, the availability of financing at reasonable interest 
rates, and general economic conditions affecting consumers. 

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In determining the allowance for credit losses, the Company estimates losses attributable to 
specific troubled credits identified through both normal and detailed or intensified credit review 
processes and also estimates losses inherent in other loans and leases. In quantifying incurred losses, 
the Company considers the factors and uses the techniques described herein and in note 5 of Notes to 
Financial Statements. For purposes of determining the level of the allowance for credit losses, the 
Company segments its loan and lease portfolio by loan type. The amount of specific loss components 
in the Company’s loan and lease portfolios is determined through a loan-by-loan analysis of 
commercial loans and commercial real estate loans in nonaccrual status. Measurement of the specific 
loss components is typically based on expected future cash flows, collateral values or other factors that 
may impact the borrower’s ability to pay. Losses associated with residential real estate loans and 
consumer loans are generally determined by reference to recent charge-off history and are evaluated 
(and adjusted if deemed appropriate) through consideration of other factors including near-term 
forecasted loss estimates developed by the Company’s credit department. These forecasts give 
consideration to overall borrower repayment performance and current geographic region changes in 
collateral values using third party published historical price indices or automated valuation 
methodologies. With regard to collateral values, the realizability of such values by the Company 
contemplates repayment of any first lien position prior to recovering amounts on a junior lien position. 
Approximately 45% of the Company’s home equity portfolio consists of junior lien loans and lines of 
credit. Except for consumer loans and residential real estate loans that are considered smaller balance 
homogeneous loans and are evaluated collectively and loans obtained at a discount in acquisition 
transactions, the Company considers a loan to be impaired when, based on current information and 
events, it is probable that the Company will be unable to collect all amounts according to the 
contractual terms of the loan agreement or the loan is delinquent 90 days or more and has been placed 
in nonaccrual status. Those impaired loans are evaluated for specific loss components. Modified loans, 
including smaller balance homogenous loans, that are considered to be troubled debt restructurings are 
evaluated for impairment giving consideration to the impact of the modified loan terms on the present 
value of the loan’s expected cash flows. Loans less than 90 days delinquent are deemed to have a 
minimal delay in payment and are generally not considered to be impaired. Loans acquired in 
connection with acquisition transactions subsequent to 2008 were recorded at fair value with no carry-
over of any previously recorded allowance for credit losses. Determining the fair value of the acquired 
loans required estimating cash flows expected to be collected on the loans and discounting those cash 
flows at then-current interest rates. For loans acquired at a discount, the impact of estimated future 
credit losses represents the predominant difference between contractually required payments and the 
cash flows expected to be collected. Subsequent decreases to those expected cash flows require the 
Company to evaluate the need for an additional allowance for credit losses and could lead to charge-
offs of acquired loan balances. 

The inherent base level loss components of the Company’s allowance for credit losses are 
generally determined by applying loss factors to specific loan balances based on loan type and 
management’s classification of such loans under the Company’s loan grading system. The Company 
utilizes a loan grading system which is applied to all commercial loans and commercial real estate 
loans. As previously described, loan officers are responsible for continually assigning grades to these 
loans based on standards outlined in the Company’s Credit Policy. Internal loan grades are also 
extensively monitored by the Company’s credit department to ensure consistency and strict 
adherence to the prescribed standards. Loan balances utilized in the inherent base level loss 
component computations exclude loans and leases for which specific allocations are maintained. 
Loan grades are assigned loss component factors that reflect the Company’s loss estimate for each 
group of loans and leases. Factors considered in assigning loan grades and loss component factors 
include borrower-specific information related to expected future cash flows and operating results, 
collateral values, financial condition, payment status, and other information; levels of and trends in 

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portfolio charge-offs and recoveries; levels of and trends in portfolio delinquencies and impaired 
loans; changes in the risk profile of specific portfolios; trends in volume and terms of loans; effects 
of changes in credit concentrations; and observed trends and practices in the banking industry. In 
determining the allowance for credit losses, management also gives consideration to such factors as 
customer, industry and geographic concentrations, as well as national and local economic conditions, 
including: (i) the comparatively poorer economic conditions and unfavorable business climate in 
many market regions served by the Company, including upstate New York and central Pennsylvania, 
that result in such regions generally experiencing significantly poorer economic growth and vitality 
as compared with much of the rest of the country; (ii) portfolio concentrations regarding loan type, 
collateral type and geographic location, in particular the large concentrations of commercial real 
estate loans secured by properties in the New York City area and other areas of New York State; and 
(iii) risk associated with the Company’s portfolio of consumer loans, in particular automobile loans, 
which generally have higher rates of loss than other types of collateralized loans. 

The inherent base level loss components related to residential real estate loans and consumer 
loans are generally determined by applying loss factors to portfolio balances after consideration of 
payment performance and recent loss experience and trends, which are mainly driven by current 
collateral values in the market place as well as the amount of loan defaults. Loss rates for loans 
secured by residential real estate, including home equity loans and lines of credit, are determined by 
reference to recent charge-off history and are evaluated (and adjusted if deemed appropriate) through 
consideration of other factors as previously described. 

In evaluating collateral, the Company relies on internally and externally prepared valuations. 

Residential real estate valuations are usually based on sales of comparable properties in the 
respective location. Commercial real estate valuations also refer to sales of comparable properties but 
oftentimes are based on calculations that utilize many assumptions and, as a result, can be highly 
subjective. Specifically, commercial real estate values can be significantly affected over relatively 
short periods of time by changes in business climate, economic conditions and interest rates, and, in 
many cases, the results of operations of businesses and other occupants of the real property. 
Additionally, management is aware that there is oftentimes a delay in the recognition of credit quality 
changes in loans and, as a result, in changes to assigned loan grades due to time delays in the 
manifestation and reporting of underlying events that impact credit quality. Accordingly, loss 
estimates derived from the inherent base level loss component computation are adjusted for current 
national and local economic conditions and trends. The Federal Reserve stated in December 2016 
that the U.S. economic recovery had continued and activity is expected to expand at a moderate pace, 
with further improvement in labor market conditions. Economic indicators in the most significant 
market regions served by the Company also showed improvement in 2016. For example, in 2016, 
average private sector employment in areas served by the Company was 1.7% above year-ago levels, 
but trailed the 2.0% U.S. average growth rate. Private sector employment increased 0.4% in upstate 
New York, 1.0% in areas of Pennsylvania served by the Company, 1.7% in New Jersey, 2.1% in 
Maryland, 2.6% in Greater Washington D.C. and 3.0% in the State of Delaware. In New York City, 
private sector employment increased by 2.4% in 2016. Nevertheless, the U.S. economy remains 
susceptible to slow global economic growth, a strong U.S. dollar and its impact on trade, and 
international market turbulence. 

The specific loss components and the inherent base level loss components together comprise the 

total base level or “allocated” allowance for credit losses. Such allocated portion of the allowance 
represents management’s assessment of losses existing in specific larger balance loans that are 
reviewed in detail by management and pools of other loans that are not individually analyzed. In 
addition, the Company has always provided an inherent unallocated portion of the allowance that is 
intended to recognize probable losses that are not otherwise identifiable. The inherent unallocated 
allowance includes management’s subjective determination of amounts necessary for such things as 

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the possible use of imprecise estimates in determining the allocated portion of the allowance and 
other risks associated with the Company’s loan portfolio which may not be specifically allocable. 

A comparative allocation of the allowance for credit losses for each of the past five year-ends is 

presented in table 15. Amounts were allocated to specific loan categories based on information 
available to management at the time of each year-end assessment and using the methodology 
described herein. Variations in the allocation of the allowance by loan category as a percentage of 
those loans reflect changes in management’s estimate of specific loss components and inherent base 
level loss components, including the impact of delinquencies and nonaccrual loans. As described in 
note 5 of Notes to Financial Statements, loans considered impaired aggregated $761 million and 
$781 million at December 31, 2016 and December 31, 2015, respectively. The allocated portion of 
the allowance for credit losses related to impaired loans totaled $83 million at December 31, 2016 
and $90 million at December 31, 2015. The unallocated portion of the allowance for credit losses 
was equal to .09% of gross loans outstanding at each of December 31, 2016 and 2015. Considering 
the inherent imprecision in the many estimates used in the determination of the allocated portion of 
the allowance, management deliberately remained cautious and conservative in establishing the 
overall allowance for credit losses. Given the Company’s high concentration of real estate loans and 
considering the other factors already discussed herein, management considers the allocated and 
unallocated portions of the allowance for credit losses to be prudent and reasonable. Furthermore, the 
Company’s allowance is general in nature and is available to absorb losses from any loan or lease 
category. Additional information about the allowance for credit losses is included in note 5 of Notes 
to Financial Statements. 

Table 15 

ALLOCATION OF THE ALLOWANCE FOR CREDIT LOSSES TO LOAN CATEGORIES 

December 31 

2016 

2015 

2014 
(Dollars in thousands) 

2013 

2012 

Commercial, financial, leasing, etc. ........ $330,833   $300,404   $288,038   $ 273,383     $ 246,759  
  403,634       425,908  
Real estate ...............................................   423,846     399,069     369,837  
  164,644       179,418  
Consumer ................................................   156,288     178,320     186,033  
   75,015        73,775  
Unallocated .............................................   78,030     78,199     75,654  
Total ................................................... $988,997   $955,992   $919,562   $ 916,676     $ 925,860  

As a Percentage of Gross Loans 
and Leases Outstanding 

Commercial, financial, leasing, etc. ........  
Real estate ...............................................  
Consumer ................................................  

1.45%  
.75    
1.29    

1.46%  
.72    
1.54    

1.47%   
1.02  
1.70  

1.45 %    
1.15       
1.60       

1.37%
1.14  
1.55   

Management believes that the allowance for credit losses at December 31, 2016 appropriately 

reflected credit losses inherent in the portfolio as of that date. The allowance for credit losses was 
$989 million or 1.09% of total loans and leases at December 31, 2016, compared with $956 million 
or 1.09% at December 31, 2015 and $920 million or 1.38% at December 31, 2014. The ratio of the 
allowance to total loans and leases at each respective year-end reflects the impact of loans obtained 
in acquisition transactions subsequent to 2008 that have been recorded at estimated fair value. As 
noted earlier, GAAP prohibits any carry-over of an allowance for credit losses for acquired loans 
recorded at fair value. However, for loans acquired at a premium, GAAP provides that an allowance 

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for credit losses be recognized for incurred losses inherent in the portfolio. The decline in the ratio of 
the allowance to total loans and leases at December 31, 2016 and December 31, 2015 as compared 
with December 31, 2014 reflects the impact of loans (predominantly residential real estate loans) 
obtained in the acquisition of Hudson City. The level of the allowance reflects management’s 
evaluation of the loan and lease portfolio using the methodology and considering the factors as 
described herein. Should the various credit factors considered by management in establishing the 
allowance for credit losses change and should management’s assessment of losses inherent in the 
loan portfolios also change, the level of the allowance as a percentage of loans could increase or 
decrease in future periods. The ratio of the allowance for credit losses to nonaccrual loans at the end 
of 2016, 2015 and 2014 was 107%, 120% and 115%, respectively. Given the Company’s general 
position as a secured lender and its practice of charging-off loan balances when collection is deemed 
doubtful, that ratio and changes in that ratio are generally not an indicative measure of the adequacy 
of the Company’s allowance for credit losses, nor does management rely upon that ratio in assessing 
the adequacy of the Company’s allowance for credit losses. The level of the allowance reflects 
management’s evaluation of the loan and lease portfolio as of each respective date. 

In establishing the allowance for credit losses, management follows the methodology described 
herein, including taking a conservative view of borrowers’ abilities to repay loans. The establishment of 
the allowance is extremely subjective and requires management to make many judgments about 
borrower, industry, regional and national economic health and performance. In order to present 
examples of the possible impact on the allowance from certain changes in credit quality factors, the 
Company assumed the following scenarios for possible deterioration of credit quality: 

 

 

 

 
 
 

 

For consumer loans and leases considered smaller balance homogenous loans and evaluated 
collectively, a 50 basis point increase in loss factors; 
For residential real estate loans and home equity loans and lines of credit, also considered 
small balance homogenous loans and evaluated collectively, a 15% increase in estimated 
inherent losses; and 
For commercial loans and commercial real estate loans, a migration of loans to lower-ranked 
risk grades resulting in a 30% increase in the balance of classified credits in each risk grade. 
For possible improvement in credit quality factors, the scenarios assumed were: 
For consumer loans and leases, a 20 basis point decrease in loss factors; 
For residential real estate loans and home equity loans and lines of credit, a 10% decrease in 
estimated inherent losses; and 
For commercial loans and commercial real estate loans, a migration of loans to higher-
ranked risk grades resulting in a 5% decrease in the balance of classified credits in each risk 
grade. 

The scenario analyses resulted in an additional $83 million that could be identifiable under the 

assumptions for credit deterioration, whereas under the assumptions for credit improvement a $27 
million reduction could occur. These examples are only a few of numerous reasonably possible 
scenarios that could be utilized in assessing the sensitivity of the allowance for credit losses based on 
changes in assumptions and other factors. 

The Company had no concentrations of credit extended to any specific industry that exceeded 

10% of total loans at December 31, 2016, however residential real estate loans comprised 
approximately 25% of the loan portfolio. Outstanding loans to foreign borrowers aggregated $292 
million at December 31, 2016, or .3% of total loans and leases. 

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Other Income 
Other income totaled $1.83 billion in each of 2016 and 2015, compared with $1.78 billion in 2014. 
The impact of gains recognized on sales of collateralized debt obligations and from higher trading 
account and foreign exchange gains in 2016 were offset by the impact of a $45 million gain 
recognized in 2015 on the sale of the Company’s trade processing business within the retirement 
services division. The Hudson City transaction did not have a significant impact on other income in 
2015 or 2016. The increase in other income from 2014 to 2015 included higher commercial mortgage 
banking revenues and the aforementioned gain from the sale of the trade processing business that was 
largely offset by lower trust income associated with that divested business.  

Mortgage banking revenues aggregated $374 million in 2016, $376 million in 2015 and $363 

million in 2014. Mortgage banking revenues are comprised of both residential and commercial 
mortgage banking activities. The Company’s involvement in commercial mortgage banking activities 
includes the origination, sales and servicing of loans under the multifamily loan programs of Fannie 
Mae, Freddie Mac and the U.S. Department of Housing and Urban Development. 

Residential mortgage banking revenues, consisting of realized gains from sales of residential 

real estate loans and loan servicing rights, unrealized gains and losses on residential real estate loans 
held for sale and related commitments, residential real estate loan servicing fees, and other residential 
real estate loan-related fees and income, were $255 million in 2016, $281 million in 2015 and $287 
million in 2014. The decline in residential mortgage banking revenues from 2014 to 2015 and from 
2015 to 2016 predominantly reflects a decrease in revenues associated with servicing residential real 
estate loans for others. 

New commitments to originate residential real estate loans to be sold declined 11% to 
approximately $3.1 billion in 2016, from $3.5 billion in 2015. Such commitments aggregated $3.2 
billion in 2014. Realized gains from sales of residential real estate loans and loan servicing rights and 
recognized net unrealized gains or losses attributable to residential real estate loans held for sale, 
commitments to originate loans for sale and commitments to sell loans aggregated to a gain of $71 
million in 2016, compared with gains of $74 million in 2015 and $75 million in 2014. 

The Company is contractually obligated to repurchase previously sold 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 purchasers for losses incurred or may 
repurchase certain loans. The Company reduces residential mortgage banking revenues for losses 
related to its obligations to loan purchasers. The amount of those charges varies 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. Residential mortgage banking revenues 
during 2016 and 2014 were each reduced by approximately $4 million, compared with $5 million in 
2015, related to the actual or anticipated settlement of repurchase obligations. 

Loans held for sale that were secured by residential real estate aggregated $414 million and 
$353 million at December 31, 2016 and 2015, respectively. Commitments to sell residential real 
estate loans and commitments to originate residential real estate loans for sale at pre-determined rates 
totaled $777 million and $479 million, respectively, at December 31, 2016, $687 million and $489 
million, respectively, at December 31, 2015 and $717 million and $432 million, respectively, at 
December 31, 2014. Net recognized unrealized gains on residential real estate loans held for sale, 
commitments to sell loans and commitments to originate loans for sale were $15 million at December 
31, 2016, $16 million at December 31, 2015 and $19 million at December 31, 2014. Changes in such 
net unrealized gains are recorded in mortgage banking revenues and resulted in net decreases in 
revenue of $3 million and $1 million in 2015 and 2014, respectively. The aggregate impact of 
changes in net unrealized gains was less than $1 million in 2016. 

Revenues from servicing residential real estate loans for others were $183 million in 2016, $206 
million in 2015 and $212 million in 2014. Residential real estate loans serviced for others aggregated 

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$53.2 billion at December 31, 2016, $61.7 billion a year earlier and $67.2 billion at December 31, 
2014 and included certain small-balance commercial real estate loans. Reflected in residential real 
estate loans serviced for others were loans sub-serviced for others of $30.4 billion, $37.8 billion and 
$42.1 billion at December 31, 2016, 2015 and 2014, respectively. Revenues earned for sub-servicing 
loans totaled $98 million in 2016, compared with $116 million in each of 2015 and 2014. The 
contractual servicing rights associated with loans sub-serviced by the Company were predominantly 
held by affiliates of Bayview Lending Group LLC (“BLG”). Information about the Company’s 
relationship with BLG and its affiliates is included in note 24 of Notes to Financial Statements. 
Capitalized servicing rights consist largely of servicing associated with loans sold by the Company. 
Capitalized residential mortgage servicing assets totaled $117 million at December 31, 2016, 
compared with $118 million and $111 million at December 31, 2015 and 2014, respectively. 
Additional information about the Company’s capitalized residential mortgage servicing assets, 
including information about the calculation of estimated fair value, is presented in note 7 of Notes to 
Financial Statements. 

Commercial mortgage banking revenues totaled $119 million in 2016, $95 million in 2015 and 

$76 million in 2014. Included in such amounts were revenues from loan origination and sales 
activities of $76 million in 2016, $53 million in 2015 and $41 million in 2014. The rise in such 
revenues from 2015 to 2016 was due to higher origination volumes. Commercial real estate loans 
originated for sale to other investors totaled approximately $2.9 billion in 2016, compared with $2.0 
billion in 2015 and $1.5 billion in 2014. Loan servicing revenues aggregated $43 million in 2016, 
$42 million in 2015 and $35 million in 2014. Capitalized commercial mortgage servicing assets were 
$104 million at December 31, 2016, $84 million at December 31, 2015 and $73 million at 
December 31, 2014. Commercial real estate loans serviced for other investors totaled $11.8 billion at 
December 31, 2016, $11.0 billion at December 31, 2015 and $11.3 billion at December 31, 2014, and 
included $2.8 billion, $2.5 billion and $2.4 billion, respectively, of loan balances for which investors 
had recourse to the Company if such balances are ultimately uncollectible. Commitments to sell 
commercial real estate loans and commitments to originate commercial real estate loans for sale 
aggregated $713 million and $70 million, respectively, at December 31, 2016, $96 million and $58 
million, respectively, at December 31, 2015 and $520 million and $212 million, respectively, at 
December 31, 2014. Commercial real estate loans held for sale were $643 million, $39 million and 
$308 million at December 31, 2016, 2015 and 2014, respectively. The higher balances at December 
31, 2016 and 2014 reflect loans originated later in the year that had not yet been delivered to 
investors. 

Service charges on deposit accounts totaled $419 million in 2016, compared with $421 million 

in 2015 and $428 million in 2014. The lower levels of fees since 2014 resulted from declines in 
consumer service charges, particularly overdraft fees. 

Trust income includes fees related to two significant businesses. The Institutional Client 
Services (“ICS”) business provides a variety of trustee, agency, investment management and 
administrative services for corporations and institutions, investment bankers, corporate tax, finance 
and legal executives, and other institutional clients who: (i) use capital markets financing structures; 
(ii) use independent trustees to hold retirement plan and other assets; and (iii) need investment and 
cash management services. The Wealth Advisory Services (“WAS”) business helps high net worth 
clients grow their wealth, protect it, and transfer it to their heirs. A comprehensive array of wealth 
management services are offered, including asset management, fiduciary services and family office 
services. Trust income totaled to $472 million in 2016, compared with $471 million in 2015 and 
$508 million in 2014. Revenues associated with the ICS business were approximately $230 million 
in 2016, $220 million in 2015 and $244 million in 2014. The increase in ICS revenue in 2016 when 
compared to the prior year was the result of stronger sales activities and higher fees earned from 
money-market funds, partially offset by lower retirement services revenues. The decline in ICS 

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revenue in 2016 and 2015 as compared with 2014 reflects the April 2015 divestiture of the trade 
processing business within the retirement services division. Revenues related to that business 
reflected in trust income (in the ICS business) during 2015 and 2014 were approximately $9 million 
and $34 million, respectively. After considering related expenses, including the portion of those 
revenues paid to sub-advisors, net income attributable to the sold business during those years was not 
material to the consolidated results of operations of the Company. The sale resulted in an after-tax 
gain in 2015 of $23 million ($45 million pre-tax) that was recorded in “other revenues from 
operations” in the consolidated statement of income. Revenues attributable to WAS totaled 
approximately $212 million, $218 million and $224 million in 2016, 2015 and 2014, respectively. 
Total trust assets, which include assets under management and assets under administration, were 
$210.6 billion at December 31, 2016, compared with $199.2 billion at December 31, 2015. Trust 
assets under management aggregated $70.7 billion and $66.7 billion at December 31, 2016 and 2015, 
respectively. Additional trust income from investment management activities were $30 million, $33 
million and $40 million in 2016, 2015 and 2014, respectively. That income largely relates to fees 
earned from retail customer investment accounts and from an affiliated investment manager. Assets 
managed by that affiliated manager totaled $7.3 billion and $7.1 billion at December 31, 2016 and 
December 31, 2015, respectively. The Company’s trust income from that affiliate was not material 
during 2016 or 2015. The Company’s proprietary mutual funds held assets of $10.9 billion and $12.2 
billion at December 31, 2016 and 2015, respectively. 

Brokerage services income, which includes revenues from the sale of mutual funds and 

annuities and securities brokerage fees, aggregated $63 million in 2016, $65 million in 2015 and $67 
million in 2014. Trading account and foreign exchange activity resulted in gains of $41 million in 
2016, $31 million in 2015 and $30 million in 2014. The higher level of such gains in 2016 as 
compared with 2015 resulted largely from higher activity related to interest rate swap transactions 
executed on behalf of commercial customers and higher gains associated with foreign exchange 
activities. As compared with 2014, higher activity in 2015 related to interest rate swap transactions 
executed on behalf of commercial customers was largely offset by decreased market values of 
trading account assets held in connection with deferred compensation arrangements and lower gains 
associated with foreign exchange activities. The Company enters into interest rate and foreign 
exchange contracts with customers who need such services and concomitantly enters into offsetting 
trading positions with third parties to minimize the risks involved with these types of transactions. 
Information about the notional amount of interest rate, foreign exchange and other contracts entered 
into by the Company for trading account purposes is included in note 18 of Notes to Financial 
Statements and herein under the heading “Liquidity, Market Risk, and Interest Rate Sensitivity.” 
The Company realized net gains from sales of investment securities of $30 million in 2016. 
There were no significant gains or losses on investment securities in 2015 or 2014. During 2016, the 
Company sold all of its collateralized debt obligations that had been held in the available-for-sale 
investment securities portfolio and that had been obtained through the acquisition of other banks. In 
total, securities with an amortized cost of $28 million were sold. Divestiture of the majority of those 
securities would have been required prior to July 21, 2017 in accordance with the provisions of the 
Volcker Rule. There were no other-than-temporary impairment losses in 2016, 2015 or 2014. Each 
reporting period the Company reviews its investment securities for other-than-temporary impairment. 
For equity securities, the Company considers various factors to determine if the decline in value is 
other than temporary, including the duration and extent of the decline in value, the factors 
contributing to the decline in fair value, including the financial condition of the issuer as well as the 
conditions of the industry in which it operates, and the prospects for a recovery in fair value of the 
equity security. For debt securities, the Company analyzes the creditworthiness of the issuer or 
reviews the credit performance of the underlying collateral supporting the bond. For debt securities 
backed by pools of loans, such as privately issued mortgage-backed securities, the Company 

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estimates the cash flows of the underlying loan collateral using forward-looking assumptions for 
default rates, loss severities and prepayment speeds. Estimated collateral cash flows are then utilized 
to estimate bond-specific cash flows to determine the ultimate collectibility of the bond. If the 
present value of the cash flows indicates that the Company should not expect to recover the entire 
amortized cost basis of a bond or if the Company intends to sell the bond or it more likely than not 
will be required to sell the bond before recovery of its amortized cost basis, an other-than-temporary 
impairment loss is recognized. If an other-than-temporary impairment loss is deemed to have 
occurred, the investment security’s cost basis is adjusted, as appropriate for the circumstances. 
Additional information about other-than-temporary impairment considerations is included herein 
under the heading “Capital.” 

Other revenues from operations aggregated $426 million in 2016, compared with $463 million 

in 2015 and $383 million in 2014. The decline in other revenues from operations in 2016 as 
compared to 2015 was largely due to the $45 million gain from the sale of the trade processing 
business in 2015 and lower letter of credit and credit-related fees (largely loan syndication fees), 
partially offset by higher merchant discount and credit card fees. The increase in 2015 as compared 
with 2014 reflected that $45 million gain from the sale of the trade processing business, $15 million 
of gains from the sale of equipment previously leased to commercial customers and higher loan 
syndication fees.  

Included in other revenues from operations were the following significant components. Letter 
of credit and other credit-related fees totaled $120 million, $134 million and $129 million in 2016, 
2015 and 2014, respectively. The decrease from 2015 to 2016 was largely due to a decline in loan 
syndication fees. Revenues from merchant discount and credit card fees were $111 million in 2016, 
$105 million in 2015 and $96 million in 2014. The continued trend of higher revenues since 2014 
was largely attributable to increased transaction volumes related to merchant activity and usage of 
the Company’s credit card products. Tax-exempt income earned from bank owned life insurance, 
which includes increases in the cash surrender value of life insurance policies and benefits received, 
aggregated $54 million in 2016, compared with $53 million in 2015 and $50 million in 2014. 
Insurance-related sales commissions and other revenues totaled $43 million in 2016, compared with 
$38 million in 2015 and $42 million in 2014. Automated teller machine usage fees aggregated $14 
million in each of 2016 and 2015 and $15 million in 2014. Gains from sales of equipment previously 
leased to commercial customers were $8 million in 2016, $17 million in 2015 and $2 million in 2014.  

M&T’s share of the operating losses of BLG recognized using the equity method of accounting 
was $11 million in 2016, compared with $14 million and $17 million in 2015 and 2014, respectively. 
Those amounts are reflected in “other revenues from operations.” The operating losses of BLG in the 
respective years reflect provisions for losses associated with securitized loans and other loans held by 
BLG and loan servicing and other administrative costs. However, as a result of past securitization 
activities, BLG is entitled to cash flows from mortgage assets that it owns or that are owned by its 
affiliates and is also entitled to receive distributions from affiliates that provide asset management 
and other services. Accordingly, the Company believes that BLG is capable of realizing positive cash 
flows that could be available for distribution to its owners, including M&T, despite a lack of positive 
GAAP-earnings from its core mortgage activities. Information about the Company’s relationship 
with BLG and its affiliates is included in note 24 of Notes to Financial Statements. 

Other Expense 
Other expense aggregated $3.05 billion in 2016, compared to $2.82 billion in 2015 and $2.69 billion 
in 2014. Included in those amounts are expenses considered to be “nonoperating” in nature consisting 
of amortization of core deposit and other intangible assets of $43 million, $26 million and $34 
million in 2016, 2015 and 2014, respectively, and merger-related expenses of $36 million and $76 

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million in 2016 and 2015, respectively. There were no merger-related expenses during 2014. 
Exclusive of those nonoperating expenses, noninterest operating expenses aggregated $2.97 billion in 
2016, $2.72 billion in 2015 and $2.66 billion in 2014. The most significant factors contributing to the 
increase from 2015 to 2016 were costs associated with the operations obtained in the Hudson City 
acquisition, higher salaries and employee benefits expenses and increased FDIC assessments. The 
rise in such expenses in 2015 as compared with 2014 was largely attributable to costs associated with 
the operations obtained in the Hudson City acquisition, higher costs for salaries and employee 
benefits and increased contributions to The M&T Charitable Foundation, partially offset by lower 
professional services costs. 

In 2016, salaries and employee benefits expense aggregated $1.62 billion, compared with $1.55 
billion and $1.40 billion in 2015 and 2014, respectively. The higher level of expenses in 2016 reflects 
the full-year impact of the additional employees formerly associated with Hudson City as well as 
annual merit increases and incentive compensation costs. There were $51 million of merger-related 
expenses included in salaries and employee benefits expense in 2015 predominantly related to 
severance for former Hudson City employees. Excluding that $51 million, the higher expense level in 
2015 as compared with 2014 was largely attributable to the impact of annual merit increases, higher 
pension and incentive compensation costs, and the impact of the additional employees formerly 
associated with Hudson City. Stock-based compensation totaled $65 million in each of 2016 and 
2014 and $67 million in 2015. Reflecting employees associated with the operations obtained from 
Hudson City, the number of full-time equivalent employees were 16,593 and 16,979 at December 31, 
2016 and 2015, respectively, compared with 15,312 at December 31, 2014. 

The Company provides pension and other postretirement benefits (including a retirement 
savings plan) for its employees. Expenses related to such benefits totaled $94 million in 2016, $100 
million in 2015 and $63 million in 2014. The Company sponsors both defined benefit and defined 
contribution pension plans. Pension benefit expense for those plans was $52 million in 2016, $63 
million in 2015 and $28 million in 2014. Included in those amounts are $25 million in 2016, $23 
million in 2015 and $22 million in 2014 for a defined contribution pension plan that the Company 
began on January 1, 2006. The decrease in pension and other postretirement benefits expense in 2016 
as compared to 2015 reflects a $15 million decrease in amortization of actuarial losses accumulated 
in the defined benefit pension plans.  The increase in pension and other postretirement benefits 
expense in 2015 as compared with 2014 was largely reflective of a $31 million increase in such 
amortization. No contributions were required or made to the qualified defined benefit pension plan in 
2016, 2015, or 2014. The determination of pension expense and the recognition of net pension assets 
and liabilities for defined benefit pension plans requires management to make various assumptions 
that can significantly impact the actuarial calculations related thereto. Those assumptions include the 
expected long-term rate of return on plan assets, the rate of increase in future compensation levels 
and the discount rate. Changes in any of those assumptions will impact the Company’s pension 
expense. The expected long-term rate of return assumption is determined by taking into consideration 
asset allocations, historical returns on the types of assets held and current economic factors. Returns 
on invested assets are periodically compared with target market indices for each asset type to aid 
management in evaluating such returns. The discount rate used by the Company to determine the 
present value of the Company’s future benefit obligations reflects specific market yields for a 
hypothetical portfolio of highly rated corporate bonds that would produce cash flows similar to the 
Company’s benefit plan obligations and the level of market interest rates in general as of the year-
end. Other factors used to estimate the projected benefit obligations include actuarial assumptions for 
turnover rate, retirement age and disability rate. Those other factors do not tend to change 
significantly over time. The Company reviews its pension plan assumptions annually to ensure that 
such assumptions are reasonable and adjusts those assumptions, as necessary, to reflect changes in 
future expectations. The Company utilizes actuaries and others to aid in that assessment. 

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The Company’s 2016 pension expense for its defined benefit plans was determined using the 
following assumptions: a long-term rate of return on assets of 6.50%; a rate of future compensation 
increase of 4.37%; and a discount rate of 4.25%. To demonstrate the sensitivity of pension expense to 
changes in the Company’s pension plan assumptions, 25 basis point increases in: the rate of return on 
plan assets would have resulted in a decrease in pension expense of $4 million; the rate of increase in 
compensation would have resulted in an increase in pension expense of $500,000; and the discount 
rate would have resulted in a decrease in pension expense of $6 million. Decreases of 25 basis points 
in those assumptions would have resulted in similar changes in amount, but in the opposite direction 
from the changes presented in the preceding sentence. The accounting guidance for defined benefit 
pension plans reflects the long-term nature of benefit obligations and the investment horizon of plan 
assets, and has the effect of reducing expense volatility related to short-term changes in interest rates 
and market valuations. Actuarial gains and losses include the impact of plan amendments, in addition 
to various gains and losses resulting from changes in assumptions and investment returns which are 
different from that which was assumed. As of December 31, 2016, the Company had cumulative 
unrecognized actuarial losses of approximately $461 million that could result in an increase in the 
Company’s future pension expense depending on several factors, including whether such losses at 
each measurement date exceed ten percent of the greater of the projected benefit obligation or the 
market-related value of plan assets. In accordance with GAAP, net unrecognized gains or losses that 
exceed that threshold are required to be amortized over the expected service period of active 
employees, and are included as a component of net pension cost. Amortization of those net 
unrealized losses had the effect of increasing the Company’s pension expense by approximately $30 
million in 2016, $45 million in 2015 and $14 million in 2014. The decrease in the cumulative 
unrecognized actuarial losses from $494 million at December 31, 2015 reflects the aforementioned 
amortization of unrealized losses in 2016.  

GAAP requires an employer to recognize in its balance sheet as an asset or liability the 
overfunded or underfunded status of a defined benefit postretirement plan, measured as the 
difference between the fair value of plan assets and the benefit obligation. For a pension plan, the 
benefit obligation is the projected benefit obligation; for any other postretirement benefit plan, such 
as a retiree health care plan, the benefit obligation is the accumulated postretirement benefit 
obligation. Gains or losses and prior service costs or credits that arise during the period, but are not 
included as components of net periodic benefit cost, are to be recognized as a component of other 
comprehensive income. As of December 31, 2016, the combined benefit obligations of the 
Company’s defined benefit postretirement plans exceeded the fair value of the assets of such plans by 
approximately $475 million. Of that amount, $270 million was related to non-qualified pension and 
other postretirement benefit plans that are generally not funded until benefits are paid. In the 
Company’s qualified defined benefit pension plan, the projected benefit obligation exceeded the fair 
value of assets by approximately $205 million as of December 31, 2016 and $218 million as of 
December 31, 2015. Higher asset balances at December 31, 2016 contributed to that change in 
funded status. The Company was required to have a net pension and postretirement benefit liability 
for the pension and other postretirement benefit plans that was equal to $475 million at December 31, 
2016. Accordingly, as of December 31, 2016 the Company recorded an additional postretirement 
benefit adjustment of $450 million. After applicable tax effect, that adjustment reduced accumulated 
other comprehensive income (and thereby shareholders’ equity) by $273 million. The result of this 
was a year-over-year decrease of $40 million to the additional minimum postretirement benefit 
liability from $490 million recorded at December 31, 2015. After applicable tax effect, the $40 
million decrease in the additional required liability adjustment increased other comprehensive 
income in 2016 by $24 million from the prior year-end amount of $297 million. In determining the 
benefit obligation for defined benefit postretirement plans the Company used a discount rate of 
4.00% at December 31, 2016 and 4.25% at December 31, 2015. A 25 basis point decrease in the 

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assumed discount rate as of December 31, 2016 to 3.75% would have resulted in increases in the 
combined benefit obligations of all defined benefit postretirement plans (including pension and other 
plans) of $76 million (pre-tax impact). A 25 basis point increase in the assumed discount rate to 
4.25% would have decreased the combined benefit obligations of all defined benefit postretirement 
plans by $72 million (pre-tax impact). Information about the Company’s pension plans, including 
significant assumptions utilized in completing actuarial calculations for the plans, is included in note 
12 of Notes to Financial Statements. 

The Company also provides a retirement savings plan (“RSP”) that is a defined contribution 
plan in which eligible employees of the Company may defer up to 50% of qualified compensation 
via contributions to the plan. The Company makes an employer matching contribution in an amount 
equal to 75% of an employee’s contribution, up to 4.5% of the employee’s qualified compensation. 
RSP expense totaled $37 million in 2016, $34 million in 2015 and $32 million in 2014. 

Expenses associated with the defined benefit and defined contribution pension plans and the 

RSP aggregated $89 million in 2016, $97 million in 2015 and $60 million in 2014. Expenses 
associated with providing medical and other postretirement benefits were $5 million in 2016, $3 
million in 2015 and $2 million 2014. 

Excluding the nonoperating expense items already noted, nonpersonnel operating expenses 
were $1.35 billion in 2016, compared with $1.22 billion in 2015 and $1.25 billion in 2014. The 
increase in nonpersonnel operating expenses in 2016 as compared with 2015 was largely due to costs 
associated with the operations obtained in the Hudson City acquisition and higher expenses for FDIC 
assessments, advertising and marketing, partially offset by lower charitable contributions. The 
decrease in nonpersonnel operating expenses in 2015 from 2014 was predominantly attributable to 
lower expenses for professional services and litigation-related costs, offset, in part, by higher 
charitable contributions of $28 million. Professional services costs related to BSA/AML activities, 
compliance, capital planning and stress testing, risk management and other operational initiatives 
were elevated throughout 2014. Litigation-related charges in 2014 were associated with pre-
acquisition activities of M&T’s Wilmington Trust entities.  

Income Taxes 
The provision for income taxes was $743 million in 2016, $595 million in 2015 and $576 million in 
2014. The effective tax rates were 36.1% in 2016, 35.5% in 2015 and 35.1% in 2014. The increase in 
the effective rate in 2016 from 2015 reflects the impact of generally recurring tax credits and other 
tax-exempt income being a smaller percentage of 2016’s higher income before income taxes. Income 
tax expense in 2015 reflected two largely offsetting items. The Company attributed $11 million of 
non-deductible goodwill to the basis of the trade processing business sold in April 2015, which 
reduced the recorded gain, but did not result in an income tax benefit. During the fourth quarter of 
2015, the provision for income taxes was reduced by $5 million to reflect technology research credits 
related to 2011 through 2014 that were accepted by the Internal Revenue Service in December 2015. 
During the second quarter of 2014, the Company resolved with tax authorities previously uncertain 
tax positions associated with pre-acquisition activities of M&T’s Wilmington Trust entities, resulting 
in a reduction of the provision for income taxes of $8 million. Excluding that reduction of income tax 
expense, the effective tax rate for 2014 would have been 35.6%. The effective tax rate is affected by 
the level of income earned that is exempt from tax relative to the overall level of pre-tax income, the 
level of income allocated to the various state and local jurisdictions where the Company operates, 
because tax rates differ among such jurisdictions, and the impact of any large but infrequently 
occurring items. 

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The Company’s effective tax rate in future periods will be affected by the results of operations 
allocated to the various tax jurisdictions within which the Company operates, any change in income 
tax laws or regulations within those jurisdictions, and interpretations of income tax regulations that 
differ from the Company’s interpretations by any of various tax authorities that may examine tax 
returns filed by M&T or any of its subsidiaries. Information about amounts accrued for uncertain tax 
positions and a reconciliation of income tax expense to the amount computed by applying the 
statutory federal income tax rate to pre-tax income is provided in note 13 of Notes to Financial 
Statements. 

International Activities 
Assets and revenues associated with international activities represent less than 1% of the Company’s 
consolidated assets and revenues. International assets included $292 million and $265 million of 
loans to foreign borrowers at December 31, 2016 and 2015, respectively. Deposits in the Company’s 
office in the Cayman Islands aggregated $202 million at December 31, 2016 and $170 million at 
December 31, 2015. The Company uses such deposits to facilitate customer demand and as an 
alternative to short-term borrowings when the costs of such deposits seem reasonable. Loans and 
deposits at M&T Bank’s commercial banking office in Ontario, Canada as of December 31, 2016 
totaled $133 million and $50  million, respectively, compared with $95 million and $35 million, 
respectively, at December 31, 2015. The Company also offers trust-related services in Europe. 
Revenues from providing such services during 2016, 2015 and 2014 were approximately $25 million, 
$26 million and $31 million, respectively.  

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

The most significant source of funding for the Company is core deposits, which are generated 
from a large base of consumer, corporate and institutional customers. That customer base has, over 
the past several years, become more geographically diverse as a result of acquisitions and expansion 
of the Company’s businesses. Nevertheless, the Company faces competition in offering products and 
services from a large array of financial market participants, including banks, thrifts, mutual funds, 
securities dealers and others. Core deposits financed 83% of the Company’s earning assets at each of 
December 31, 2016 and 2014, compared with 81% at December 31, 2015. 

The Company supplements funding provided through core deposits with various short-term and 

long-term wholesale borrowings, including federal funds purchased and securities sold under 
agreements to repurchase, brokered deposits, Cayman Islands office deposits and longer-term 
borrowings. At December 31, 2016, M&T Bank had short-term and long-term credit facilities with 
the FHLBs aggregating $22.5 billion. Outstanding borrowings under FHLB credit facilities totaled 
$1.2 billion and $3.1 billion at December 31, 2016 and 2015, respectively. Such borrowings were 
secured by loans and investment securities. As a result of the Hudson City acquisition, the Company 
assumed $2.0 billion of short-term borrowings from the FHLB of New York. Such borrowings had 
fixed rates of interest and matured on various dates in 2016. M&T Bank had an available line of 
credit with the Federal Reserve Bank of New York that totaled approximately $11.2 billion at 
December 31, 2016. The amount of that line is dependent upon the balances of loans and securities 
pledged as collateral. There were no borrowings outstanding under such line of credit at 
December 31, 2016 or December 31, 2015. M&T Bank has a Bank Note Program whereby M&T 

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Bank may offer unsecured senior and subordinated notes. Only unsecured senior notes have been 
issued under that program. Those outstanding notes totaled $5.2 billion at December 31, 2016 and 
$5.5 billion at December 31, 2015. The proceeds of the issuances of borrowings under the Bank Note 
Program have been predominantly utilized to purchase high-quality liquid assets that meet the 
requirements of the LCR. 

From time to time, the Company has issued subordinated capital notes and junior subordinated 

debentures associated with trust preferred securities to provide liquidity and enhance regulatory 
capital ratios. However, pursuant to the Dodd-Frank Act, the Company’s junior subordinated 
debentures associated with trust preferred securities have been phased-out of the definition of Tier 1 
capital. Effective January 1, 2015, 75% of such securities were excluded from the Company’s Tier 1 
capital, and beginning January 1, 2016 all were excluded. The amounts excluded from Tier 1 capital 
are still includable in total capital. In accordance with its 2015 capital plan, in April 2015 M&T 
redeemed the junior subordinated debentures associated with the $310 million of trust preferred 
securities of M&T Capital Trusts I, II and III. Information about the Company’s borrowings is 
included in note 9 of Notes to Financial Statements. 

The Company has informal and sometimes reciprocal sources of funding available through 
various arrangements for unsecured short-term borrowings from a wide group of banks and other 
financial institutions. Short-term federal funds borrowings totaled $112 million and $99 million at 
December 31, 2016 and 2015, respectively. In general, those borrowings were unsecured and 
matured on the next business day. In addition to satisfying customer demand, Cayman Islands office 
deposits may be used by the Company as an alternative to short-term borrowings. Cayman Islands 
office deposits totaled $202 million and $170 million at December 31, 2016 and 2015, respectively. 
The Company has also benefited from the placement of brokered deposits. The Company has 
brokered savings and interest-bearing checking deposit accounts which aggregated $1.2 billion at 
each of December 31, 2016 and 2015. Brokered time deposits were not a significant source of 
funding as of those dates. 

The Company’s ability to obtain funding from these or other sources could be negatively 

impacted should the Company experience a substantial deterioration in its financial condition or its debt 
ratings, or should the availability of short-term funding become restricted due to a disruption in the 
financial markets. The Company attempts to quantify such credit-event risk by modeling scenarios that 
estimate the liquidity impact resulting from a short-term ratings downgrade over various grading levels. 
Such impact is estimated by attempting to measure the effect on available unsecured lines of credit, 
available capacity from secured borrowing sources and securitizable assets. Information about the 
credit ratings of M&T and M&T Bank is presented in table 16. Additional information regarding the 
terms and maturities of all of the Company’s short-term and long-term borrowings is provided in note 9 
of Notes to Financial Statements. In addition to deposits and borrowings, other sources of liquidity 
include maturities of investment securities and other earning assets, repayments of loans and 
investment securities, and cash generated from operations, such as fees collected for services. 

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Table 16 

DEBT RATINGS 

  Moody’s 

Standard 
and Poor’s 

Fitch 

M&T Bank Corporation 

Senior debt .................................................................................   
Subordinated debt ......................................................................   

A3  
A– 
A3   BBB+ 

M&T Bank 

Short-term deposits....................................................................    Prime-1  
Aa2  
Long-term deposits ....................................................................   
A2  
Senior debt .................................................................................   
A3  
Subordinated debt ......................................................................   

A-1 
A 
A 
A– 

A
A–

F1
A+
A
A–

Certain customers of the Company obtain financing through the issuance of variable rate demand 

bonds (“VRDBs”). The VRDBs are generally enhanced by letters of credit provided by M&T Bank. 
M&T Bank oftentimes acts as remarketing agent for the VRDBs and, at its discretion, may from time-
to-time own some of the VRDBs while such instruments are remarketed. When this occurs, the VRDBs 
are classified as trading account assets in the Company’s consolidated balance sheet. Nevertheless, 
M&T Bank is not contractually obligated to purchase the VRDBs. The value of VRDBs in the 
Company’s trading account totaled $30 million at December 31, 2016 (all of which were remarketed in 
January 2017) and less than $1 million at December 31, 2015. The total amount of VRDBs outstanding 
backed by M&T Bank letters of credit was $1.3 billion and $1.7 billion at December 31, 2016 and 
2015, respectively. M&T Bank also serves as remarketing agent for most of those bonds. 

Table 17 

MATURITY DISTRIBUTION OF SELECTED LOANS(a) 

December 31, 2016 

Demand 

2017 

2018 - 2021 

    After 2021 

(In thousands) 

Commercial, financial, etc. ....................................  $6,971,475 $3,616,703 $ 9,427,225   $ 1,092,732
41,223   3,324,793   4,225,443      439,580
Real estate — construction.....................................   
Total ..................................................................  $7,012,698 $6,941,496 $13,652,668   $ 1,532,312

Floating or adjustable interest rates ........................   
Fixed or predetermined interest rates .....................   
Total ..................................................................   

(a)  The data do not include nonaccrual loans. 

$12,015,298   $ 1,004,290
  1,637,370      528,022
$13,652,668   $ 1,532,312  

The Company enters into contractual obligations in the normal course of business that require 
future cash payments. The contractual amounts and timing of those payments as of December 31, 2016 
are summarized in table 18. Off-balance sheet commitments to customers may impact liquidity, 
including commitments to extend credit, standby letters of credit, commercial letters of credit, financial 
guarantees and indemnification contracts, and commitments to sell real estate loans. Because many of 
these commitments or contracts expire without being funded in whole or in part, the contract amounts 
are not necessarily indicative of future cash flows. Further discussion of these commitments is provided 

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in note 21 of Notes to Financial Statements. Table 18 summarizes the Company’s other commitments 
as of December 31, 2016 and the timing of the expiration of such commitments. 

Table 18 

CONTRACTUAL OBLIGATIONS AND OTHER COMMITMENTS 

December 31, 2016 

Payments due for contractual 
   obligations 

Less Than One
Year

One to Three 
Years

Three to Five
Years
(In thousands) 

Over Five 
Years 

Total 

201,927     

6,789     $ 10,131,846

Time deposits ......................   $  6,682,736    $2,226,615    $1,215,706    $
Deposits at Cayman 
   Islands office ....................     
Federal funds purchased 
   and agreements to 
   repurchase securities.........     
163,442
Long-term borrowings .........      3,442,484      3,013,860      1,770,083      1,267,408        9,493,835
466,658
Operating leases ..................     
Other ....................................     
206,609
Total ....................................   $ 10,681,740    $5,467,138    $3,105,985    $1,409,454     $ 20,664,317

169,262     
57,401     

102,724     
17,472     

94,825       
40,432       

99,847     
91,304     

163,442     

201,927

—       

—       

—     

—     

—     

—     

Other commitments 

992,324     

Commitments to extend 
   credit .................................   $  9,431,954    $6,831,786    $4,506,591    $4,261,231     $ 25,031,562
Standby letters of credit .......      1,618,032     
32,049        2,987,091
Commercial letters of 
   credit .................................     
Financial guarantees and 
   indemnification 
   contracts ...........................     
Commitments to sell real 
   estate loans .......................      1,444,354     
—        1,489,237
Total ....................................   $ 12,604,740    $8,195,717    $5,316,538    $6,479,198     $ 32,596,193  

436,302      2,185,918        3,043,580

325,899     

344,686     

44,883     

14,939     

28,959     

95,461     

44,723

825     

—       

—     

M&T’s primary source of funds to pay for operating expenses, shareholder dividends and 

treasury stock repurchases has historically been the receipt of dividends from its banking 
subsidiaries, which are subject to various regulatory limitations. Dividends from any banking 
subsidiary to M&T are limited by the amount of earnings of the banking subsidiary in the current 
year and the two preceding years. For purposes of that test, at December 31, 2016 approximately 
$627 million was available for payment of dividends to M&T from banking subsidiaries. Information 
regarding the long-term debt obligations of M&T is included in note 9 of Notes to Financial 
Statements. 

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Table 19 

MATURITY AND TAXABLE-EQUIVALENT YIELD OF INVESTMENT SECURITIES 

December 31, 2016 

Investment securities available for sale(a) 
U.S. Treasury and federal agencies 

One Year
or Less

One to Five
Years

Five to Ten
Years

Over Ten 
Years 

Total 

(Dollars in thousands) 

Carrying value ..................................................   $155,828   $1,746,716   $
1.04%  
Yield .................................................................  

1.16%  

—   $ 
—  

—     $  1,902,544  
1.05%
—       

Obligations of states and political subdivisions 

Carrying value ..................................................  
Yield .................................................................  

584  
6.31%  

1,557  
7.62%  

—  
—  

1,500       
6.28 %    

3,641  
6.85%

Mortgage-backed securities(b) 

Government issued or guaranteed 

Carrying value .............................................  
Yield ...........................................................  

Privately issued 

  598,628  

  2,533,948  

  3,564,284  

2.31%  

2.32%  

2.32%   

  4,258,001       10,954,861  
2.29%

2.25 %    

Carrying value .............................................  
Yield ...........................................................  

33  
3.95%  

11  
4.43%  

—  
—  

—       
—       

44  
4.07%

Other debt securities 

Carrying value ..................................................  
Yield .................................................................  

1,922  
3.63%  

2,269  
4.56%  

3,132  
6.47%   

   111,193       
2.45 %    

118,516  
2.58%

Equity securities 

Carrying value ..................................................  
Yield .................................................................  

—  
—  

—  
—  

—  
—  

—       
—       

352,466  
.91%

Total investment securities available for sale 

Carrying value ..................................................  
Yield .................................................................  

Investment securities held to maturity 
Obligations of states and political subdivisions 

  756,995  

  4,284,501  

  3,567,416  

2.08%  

1.80%  

2.32%   

  4,370,694       13,332,072  
2.08%

2.26 %    

Carrying value ..................................................  
Yield .................................................................  

  24,533  

34,073  

4.66%  

5.54%  

2,252  
6.56%   

—       
—       

60,858  
5.23%

Mortgage-backed securities(b) 

Government issued or guaranteed 

Carrying value .............................................  
Yield ...........................................................  

Privately issued 

  127,293  

360,496  

479,018  

2.68%  

2.68%  

2.68%   

  1,266,366        2,233,173  
2.66%

2.65 %    

Carrying value .............................................  
Yield ...........................................................  

5,878  
4.77%  

24,194  

32,152  

4.77%  

4.76%   

95,480       
4.67 %    

157,704  
4.71%

Other debt securities 

Carrying value ..................................................  
Yield .................................................................  

—  
—  

—  
—  

—  
—  

5,543       
4.50 %    

5,543  
4.50%

Total investment securities held to maturity 

Carrying value ..................................................  
Yield .................................................................  
Other investment securities ....................................  
Total investment securities 

  157,704  

418,763  

513,422  

3.07%  
—  

3.03%  
—  

  1,367,389        2,457,278  
2.86%
461,118  

2.80 %    
—       

2.82%   
—  

Carrying value ..................................................   $914,699   $4,703,264   $4,080,838   $ 5,738,083     $ 16,250,468  
2.14%
2.25%  
Yield .................................................................  

2.38%   

2.39 %    

1.91%  

(a) 

Investment securities available for sale are presented at estimated fair value. Yields on such securities are based on 
amortized cost. 

(b)  Maturities are reflected based upon contractual payments due. Actual maturities are expected to be significantly 

shorter as a result of loan repayments in the underlying mortgage pools. 

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Table 20 

MATURITY OF DOMESTIC CERTIFICATES OF DEPOSIT AND TIME DEPOSITS 
WITH BALANCES OF $100,000 OR MORE 

   December 31,   
2016 
(In thousands)  

Under 3 months .................................................................................................................     $  968,051 
3 to 6 months .....................................................................................................................        668,465 
6 to 12 months ...................................................................................................................        907,618 
Over 12 months .................................................................................................................        1,468,420 
Total .............................................................................................................................     $ 4,012,554  

Management closely monitors the Company’s liquidity position on an ongoing basis for 

compliance with internal policies and believes that available sources of liquidity are adequate to meet 
funding needs anticipated in the normal course of business. Management does not anticipate 
engaging in any activities, either currently or in the long-term, for which adequate funding would not 
be available and would therefore result in a significant strain on liquidity at either M&T or its 
subsidiary banks. Banking regulators have enacted the LCR rules requiring a banking company to 
maintain a minimum amount of liquid assets to withstand a standardized supervisory liquidity stress 
scenario. The effective date for those rules for the Company was January 1, 2016, subject to a phase-
in period. The Company has taken steps as noted herein to enhance its liquidity and is in compliance 
with the phase-in requirements of the rules. 

Market risk is the risk of loss from adverse changes in the market prices and/or interest rates of 
the Company’s financial instruments. The primary market risk the Company is exposed to is interest 
rate risk. Interest rate risk arises from the Company’s core banking activities of lending and deposit-
taking, because assets and liabilities reprice at different times and by different amounts as interest 
rates change. As a result, net interest income earned by the Company is subject to the effects of 
changing interest rates. The Company measures interest rate risk by calculating the variability of net 
interest income in future periods under various interest rate scenarios using projected balances for 
earning assets, interest-bearing liabilities and derivatives used to hedge interest rate risk. 
Management’s philosophy toward interest rate risk management is to limit the variability of net 
interest income. The balances of financial instruments used in the projections are based on expected 
growth from forecasted business opportunities, anticipated prepayments of loans and investment 
securities, and expected maturities of investment securities, loans and deposits. Management uses a 
“value of equity” model to supplement the modeling technique described above. Those supplemental 
analyses are based on discounted cash flows associated with on- and off-balance sheet financial 
instruments. Such analyses are modeled to reflect changes in interest rates and provide management 
with a long-term interest rate risk metric. The Company has entered into interest rate swap 
agreements to help manage exposure to interest rate risk. At December 31, 2016, the aggregate 
notional amount of interest rate swap agreements entered into for interest rate risk management 
purposes was $900 million. Information about interest rate swap agreements entered into for interest 
rate risk management purposes is included herein under the heading “Net Interest Income/Lending 
and Funding Activities” and in note 18 of Notes to Financial Statements. 

The Company’s Asset-Liability Committee, which includes members of senior management, 
monitors the sensitivity of the Company’s net interest income to changes in interest rates with the aid 
of a computer model that forecasts net interest income under different interest rate scenarios. In 

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

Table 21 displays as of December 31, 2016 and 2015 the estimated impact on net interest 
income from non-trading financial instruments in the base scenario described above resulting from 
parallel changes in interest rates across repricing categories during the first modeling year. 

Table 21 

SENSITIVITY OF NET INTEREST INCOME TO CHANGES IN INTEREST RATES 

Changes in interest rates 

Calculated Increase (Decrease)
in Projected Net Interest Income  
December 31 

2016 

2015 

(In thousands) 

+200 basis points ...........................................................................................   $ 227,283     $  243,958 
+100 basis points ...........................................................................................     147,400        145,169 
(99,603)
-50 basis points ..............................................................................................    

(98,945 )     

The Company utilized many assumptions to calculate the impact that changes in interest rates 

may have on net interest income. The more significant of those assumptions included the rate of 
prepayments of mortgage-related assets, cash flows from derivative and other financial instruments 
held for non-trading purposes, loan and deposit volumes and pricing, and deposit maturities. In the 
scenarios presented, the Company also assumed gradual increases in interest rates during a twelve-
month period of 100 and 200 basis points, as compared with the assumed base scenario, as well as a 
gradual decrease of 50 basis points. In the declining rate scenario, the rate changes may be limited to 
lesser amounts such that interest rates remain positive on all points of the yield curve. In 2016, the 
Company suspended the -100 basis point scenario due to the persistent low level of interest rates. 
This scenario will be reinstated if and when interest rates rise sufficiently to make the analysis more 
meaningful. The assumptions used in interest rate sensitivity modeling are inherently uncertain and, 
as a result, the Company cannot precisely predict the impact of changes in interest rates on net 
interest income. Actual results may differ significantly from those presented due to the timing, 
magnitude and frequency of changes in interest rates and changes in market conditions and interest 
rate differentials (spreads) between maturity/repricing categories, as well as any actions, such as 
those previously described, which management may take to counter such changes. 

Table 22 presents cumulative totals of net assets (liabilities) repricing on a contractual basis 
within the specified time frames, as adjusted for the impact of interest rate swap agreements entered 

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into for interest rate risk management purposes. Management believes that this measure does not 
appropriately depict interest rate risk since changes in interest rates do not necessarily affect all 
categories of earning assets and interest-bearing liabilities equally nor, as assumed in the table, on the 
contractual maturity or repricing date. Furthermore, this static presentation of interest rate risk fails to 
consider the effect of ongoing lending and deposit gathering activities, projected changes in balance 
sheet composition or any subsequent interest rate risk management activities the Company is likely 
to implement. 

Table 22 

CONTRACTUAL REPRICING DATA 

December 31, 2016 

Three Months 
or Less

Four to Twelve
Months

One to 
Five Years
(Dollars in thousands) 

After 
Five Years 

Total 

Loans and leases, net ..............   $ 52,329,463   $ 5,830,801   $17,166,648   $15,526,504     $  90,853,416
Investment securities ..............     
9,649,847        16,250,468
855,044  
Other earning assets ...............      5,087,011  
5,087,787
Total earning assets ..........      58,271,518  
25,176,351       112,191,671

4,811,227  
—  
21,977,875  

934,350  
776  
6,765,927  

—       

Savings and interest-checking 
   deposits................................      52,346,207  
Time deposits .........................      2,448,960  
Deposits at Cayman Islands 
   office ...................................     

201,927  

Total interest-bearing 
   deposits ...........................      54,997,094  
163,442  
Short-term borrowings ...........     
Long-term borrowings ...........      3,082,764  

Total interest-bearing 
   liabilities .........................      58,243,300  

—  
4,233,776  

—  
3,442,321  

—        52,346,207
6,789        10,131,846

—  

—  

—       

201,927

4,233,776  
—  
1,739,902  

3,442,321  
—  
3,871,731  

6,789        62,679,980
163,442
9,493,835

—       
799,438       

5,973,678  

7,314,052  

806,227        72,337,257

Interest rate swap 
   agreements ..........................     
Periodic gap............................   $ 
Cumulative gap ......................     
Cumulative gap as a % of 
   total earning assets ..............     

400,000  

(900,000) 
—       
(871,782)  $ 1,192,249   $15,163,823   $24,370,124       
39,854,414       
(871,782) 

15,484,290  

320,467  

500,000  

—

(0.8)%

0.3%

13.8%

35.5 %    

Changes in fair value of the Company’s financial instruments can also result from a lack of 

trading activity for similar instruments in the financial markets. That impact is most notable on the 
values assigned to some of the Company’s investment securities. Information about the fair valuation 
of investment securities is presented herein under the heading “Capital” and in notes 3 and 20 of 
Notes to Financial Statements. 

The Company engages in limited trading account activities to meet the financial needs of 
customers and to fund the Company’s obligations under certain deferred compensation plans. 
Financial instruments utilized in trading account activities consist predominantly of interest rate 
contracts, such as swap agreements, and forward and futures contracts related to foreign currencies. 
The Company generally mitigates the foreign currency and interest rate risk associated with trading 
account activities by entering into offsetting trading positions that are also included in the trading 
account. The fair values of the offsetting trading account positions associated with interest rate 

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contracts and foreign currency and other option and futures contracts are presented in note 18 of 
Notes to Financial Statements. The amounts of gross and net trading account positions, as well as the 
type of trading account activities conducted by the Company, are subject to a well-defined series of 
potential loss exposure limits established by management and approved by M&T’s Board of 
Directors. However, as with any non-government guaranteed financial instrument, the Company is 
exposed to credit risk associated with counterparties to the Company’s trading account activities. 

The notional amounts of interest rate contracts entered into for trading account purposes totaled 
$21.6 billion at December 31, 2016 and $18.4 billion at December 31, 2015. The notional amounts of 
foreign currency and other option and futures contracts entered into for trading account purposes 
were $471 million and $1.6 billion at December 31, 2016 and 2015, respectively. Although the 
notional amounts of these contracts are not recorded in the consolidated balance sheet, the fair values 
of all financial instruments used for trading account activities are recorded in the consolidated 
balance sheet. The fair values of all trading account assets and liabilities were $324 million and $174 
million, respectively, at December 31, 2016 and $274 million and $161 million, respectively, at 
December 31, 2015. Included in trading account assets at December 31, 2016 and 2015 were $22 
million and $24 million, respectively, of assets related to deferred compensation plans. Changes in 
the fair value of such assets are recorded as “trading account and foreign exchange gains” in the 
consolidated statement of income. Included in “other liabilities” in the consolidated balance sheet at 
December 31, 2016 and 2015 were $26 million and $28 million, respectively, of liabilities related to 
deferred compensation plans. Changes in the balances of such liabilities due to the valuation of 
allocated investment options to which the liabilities are indexed are recorded in “other costs of 
operations” in the consolidated statement of income. Also included in trading account assets were 
investments in mutual funds and other assets that the Company was required to hold under terms of 
certain non-qualified supplemental retirement and other benefit plans that were assumed by the 
Company in various acquisitions. Those assets totaled $24 million and $33 million at December 31, 
2016 and 2015, respectively. 

Given the Company’s policies, limits and positions, management believes that the potential loss 

exposure to the Company resulting from market risk associated with trading account activities was 
not material, however, as previously noted, the Company is exposed to credit risk associated with 
counterparties to transactions related to the Company’s trading account activities. Additional 
information about the Company’s use of derivative financial instruments in its trading account 
activities is included in note 18 of Notes to Financial Statements. 

Capital 
Shareholders’ equity was $16.5 billion at December 31, 2016 and represented 13.35% of total assets, 
compared with $16.2 billion or 13.17% at December 31, 2015 and $12.3 billion or 12.76% at 
December 31, 2014. 

Included in shareholders’ equity was preferred stock with financial statement carrying values of 

$1.2 billion at December 31, 2016 and 2015.  On October 28, 2016, M&T issued 50,000 shares of 
Series F Perpetual Fixed-to-Floating Rate Non-cumulative Preferred Stock, par value $1.00 per share 
and liquidation preference of $10,000 per share.  Through October 31, 2026 holders of the Series F 
preferred stock are entitled to receive, only when, as and if declared by M&T’s Board of Directors, 
non-cumulative cash dividends at an annual rate of 5.125%, payable semi-annually in arrears.  
Subsequent to November 1, 2026 holders will be entitled to receive quarterly cash dividends at an 
annual rate of three-month London Interbank Offered Rate (“LIBOR”) plus 352 basis points.  The 
Series F preferred stock may be redeemed at M&T’s option, in whole or in part, on any dividend 
payment date on or after November 1, 2026 or, in whole but not in part, at any time within 90 days 
following a regulatory capital treatment event whereby the full liquidation value of the shares no 
longer qualifies as Tier 1 capital.  On December 15, 2016, M&T redeemed 50,000 shares of the 

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Series D Fixed Rate Non-cumulative Perpetual Preferred Stock, par value $1.00 per share and 
liquidation preference of $10,000 per share, having received the approval of the Federal Reserve to 
redeem such shares after issuing the Series F preferred stock.  On February 11, 2014, M&T issued 
350,000 shares of Series E Perpetual Fixed-to-Floating Rate Non-cumulative Preferred Stock, par 
value $1.00 per share and liquidation preference of $1,000 per share. Dividends, if and when 
declared, are paid semi-annually at a rate of 6.45% through February 14, 2024 and thereafter will be 
paid quarterly at a rate of the three-month LIBOR plus 361 basis points. The shares are redeemable 
in whole or in part on or after February 15, 2024. Notwithstanding M&T’s option to redeem the 
shares, if an event occurs such that the shares no longer qualify as Tier 1 capital, M&T may redeem 
all of the shares within 90 days following that occurrence. Further information concerning M&T’s 
preferred stock can be found in note 10 of Notes to Financial Statements. 

Common shareholders’ equity was $15.3 billion, or $97.64 per share, at December 31, 2016, 

compared with $14.9 billion, or $93.60 per share, at December 31, 2015 and $11.1 billion, or $83.88 
per share, at December 31, 2014. In conjunction with the acquisition of Hudson City, M&T issued 
25,953,950 common shares, which added $3.1 billion to common shareholders’ equity on 
November 1, 2015. Tangible equity per common share, which excludes goodwill and core deposit 
and other intangible assets and applicable deferred tax balances, was $67.85 at December 31, 2016, 
compared with $64.28 and $57.06 at December 31, 2015 and 2014, respectively. The Company’s 
ratio of tangible common equity to tangible assets was 8.92% at December 31, 2016, compared with 
8.69% and 8.11% at December 31, 2015 and 2014, respectively. Reconciliations of total common 
shareholders’ equity and tangible common equity and total assets and tangible assets as of 
December 31, 2016, 2015 and 2014 are presented in table 2. During 2016, 2015 and 2014, the ratio 
of average total shareholders’ equity to average total assets was 13.21%, 13.00% and 13.13%, 
respectively. The ratio of average common shareholders’ equity to average total assets was 12.16%, 
11.79% and 11.83% in 2016, 2015 and 2014, respectively. 

Shareholders’ equity reflects accumulated other comprehensive income or loss, which includes 
the net after-tax impact of unrealized gains or losses on investment securities classified as available 
for sale, unrealized losses on held-to-maturity securities for which an other-than-temporary 
impairment charge has been recognized, gains or losses associated with interest rate swap agreements 
designated as cash flow hedges, foreign currency translation adjustments and adjustments to reflect 
the funded status of defined benefit pension and other postretirement plans. Net unrealized losses on 
investment securities reflected in shareholders’ equity, net of applicable tax effect, were $16 million, 
or $.10 per common share, at December 31, 2016, compared with net unrealized gains of $48 
million, or $.30 per common share, at December 31, 2015 and $127 million, or $.96 per common 
share, at December 31, 2014. Changes in unrealized gains and losses on investment securities are 
predominantly reflective of the impact of changes in interest rates on the values of such securities. 
Information about unrealized gains and losses as of December 31, 2016 and 2015 is included in note 
3 of Notes to Financial Statements. 

Reflected in net unrealized losses at December 31, 2016 were pre-tax effect unrealized gains of 

$135 million on available-for-sale investment securities with an amortized cost of $4.5 billion and 
pre-tax effect unrealized losses of $141 million on securities with an amortized cost of $8.8 billion. 
The pre-tax effect unrealized losses reflect $17 million of losses on trust preferred securities issued 
by financial institutions having an amortized cost of $102 million and an estimated fair value of $85 
million (generally considered Level 2 valuations). Further information concerning the Company’s 
valuations of available-for-sale investment securities is provided in note 20 of Notes to Financial 
Statements. 

As of December 31, 2016, based on a review of each of the securities in the investment 
securities portfolio, the Company concluded that the declines in the values of any securities 
containing an unrealized loss were temporary and that any additional other-than-temporary 

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impairment charges were not appropriate. During 2016, the Company sold all of its collateralized 
debt obligations held in the available-for-sale investment securities portfolio for a pre-tax gain of $30 
million.  Those securities had been obtained through the acquisition of other banks.  Divestiture of 
the majority of the securities would have been required prior to July 21, 2017 in accordance with the 
Volcker Rule.  As of December 31, 2016, the Company did not intend to sell nor is it anticipated that 
it would be required to sell any of its impaired securities, that is, where fair value is less than the cost 
basis of the security. The Company intends to continue to closely monitor the performance of its 
securities because changes in their underlying credit performance or other events could cause the cost 
basis of those securities to become other-than-temporarily impaired. However, because the 
unrealized losses on available-for-sale investment securities have generally already been reflected in 
the financial statement values for investment securities and shareholders’ equity, any recognition of 
an other-than-temporary decline in value of those investment securities would not have a material 
effect on the Company’s consolidated financial condition. Any other-than-temporary impairment 
charge related to held-to-maturity securities would result in reductions in the financial statement 
values for investment securities and shareholders’ equity. Additional information concerning fair 
value measurements and the Company’s approach to the classification of such measurements is 
included in note 20 of the Notes to Financial Statements. For additional information concerning the 
Volcker Rule, refer to Part I, Item 1 of this Form 10-K under the heading “Volcker Rule.” 

The Company assessed impairment losses on privately issued mortgage-backed securities in the 

held-to-maturity portfolio by performing internal modeling to estimate bond-specific cash flows 
considering recent performance of the mortgage loan collateral and utilizing assumptions about 
future defaults and loss severity. These bond-specific cash flows also reflect the placement of the 
bond in the overall securitization structure and the remaining subordination levels. In total, at 
December 31, 2016 and 2015, the Company had in its held-to-maturity portfolio privately issued 
mortgage-backed securities with an amortized cost basis of $158 million and $181 million, 
respectively, and a fair value of $121 million and $142 million, respectively. At December 31, 2016, 
85% of the mortgage-backed securities were in the most senior tranche of the securitization structure 
with 25% being independently rated as investment grade. The mortgage-backed securities are 
generally collateralized by residential and small-balance commercial real estate loans originated 
between 2004 and 2008 and had a weighted-average credit enhancement of 16% at December 31, 
2016, calculated by dividing the remaining unpaid principal balance of bonds subordinate to the 
bonds owned by the Company plus any overcollateralization remaining in the securitization structure 
by the remaining unpaid principal balance of all bonds in the securitization structure. All mortgage-
backed securities in the held-to-maturity portfolio had a current payment status as of December 31, 
2016. The weighted-average default percentage and loss severity assumptions utilized in the 
Company’s internal modeling were 30% and 79%, respectively. The Company has concluded that as 
of December 31, 2016, those privately issued mortgage-backed securities were not other-than-
temporarily impaired. Nevertheless, it is possible that adverse changes in the future performance of 
mortgage loan collateral underlying such securities could impact the Company’s conclusions. 

Adjustments to reflect the funded status of defined benefit pension and other postretirement 

plans, net of applicable tax effect, reduced accumulated other comprehensive income by $273 
million, or $1.75 per common share, at December 31, 2016, $297 million, or $1.86 per common 
share, at December 31, 2015 and $306 million, or $2.31 per common share, at December 31, 2014. 
Information about the funded status of the Company’s pension and other postretirement benefit plans 
is included in note 12 of Notes to Financial Statements. 

On June 29, 2016, M&T announced that the Federal Reserve did not object to M&T’s revised 

2016 Capital Plan.  That plan includes the repurchase of up to $1.15 billion of common shares during 
the four-quarter period starting on July 1, 2016 and an increase in the quarterly common stock 
dividend in the first quarter of 2017 of up to $.05 per share to $.75 per share.  M&T may also 

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continue to pay dividends and interest on other equity and debt instruments included in regulatory 
capital, including preferred stock, trust preferred securities and subordinated debt that were 
outstanding at December 31, 2015, consistent with the contractual terms of those instruments. 
Dividends are subject to declaration by M&T’s Board of Directors. Furthermore, on July 19, 2016, 
M&T’s Board of Directors authorized a new stock repurchase program to repurchase up to $1.15 
billion of shares of M&T’s common stock subject to all applicable regulatory limitations, including 
those set forth in M&T’s 2016 Capital Plan.  During 2016, in accordance with the 2016 and 2015 
Capital Plans, M&T repurchased 5,607,595 common shares for $641 million. The remaining amount 
of authorized common share repurchases pursuant to the 2016 Capital Plan at December 31, 2016 
totaled $763 million, of which $538 million should be repurchased in the first quarter of 2017 and 
$225 million in the second quarter. The Company did not repurchase any shares of its common stock 
in 2015 or 2014. 

Cash dividends declared on M&T’s common stock totaled $442 million in 2016, compared with 

$375 million and $371 million in 2015 and 2014, respectively. Dividends per common share totaled 
$2.80 in each of 2016, 2015 and 2014. Dividends of $81 million in each of 2016 and 2015 and $76 
million in 2014 were declared on preferred stock in accordance with the terms of each series. No 
dividends were declared in 2016 on the Series F preferred stock issued in October 2016. 

M&T and its subsidiary banks are required to comply with applicable capital adequacy 
standards established by the federal banking agencies. Pursuant to those regulations, the minimum 
capital ratios are as follows: 

 

 

 

 

4.5% Common Equity Tier 1 (“CET1”) to risk-weighted assets (each as defined in the 
capital regulations); 
6.0% Tier 1 capital (that is, CET1 plus Additional Tier 1 capital) to risk-weighted assets 
(each as defined in the capital regulations); 
8.0% Total capital (that is, Tier 1 capital plus Tier 2 capital) to risk-weighted assets (each 
as defined in the capital regulations); and 
4.0% Tier 1 capital to average consolidated assets as reported on consolidated financial 
statements (known as the “leverage ratio”), as defined in the capital regulations. 

In addition, capital regulations provide for the phase-in of a “capital conservation buffer” 
composed entirely of CET1 on top of these minimum risk-weighted asset ratios.  When fully phased-
in on January 1, 2019 the capital conservation buffer will be 2.5%.  For 2016, the phase-in transition 
portion of that buffer was .625%. The regulatory capital amounts and ratios of M&T and its bank 
subsidiaries as of December 31, 2016 are presented in note 23 of Notes to Financial Statements. A 
detailed discussion of the regulatory capital rules is included in Part I, Item 1 of this Form 10-K 
under the heading “Capital Requirements.” 

The Company is also subject to the comprehensive regulatory framework applicable to bank and 
financial holding companies and their subsidiaries, which includes regular examinations by a number 
of federal regulators. Regulation of financial institutions such as M&T and its subsidiaries is intended 
primarily for the protection of depositors, the Deposit Insurance Fund of the FDIC and the banking and 
financial system as a whole, and generally is not intended for the protection of shareholders, investors 
or creditors other than insured depositors. Changes in laws, regulations and regulatory policies 
applicable to the Company’s operations can increase or decrease the cost of doing business, limit or 
expand permissible activities or affect the competitive environment in which the Company operates, all 
of which could have a material effect on the business, financial condition or results of operations of the 
Company and in M&T’s ability to pay dividends. For additional information concerning this 
comprehensive regulatory framework, refer to Part I, Item 1 of this Form 10-K.  

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On June 17, 2013, M&T and M&T Bank entered into a written agreement with the Federal 
Reserve Bank of New York. Under the terms of the agreement, M&T and M&T Bank were required 
to submit to the Federal Reserve Bank of New York a revised compliance risk management program 
designed to ensure compliance with the Bank Secrecy Act and anti-money-laundering laws and 
regulations (“BSA/AML”) and to take certain other steps to enhance their compliance practices. 
M&T and M&T Bank have since made substantial progress in implementing a BSA/AML program 
with significantly expanded scale and scope, as recognized by the Board of Governors of the Federal 
Reserve System in its Order approving M&T and M&T Bank’s applications to acquire Hudson City 
and Hudson City Savings Bank. M&T and M&T Bank are continuing to work towards the resolution 
of all outstanding issues in the written agreement. 

Fourth Quarter Results 
Net income during the fourth quarter of 2016 was $331 million, up 22% from $271 million in the 
year-earlier quarter.  The final 2015 quarter reflected the impact of merger-related expenses 
associated with the acquisition of Hudson City. There were no merger-related expenses in the fourth 
quarter of 2016. Diluted and basic earnings per common share were each $1.98 in the final quarter of 
2016, compared with diluted and basic earnings per common share of $1.65 in the year-earlier 
quarter.  The annualized rates of return on average assets and average common shareholders’ equity 
for the fourth quarter of 2016 were 1.05% and 8.13%, respectively, compared with .93% and 7.22%, 
respectively, in the similar quarter of 2015. 

Net operating income totaled $336 million in the fourth quarter of 2016, compared with $338 
million in the year-earlier quarter. Diluted net operating earnings per common share were $2.01 and 
$2.09 in the fourth quarters of 2016 and 2015, respectively. The annualized net operating returns on 
average tangible assets and average tangible common equity in the final quarter of 2016 were 1.10% 
and 11.93%, respectively, compared with 1.21% and 13.26%, respectively, in the corresponding 
2015 quarter. Reconciliations of GAAP results with non-GAAP results for the quarterly periods of 
2016 and 2015 are provided in table 24. 

Net interest income on a taxable-equivalent basis aggregated $883 million in the last quarter of 
2016, 9% above $813 million recorded in the year-earlier period. That improvement was attributable to 
a 10% increase in average earning assets, which grew to $114.3 billion in the recent quarter from 
$103.6 billion in the fourth quarter of 2015. The growth in earning assets was largely the result of 
higher average loans, which rose to $90.0 billion in the fourth quarter of 2016, up $8.9 billion, or 11%, 
from $81.1 billion in the year-earlier quarter. Partially offsetting the favorable impact of the asset 
growth was a four basis point narrowing of the net interest margin to 3.08% in the recent quarter from 
3.12% in 2015’s fourth quarter. Average commercial loan and lease balances were $21.9 billion in the 
recent quarter, up $1.7 billion or 8% from $20.2 billion in the fourth quarter of 2015. Commercial real 
estate loans averaged $32.8 billion in the fourth quarter of 2016, up $3.8 billion or 13% from $29.0 
billion in the year-earlier quarter. The growth in commercial loans and commercial real estate loans 
reflects higher loan demand by customers. Included in the commercial real estate loan portfolio were 
average balances of loans held for sale of $524 million in the final 2016 quarter, compared with $145 
million in the year-earlier period. Average residential real estate loans outstanding increased $2.7 
billion to $23.1 billion in the recent quarter from $20.4 billion in the fourth quarter of 2015, reflecting 
the full-quarter impact of loans acquired in the Hudson City acquisition, net of loan repayments during 
2016. Included in the residential real estate loan portfolio were average balances of loans held for sale 
of $410 million in the recent quarter, compared with $368 million in the fourth quarter of 2015. 
Consumer loans averaged $12.1 billion in the recent quarter, up $576 million, or 5%, from $11.5 billion 
in the final 2015 quarter. That increase was primarily due to higher average balances of automobile and 
recreational vehicle loans. Total loans and leases at December 31, 2016 rose $1.2 billion to $90.9 

100 

100

 
billion from $89.6 billion at September 30, 2016. That growth was predominantly attributable to an 
increase in outstanding commercial real estate loans. The net interest spread narrowed in the fourth 
quarter of 2016 to 2.88%, down six basis points from 2.94% in the last quarter of 2015. The yield on 
earning assets in the final 2016 quarter was 3.45%, down three basis points from the year-earlier 
quarter. That decline reflects the impact of higher average balances of relatively low-yielding interest-
bearing deposits held at the Federal Reserve Bank of New York and lower yields on investment 
securities. The rate paid on interest-bearing liabilities in the fourth quarter of 2016 was .57%, up three 
basis points from .54% in the similar 2015 quarter. That increase was largely due to higher rates paid 
on interest-bearing deposits, in part associated with time deposits obtained in the Hudson City 
acquisition. The contribution of net interest-free funds to the Company’s net interest margin was .20% 
in the recent quarter, compared with .18% in the fourth 2015 quarter. As a result, the Company’s net 
interest margin narrowed to 3.08% in the final quarter of 2016 from 3.12% in the corresponding period 
of 2015. 

The provision for credit losses in the final quarter of 2016 was $62 million, compared with $58 
million in the year-earlier period. A $21 million provision for credit losses was recorded in the fourth 
quarter of 2015, in accordance with GAAP, related to loans obtained in the acquisition of Hudson 
City that had a fair value in excess of outstanding principal. GAAP provides that an allowance for 
credit losses on such loans be recorded beyond the recognition of the fair value of the loans at the 
acquisition date. Net loan charge-offs were $49 million in the recent quarter, representing an 
annualized .22% of average loans and leases outstanding, compared with $36 million or .18% during 
the fourth quarter of 2015. Net charge-offs included: residential real estate loans of $5 million in the 
final 2016 quarter, compared with $2 million in 2015’s fourth quarter; net charge-offs of commercial 
real estate loans of $1 million in the recent quarter, compared with net recoveries of $2 million in the 
year-earlier quarter; net charge-offs of commercial loans of $17 million in the fourth quarter of 2016, 
compared with net recoveries of $3 million in year-earlier quarter; and net charge-offs of consumer 
loans of $26 million in the recently completed quarter, compared with $39 million 2015’s fourth 
quarter. Net charge-offs of commercial loans and leases in the fourth quarter of 2016 included a $12 
million charge-off associated with a multi-regional manufacturer of refractory brick and other 
castable products. Reflected in net recoveries of previously charged-off commercial loans in the 
fourth quarter of 2015 were $10 million of recoveries from a motor vehicle-related parts wholesaler. 
Net charge-offs of consumer loans in the fourth quarter of 2015 included a $20 million charge-off 
associated with a personal usage loan obtained in a previous acquisition. 

Other income aggregated $465 million in the three-month period ended December 31, 2016, up 

from $448 million in the similar period of 2015. That improvement resulted predominantly from 
higher mortgage banking revenues and trust income. The $11 million rise in mortgage banking 
revenues includes higher commercial mortgage banking revenues of $9 million resulting from 
increased loan origination and sales activities. The $7 million increase in trust income was primarily 
the result of higher revenues in the ICS business reflecting increased fees earned from money-market 
funds and stronger sales activities. 

During the fourth quarter of 2016, other expense aggregated $769 million, compared with $786 

million in the similar 2015 quarter. Included in such amounts are expenses considered to be 
“nonoperating” in nature consisting of amortization of core deposit and other intangible assets of $9 
million and $10 million during the quarters ended December 31, 2016 and 2015, respectively, and 
merger-related expenses of $76 million in the fourth quarter of 2015. Exclusive of those 
nonoperating expenses, noninterest operating expenses were $760 million in the fourth quarter of 
2016, compared with $701 million in the year-earlier quarter. The increased operating expenses in 
the recently completed quarter reflect the $30 million contribution to The M&T Charitable 
Foundation and higher expenses for salaries and employee benefits and FDIC assessments. The 
recent quarter increase in salaries and employee benefits resulted largely from higher incentive 

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compensation costs as compared with 2015’s fourth quarter. The Company’s efficiency ratio during 
the fourth quarters of 2016 and 2015 was 56.4% and 55.5%, respectively. Table 24 includes a 
reconciliation of other expense to noninterest operating expense and the calculation of the efficiency 
ratio for each of the quarters of 2016 and 2015. 

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

The financial information of the Company’s segments was compiled utilizing the accounting 

policies described in note 22 of Notes to Financial Statements. The management accounting policies 
and processes utilized in compiling segment financial information are highly subjective and, unlike 
financial accounting, are not based on authoritative guidance similar to GAAP. As a result, reported 
segments and the financial information of the reported segments are not necessarily comparable with 
similar information reported by other financial institutions.  Furthermore, changes in management 
structure or allocation methodologies and procedures may result in changes in reported segment 
financial data.  During 2016, the Company revised its funds transfer pricing allocation related to 
borrowings and to the residential real estate loans obtained in the acquisition of Hudson City, 
retroactive to 2015.  Accordingly, financial information for the Discretionary Portfolio segment and the 
“All Other” category for 2015 has been reclassified to conform to the current allocation methodology.  
Financial information about the Company’s segments, including the impact of the change noted above, 
is presented in note 22 of Notes to Financial Statements. 

The Business Banking segment provides a wide range of services to small businesses and 
professionals within markets served by the Company through the Company’s branch network, 
business banking centers and other delivery channels such as telephone banking, Internet banking 
and automated teller machines. Services and products offered by this segment include various 
business loans and leases, including loans guaranteed by the Small Business Administration, business 
credit cards, deposit products, and financial services such as cash management, payroll and direct 
deposit, merchant credit card and letters of credit. The Business Banking segment recorded net 
income of $93 million in 2016, compared with $99 million in 2015.  That 5% decline was 
attributable to higher centrally-allocated costs largely associated with the acquired Hudson City 
operations, an increase in FDIC assessments of $3 million and higher personnel costs and advertising 
and marketing expenses of $2 million each, offset, in part, by a $15 million rise in net interest income 
and a $3 million decline in the provision for credit losses.  The growth in net interest income 
reflected an increase in average outstanding deposit balances of $986 million.  Net income for this 
segment also aggregated $99 million in 2014.  Declines in 2015 in net interest income of $7 million 
and service charges on deposit accounts of $2 million were offset by a $3 million decrease in the 
provision for credit losses, due to lower net charge-offs, a $4 million increase in merchant discount 
and credit card fees and lower costs for FDIC assessments of $2 million.  The decline in net interest 
income resulted from a narrowing of the net interest margin on deposits of 18 basis points offset, in 
part, by an increase in average outstanding deposit balances of $615 million. 

The Commercial Banking segment provides a wide range of credit products and banking 
services for middle-market and large commercial customers, mainly within the markets served by the 
Company. Services provided by this segment include commercial lending and leasing, letters of 
credit, deposit products, and cash management services.  The Commercial Banking segment 

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102

 
 
 
contributed net income of $412 million in 2016, compared with $431 million in 2015.  That decline 
was due to the following factors:  lower letter of credit and other credit-related fees of $15 million, 
largely due to loan syndication fees; higher FDIC assessments of $13 million; an increase in the 
provision for credit losses of $10 million; lower gains on the sale of previously leased equipment of 
$9 million; an increase in personnel costs of $5 million; and higher allocated operating expenses 
associated with data processing, risk management and other support services provided to the 
Commercial Banking segment.  Those unfavorable factors were largely offset by a $32 million rise in 
net interest income and a $4 million increase in corporate advisory fees.  The higher net interest 
income resulted from higher average outstanding loan and deposit balances of $1.4 billion and $794 
million, respectively.  Net income for the Commercial Banking segment totaled $403 million in 
2014.  The 7% improvement in net income in 2015 as compared with 2014 resulted from:  a $7 
million rise in net interest income, reflecting growth in average outstanding loan and deposit balances 
of $1.3 billion and $569 million, respectively, partially offset by a narrowing of the net interest 
margin on loans and deposits of eight basis points and six basis points, respectively; increased gains 
from the sale of equipment previously leased to commercial customers of $15 million; higher credit-
related and other fees of $8 million; and an $8 million decline in the provision for credit losses, 
reflecting a partial recovery of $10 million associated with a relationship with a motor vehicle-related 
parts wholesaler previously charged-off in 2013. 

The Commercial Real Estate segment provides credit and deposit services to its customers. Real 

estate securing loans in this segment is generally located in New York State, Maryland, New Jersey, 
Pennsylvania, Delaware, Connecticut, Virginia, West Virginia, the District of Columbia and the 
western portion of the United States.  Commercial real estate loans may be secured by 
apartment/multifamily buildings; office, retail and industrial space; or other types of collateral. 
Activities of this segment also include the origination, sales and servicing of commercial real estate 
loans through the Fannie Mae DUS program and other programs.  Commercial real estate loans held 
for sale are included in this segment.  Net income of the Commercial Real Estate segment aggregated 
$350 million in 2016, up 3% from $341 million in 2015.  That improvement resulted from: a rise in 
net interest income of $30 million; higher mortgage banking revenues of $27 million, resulting from 
increased loan origination activities; and higher trading account and foreign exchange gains of $8 
million, largely due to increased volumes of interest rate swap transactions executed by commercial 
customers.  Those favorable factors were partially offset by increased FDIC assessments of $14 
million, a $10 million rise in personnel-related expenses, a $5 million increase in the provision for 
credit losses and higher allocated operating expenses associated with data processing, risk 
management and other support services provided to the Commercial Real Estate segment.  The 
higher net interest income was attributable to a $2.3 billion increase in average loan balances and a 
19 basis point widening of the net interest margin on deposits, offset, in part, by a 22 basis point 
narrowing of the net interest margin on loans.  Net income for this segment was $316 million in 
2014.  The 8% increase in net income in 2015 as compared with 2014 reflected increases in net 
interest income and mortgage banking revenues.  The $23 million rise in net interest income resulted 
largely from increases in average outstanding loan and deposit balances of $1.4 billion and $393 
million, respectively, partially offset by a narrowing of the net interest margin on deposits and loans 
of 11 basis points and six basis points, respectively.  The increase in mortgage banking revenues of 
$13 million was largely reflective of an increase in loans originated for sale and higher servicing 
revenues.     

The Discretionary Portfolio segment includes investment and trading account securities, 

residential real estate loans (including those obtained in the Hudson City acquisition) and other 
assets; short-term and long-term borrowed funds; brokered deposits; and Cayman Islands office 
deposits.  This segment also provides foreign exchange services to customers.  The Discretionary 
Portfolio segment recorded net income of $164 million in 2016 and $59 million in 2015.  Reflected 

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103

 
in 2016’s results were pre-tax investment securities gains of $30 million from the sale of the 
Company’s collateralized debt obligations.  In addition to the investment securities gains, the 
improved performance of this segment in 2016 as compared with 2015 was due to a $248 million rise 
in net interest income, which reflects the impact of the acquisition of Hudson City.  Those favorable 
factors were partially offset by increases of $25 million in the provision for credit losses and $16 
million in FDIC assessments, and higher loan and other real estate servicing costs.  Net income 
contributed by the Discretionary Portfolio segment totaled $48 million in 2014.  The higher net 
income in 2015 as compared with 2014 reflected the impact of the residential real estate loans 
obtained in the November 1, 2015 acquisition of Hudson City.  Partially offsetting the favorable 
impact of those loans on net interest income was a 27 basis point narrowing of the net interest margin 
on investment securities, resulting from the Company’s allocation of funding charges associated with 
those assets.  A $9 million year-over-year decline in the provision for credit losses also contributed to 
the improvement in the segment’s net income.  Those favorable factors were partially offset by 
higher loan servicing and other costs. 

The Residential Mortgage Banking segment originates and services residential mortgage loans 
and sells substantially all of those loans in the secondary market to investors or to the Discretionary 
Portfolio segment.  In addition to the geographic regions served by or contiguous with the 
Company’s branch network, the Company maintains mortgage loan origination offices in several 
western states.  The Company periodically purchases the rights to service loans and also sub-services 
residential real estate loans for others. Residential real estate loans held for sale are included in this 
segment.  The Residential Mortgage Banking segment’s net income declined 10% to $80 million in 
2016 from $89 million in 2015. That decline reflected lower revenues from servicing residential real 
estate loans for unaffiliated parties of $23 million, offset, in part, by a $7 million rise in net interest 
income and increased intersegment revenues.  Net income for the Residential Mortgage Banking 
segment in 2015 was up 5% from $85 million in 2014.  The improved performance in 2015 resulted 
from lower amortization of capitalized servicing rights of $19 million (reflecting lower prepayment 
trends), partially offset by increased professional services, personnel costs and centrally-allocated 
loan servicing expenses. 

The Retail Banking segment offers a variety of services to consumers through several delivery 

channels which include branch offices, automated teller machines, and telephone, mobile and 
Internet banking. The Company has branch offices in New York State, Maryland, New Jersey, 
Pennsylvania, Delaware, Connecticut, Virginia, West Virginia and the District of Columbia. Credit 
services offered by this segment include consumer installment loans, automobile loans (originated 
both directly and indirectly through dealers), home equity loans and lines of credit and credit cards. 
The segment also offers to its customers deposit products, including demand, savings and time 
accounts; investment products, including mutual funds and annuities; and other services.  Net income 
for the Retail Banking segment was $275 million in 2016, up 3% from $268 million in 2015.  An 
increase in net interest income of $157 million, predominantly due to the impact of deposits obtained 
in the acquisition of Hudson City, was largely offset by the following unfavorable factors:  a $47 
million rise in the provision for credit losses, including the accelerated partial charge-offs of $32 
million recognized on loans for which the customer was either bankrupt or deceased; increases in 
expenses for personnel, equipment and net occupancy, and advertising and marketing of $45 million, 
$18 million and $11 million, respectively, that include the impact of the expanded operations 
associated with the acquisition of Hudson City; higher FDIC assessments of $10 million; and higher 
allocated operating expenses associated with data processing, risk management and other support 
services provided from centralized service areas.  This segment’s net income declined 2% in 2015 
from $273 million in 2014.  An $8 million rise in net interest income, largely due to increases in 
average outstanding loan balances, and a $4 million decline in the provision for credit losses, largely 
due to lower net charge-offs, were more than offset by a $6 million decline in fees earned for 

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providing deposit account services, a $5 million decrease in servicing revenues related to securitized 
automobile loans, and higher operating expenses, including expenses associated with operations 
added in the Hudson City acquisition. 

The “All Other” category reflects other activities of the Company that are not directly 

attributable to the reported segments.  Reflected in this category are the amortization of core deposit 
and other intangible assets resulting from the acquisitions of financial institutions, M&T’s share of 
the operating losses of BLG, merger-related expenses resulting from acquisitions and the net impact 
of the Company’s allocation methodologies for internal transfers for funding charges and credits 
associated with the earning assets and interest-bearing liabilities of the Company’s reportable 
segments, and the provision for credit losses.  The “All Other” category also includes trust income of 
the Company that reflects the ICS and WAS business activities.  The various components of the “All 
Other” category resulted in net losses of $58 million, $206 million and $158 million in 2016, 2015 
and 2014, respectively.  Reflected in 2015’s results was the $45 million pre-tax gain related to the 
sale of the trade processing business within the retirement services division.  The improved 
performance in 2016 as compared with 2015 was predominantly due to the favorable impact from the 
Company’s allocation methodologies for internal transfers for funding charges and credits associated 
with earning assets and interest-bearing liabilities of the Company’s reportable segments and a $61 
million decrease in merger-related expenses associated with the acquisition of Hudson City.  The 
most significant factors contributing to the unfavorable performance in 2015 as compared with 2014 
include:  higher personnel-related expenses, including the impact of merger-related expenses and 
increased pension costs; a decline in trust income, predominantly due to the impact of the April 2015 
sale of the trade processing business; and higher charitable contributions.  Those unfavorable factors 
were offset, in part, by lower professional services costs, largely related to elevated 2014 costs 
associated with BSA/AML and other company-wide initiatives, the $45 million gain from the sale of 
the trade processing business, and the favorable impact from the Company’s allocation 
methodologies. 

Recent Accounting Developments 
A discussion of recent accounting developments is included in note 26 of Notes to Financial 
Statements. 

Forward-Looking Statements 
Management’s Discussion and Analysis of Financial Condition and Results of Operations and other 
sections of this Annual Report contain forward-looking statements that are based on current 
expectations, estimates and projections about the Company’s business, management’s beliefs and 
assumptions made by management. Forward-looking statements are typically identified by words 
such as “believe,” “expect,” “anticipate,” “intend,” “target,” “estimate,” “continue,” “positions,” 
“prospects” or “potential,” by future conditional verbs such as “will,” “would,” “should,” “could,” or 
“may,” or by variations of such words or by similar expressions. These statements are not guarantees 
of future performance and involve certain risks, uncertainties and assumptions (“Future Factors”) 
which are difficult to predict. Therefore, actual outcomes and results may differ materially from what 
is expressed or forecasted in such forward-looking statements. Forward-looking statements speak 
only as of the date they are made and the Company assumes no duty to update forward-looking 
statements. 

Future Factors include changes in interest rates, spreads on earning assets and interest-bearing 

liabilities, and interest rate sensitivity; prepayment speeds, loan originations, credit losses and market 
values of loans, collateral securing loans and other assets; sources of liquidity; common shares 

105 

105

 
 
 
 
 
outstanding; common stock price volatility; fair value of and number of stock-based compensation 
awards to be issued in future periods; the impact of changes in market values on trust-related 
revenues; legislation and/or regulation affecting the financial services industry as a whole, and M&T 
and its subsidiaries individually or collectively, including tax legislation or regulation; regulatory 
supervision and oversight, including monetary policy and capital requirements; changes in 
accounting policies or procedures as may be required by the FASB or regulatory agencies; increasing 
price and product/service competition by competitors, including new entrants; rapid technological 
developments and changes; the ability to continue to introduce competitive new products and 
services on a timely, cost-effective basis; the mix of products/services; containing costs and 
expenses; governmental and public policy changes; protection and validity of intellectual property 
rights; reliance on large customers; technological, implementation and cost/financial risks in large, 
multi-year contracts; the outcome of pending and future litigation and governmental proceedings, 
including tax-related examinations and other matters; continued availability of financing; financial 
resources in the amounts, at the times and on the terms required to support M&T and its subsidiaries’ 
future businesses; and material differences in the actual financial results of merger, acquisition and 
investment activities compared with M&T’s initial expectations, including the full realization of 
anticipated cost savings and revenue enhancements. 

These are representative of the Future Factors that could affect the outcome of the forward-

looking statements. In addition, such statements could be affected by general industry and market 
conditions and growth rates, general economic and political conditions, either nationally or in the 
states in which M&T and its subsidiaries do business, including interest rate and currency exchange 
rate fluctuations, changes and trends in the securities markets, and other Future Factors. 

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Table 23 

QUARTERLY TRENDS 

   Fourth    

  Third 

  Second    

First 

  Fourth    

  Third 

   Second    

First 

2016 Quarters 

2015 Quarters 

Earnings and dividends 
Amounts in thousands, except per share 
Interest income (taxable-equivalent basis) ......................      $ 990,284      
Interest expense ..............................................................         107,137      
Net interest income .........................................................         883,147      
Less: provision for credit losses ......................................         62,000      
Other income ..................................................................         465,459      
Less: other expense ........................................................         769,103      
Income before income taxes ...........................................         517,503      
Applicable income taxes .................................................         179,549      
Taxable-equivalent adjustment .......................................        
7,383      
Net income .....................................................................      $ 330,571      

Net income available to common shareholders- 
   diluted .........................................................................     $ 307,797      
Per common share data 

  976,240      
  111,175      
  865,065      
  47,000      
  491,350      
  752,392      
  557,023      
  200,314      
6,725      
  349,984      

  977,143      
  106,802      
  870,341      
  32,000      
  448,254      
  749,895      
  536,700      
  194,147      
6,522      
  336,031      

  979,166      
  100,870      
  878,296      
  49,000      
  420,933      
  776,095      
  474,134      
  169,274      
6,332      
  298,528      

  908,734      
  95,333      
  813,401      
  58,000      
  448,108      
  786,113      
  417,396      
  140,074      
6,357      
  270,965      

  776,274      
  77,199      
  699,075      
  44,000      
  439,699      
  653,816      
  440,958      
  154,309      
6,248      
  280,401      

   766,374      
   77,226      
   689,148      
   30,000      
   497,027      
   696,628      
   459,547      
   166,839      
6,020      
   286,688      

  743,925      
  78,499      
  665,426      
  38,000      
  440,203      
  686,375      
  381,254      
  133,803      
5,838      
  241,613      

  326,998      

  312,974      

  275,748      

  248,059      

  257,346      

   263,481      

  218,837      

Basic earnings ........................................................      $ 
Diluted earnings .....................................................        
Cash dividends .......................................................      $ 

1.98      
1.98      
.70      

2.10      
2.10      
.70      

1.98      
1.98      
.70      

1.74      
1.73      
.70      

1.65      
1.65      
.70      

1.94      
1.93      
.70      

1.99      
1.98      
.70      

1.66      
1.65      
.70      

Average common shares outstanding 

Basic ......................................................................         155,123      
Diluted ...................................................................         155,700      

  155,493      
  156,026      

  157,802      
  158,341      

  158,734      
  159,181      

  150,027      
  150,718      

  132,630      
  133,376      

   132,356      
   133,116      

  132,049      
  132,769      

Performance ratios, annualized 
Return on 

Average assets ........................................................        
Average common shareholders’ equity ...................        

1.05 %   
8.13 %   

1.12 %   
8.68 %   

1.09 %   
8.38 %   

.97 %   
7.44 %   

.93 %   
7.22 %   

1.13 %   
8.93 %   

1.18 %   
9.37 %   

1.02 %   
7.99 %   

Net interest margin on average earning assets 
   (taxable-equivalent basis) ............................................       
Nonaccrual loans to total loans and leases, net 
   of unearned discount....................................................       
Net operating (tangible) results(a) 
Net operating income (in thousands) ..............................      $ 336,095      
Diluted net operating income per common share ............        
2.01      
Annualized return on 

1.01 %   

3.08 %   

3.05 %   

3.13 %   

3.18 %   

3.12 %   

3.14 %   

3.17 %   

3.17 %   

.93 %   

.96 %   

1.00 %   

.91 %   

1.15 %   

1.17 %   

1.18 %   

  355,929      
2.13      

  350,604      
2.07      

  320,064      
1.87      

  337,613      
2.09      

  282,907      
1.95      

   290,341      
2.01      

  245,776      
1.68      

Average tangible assets ..........................................        
Average tangible common shareholders’ equity .....        
Efficiency ratio(b) ..........................................................        
Balance sheet data 
In millions, except per share 
Average balances 

1.10 %   
11.93 %   
56.42 %   

1.18 %   
12.77 %   
55.92 %   

1.18 %   
12.68 %   
55.06 %   

1.09 %   
11.62 %   
57.00 %   

1.21 %   
13.26 %   
55.53 %   

1.18 %   
12.98 %   
57.05 %   

1.24 %   
13.76 %   
58.23 %   

1.08 %   
11.90 %   
61.46 %   

Total assets(c) ........................................................      $ 125,734      
Total tangible assets(c) ...........................................         121,079      
Earning assets.........................................................         114,254      
Investment securities ..............................................         15,417      
Loans and leases, net of unearned discount ............         89,977      
Deposits .................................................................         96,914      
Common shareholders’ equity(c) ............................         15,181      
Tangible common shareholders’ equity(c) ..............         10,526      

  124,725      
  120,064      
  112,864      
  14,361      
  88,732      
  95,852      
  15,115      
  10,454      

  123,706      
  119,039      
  111,872      
  14,914      
  88,155      
  94,033      
  15,145      
  10,478      

  123,252      
  118,577      
  111,211      
  15,348      
  87,584      
  92,391      
  15,047      
  10,372      

  115,052      
  110,772      
  103,587      
  15,786      
  81,110      
  85,657      
  13,775      
9,495      

  98,515      
  94,989      
  88,446      
  14,441      
  67,849      
  73,821      
  11,555      
8,029      

   97,598      
   94,067      
   87,333      
   14,195      
   67,670      
   72,958      
   11,404      
7,873      

  95,892      
  92,346      
  85,212      
  13,376      
  66,587      
  71,698      
  11,227      
7,681      

At end of quarter 

Total assets(c) ........................................................      $ 123,449      
Total tangible assets(c) ...........................................         118,797      
Earning assets.........................................................         112,192      
Investment securities ..............................................         16,250      
Loans and leases, net of unearned discount ............         90,853      
Deposits .................................................................         95,494      
Common shareholders’ equity, net of 
   undeclared cumulative preferred dividends(c) .....        15,252      
Tangible common shareholders’ equity(c) ..............         10,600      
97.64      
Equity per common share .......................................        
67.85      
Tangible equity per common share .........................        

Market price per common share 

  126,841      
  122,183      
  115,293      
  14,734      
  89,646      
  98,137      

  123,821      
  119,157      
  112,057      
  14,963      
  88,522      
  94,650      

  124,626      
  119,955      
  113,005      
  15,467      
  87,872      
  94,215      

  122,788      
  118,109      
  110,802      
  15,656      
  87,489      
  91,958      

  97,797      
  94,272      
  87,807      
  14,495      
  68,540      
  72,945      

   97,080      
   93,552      
   86,990      
   14,752      
   68,131      
   72,630      

  98,378      
  94,834      
  87,959      
  14,393      
  67,099      
  73,594      

  15,106      
  10,448      
97.47      
67.42      

  15,237      
  10,573      
96.49      
66.95      

  15,120      
  10,449      
95.00      
65.65      

  14,939      
  10,260      
93.60      
64.28      

  11,687      
8,162      
87.67      
61.22      

   11,433      
7,905      
85.90      
59.39      

  11,294      
7,750      
84.95      
58.29      

High .......................................................................      $  158.35      
Low ........................................................................         112.25      
Closing ...................................................................         156.43      

  120.40      
  111.13      
  116.10      

  121.11      
  107.01      
  118.23      

  119.24      
  100.08      
  111.00      

  127.39      
  111.50      
  121.18      

  134.00      
  111.86      
  121.95      

   128.70      
   117.86      
   124.93      

  129.58      
  111.78      
  127.00      

(a) 

(b) 
(c) 

Excludes amortization and balances related to goodwill and core deposit and other intangible assets and merger-related expenses which, except in the calculation of the 
efficiency ratio, are net of applicable income tax effects. A reconciliation of net income and net operating income appears in Table 24. 
Excludes impact of merger-related expenses and net securities transactions. 
The  difference  between  total  assets  and  total  tangible  assets,  and  common  shareholders’  equity  and  tangible  common  shareholders’  equity,  represents  goodwill,  core 
deposit and other intangible assets, net of applicable deferred tax balances. A reconciliation of such balances appears in Table 24. 

107 

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Table 24 

RECONCILIATION OF QUARTERLY GAAP TO NON-GAAP MEASURES 

   Fourth 

  Third 

  Second    

First 

  Fourth 

  Third 

   Second    

First 

2016 Quarters 

2015 Quarters 

  298,528         270,965         280,401          286,688         241,613   

Income statement data 
Dollars in thousands, except per share 
Net income 
Net income .....................................................................     $  330,571        349,984         336,031   
Amortization of core deposit and other intangible 
   assets(a) .......................................................................       
Merger-related expenses(a) ............................................       

4,163   
—   
Net operating income .............................................     $  336,095        355,929         350,604         320,064         337,613         282,907          290,341         245,776   

5,828        
60,820        

7,488        
14,048        

2,506         
—         

3,653        
—        

6,936        
7,637        

5,945        
—        

5,524       
—       

Earnings per common share 
Diluted earnings per common share ................................     $ 
Amortization of core deposit and other intangible 
   assets(a) .......................................................................       
Merger-related expenses(a) ............................................       
Diluted net operating earnings per common share ..     $ 

1.98       

2.10        

1.98        

1.73        

1.65        

1.93         

1.98        

1.65   

.03       
—       
2.01       

.03   
—        
2.13        

.04   
.05        
2.07        

.05   
.09   
1.87        

.04   
.40        
2.09        

.02   
—         
1.95         

.03   
—        
2.01        

.03   
—   
1.68   

Other expense 
Other expense .................................................................     $  769,103        752,392         749,895         776,095         786,113         653,816          696,628         686,375   
(6,793 ) 
Amortization of core deposit and other intangible assets        
—   
Merger-related expenses .................................................       
Noninterest operating expense ................................     $  760,014        742,605         725,884         740,614         700,561         649,726          690,663         679,582   

(9,576 )      
(75,976 )      

(12,319 )      
(23,162 )      

(11,418 )      
(12,593 )      

(4,090 )       
—         

(5,965 )      
—        

(9,787 )      
—        

(9,089 )     
—       

Merger-related expenses 
Salaries and employee benefits .......................................     $ 
Equipment and net occupancy ........................................       
Outside data processing and software .............................       
Advertising and marketing .............................................       
Printing, postage and supplies ........................................       
Other costs of operations ................................................       
Other expense.........................................................       
Provision for credit losses ...............................................       
Total .......................................................................     $ 

—       
—       
—       
—       
—       
—       
—       
—       
—       

—        
—        
—        
—        
—        
—        
—        
—        
—        

60        
339        
352        
6,327        
545        
4,970        
12,593        
—        
12,593        

5,274        
939        
715        
4,195        
937        
11,102        
23,162        
—        
23,162        

51,287        
3        
785        
79        
504        
23,318        
75,976        
21,000        
96,976        

—         
—         
—         
—         
—         
—         
—         
—         
—         

—        
—        
—        
—        
—        
—        
—        
—        
—        

—   
—   
—   
—   
—   
—   
—   
—   
—   

Efficiency ratio 
Noninterest operating expense (numerator) ....................     $  760,014        742,605         725,884         740,614         700,561         649,726          690,663         679,582   

Taxable-equivalent net interest income ...........................        883,147        865,065         870,341         878,296         813,401         699,075          689,148         665,426   
Other income ..................................................................        465,459        491,350         448,254         420,933         448,108         439,699          497,027         440,203   
Less: Gain (loss) on bank investment securities ..............       
(98 ) 
Denominator ..................................................................     $ 1,347,040       1,327,935        1,318,331        1,299,225        1,261,531        1,138,774         1,186,185        1,105,727   

28,480        

1,566       

264        

(22 )      

(10 )      

—         

4        

Efficiency ratio ...............................................................       

56.42 %    

55.92 %     

55.06 %     

57.00 %     

55.53 %     

57.05 %      

58.23 %     

61.46 %

Balance sheet data 
In millions 
Average assets 
Average assets ................................................................     $  125,734        124,725         123,706         123,252         115,052        
(4,218 )      
(4,593 )     
Goodwill ........................................................................       
(101 )      
(102 )     
Core deposit and other intangible assets .........................       
39        
40       
Deferred taxes ................................................................       
Average tangible assets ..........................................     $  121,079        120,064         119,039         118,577         110,772        

(4,593 )      
(122 )      
48        

(4,593 )      
(112 )      
44        

(4,593 )      
(134 )      
52        

98,515         
(3,513 )       
(20 )       
7         
94,989         

97,598        
(3,514 )      
(25 )      
8        
94,067        

Average common equity 
Average total equity .......................................................     $ 
Preferred stock ...............................................................       
Average common equity ........................................       
Goodwill ........................................................................       
Core deposit and other intangible assets .........................       
Deferred taxes ................................................................       
Average tangible common equity ...........................     $ 

16,673       
(1,492 )     
15,181       
(4,593 )     
(102 )     
40       
10,526       

16,347        
(1,232 )      
15,115        
(4,593 )      
(112 )      
44        
10,454        

16,377        
(1,232 )      
15,145        
(4,593 )      
(122 )      
48        
10,478        

16,279        
(1,232 )      
15,047        
(4,593 )      
(134 )      
52        
10,372        

15,007        
(1,232 )      
13,775        
(4,218 )      
(101 )      
39        
9,495        

12,787         
(1,232 )       
11,555         
(3,513 )       
(20 )       
7         
8,029         

12,636        
(1,232 )      
11,404        
(3,514 )      
(25 )      
8        
7,873        

95,892   
(3,525 ) 
(31 ) 
10   
92,346   

12,459   
(1,232 ) 
11,227   
(3,525 ) 
(31 ) 
10   
7,681   

At end of quarter 
Total assets 
Total assets .....................................................................     $  123,449        126,841         123,821         124,626         122,788        
(4,593 )      
(4,593 )     
Goodwill ........................................................................       
(140 )      
(98 )     
Core deposit and other intangible assets .........................       
54        
39       
Deferred taxes ................................................................       
Total tangible assets ...............................................     $  118,797        122,183         119,157         119,955         118,109        

(4,593 )      
(117 )      
46        

(4,593 )      
(107 )      
42        

(4,593 )      
(128 )      
50        

97,797         
(3,513 )       
(18 )       
6         
94,272         

97,080        
(3,513 )      
(22 )      
7        
93,552        

98,378   
(3,525 ) 
(28 ) 
9   
94,834   

Total common equity 
Total equity ....................................................................     $ 
Preferred stock ...............................................................       
Undeclared dividends - cumulative preferred stock ........       
Common equity, net of undeclared cumulative 
   preferred dividends ..............................................       
Goodwill ........................................................................       
Core deposit and other intangible assets .........................       
Deferred taxes ................................................................       
Total tangible common equity ................................     $ 

(a) 

After any related tax effect. 

16,487       
(1,232 )     
(3 )     

16,341        
(1,232 )      
(3 )      

16,472        
(1,232 )      
(3 )      

16,355        
(1,232 )      
(3 )      

16,173        
(1,232 )      
(2 )      

12,922         
(1,232 )       
(3 )       

12,668        
(1,232 )      
(3 )      

12,528   
(1,232 ) 
(2 ) 

15,252       
(4,593 )     
(98 )     
39       
10,600       

15,106        
(4,593 )      
(107 )      
42        
10,448        

15,237        
(4,593 )      
(117 )      
46        
10,573        

15,120        
(4,593 )      
(128 )      
50        
10,449        

14,939        
(4,593 )      
(140 )      
54        
10,260        

11,687         
(3,513 )       
(18 )       
6         
8,162         

11,433        
(3,513 )      
(22 )      
7        
7,905        

11,294   
(3,525 ) 
(28 ) 
9   
7,750   

108 

108

 
 
  
  
  
 
  
  
  
  
 
  
  
  
 
  
     
      
       
       
       
       
         
       
  
     
      
       
       
       
       
         
       
  
     
      
       
       
       
       
         
       
  
     
      
       
       
       
       
         
       
  
 
 
 
 
   
 
 
     
      
       
       
       
       
         
       
  
     
      
       
       
       
       
         
       
  
     
      
       
       
       
       
         
       
  
     
      
       
       
       
       
         
       
  
     
      
       
       
       
       
         
       
  
     
      
       
       
       
       
         
       
  
     
      
       
       
       
       
         
       
  
     
      
       
       
       
       
         
       
  
     
      
       
       
       
       
         
       
  
     
      
       
       
       
       
         
       
  
 
 
 
Item 7A.  Quantitative and Qualitative Disclosures About Market Risk. 

Incorporated by reference to the discussion contained in Part II, Item 7, “Management’s Discussion 
and Analysis of Financial Condition and Results of Operations,” under the captions “Liquidity, 
Market Risk, and Interest Rate Sensitivity” (including Table 21) and “Capital.” 

Item 8.  Financial Statements and Supplementary Data. 

Financial Statements and Supplementary Data consist of the financial statements as indexed and 
presented below and Table 23 “Quarterly Trends” presented in Part II, Item 7, “Management’s 
Discussion and Analysis of Financial Condition and Results of Operations.” 

Index to Financial Statements and Financial Statement Schedules
Report on Internal Control Over Financial Reporting ...................................................................
Report of Independent Registered Public Accounting Firm ..........................................................
Consolidated Balance Sheet — December 31, 2016 and 2015 ......................................................
Consolidated Statement of Income — Years ended December 31, 2016, 2015 and 2014 ............
Consolidated Statement of Comprehensive Income — Years ended December 31, 2016, 2015 
and 2014 .....................................................................................................................................
Consolidated Statement of Cash Flows — Years ended December 31, 2016, 2015 and 2014 .....
Consolidated Statement of Changes in Shareholders’ Equity — Years ended December 31, 

2016, 2015 and 2014 ..................................................................................................................
Notes to Financial Statements ........................................................................................................

110
111
112
113

114
115

116
117

109 

109

 
 
 
 
Report on Internal Control Over Financial Reporting 

Management is responsible for establishing and maintaining adequate internal control over financial 
reporting at M&T Bank Corporation and subsidiaries (“the Company”). Management has assessed 
the effectiveness of the Company’s internal control over financial reporting as of December 31, 2016 
based on criteria described in “Internal Control — Integrated Framework (2013)” issued by the 
Committee of Sponsoring Organizations of the Treadway Commission. Based on that assessment, 
management concluded that the Company maintained effective internal control over financial 
reporting as of December 31, 2016. 

The consolidated financial statements of the Company have been audited by 

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

M&T BANK CORPORATION 

ROBERT G. WILMERS 
Chairman of the Board and Chief Executive Officer 

Darren J. King 
Executive Vice President and Chief Financial Officer

110 

110

 
 
  
  
  
  
  
 
 
  
  
 
 
Report of Independent Registered Public Accounting Firm 

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

In our opinion, the accompanying consolidated balance sheets and the related consolidated statements of 
income, comprehensive income, cash flows, and changes in shareholders’ equity present fairly, in all 
material respects, the financial position of M&T Bank Corporation and its subsidiaries at December 31, 
2016 and December 31, 2015, and the results of their operations and their cash flows for each of the three 
years in the period ended December 31, 2016 in conformity with accounting principles generally accepted 
in the United States of America. Also in our opinion, the Company maintained, in all material respects, 
effective internal control over financial reporting as of December 31, 2016, based on criteria established 
in Internal Control — Integrated Framework (2013) issued by the Committee of Sponsoring 
Organizations of the Treadway Commission (COSO). The Company’s management is responsible for 
these financial statements, for maintaining effective internal control over financial reporting and for its 
assessment of the effectiveness of internal control over financial reporting, included in the accompanying 
Report on Internal Control over Financial Reporting. Our responsibility is to express opinions on these 
financial statements and on the Company’s internal control over financial reporting based on our 
integrated audits. We conducted our audits in accordance with the standards of the Public Company 
Accounting Oversight Board (United States). Those standards require that we plan and perform the audits 
to obtain reasonable assurance about whether the financial statements are free of material misstatement 
and whether effective internal control over financial reporting was maintained in all material respects. Our 
audits of the financial statements included examining, on a test basis, evidence supporting the amounts 
and disclosures in the financial statements, assessing the accounting principles used and significant 
estimates made by management, and evaluating the overall financial statement presentation. Our audit of 
internal control over financial reporting included obtaining an understanding of internal control over 
financial reporting, assessing the risk that a material weakness exists, and testing and evaluating the 
design and operating effectiveness of internal control based on the assessed risk. Our audits also included 
performing such other procedures as we considered necessary in the circumstances. We believe that our 
audits provide a reasonable basis for our opinions. 

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

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

Buffalo, New York 
February 22, 2017 

111 

111

 
 
December 31 

2016 

2015 

1,320,549      $ 
5,000,638        
323,867        

1,368,040 
7,594,350 
273,783 

13,332,072         12,242,671 

2,457,278        

2,859,709 

M&T BANK CORPORATION AND SUBSIDIARIES 
Consolidated Balance Sheet 

(Dollars in thousands, except per share) 
Assets 
Cash and due from banks ............................................................................................................    $
Interest-bearing deposits at banks ...............................................................................................     
Trading account ..........................................................................................................................     
Investment securities (includes pledged securities that can be sold or repledged of 
    $1,203,473 at December 31, 2016; $2,136,712  at December 31, 2015)

Available for sale (cost: $13,338,301 at December 31, 2016; 
   $12,138,636 at December 31, 2015) ..................................................................................     
Held to maturity (fair value: $2,451,222 at December 31, 2016; 
   $2,864,147 at December 31, 2015) ....................................................................................     
Other (fair value: $461,118 at December 31, 2016; $554,059 at 
   December 31, 2015) ...........................................................................................................     
Total investment securities ..............................................................................................     
Loans and leases .........................................................................................................................     
Unearned discount ................................................................................................................     
Loans and leases, net of unearned discount ....................................................................     
Allowance for credit losses ...................................................................................................     
Loans and leases, net .......................................................................................................     
Premises and equipment..............................................................................................................     
Goodwill .....................................................................................................................................     
Core deposit and other intangible assets .....................................................................................     
Accrued interest and other assets ................................................................................................     

554,059 
16,250,468         15,656,439 
91,101,677         87,719,234 
(229,735)
90,853,416         87,489,499 
(955,992)
89,864,419         86,533,507 
666,682 
4,593,112 
140,268 
5,961,703 
Total assets ......................................................................................................................    $ 123,449,206      $ 122,787,884 

675,263        
4,593,112        
97,655        
5,323,235        

(988,997 )      

(248,261 )      

461,118        

Liabilities 
Noninterest-bearing deposits .......................................................................................................    $ 32,813,896      $  29,110,635 
52,346,207         49,566,644 
Savings and interest-checking deposits .......................................................................................     
10,131,846         13,110,392 
Time deposits ..............................................................................................................................     
Deposits at Cayman Islands office ..............................................................................................     
170,170 
95,493,876         91,957,841 
Total deposits ..................................................................................................................     
163,442        
Federal funds purchased and agreements to repurchase securities ..............................................     
150,546 
—        
1,981,636 
Other short-term borrowings .......................................................................................................     
1,870,714 
1,811,431        
Accrued interest and other liabilities ...........................................................................................     
9,493,835         10,653,858 
Long-term borrowings ................................................................................................................     
Total liabilities ................................................................................................................      106,962,584         106,614,595 

201,927        

Shareholders' equity 
Preferred stock, $1.00 par, 1,000,000 shares authorized; 
   Issued and outstanding: Liquidation preference of $1,000 per 
   share: 731,500 shares at December 31, 2016 and December 31, 2015; 
   Liquidation preference of $10,000 per share: 50,000 
   shares at December 31, 2016 and December 31, 2015 .............................................................     
Common stock, $.50 par, 250,000,000 shares authorized, 159,945,678 shares issued 
   at December 31, 2016; 159,563,512 shares issued at December 31, 2015 ...............................     
Common stock issuable, 32,403 shares at December 31, 2016; 
2,364 
   36,644 shares at December 31, 2015 ........................................................................................     
6,680,768 
Additional paid-in capital............................................................................................................     
8,430,502 
Retained earnings ........................................................................................................................     
(251,627)
Accumulated other comprehensive income (loss), net ................................................................     
— 
Treasury stock - common, at cost - 3,764,742 shares at December 31, 2016 ..............................     
Total shareholders’ equity ...............................................................................................     
16,486,622         16,173,289 
Total liabilities and shareholders’ equity ........................................................................    $ 123,449,206      $ 122,787,884  

2,145        
6,676,948        
9,222,488        
(294,636 )      
(431,796 )      

1,231,500        

79,973        

1,231,500 

79,782 

See accompanying notes to financial statements. 

112 

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M&T BANK CORPORATION AND SUBSIDIARIES 
Consolidated Statement of Income 

(In thousands, except per share) 
Interest income 
Loans and leases, including fees .......................................................   $ 3,485,050    $ 2,778,151      $ 2,596,586 
Investment securities 

2014 

2016 

Year Ended December 31 
2015 

Fully taxable ................................................................................    
Exempt from federal taxes ..........................................................    
Deposits at banks ..............................................................................    
Other .................................................................................................    
Total interest income..............................................................    

361,494     
2,606     
45,516     
1,205     
3,895,871     

372,162        
4,263        
15,252        
1,016        

340,391 
5,356 
13,361 
1,183 
3,170,844         2,956,877 

Interest expense 
Savings and interest-checking deposits ............................................    
Time deposits ....................................................................................    
Deposits at Cayman Islands office ....................................................    
Short-term borrowings ......................................................................    
Long-term borrowings ......................................................................    
Total interest expense ............................................................    
Net interest income ...........................................................................    
Provision for credit losses .................................................................    
Net interest income after provision for credit losses .........................    
Other income 
Mortgage banking revenues ..............................................................    
Service charges on deposit accounts .................................................    
Trust income .....................................................................................    
Brokerage services income ...............................................................    
Trading account and foreign exchange gains ....................................    
Gain (loss) on bank investment securities.........................................    
Other revenues from operations ........................................................    
Total other income .................................................................    

87,704     
102,841     
797     
3,625     
231,017     
425,984     
3,469,887     
190,000     
3,279,887     

373,697     
419,102     
472,184     
63,423     
41,126     
30,314     
426,150     
1,825,996     

46,140        
27,059        
615        
1,677        
252,766        
328,257        

46,869 
15,515 
699 
101 
217,247 
280,431 
2,842,587         2,676,446 
124,000 
2,672,587         2,552,446 

170,000        

375,738        
420,608        
470,640        
64,770        
30,577        
(130 )      
462,834        

362,912 
427,956 
508,258 
67,212 
29,874 
— 
383,061 
1,825,037         1,779,273 

Other expense 
1,549,530         1,404,950 
Salaries and employee benefits .........................................................    
269,299 
Equipment and net occupancy ..........................................................    
151,568 
Outside data processing and software ...............................................    
55,531 
FDIC assessments .............................................................................    
47,111 
Advertising and marketing ................................................................    
38,201 
Printing, postage and supplies ..........................................................    
33,824 
Amortization of core deposit and other intangible assets .................    
688,990 
Other costs of operations ..................................................................    
2,822,932         2,689,474 
Total other expense ................................................................    
1,674,692         1,642,245 
Income before taxes ..........................................................................    
Income taxes .....................................................................................    
575,999 
Net income ........................................................................................   $ 1,315,114    $ 1,079,667      $ 1,066,246 
Net income available to common shareholders 

1,623,600     
295,141     
172,389     
105,045     
87,137     
39,546     
42,613     
682,014     
3,047,485     
2,058,398     
743,284     

272,539        
164,133        
52,113        
59,227        
38,491        
26,424        
660,475        

595,025        

Basic ......................................................................................   $ 1,223,459    $
1,223,481     
Diluted ...................................................................................    

987,689      $
987,724        

978,531 
978,581 

Net income per common share 

Basic ......................................................................................   $
Diluted ...................................................................................    

7.80    $
7.78     

7.22      $
7.18        

7.47 
7.42  

See accompanying notes to financial statements. 

113 

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M&T BANK CORPORATION AND SUBSIDIARIES 

Consolidated Statement of Comprehensive Income 

(In thousands) 

Year Ended December 31 
2015 

2014 

2016 

Net income ........................................................................   $ 1,315,114    $ 1,079,667     $ 1,066,246   
Other comprehensive income (loss), net of tax and 
   reclassification adjustments: 

Net unrealized gains (losses) on investment 
93,275   
   securities ....................................................................    
(96) 
Cash flow hedges adjustments .....................................    
(2,607) 
Foreign currency translation adjustment ......................    
(207,407) 
Defined benefit plans liability adjustments ..................    
Total other comprehensive loss ...............................    
(116,835) 
Total comprehensive income ...................................   $ 1,272,105    $ 1,009,034     $  949,411    

(79,114 )     
796       
(925 )     
8,610       
(70,633 )     

(64,406)   
(94)   
(2,614)   
24,105     
(43,009)   

See accompanying notes to financial statements. 

114 

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M&T BANK CORPORATION AND SUBSIDIARIES 

Consolidated Statement of Cash Flows 

(In thousands) 
Cash flows from operating activities 
Net income ................................................................................................................................................................    $ 1,315,114       $  1,079,667       $ 1,066,246  
Adjustments to reconcile net income to net cash provided by operating activities 

2014 

2016 

Year Ended December 31 
2015 

170,000      
Provision for credit losses ..................................................................................................................................     
99,019      
Depreciation and amortization of premises and equipment ................................................................................     
49,906      
Amortization of capitalized servicing rights ......................................................................................................     
26,424      
Amortization of core deposit and other intangible assets ...................................................................................     
396,596      
Provision for deferred income taxes ..................................................................................................................     
9,029      
Asset write-downs .............................................................................................................................................     
(67,759 )   
Net gain on sales of assets .................................................................................................................................     
(46,338 )   
Net change in accrued interest receivable, payable ............................................................................................     
(289,139 )   
Net change in other accrued income and expense ..............................................................................................     
323,330      
Net change in loans originated for sale ..............................................................................................................     
Net change in trading account assets and liabilities ...........................................................................................     
(8,327 )   
Net cash provided by operating activities ..........................................................................................................      1,183,411          1,742,408      

190,000         
106,996         
50,982         
42,613         
174,013         
21,036         
(63,222 )      
(12,282 )      
60,263         
(665,649 )      
(36,453 )      

124,000  
96,496  
68,410  
33,824  
92,848  
6,593  
(6,859 )
15,163  
(68,722 )
(350,581 )
21,623  
1,099,041  

Cash flows from investing activities 
Proceeds from sales of investment securities 

Available for sale ..............................................................................................................................................     
Other .................................................................................................................................................................     

63,513          5,654,850      
183,892      
94,749         

16  
23,445  

Proceeds from maturities of investment securities 

Available for sale ..............................................................................................................................................      2,309,208          2,392,331      
662,959      
Held to maturity ................................................................................................................................................     

609,080         

998,413  
468,999  

Purchases of investment securities 

Available for sale ..............................................................................................................................................      (3,562,711 )       (3,614,324 )   
(29,431 )   
Held to maturity ................................................................................................................................................     
(99,317 )   
Other .................................................................................................................................................................     
Net increase in loans and leases ................................................................................................................................      (2,952,129 )       (2,326,744 )   
Net (increase) decrease in interest-bearing deposits at banks.....................................................................................      2,593,712          6,445,451      
(81,936 )   
Capital expenditures, net ...........................................................................................................................................     
448,271      
Net (increase) decrease in loan servicing advances ...................................................................................................     
—          (1,932,596 )   
Acquisition of bank and bank holding company, net of cash acquired ......................................................................     
277,961         
Other, net ..................................................................................................................................................................     
10,876      
(720,768 )       7,714,282      
Net cash provided (used) by investing activities ................................................................................................     

(214,791 )      
(1,808 )      

(107,693 )      
170,141         

(5,347,145 )
(21,283 )
(53,606 )
(2,421,162 )
(4,819,729 )
(73,161 )
(484,689 )
—  
19,531  
  (11,710,371 )

Cash flows from financing activities 
504,393      
Net increase in deposits .............................................................................................................................................      3,554,673         
6,466,697  
Net decrease in short-term borrowings ......................................................................................................................      (1,937,105 )       (2,167,405 )   
(67,779 )
Proceeds from long-term borrowings ........................................................................................................................     
—          1,500,000      
4,345,478  
Payments on long-term borrowings ...........................................................................................................................      (1,119,898 )       (8,912,474 )   
(426,275 )
—      
Purchases of treasury stock .......................................................................................................................................     
(641,334 )      
—  
(375,017 )   
Dividends paid — common .......................................................................................................................................     
(441,891 )      
(371,199 )
(81,270 )   
Dividends paid — preferred ......................................................................................................................................     
(81,270 )      
(70,234 )
—      
Redemption of Series D preferred stock ....................................................................................................................     
(500,000 )      
—  
—      
Proceeds from issuance of preferred stock ................................................................................................................     
495,000         
346,500  
161,691         
Other, net ..................................................................................................................................................................     
69,766      
88,565  
(510,134 )       (9,462,007 )   
Net cash provided (used) by financing activities ................................................................................................     
  10,311,753  
Net decrease in cash and cash equivalents .................................................................................................................     
(5,317 )   
(47,491 )      
(299,577 )
1,672,934  
Cash and cash equivalents at beginning of year .........................................................................................................      1,368,040          1,373,357      
Cash and cash equivalents at end of year...................................................................................................................    $ 1,320,549       $  1,368,040       $ 1,373,357  

Supplemental disclosure of cash flow information 
Interest received during the year ...............................................................................................................................    $ 3,903,374       $  3,134,311       $ 2,893,153  
257,553  
Interest paid during the year ......................................................................................................................................     
411,912  
Income taxes paid during the year .............................................................................................................................     
Supplemental schedule of noncash investing and financing activities 
Real estate acquired in settlement of loans ................................................................................................................    $
Acquisition of bank and bank holding company 

498,951         
276,866         

400,329      
378,660      

124,033       $ 

67,753       $

43,821  

Common stock issued ........................................................................................................................................     
Common stock awards converted ......................................................................................................................     
Fair value of 
       Assets acquired (noncash)...........................................................................................................................     
       Liabilities assumed .....................................................................................................................................     

—          3,110,581      
28,243      
—         

—          36,567,632      
—          31,496,212      

—  
—  

—  
—  

Securitization of residential mortgage loans allocated to 

Available-for-sale investment securities ................................................................................................................     
Capitalized servicing rights ...................................................................................................................................     

24,233         
248         

65,023      
646      

134,698  
1,760   

See accompanying notes to financial statements. 

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M&T BANK CORPORATION AND SUBSIDIARIES 

Consolidated Statement of Changes in Shareholders’ Equity 

Common Additional

 Preferred Common
  Stock

Stock

Stock
Issuable

Paid-in
Capital

Retained
Earnings

Accumulated       

Other 
Comprehensive      
Income 
(Loss), Net 

   Treasury 
    Stock 

Total

Dollars in thousands, except per share 
2014 
Balance — January 1, 2014 .................................   $  881,500    65,258  
—  
—   
Total comprehensive income ...............................     
—  
Preferred stock cash dividends ............................     
—   
Issuance of Series E preferred stock ....................      350,000   
—  
Exercise of 427,905 Series A stock warrants 
   into 169,543 shares of common stock ...............     
Stock-based compensation plans: 

—   

85  

Compensation expense, net ..........................     
Exercises of stock options, net .....................     
Stock purchase plan ......................................     
Directors’ stock plan ....................................     
Deferred compensation plans, net, including 
   dividend equivalents ..................................     
Other ............................................................     

—   
—   
—   
—   

—   
—   

128  
633  
43  
7  

3  
—  

Common stock cash dividends - $2.80 per 
   share .................................................................     
—  
Balance — December 31, 2014 ...........................   $ 1,231,500    66,157  
2015 
Total comprehensive income ...............................     
Acquisition of Hudson City Bancorp, Inc.: 

—   

—   

—  

2,915     3,232,014  7,188,004    
—  1,066,246    
(75,878)   
— 
—    
(3,500)

—    
—    
—    

(64,159 )    
(116,835 )    
—      
—      

—  $11,305,532  
949,411  
—   
(75,878 )
—   
346,500  
—   

—    

(85)

—    
—    
—    
—    

45,306 
122,476 
9,545 
1,658 

—    

—    
—    
—    
—    

(307)   
—    

345 
1,747 

(116)   
—    

—    

(371,137)   
2,608     3,409,506  7,807,119    

— 

—      

—   

—  

—      
—      
—      
—      

—      
—      

—   
—   
—   
—   

—   
—   

45,434  
123,109  
9,588  
1,665  

(75 )
1,747  

—      
(180,994 )    

—   
(371,137 )
—  $12,335,896  

—    

—  1,079,667    

(70,633 )    

—    1,009,034  

Common stock issued ...................................     
Common stock awards converted .................     
Preferred stock cash dividends ............................     
Exercise of 2,315 Series A stock warrants 
   into 904 shares of common stock......................     
Stock-based compensation plans: 

Compensation expense, net ..........................     
Exercises of stock options, net .....................     
Stock purchase plan ......................................     
Directors’ stock plan ....................................     
Deferred compensation plans, net, including 
   dividend equivalents ..................................     
Other ............................................................     

—    12,977  
—  
—   
—  
—   

—     3,097,604 
28,243 
—    
— 
—    

—    
—    
(81,270)   

—   

—   
—   
—   
—   

—   
—   

155  
438  
45  
7  

2  
—  

1  

—    

(1)

—    
—    
—    
—    

43,040 
88,455 
10,301 
1,754 

—    

—    
—    
—    
—    

(244)   
—    

293 
1,573 

(102)   
—    

—    

(374,912)   
2,364     6,680,768  8,430,502    

— 

—      
—      
—      

—    3,110,581  
28,243  
—   
(81,270 )
—   

—      

—   

—  

—      
—      
—      
—      

—      
—      

—   
—   
—   
—   

—   
—   

43,195  
88,893  
10,346  
1,761  

(51 )
1,573  

—      
(251,627 )    

—   
(374,912 )
—  $16,173,289  

—   

Common stock cash dividends - $2.80 per 
   share .................................................................     
—  
Balance — December 31, 2015 ...........................   $ 1,231,500    79,782  
2016 
—   
Total comprehensive income ...............................     
—   
Preferred stock cash dividends ............................     
Redemption of Series D preferred stock ..............      (500,000)  
Issuance of Series F preferred stock ....................      500,000   
Exercise of 87,381 Series A stock warrants 
   into 41,439 shares of common stock .................     
Purchases of treasury stock ..................................   
Stock-based compensation plans: 

—  
—  
—  
—  

—   
—   

—  
—  

Compensation expense, net ..........................     
Exercises of stock options, net .....................     
Stock purchase plan ......................................     
Directors’ stock plan ....................................     
Deferred compensation plans, net, including 
   dividend equivalents ..................................     
Other ............................................................     

—   
—   
—   
—   

—   
—   

169  
18  
—  
2  

2  
—  

Common stock cash dividends - $2.80 per 
   share .................................................................     
—  
Balance — December 31, 2016 ...........................   $ 1,231,500    79,973  

—   

—    
—    
—    
—    

—    
— 

—    
—    
—    
—    

(4,750)
— 

16,132 
(12,190)
275 
535 

(219)   
—    

163 
1,015 

—  1,315,114    
(81,270)   
— 
—    
— 
—    
(5,000)

(43,009 )    
—      
—      
—    

—    1,272,105  
(81,270 )
—   
(500,000 )
—   
495,000  
—    

—    
—    

—    
—    
—    
—    

(93)   
—    

—      
4,748   
—       (641,334)  

(2 )
(641,334 )

—      
10,989   
—       181,789   
10,319   
—      
1,543   
—      

27,290  
169,617  
10,594  
2,080  

—      
—      

150   
—   

3  
1,015  

—    

(441,765)   
2,145     6,676,948  9,222,488    

— 

—      

(441,765 )
(294,636 )     (431,796) $16,486,622  

—   

See accompanying notes to financial statements. 

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M&T BANK CORPORATION AND SUBSIDIARIES 

Notes to Financial Statements 

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

The accounting and reporting policies of M&T and subsidiaries (“the Company”) are in 

accordance with accounting principles generally accepted in the United States of America (“GAAP”) 
and to general practices within the banking industry. The preparation of financial statements in 
conformity with GAAP requires management to make estimates and assumptions that affect the 
reported amounts of assets and liabilities and disclosure of contingent assets and liabilities at the date 
of the financial statements and the reported amounts of revenues and expenses during the reporting 
period. Actual results could differ from those estimates. The more significant accounting policies are 
as follows: 

Consolidation 
The consolidated financial statements include M&T and all of its subsidiaries. All significant 
intercompany accounts and transactions of consolidated subsidiaries have been eliminated in 
consolidation. The financial statements of M&T included in note 25 report investments in 
subsidiaries under the equity method. Information about some limited purpose entities that are 
affiliates of the Company but are not included in the consolidated financial statements appears in 
note 19. 

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

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

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

Investment securities 
Investments in debt securities are classified as held to maturity and stated at amortized cost when 
management has the positive intent and ability to hold such securities to maturity. Investments in 

117 

117

 
 
other debt securities and equity securities having readily determinable fair values are classified as 
available for sale and stated at estimated fair value. Amortization of premiums and accretion of 
discounts for investment securities available for sale and held to maturity are included in interest 
income. 

Other securities are stated at cost and include stock of the Federal Reserve Bank of New York 

and the Federal Home Loan Bank (“FHLB”) of New York. 

The cost basis of individual securities is written down through a charge to earnings when 
declines in value below amortized cost are considered to be other than temporary. In cases where fair 
value is less than amortized cost and the Company intends to sell a debt security, it is more likely 
than not to be required to sell a debt security before recovery of its amortized cost basis, or the 
Company does not expect to recover the entire amortized cost basis of a debt security, an other-than-
temporary impairment is considered to have occurred. If the Company intends to sell the debt 
security or more likely than not will be required to sell the security before recovery of its amortized 
cost basis, the other-than-temporary impairment is recognized in earnings equal to the entire 
difference between the debt security’s amortized cost basis and its fair value. If the Company does 
not expect to recover the entire amortized cost basis of the security, the Company does not intend to 
sell the security and it is not more likely than not that the Company will be required to sell the 
security before recovery of its amortized cost basis, the other-than-temporary impairment is separated 
into (a) the amount representing the credit loss and (b) the amount related to all other factors. The 
amount of the other-than-temporary impairment related to the credit loss is recognized in earnings 
while the amount related to other factors is recognized in other comprehensive income, net of 
applicable taxes. Subsequently, the Company accounts for the other-than-temporarily impaired debt 
security as if the security had been purchased on the measurement date of the other-than-temporary 
impairment at an amortized cost basis equal to the previous amortized cost basis less the other-than-
temporary impairment recognized in earnings. The cost basis of individual equity securities is written 
down to estimated fair value through a charge to earnings when declines in value below cost are 
considered to be other than temporary. Realized gains and losses on the sales of investment securities 
are determined using the specific identification method. 

Loans and leases 
The Company’s accounting methods for loans depends on whether the loans were originated by the 
Company or were acquired in a business combination. 

Originated loans and leases 
Interest income on loans is accrued on a level yield method. Loans are placed on nonaccrual status 
and previously accrued interest thereon is charged against income when principal or interest is 
delinquent 90 days, unless management determines that the loan status clearly warrants other 
treatment. Nonaccrual commercial loans and commercial real estate loans are returned to accrual 
status when borrowers have demonstrated an ability to repay their loans and there are no delinquent 
principal and interest payments. Consumer loans not secured by residential real estate are returned to 
accrual status when all past due principal and interest payments have been paid by the borrower. 
Loans secured by residential real estate are returned to accrual status when they are deemed to have 
an insignificant delay in payments of 90 days or less. Loan balances are charged off when it becomes 
evident that such balances are not fully collectible. For commercial loans and commercial real estate 
loans, charge-offs are recognized after an assessment by credit personnel of the capacity and 
willingness of the borrower to repay, the estimated value of any collateral, and any other potential 
sources of repayment. A charge-off is recognized when, after such assessment, it becomes evident 
that the loan balance is not fully collectible. For loans secured by residential real estate, the excess of 

118 

118

 
the loan balances over the net realizable value of the property collateralizing the loan is charged-off 
when the loan becomes 150 days delinquent. Consumer loans are generally charged-off when the 
loans are 91 to 180 days past due, depending on whether the loan is collateralized and the status of 
repossession activities with respect to such collateral. Loan fees and certain direct loan origination 
costs are deferred and recognized as an interest yield adjustment over the life of the loan. Net 
deferred fees have been included in unearned discount as a reduction of loans outstanding. 
Commitments to sell real estate loans are utilized by the Company to hedge the exposure to changes 
in fair value of real estate loans held for sale. The carrying value of hedged real estate loans held for 
sale recorded in the consolidated balance sheet includes changes in estimated fair market value 
during the hedge period, typically from the date of close through the sale date. Valuation adjustments 
made on these loans and commitments are included in “mortgage banking revenues.” 

Except for consumer and residential mortgage loans that are considered smaller balance 
homogenous loans and are evaluated collectively, the Company considers a loan to be impaired for 
purposes of applying GAAP when, based on current information and events, it is probable that the 
Company will be unable to collect all amounts according to the contractual terms of the loan 
agreement or the loan is delinquent 90 days. Regardless of loan type, the Company considers a loan 
to be impaired if it qualifies as a troubled debt restructuring. Impaired loans are classified as either 
nonaccrual or as loans renegotiated at below market rates which continue to accrue interest, provided 
that a credit assessment of the borrower’s financial condition results in an expectation of full 
repayment under the modified contractual terms. Certain loans greater than 90 days delinquent are 
not considered impaired if they are well-secured and in the process of collection. Loans less than 90 
days delinquent are deemed to have an insignificant delay in payment and are generally not 
considered impaired. Impairment of a loan is measured based on the present value of expected future 
cash flows discounted at the loan’s effective interest rate, the loan’s observable market price, or the 
fair value of collateral if the loan is collateral-dependent. Interest received on impaired loans placed 
on nonaccrual status is generally applied to reduce the carrying value of the loan or, if principal is 
considered fully collectible, recognized as interest income. 

Residual value estimates for commercial leases are generally determined through internal or 

external reviews of the leased property. The Company reviews commercial lease residual values at 
least annually and recognizes residual value impairments deemed to be other than temporary. 

Loans and leases acquired in a business combination 
Loans acquired in a business combination subsequent to December 31, 2008 are initially recorded at 
fair value with no carry-over of an acquired entity’s previously established allowance for credit 
losses. Purchased impaired loans represent specifically identified loans with evidence of credit 
deterioration for which it was probable at acquisition that the Company would be unable to collect all 
contractual principal and interest payments. For purchased impaired loans and other loans acquired at 
a discount that was, in part, attributable to credit quality, the excess of cash flows expected at 
acquisition over the estimated fair value of acquired loans is recognized as interest income over the 
remaining lives of the loans. Subsequent decreases in the expected principal cash flows require the 
Company to evaluate the need for additions to the Company’s allowance for credit losses. 
Subsequent improvements in expected cash flows result first in the recovery of any related allowance 
for credit losses and then in recognition of additional interest income over the then-remaining lives of 
the loans. 

For all other acquired loans, the difference between the fair value and outstanding principal 

balance of the loans is recognized as an adjustment to interest income over the lives of those loans. 
Those loans are then accounted for in a manner that is similar to originated loans. 

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Allowance for credit losses 
The allowance for credit losses represents, in management’s judgment, the amount of losses inherent 
in the loan and lease portfolio as of the balance sheet date. The allowance is determined by 
management’s evaluation of the loan and lease portfolio based on such factors as the differing 
economic risks associated with each loan category, the current financial condition of specific 
borrowers, the economic environment in which borrowers operate, the level of delinquent loans, the 
value of any collateral and, where applicable, the existence of any guarantees or indemnifications. 
The effects of probable decreases in expected principal cash flows on loans acquired at a discount are 
also considered in the establishment of the allowance for credit losses. 

Assets taken in foreclosure of defaulted loans 
Assets taken in foreclosure of defaulted loans are primarily comprised of commercial and residential 
real property and are included in “other assets” in the consolidated balance sheet. An in-substance 
repossession or foreclosure occurs and a creditor is considered to have received physical possession 
of residential real estate property collateralizing a consumer mortgage loan upon either (1) the 
creditor obtaining legal title to the residential real estate property upon completion of a foreclosure or 
(2) the borrower conveying all interest in the residential real estate property to the creditor to satisfy 
that loan through completion of a deed in lieu of foreclosure or through a similar legal agreement. 
Upon acquisition of assets taken in satisfaction of a defaulted loan, the excess of the remaining loan 
balance over the asset’s estimated fair value less costs to sell is charged-off against the allowance for 
credit losses. Subsequent declines in value of the assets are recognized as “other costs of operations” 
in the consolidated statement of income. 

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

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

To estimate the fair value of servicing rights, the Company considers market prices for similar 

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

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

Securitization structures typically require the use of special-purpose trusts that are considered 

variable interest entities. A variable interest entity is included in the consolidated financial statements 
if the Company has the power to direct the activities that most significantly impact the variable 
interest entity’s economic performance and has the obligation to absorb losses or the right to receive 
benefits of the variable interest entity that could potentially be significant to that entity. 

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

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

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

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

121 

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for sale and commitments to sell real estate loans are generally recorded in the consolidated balance 
sheet at estimated fair value. 

Derivative instruments not related to mortgage banking activities, including financial futures 

commitments and interest rate swap agreements, that do not satisfy the hedge accounting 
requirements are recorded at fair value and are generally classified as trading account assets or 
liabilities with resultant changes in fair value being recognized in “trading account and foreign 
exchange gains” in the consolidated statement of income. 

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

Income taxes 
Deferred tax assets and liabilities are recognized for the future tax effects attributable to differences 
between the financial statement value of existing assets and liabilities and their respective tax bases 
and carryforwards. Deferred tax assets and liabilities are measured using enacted tax rates and laws. 
The Company evaluates uncertain tax positions using the two-step process required by GAAP. 
The first step requires a determination of whether it is more likely than not that a tax position will be 
sustained upon examination, including resolution of any related appeals or litigation processes, based 
on the technical merits of the position. Under the second step, a tax position that meets the more-
likely-than-not recognition threshold is measured at the largest amount of benefit that is greater than 
fifty percent likely of being realized upon ultimate settlement. 

The Company accounts for its investments in qualified affordable housing projects using the 

proportional amortization method. Under that method, the Company amortizes the initial cost of the 
investment in proportion to the tax credits and other tax benefits received and recognizes the net 
investment performance in the income statement as a component of income tax expense. 

Earnings per common share 
Basic earnings per common share exclude dilution and are computed by dividing income available to 
common shareholders by the weighted-average number of common shares outstanding (exclusive of 
shares represented by the unvested portion of restricted stock and restricted stock unit grants) and 
common shares issuable under deferred compensation arrangements during the period. Diluted 
earnings per common share reflect shares represented by the unvested portion of restricted stock and 
restricted stock unit grants and the potential dilution that could occur if securities or other contracts 
to issue common stock were exercised or converted into common stock or resulted in the issuance of 
common stock that then shared in earnings. Proceeds assumed to have been received on such 
exercise or conversion are assumed to be used to purchase shares of M&T common stock at the 
average market price during the period, as required by the “treasury stock method” of accounting. 

GAAP requires that unvested share-based payment awards that contain nonforfeitable rights to 

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

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

2.    Acquisition and divestiture 

Hudson City Bancorp, Inc. 
On November 1, 2015, M&T completed the acquisition of Hudson City Bancorp, Inc. (“Hudson 
City”), headquartered in Paramus, New Jersey. On that date, Hudson City Savings Bank, the banking 
subsidiary of Hudson City, was merged into M&T Bank, a wholly owned banking subsidiary of 
M&T. Hudson City Savings Bank operated 135 banking offices in New Jersey, Connecticut and New 
York at the date of acquisition. The results of operations acquired in the Hudson City transaction 
have been included in the Company’s financial results since November 1, 2015. After application of 
the election, allocation and proration procedures contained in the merger agreement with Hudson 
City, M&T paid $2.1 billion in cash and issued 25,953,950 shares of M&T common stock in 
exchange for Hudson City shares outstanding at the time of the acquisition. The purchase price was 
approximately $5.2 billion based on the cash paid to Hudson City shareholders, the fair value of 
M&T stock exchanged and the estimated fair value of Hudson City stock awards converted into 
M&T stock awards. The acquisition of Hudson City expanded the Company’s presence in New 
Jersey, Connecticut and New York, and management expects that the Company will benefit from 
greater geographic diversity and the advantages of scale associated with a larger company. 

The Hudson City transaction was accounted for using the acquisition method of accounting and, 

accordingly, assets acquired, liabilities assumed and consideration exchanged were recorded at 
estimated fair value on the acquisition date. The consideration paid for Hudson City’s common 
equity and the amounts of identifiable assets acquired and liabilities assumed as of the acquisition 
date were as follows: 

   (In thousands) 

Identifiable assets: 

Cash and due from banks .............................................................................................    $ 
131,688
Interest-bearing deposits at banks ................................................................................       7,568,934
Investment securities ....................................................................................................       7,929,014
Loans ............................................................................................................................      19,015,013
Goodwill .......................................................................................................................       1,079,787
131,665
Core deposit intangible .................................................................................................      
843,219
Other assets ..................................................................................................................      
Total identifiable assets ...........................................................................................      36,699,320

Liabilities: 

Deposits ........................................................................................................................      17,879,589
Borrowings ...................................................................................................................      13,211,598
405,025
Other liabilities .............................................................................................................      
Total liabilities .........................................................................................................      31,496,212
Total consideration ............................................................................................................    $  5,203,108
Cash paid ...........................................................................................................................    $  2,064,284
Common stock issued (25,953,950 shares) .......................................................................       3,110,581
28,243
Common stock awards converted .....................................................................................      
Total consideration ..................................................................................................    $  5,203,108  

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In early November 2015, the Company sold $5.8 billion of investment securities obtained in the 
acquisition and repaid $10.6 billion of borrowings assumed in the transaction. In connection with the 
acquisition, the Company recorded approximately $1.1 billion of goodwill and $132 million of core 
deposit intangible. The core deposit intangible asset is being amortized over a period of seven years 
using an accelerated method. 

In many cases, determining the fair value of the acquired assets and assumed liabilities required 

the Company to estimate cash flows expected to result from those assets and liabilities and to 
discount those cash flows at appropriate rates of interest. The most significant of these 
determinations related to the fair valuation of acquired loans. Approximately $688 million of the 
loans acquired from Hudson City had specific evidence of credit deterioration at the acquisition date 
and it was deemed probable that the Company would be unable to collect all contractually required 
principal and interest payments (“purchased impaired loans”). Such loans were acquired at a discount 
from outstanding customer principal balance of $1.0 billion. For purchased impaired loans, the 
excess of cash flows expected at acquisition over the estimated fair value is recognized as interest 
income over the remaining lives of the loans. The difference between contractually required 
payments at acquisition and the cash flows expected to be collected at acquisition, as shown in the 
following table, reflected the impact of estimated credit losses and other factors, such as 
prepayments. 

November 1, 
2015
  (In thousands)  

Contractually required principal and interest at acquisition ...............................................    $ 1,304,366 
Contractual cash flows not expected to be collected ..........................................................       (498,919)
Expected cash flows at acquisition .....................................................................................       805,447 
Interest component of expected cash flows ........................................................................       (117,251)
Estimated fair value ............................................................................................................    $  688,196  

The remaining acquired loans had a fair value of $18.3 billion and outstanding principal of 
$18.0 billion, resulting in a premium which will be amortized over the remaining lives of the loans as 
a reduction of interest income. In accordance with GAAP, there was no carry-over of Hudson City’s 
previously established allowance for credit losses. 

124 

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The following table discloses the impact of Hudson City since the acquisition on November 1, 

2015 through the end of 2015. The table also presents certain pro forma information as if Hudson 
City had been acquired on January 1, 2014. These results combine the historical results of Hudson 
City into the Company’s consolidated statement of income and, while certain adjustments were made 
for the estimated impact of certain fair valuation adjustments and other acquisition-related activity, 
they are not indicative of what would have occurred had the acquisition taken place on the indicated 
date. In particular, no adjustments have been made to eliminate the impact of gains on securities 
transactions of $102 million in 2015 and $104 million in 2014 that may not have been recognized 
had the investment securities been recorded at fair value as of the beginning of 2014. Furthermore, 
expenses related to systems conversions and other costs of integration of $97 million are included in 
the 2015 periods in which such costs were incurred. Additionally, the Company expects to achieve 
further operating cost savings and other business synergies as a result of the acquisition which are not 
reflected in the pro forma amounts that follow. 

  Actual Since   
  Acquisition 

Through 
  December 31,  
2015 

Pro Forma 
Year Ended December 31 
2015 
2014 
(In thousands) 

Total revenues(a) ..............................................................  $ 111,168  $ 5,132,662   
  1,011,463   
Net income (loss) ............................................................. 

(21,175)

 $  5,406,291 
    1,445,779  

(a)  Represents net interest income plus other income. 

In connection with the Hudson City acquisition, the Company incurred merger-related expenses 

related to systems conversions and other costs of integrating and conforming acquired operations 
with and into the Company. Those expenses consisted largely of professional services and other 
temporary help fees associated with preparing for systems conversions and/or integration of 
operations; costs related to termination of existing contractual arrangements for various services; 
initial marketing and promotion expenses designed to introduce M&T Bank to its new customers; 
severance (for former Hudson City employees); travel costs; and other costs of completing the 
transaction and commencing operations in new markets and offices. There were no merger-related 
expenses during 2014. In 2015, the Company also recognized a $21 million provision for credit 
losses related to the $18.3 billion of Hudson City loans acquired at a premium. GAAP does not allow 
the credit loss component of the net premium associated with those loans to be bifurcated and 
accounted for as a nonaccreting difference as is the case with purchased impaired loans and other 
loans acquired at a discount. Neverthless, GAAP requires that an allowance for credit losses be 
recognized for incurred losses in loans acquired at a premium even though in a relatively 
homogenous portfolio of residential mortgage loans the specific loans to which the losses relate 
cannot be individually identified at the acquisition date. Given the recognition of such losses above 
and beyond the impact of forecasted losses used in determining the fair value of the loans acquired at 
a premium, the initial $21 million provision for credit losses has been noted as a merger-related 
expense. 

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A summary of merger-related expenses included in the consolidated statement of income for the 

years ended December 31, 2016 and 2015 follows: 

2016 

2015 

(In thousands) 

Salaries and employee benefits ..........................................................................     $  5,334      $ 51,287 
3 
Equipment and net occupancy ...........................................................................        1,278       
785 
Outside data processing and software ................................................................        1,067       
79 
Advertising and marketing .................................................................................        10,522       
Printing, postage and supplies ............................................................................        1,482       
504 
Other cost of operations .....................................................................................        16,072        23,318 
Other expense ..............................................................................................        35,755        75,976 
—        21,000 
Total ..............................................................................................................     $ 35,755      $ 96,976  

Provision for credit losses ..................................................................................       

Sale of trust accounts 
In April 2015, the Company sold the trade processing business within the retirement services division 
of its Institutional Client Services business. That sale resulted in an after-tax gain of $23 million ($45 
million pre-tax) that reflected the allocation of approximately $11 million of previously recorded 
goodwill to the divested business. Revenues of the sold business had been included in “trust income” 
and were $9 million and $34 million during 2015 and 2014, respectively. After considering related 
expenses, net income attributable to the business that was sold was not material to the consolidated 
results of operations of the Company in any of those periods. 

126 

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

Amortized 
Cost

Gross 
Unrealized 
Gains

Gross 
Unrealized 
Losses 

(In thousands) 

Estimated 
Fair Value

December 31, 2016 
Investment securities available for sale: 
U.S. Treasury and federal agencies .........................  $ 1,912,110 $
Obligations of states and political subdivisions ...... 
Mortgage-backed securities: 

3,570

386 $
77

9,952     $  1,902,544
3,641

6       

Government issued or guaranteed ......................  10,980,507
45
Privately issued .................................................. 
134,105
Other debt securities ................................................ 
307,964
Equity securities ...................................................... 
13,338,301

88,343
—
1,407
45,073
135,286

113,989       10,954,861
44
118,516
352,466
141,515       13,332,072

1       
16,996       
571       

Investment securities held to maturity: 
Obligations of states and political subdivisions ...... 
Mortgage-backed securities: 

60,858

267

224       

60,901

Government issued or guaranteed ...................... 
Privately issued .................................................. 
Other debt securities ................................................ 

7,374        2,263,297
37,120       
121,481
—       
5,543
44,718        2,451,222
Other securities ....................................................... 
461,118
Total ........................................................................  $16,256,697 $ 173,948 $ 186,233     $ 16,244,412

2,233,173
157,704
5,543
2,457,278
461,118

37,498
897
—
38,662
—

—       

December 31, 2015 
Investment securities available for sale: 
U.S. Treasury and federal agencies .........................  $
Obligations of states and political subdivisions ...... 
Mortgage-backed securities: 

299,890 $
5,924

294 $
146

187     $ 
42       

299,997
6,028

Government issued or guaranteed ......................  11,592,959
74
Privately issued .................................................. 
28,438
Collateralized debt obligations ................................ 
137,556
Other debt securities ................................................ 
73,795
Equity securities ...................................................... 
12,138,636

142,370
2
20,143
1,514
10,230
174,699

2       
1,188       
20,190       
354       

48,701       11,686,628
74
47,393
118,880
83,671
70,664       12,242,671

Investment securities held to maturity: 
Obligations of states and political subdivisions ...... 
Mortgage-backed securities: 

118,431

1,003

421       

119,013

Government issued or guaranteed ...................... 
Privately issued .................................................. 
Other debt securities ................................................ 

7,817        2,596,731
141,828
41,367       
—       
6,575
49,605        2,864,147
554,059
Other securities ....................................................... 
Total ........................................................................  $15,552,404 $ 228,742 $ 120,269     $ 15,660,877  

2,553,612
181,091
6,575
2,859,709
554,059

50,936
2,104
—
54,043
—

—       

127 

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No investment in securities of a single non-U.S. Government, government agency or 

government guaranteed issuer exceeded ten percent of shareholders’ equity at December 31, 2016. 

As of December 31, 2016, the latest available investment ratings of all obligations of states and 

political subdivisions, privately issued mortgage-backed securities and other debt securities were: 

Average Credit Rating of Fair Value Amount 

Amortized
Cost

Estimated
Fair Value   

A or 
Better

   BBB 
(In thousands) 

BB 

    B or Less   

Not 
Rated

Obligations of states and political 
   subdivisions ...........................................   $ 64,428   $ 64,542   $47,023   $ —   $ —     $  —   $17,519
Privately issued mortgage-backed 
19
   securities ................................................     157,749     121,525     30,760    
Other debt securities .................................     139,648     124,059     5,442     63,353     30,373        —     24,891
Total ..........................................................   $361,825   $310,126   $83,225   $63,369   $30,373     $ 90,730   $42,429  

—       90,730    

16    

The amortized cost and estimated fair value of collateralized mortgage obligations included in 

mortgage-backed securities were as follows: 

December 31 

2016 

2015 

(In thousands) 

Collateralized mortgage obligations: 

Amortized cost ..............................................................................................    $ 162,027     $188,819 
Estimated fair value .......................................................................................      125,848       149,632  

Gross realized gains from sales of investment securities were $30,545,000 in 2016. During 
2016, the Company sold its collateralized debt obligations held in the available-for-sale investment 
securities portfolio for a gain of $30 million. There were no significant realized gross losses from 
sales of investments securities in 2016. There were no significant gross realized gains or losses from 
sales of investment securities in 2015 or 2014. 

128 

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At December 31, 2016, the amortized cost and estimated fair value of debt securities by 

contractual maturity were as follows: 

Amortized 
Cost 

Estimated 
Fair Value 

(In thousands) 

Debt securities available for sale: 
Due in one year or less ...............................................................................   $
158,334
Due after one year through five years ........................................................     1,760,301       1,750,542
Due after five years through ten years .......................................................    
3,132
112,693
Due after ten years .....................................................................................    
    2,049,785       2,024,701
Mortgage-backed securities available for sale ...........................................     10,980,552      10,954,905
  $13,030,337    $ 12,979,606

2,689      
128,841      

157,954    $ 

Debt securities held to maturity: 
Due in one year or less ...............................................................................   $
Due after one year through five years ........................................................    
Due after five years through ten years .......................................................    
Due after ten years .....................................................................................    

24,643
33,963
2,295
5,543
66,444
Mortgage-backed securities held to maturity .............................................     2,390,877       2,384,778
  $ 2,457,278    $  2,451,222  

24,533    $ 
34,073      
2,252      
5,543      
66,401      

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A summary of investment securities that as of December 31, 2016 and 2015 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 
Fair 
Value

Unrealized 
Losses 

12 Months or More 
Fair 
Value 

Unrealized
Losses

(In thousands) 

December 31, 2016 
Investment securities available for sale: 
U.S. Treasury and federal agencies .................................................   $1,710,241  $
Obligations of states and political subdivisions ..............................    
Mortgage-backed securities: 

— 

(9,950 )   $  2,295    $
593     

—       

(2)
(6)

Government issued or guaranteed .............................................     6,730,829 
— 
Privately issued .........................................................................    
100 
Other debt securities .......................................................................    
17,776 
Equity securities..............................................................................    

(615)
  (113,374 )      81,003     
—       
(1)
27     
(1 )      85,400      (16,995)
(149)
151     
(422 )     
    8,458,946      (123,747 )     169,469       (17,768)

Investment securities held to maturity: 
Obligations of states and political subdivisions ..............................    
Mortgage-backed securities: 

17,988 

(126 )      11,891     

(98)

Government issued or guaranteed .............................................    
Privately issued .........................................................................    

(6,842 )      17,481     
(532)
(1,222 )      57,016      (35,898)
(8,190 )      86,388       (36,528)
Total ................................................................................................   $9,113,677  $(131,937 )   $ 255,857     $ (54,296)

618,832 
17,911 
654,731 

December 31, 2015 
Investment securities available for sale: 
U.S. Treasury and federal agencies .................................................  $ 147,508  $
Obligations of states and political subdivisions ..............................   
Mortgage-backed securities: 

865 

(187 )   $ 
(2 )     

—    $
1,335     

— 
(40)

Government issued or guaranteed .............................................    4,061,899 
— 
Privately issued .........................................................................   
5,711 
Collateralized debt obligations .......................................................   
12,935 
Other debt securities .......................................................................   
18,073 
Equity securities..............................................................................   
  4,246,991 

(167)
7,216     
(48,534 )     
(2)
43     
—       
(335 )     
(853)
2,063     
(462 )      93,344      (19,728)
(147)
(207 )     
(49,727 )     104,154      (20,937)

153     

Investment securities held to maturity: 
Obligations of states and political subdivisions ..............................   
Mortgage-backed securities: 

42,913 

(335 )     

5,853     

(86)

Government issued or guaranteed .............................................   
Privately issued .........................................................................   

(6,016)
—       112,155      (41,367)
(2,136 )     346,875       (47,469)
Total ................................................................................................  $4,749,887  $ (51,863 )   $ 451,029     $ (68,406)

459,983 
— 
502,896 

(1,801 )     228,867     

The Company owned 1,083 individual investment securities with aggregate gross unrealized 

losses of $186 million at December 31, 2016. Based on a review of each of the securities in the 
investment securities portfolio at December 31, 2016, the Company concluded that it expected to 
recover the amortized cost basis of its investment. As of December 31, 2016, the Company does not 

130 

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intend to sell nor is it anticipated that it would be required to sell any of its impaired investment 
securities at a loss. At December 31, 2016, the Company has not identified events or changes in 
circumstances which may have a significant adverse effect on the fair value of the $461 million of 
cost method investment securities. 

At December 31, 2016, investment securities with a carrying value of $3,775,571,000, 
including $3,240,079,000 of investment securities available for sale, were pledged to secure 
borrowings from various FHLBs, repurchase agreements, governmental deposits, interest rate swap 
agreements and available lines of credit as described in note 9. 

Investment securities pledged by the Company to secure obligations whereby the secured party 

is permitted by contract or custom to sell or repledge such collateral totaled $1,203,473,000 at 
December 31, 2016. The pledged securities included securities of the U.S. Treasury and federal 
agencies and mortgage-backed securities. 

4.    Loans and leases 
Total loans and leases outstanding were comprised of the following: 

December 31 

2016 

2015 

(In thousands) 

Loans 
Commercial, financial, etc. .....................................................................   $21,351,119     $ 19,223,419 
Real estate: 

Residential ..........................................................................................     22,584,141       26,249,059 
Commercial ........................................................................................     25,550,057       23,592,097 
Construction .......................................................................................     8,066,756        5,716,994 
Consumer ................................................................................................     12,130,094       11,584,347 
Total loans ..........................................................................................     89,682,167       86,365,916 

Leases 

Commercial ........................................................................................     1,419,510        1,353,318 
Total loans and leases .............................................................................     91,101,677       87,719,234 
(229,735)
Less: unearned discount ..........................................................................    
Total loans and leases, net of unearned discount ....................................   $90,853,416     $ 87,489,499  

(248,261 )     

One-to-four family residential mortgage loans held for sale were $414 million at December 31, 
2016 and $353 million at December 31, 2015. Commercial real estate loans held for sale were $643 
million at December 31, 2016 and $39 million at December 31, 2015. 

As of December 31, 2016, approximately $2.8 billion of commercial real estate loan balances 
serviced for others had been sold with recourse in conjunction with the Company’s participation in 
the Federal National Mortgage Association (“Fannie Mae”) Delegated Underwriting and Servicing 
(“DUS”) program. At December 31, 2016, 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. 

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In addition to recourse obligations, as described in note 21, 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. 
Charges incurred for such obligation, which are recorded as a reduction of mortgage banking 
revenues, were $4 million, $5 million and $4 million in 2016, 2015 and 2014, respectively. 

The outstanding principal balance and the carrying amount of loans acquired at a discount that 

were recorded at fair value at the acquisition date and included in the consolidated balance sheet 
were as follows: 

December 31 

2016 

2015 

(In thousands) 

Outstanding principal balance .................................................................   $ 2,311,699      $  3,122,935 
Carrying amount: 

Commercial, financial, leasing, etc. ...................................................    
Commercial real estate .......................................................................    
Residential real estate .........................................................................    
Consumer ...........................................................................................    

78,847 
59,928        
456,820        
644,284 
799,802         1,016,129 
725,807 
487,721        
  $ 1,804,271      $  2,465,067  

Purchased impaired loans included in the table above totaled $578 million at December 31, 
2016 and $768 million at December 31, 2015, representing less than 1% of the Company’s assets as 
of each date. A summary of changes in the accretable yield for loans acquired at a discount for the 
years ended December 31, 2016, 2015 and 2014 follows: 

For the Year Ended December 31, 

2016 

2015 

2014 

  Purchased   
  Impaired 

Other 

  Acquired 

  Purchased   
Impaired 

Other 

  Acquired 

    Purchased     
    Impaired      Acquired 

Other 

(In thousands) 

Balance at beginning of period ....   $ 184,618  $ 296,434  $ 76,518  $ 397,379    $  37,230    $ 538,633 
Additions ......................................     
— 
Interest income .............................      (52,769)   (123,044)   (28,551)   (158,260 )    (21,263 )    (178,670)
Reclassifications from 
49,930       60,551       24,907 
   nonaccretable balance ...............      22,384   
Other(a) ........................................     
—       12,509 
—   
Balance at end of period ...............   $ 154,233  $ 201,153  $184,618  $ 296,434    $  76,518    $ 397,379  

22,677    19,400   
—   
5,086   

—    117,251   

7,385      

—      

—      

—   

(a)  Other changes in expected cash flows including changes in interest rates and prepayment 

assumptions. 

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A summary of current, past due and nonaccrual loans as of December 31, 2016 and 2015 follows: 

Accruing
Loans Past
Due 90 
Days or 
More(a)

Accruing 
Loans 
Acquired at
a Discount
Past Due 
90 Days or
More(b)
(In thousands) 

Purchased 
Impaired(c)   Nonaccrual   

Total 

  Current 

30-89 Days 
Past Due

December 31, 2016 
Commercial, financial, 
   leasing, etc. .................................   $ 22,287,857 $
Real estate: 

Commercial ..............................     25,076,684  
Residential builder and 
   developer ...............................      1,884,989  
Other commercial 
   construction ...........................      5,985,118  
Residential ................................     17,631,377  
Residential — limited 
   documentation .......................      3,239,344  

Consumer: 

53,503 $

6,195 $

417 $

641   $ 261,434   $22,610,047

183,531  

7,054  

12,870  

31,404      176,201     25,487,744

4,667  

5  

1,952  

14,006      16,707      1,922,326

77,701  

922  
485,468   281,298  

198  

14,274      18,111      6,096,324
11,537   378,549      229,242     19,017,471

88,366  

—  

—   139,158      106,573      3,573,441

Home equity lines and loans ....      5,502,091  
Automobile ...............................      2,869,232  
Other .........................................      3,491,629  

—      81,815      5,641,149
44,565  
—      18,674      2,944,065
56,158  
—      11,258      3,560,849
31,286  
Total ...............................................   $ 87,968,321 $1,025,245 $300,659 $ 61,144 $ 578,032   $ 920,015   $90,853,416

12,678  
1  
21,491  

—  
—  
5,185  

December 31, 2015 
Commercial, financial, 
   leasing, etc. .................................   $ 20,122,648 $
Real estate: 

Commercial(d) .........................     23,111,673  
Residential builder and 
   developer ...............................      1,507,856  
Other commercial 
   construction(d) ......................      3,962,620  
Residential ................................     20,507,551  
Residential — limited 
   documentation .......................      3,885,073  

Consumer: 

52,868 $

2,310 $

693 $

1,902   $ 241,917   $20,422,338

172,439   12,963  

8,790  

46,790      179,606     23,532,261

7,969  

5,760  

6,925  

28,734      28,429      1,585,673

65,932  

7,936  
560,312   284,451  

2,001  
24,525      16,363      4,079,377
16,079   488,599      153,281     22,010,273

137,289  

—  

—   175,518      61,950      4,259,830

Home equity lines and loans ....      5,805,222  
Automobile ...............................      2,446,473  
Other .........................................      3,051,435  

45,604  
2,261      84,467      5,952,776
56,181  
—      16,597      2,519,257
—      16,799      3,127,714
36,702  
Total ...............................................   $ 84,400,551 $1,135,296 $317,441 $ 68,473 $ 768,329   $ 799,409   $87,489,499  

15,222  
6  
18,757  

—  
—  
4,021  

(a)  Excludes loans acquired at a discount. 
(b)  Loans acquired at a discount that were recorded at fair value at acquisition date. This category does not 

include purchased impaired loans that are presented separately. 

(c)  Accruing loans acquired at a discount that were impaired at acquisition date and recorded at fair value. 
(d)  The Company expanded its definition of construction loans in 2016 and, as a result, re-characterized certain 
commercial real estate loans as other commercial construction loans.  The December 31, 2015 balances 
reflect such changes. 

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If nonaccrual and renegotiated loans had been accruing interest at their originally contracted 

terms, interest income on such loans would have amounted to $68,371,000 in 2016, $56,784,000 in 
2015 and $58,314,000 in 2014. The actual amounts included in interest income during 2016, 2015 
and 2014 on such loans were $33,941,000, $30,735,000 and $28,492,000, respectively. 

During the normal course of business, the Company modifies loans to maximize recovery efforts. 
If the borrower is experiencing financial difficulty and a concession is granted, the Company considers 
such modifications as troubled debt restructurings and classifies those loans as either nonaccrual loans 
or renegotiated loans. The types of concessions that the Company grants typically include principal 
deferrals and interest rate concessions, but may also include other types of concessions. 

134 

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The table below summarizes the Company’s loan modification activities that were considered 

troubled debt restructurings for the year ended December 31, 2016: 

Recorded Investment 
Post- 
Pre- 
modification     
modification   
(Dollars in thousands) 

Financial Effects of 
Modification

Recorded 
Investment(a)   

Interest 
(b)

  Number    

Commercial, financial, leasing, etc. 

Principal deferral ...............................................     
Combination of concession types .....................     

Real estate: 

Commercial 

Principal deferral ...............................................     
Interest rate reduction .......................................     
Other .................................................................     
Combination of concession types .....................     

Residential builder and developer 

Principal deferral ...............................................     
Combination of concession types .....................     

Other commercial construction 

Principal deferral ...............................................     
Combination of concession types .....................     

Residential 

Principal deferral ...............................................     
Combination of concession types .....................     

Residential-limited documentation 

Principal deferral ...............................................     
Combination of concession types .....................     

Consumer: 

Home equity lines and loans 

127  $ 102,872  $ 102,446    $ 
41,673       

51,221   

37   

56   
1   
1   
23   

3   
3   

1   
2   

73   
46   

8   
13   

24,323   
129   
4,723   
15,695   

23,558       
129       
4,447       
15,603       

23,905   
15,755   

22,958       
15,123       

250   
2,863   

250       
2,782       

11,082   
8,975   

11,771       
9,367       

902   
2,658   

1,047       
2,917       

Principal deferral ...............................................     
Combination of concession types .....................     

10   
93   

760   
11,110   

761       
11,110       

Automobile 

Principal deferral ...............................................     
Other .................................................................     
Combination of concession types .....................     

117   
38   
8   

1,124   
55   
85   

1,124       
55       
85       

Other 

(426 ) $
(9,548 )  

— 
(95)

(765 )  
—    
(276 )  
(92 )  

(947 )  
(632 )  

—    
(81 )  

689    
392    

145    
259    

1    
—    

—    
—    
—    

— 
(25)
— 
(585)

— 
— 

— 
— 

— 
(120)

— 
(706)

— 
(916)

— 
— 
(3)

Principal deferral ...............................................     
Other .................................................................     
Combination of concession types .....................     
Total .............................................................................     

57   
5   
17   

968       
968   
45       
45   
196       
196   
739  $ 279,696  $ 268,415     $ 

—    
—    
—    

— 
— 
(32)
(11,281 ) $ (2,482)

(a)  Financial effects impacting the recorded investment included principal payments or advances, charge-offs 

and capitalized escrow arrearages.  

(b)  Represents the present value of interest rate concessions discounted at the effective rate of the original loan.  

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The table below summarizes the Company’s loan modification activities that were considered 

troubled debt restructurings for the year ended December 31, 2015: 

  Number    

Recorded Investment 
Post- 
Pre- 
modification     
modification   
(Dollars in thousands) 

Recorded 
Investment(a)   

Financial Effects of 
Modification

Interest 
(b)

— 
(19)
— 
(245)

— 
— 
(159)

Commercial, financial, leasing, etc. 

Principal deferral ...............................................     
Interest rate reduction .......................................     
Other .................................................................     
Combination of concession types .....................     

114  $
1   
3   
9   

55,621  $
99   
12,965   
32,444   

50,807    $ 
99       
12,827       
31,439       

(4,814 ) $
—    
(138 )  
(1,005 )  

Real estate: 

Commercial 

Principal deferral ...............................................     
Other .................................................................     
Combination of concession types .....................     

49   
3   
6   

49,486   
4,169   
3,238   

48,388       
4,087       
3,242       

(1,098 )  
(82 )  
4    

Residential builder and developer 

Principal deferral ...............................................     

2   

10,650   

10,598       

(52 )  

— 

Other commercial construction 

Principal deferral ...............................................     
Combination of concession types .....................     

4   
2   

368   
10,375   

460       
10,375       

Residential 

Principal deferral ...............................................     
Other .................................................................     
Combination of concession types .....................     

Residential-limited documentation 

Principal deferral ...............................................     
Combination of concession types .....................     

58   
1   
26   

2   
9   

6,194   
267   
4,024   

6,528       
267       
4,277       

426   
1,536   

437       
1,635       

Consumer: 

Home equity lines and loans 

Principal deferral ...............................................     
Combination of concession types .....................     

8   
63   

2,175   
5,203   

2,175       
5,204       

Automobile 

Principal deferral ...............................................     
Interest rate reduction .......................................     
Other .................................................................     
Combination of concession types .....................     

192   
7   
46   
57   

1,818   
137   
150   
948   

1,818       
137       
150       
948       

Other 

92    
—    

334    
—    
253    

11    
99    

—    
1    

—    
—    
—    
—    

— 
(49)

— 
— 
(483)

— 
(121)

— 
(677)

— 
(10)
— 
(43)

Principal deferral ...............................................     
Other .................................................................     
Combination of concession types .....................     
Total .............................................................................     

102   
13   
40   

1,995   
1,995       
116   
116       
396       
396   
817  $ 204,800  $ 198,405     $ 

—    
—    
—    

— 
— 
(45)
(6,395 ) $ (1,851)

(a)  Financial effects impacting the recorded investment included principal payments or advances, charge-offs 

and capitalized escrow arrearages. 

(b)  Represents the present value of interest rate concessions discounted at the effective rate of the original loan. 

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The table below summarizes the Company’s loan modification activities that were considered 

troubled debt restructurings for the year ended December 31, 2014: 

  Number    

   Recorded Investment 
Post- 
modification     
(Dollars in thousands) 

Pre- 
modification   

Financial Effects of 
Modification

Recorded 
Investment(a)  

Interest 
(b)

Commercial, financial, leasing, etc. 

Principal deferral .................................................. 
Other .................................................................... 
Combination of concession types ........................ 

95 $
3  
7  

29,035 $
29,912  
19,167  

23,628    $ 
31,604     
19,030     

(5,407 ) $
1,692    
(137 )  

— 
— 
(20)

Real estate: 

Commercial 

Principal deferral .................................................. 
Interest rate reduction .......................................... 
Other .................................................................... 
Combination of concession types ........................ 

Residential builder and developer 

Principal deferral .................................................. 

Other commercial construction 

Principal deferral .................................................. 

Residential 

Principal deferral .................................................. 
Interest rate reduction .......................................... 
Other .................................................................... 
Combination of concession types ........................ 

Residential-limited documentation 

Principal deferral .................................................. 
Combination of concession types ........................ 

Consumer: 

Home equity lines and loans 

Principal deferral .................................................. 
Interest rate reduction .......................................... 
Combination of concession types ........................ 

Automobile 

39  
1  
1  
7  

2  

4  

28  
11  
1  
30  

6  
21  

3  
6  
47  

Principal deferral .................................................. 
Interest rate reduction .......................................... 
Other .................................................................... 
Combination of concession types ........................ 

208  
9  
42  
81  

19,077  
255  
650  
1,152  

18,997     
252     
—     
1,198     

(80 )  
(3 )  
(650 )  
46    

1,639  

1,639     

—    

6,703  

6,611     

(92 )  

2,710  
1,146  
188  
4,211  

2,905     
1,222     
188     
4,287     

880  
3,806  

963     
3,846     

280  
535  
5,031  

3,293  
152  
255  
1,189  

280     
535     
5,031     

3,293     
152     
255     
1,189     

195    
76    
—    
76    

83    
40    

—    
—    
—    

—    
—    
—    
—    

— 
(48)
— 
(264)

— 

— 

— 
(152)
— 
(483)

— 
(386)

— 
(120)
(560)

— 
(12)
— 
(100)

Other 

Principal deferral .................................................. 
Interest rate reduction .......................................... 
Other .................................................................... 
Combination of concession types ........................ 

Total ................................................................................    

33  
4  
1  
70  

245     
293     
45     
2,502     
760 $ 134,351 $ 130,190   $ 

245  
293  
45  
2,502  

—    
—    
—    
—    

— 
(63)
— 
(761)
(4,161 ) $ (2,969)

(a)  Financial effects impacting the recorded investment included principal payments or advances, charge-offs 

and capitalized escrow arrearages. 

(b)  Represents the present value of interest rate concessions discounted at the effective rate of the original loan. 

Troubled debt restructurings are considered to be impaired loans and for purposes of 

establishing the allowance for credit losses are evaluated for impairment giving consideration to the 

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impact of the modified loan terms on the present value of the loan’s expected cash flows. Impairment 
of troubled debt restructurings that have subsequently defaulted may also be measured based on the 
loan’s observable market price or the fair value of collateral if the loan is collateral-dependent. 
Charge-offs may also be recognized on troubled debt restructurings that have subsequently defaulted. 
Loans that were modified as troubled debt restructurings during the twelve months ended 
December 31, 2016, 2015 and 2014 and for which there was a subsequent payment default during the 
respective period were not material. 

Borrowings by directors and certain officers of M&T and its banking subsidiaries, and by 

associates of such persons, exclusive of loans aggregating less than $120,000, amounted to 
$63,543,000 and $52,152,000 at December 31, 2016 and 2015, respectively. During 2016, new 
borrowings by such persons amounted to $15,350,000 (including any borrowings of new directors or 
officers that were outstanding at the time of their election) and repayments and other reductions 
(including reductions resulting from retirements) were $3,959,000. 

At December 31, 2016, approximately $11.9 billion of commercial loans and leases, $12.5 
billion of commercial real estate loans, $17.8 billion of one-to-four family residential real estate 
loans, $2.3 billion of home equity loans and lines of credit and $4.4 billion of other consumer loans 
were pledged to secure outstanding borrowings from the FHLB of New York and available lines of 
credit as described in note 9. 

The Company’s loan and lease portfolio includes commercial lease financing receivables 
consisting of direct financing and leveraged leases for machinery and equipment, railroad equipment, 
commercial trucks and trailers, and aircraft. A summary of lease financing receivables follows: 

December 31 

2016 

2015 

(In thousands) 

Commercial leases: 

Direct financings: 

Lease payments receivable .................................................................... $ 1,136,815    $ 1,058,605 
Estimated residual value of leased assets ..............................................  
81,269 
(107,535 )     (102,723)
Unearned income ...................................................................................  
Investment in direct financings .........................................................   1,108,729      1,037,151 

79,449      

Leveraged leases: 

Lease payments receivable ....................................................................  
Estimated residual value of leased assets ..............................................  
Unearned income ...................................................................................  
Investment in leveraged leases .........................................................  

92,918      
95,316 
110,328       118,128 
(41,556)
(38,760 )    
164,486       171,888 
Total investment in leases ............................................................................... $ 1,273,215    $ 1,209,039 
Deferred taxes payable arising from leveraged leases .................................... $  139,067    $  160,603  

Included within the estimated residual value of leased assets at December 31, 2016 and 2015 
were $47 million and $50 million, respectively, in residual value associated with direct financing 
leases that are guaranteed by the lessees or others. 

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At December 31, 2016, the minimum future lease payments to be received from lease 

financings were as follows: 

Year ending December 31: 

(In thousands)  

2017 ..............................................................................................................................     $  301,611 
2018 ..............................................................................................................................        276,524 
2019 ..............................................................................................................................        209,835 
2020 ..............................................................................................................................        150,631 
2021 ..............................................................................................................................        101,403 
Later years ....................................................................................................................        189,729 
   $ 1,229,733  

The amount of foreclosed residential real estate property held by the Company was $129 
million and $172 million at December 31, 2016 and 2015, respectively. There were $314 million and 
$315 million at December 31, 2016 and 2015, respectively, in loans secured by residential real estate 
and serviced by the Company that were in the process of foreclosure. There were $192 million in 
loans secured by residential real estate and serviced by other entities for the Company that were in 
the process of foreclosure at December 31, 2016. Of all the loans in the process of foreclosure at 
December 31, 2016, approximately 57% were classified as purchased impaired and 20% were 
government guaranteed. 

5.    Allowance for credit losses 
Changes in the allowance for credit losses for the years ended December 31, 2016, 2015 and 2014 
were as follows: 

Commercial,
Financial,

Real Estate 

2016 

 Leasing, etc.   Commercial   Residential   Consumer     Unallocated    

Total 

(In thousands) 

Beginning balance ............................   $ 300,404    326,831    72,238  178,320       78,199    $ 955,992 
Provision for credit losses ................     59,506    33,627    6,902 
(169 )     190,000 
Net charge-offs 

90,134      

—      (231,255)
Charge-offs ..................................     (59,244)  
—       74,260 
Recoveries ...................................     30,167   
Net (charge-offs) recoveries .............     (29,077)  
—      (156,995)
Ending balance .................................   $ 330,833    362,719    61,127  156,288       78,030    $ 988,997  

(4,805)   (26,133) (141,073 )    
28,907      
7,066    8,120 
2,261    (18,013) (112,166 )    

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Commercial,
Financial,

Real Estate 

2015 

Leasing, etc.   Commercial   Residential   Consumer     Unallocated   

Total 

(In thousands) 

Beginning balance ..............................  $ 288,038    307,927    61,910  186,033       75,654   $ 919,562 
Provision for credit losses ..................    43,065    25,768    19,133 
79,489       2,545      170,000 
Net charge-offs 

—     (198,373)
Charge-offs ....................................    (60,983)   (16,487)   (13,116) (107,787 )    
—      64,803 
20,585      
Recoveries .....................................    30,284   
Net charge-offs ...................................    (30,699)  
—     (133,570)
(87,202 )    
Ending balance ...................................  $ 300,404    326,831    72,238  178,320       78,199   $ 955,992 

9,623   
(6,864)  

4,311 
(8,805)

2014 

Beginning balance ..............................  $ 273,383    324,978    78,656  164,644       75,015   $ 916,676 
639      124,000 
Provision for credit losses ..................    51,410    (13,779)  
Net charge-offs 

89,704      

(3,974)

Charge-offs ....................................    (58,943)   (14,058)   (21,351)
8,579 
Recoveries .....................................    22,188    10,786   
(3,272)   (12,772)

—     (178,742)
—      57,628 
—     (121,114)
Net charge-offs ...................................    (36,755)  
Ending balance ...................................  $ 288,038    307,927    61,910  186,033       75,654   $ 919,562  

(84,390 )    
16,075      
(68,315 )    

Despite the above allocation, the allowance for credit losses is general in nature and is available 

to absorb losses from any loan or lease type. 

In establishing the allowance for credit losses, the Company estimates losses attributable to 
specific troubled credits identified through both normal and detailed or intensified credit review 
processes and also estimates losses inherent in other loans and leases on a collective basis. For 
purposes of determining the level of the allowance for credit losses, the Company evaluates its loan 
and lease portfolio by loan type. The amounts of loss components in the Company’s loan and lease 
portfolios are determined through a loan-by-loan analysis of larger balance commercial loans and 
commercial real estate loans that are in nonaccrual status and by applying loss factors to groups of 
loan balances based on loan type and management’s classification of such loans under the 
Company’s loan grading system. Measurement of the specific loss components is typically based on 
expected future cash flows, collateral values and other factors that may impact the borrower’s ability 
to pay. In determining the allowance for credit losses, the Company utilizes a loan grading system 
which is applied to commercial and commercial real estate credits on an individual loan basis. Loan 
officers are responsible for continually assigning grades to these loans based on standards outlined in 
the Company’s Credit Policy. Internal loan grades are also monitored by the Company’s credit 
review department to ensure consistency and strict adherence to the prescribed standards. Loan 
grades are assigned loss component factors that reflect the Company’s loss estimate for each group of 
loans and leases. Factors considered in assigning loan grades and loss component factors 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; levels of and trends in portfolio charge-offs and recoveries; levels of and trends in 
portfolio delinquencies and impaired loans; changes in the risk profile of specific portfolios; trends in 
volume and terms of loans; effects of changes in credit concentrations; and observed trends and 
practices in the banking industry. As updated appraisals are obtained on individual loans or other 
events in the market place indicate that collateral values have significantly changed, individual loan 
grades are adjusted as appropriate. Changes in other factors cited may also lead to loan grade changes 

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at any time. Except for consumer loans and residential real estate loans that are considered smaller 
balance homogenous loans and acquired loans that are evaluated on an aggregated basis, the 
Company considers a loan to be impaired for purposes of applying GAAP when, based on current 
information and events, it is probable that the Company will be unable to collect all amounts 
according to the contractual terms of the loan agreement or the loan is delinquent 90 days. Regardless 
of loan type, the Company considers a loan to be impaired if it qualifies as a troubled debt 
restructuring. Modified loans, including smaller balance homogenous loans, that are considered to be 
troubled debt restructurings are evaluated for impairment giving consideration to the impact of the 
modified loan terms on the present value of the loan’s expected cash flows. 

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The following tables provide information with respect to loans and leases that were considered 
impaired as of December 31, 2016 and 2015 and for the years ended December 31, 2016, 2015 and 
2014. 

December 31, 2016 
Unpaid 
Principal 
Balance

Recorded 
Investment    

Related 
Allowance  

Recorded 
Investment     

December 31, 2015 
Unpaid 
Principal 
Balance 

Related 
Allowance

With an allowance recorded: 

Commercial, financial, leasing, etc. .... $168,072   184,432    48,480  179,037      195,821    44,752
Real estate: 

(In thousands) 

Commercial .....................................   71,862    86,666    11,620   85,974       95,855    18,764
196
Residential builder and developer ...  
Other commercial construction .......  
348
Residential ......................................   86,680   105,944    3,457   79,558       96,751    4,727
Residential-limited 
   documentation .............................   82,547    97,718    6,000   90,356      104,251    8,000

3,316       5,101   
3,548       3,843   

7,396   
2,475   

8,361   
2,731   

506  
448  

Consumer: 

Home equity lines and loans ...........   44,693    48,965    8,027   25,220       26,195    3,777
Automobile .....................................   16,982    18,272    3,740   22,525       22,525    4,709
776   17,620       17,620    4,820
Other ...............................................  
  484,498   558,385    83,054  507,154      567,962    90,093

3,791   

5,296   

With no related allowance recorded: 

Commercial, financial, leasing, etc. ....   100,805   124,786    —   93,190      110,735    —
Real estate: 

Commercial .....................................   113,276   121,846    —  101,340      116,230    —
Residential builder and developer ...   14,368    21,124    —   27,651       47,246    —
Other commercial construction .......   15,933    35,281    —   13,221       31,477    —
Residential ......................................   16,823    24,161    —   19,621       30,940    —
Residential-limited 
   documentation .............................   15,429    24,590    —   18,414       31,113    —
  276,634   351,788    —  273,437      367,741    —

Total: 

Commercial, financial, leasing, etc. ....   268,877   309,218    48,480  272,227      306,556    44,752
Real estate: 

Commercial .....................................   185,138   208,512    11,620  187,314      212,085    18,764
196
Residential builder and developer ...   21,764    29,485   
Other commercial construction .......   18,408    38,012   
348
Residential ......................................   103,503   130,105    3,457   99,179      127,691    4,727
Residential-limited 
   documentation .............................   97,976   122,308    6,000  108,770      135,364    8,000

506   30,967       52,347   
448   16,769       35,320   

Consumer: 

Home equity lines and loans ...........   44,693    48,965    8,027   25,220       26,195    3,777
Automobile .....................................   16,982    18,272    3,740   22,525       22,525    4,709
776   17,620       17,620    4,820
Other ...............................................  
Total ........................................................ $761,132   910,173    83,054  780,591      935,703    90,093  

3,791   

5,296   

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Year Ended December 31, 2016 
Interest Income 
Recognized

Average 
Recorded 
Investment

  Total 

Cash 
Basis

Year Ended December 31, 2015 
Interest Income 
Recognized

Average 
Recorded 
Investment        Total 

Cash 
Basis

(In thousands) 

$ 277,647 

  8,342      8,342      236,201        2,933       2,933 

Commercial, financial, leasing, 
   etc. ................................................  
Real estate: 

Commercial ................................       175,877 
Residential builder and 
   developer .................................  
Other commercial 
   construction .............................  
   19,697 
Residential ..................................       98,394 
Residential-limited 
   documentation .........................  

   29,237 

   103,060 

  4,878      4,878      166,628        6,243       6,243 

  2,300      2,300      59,457       

335      

335 

644     

644      20,276        2,311       2,311 
  6,227      3,154      101,483        6,188       4,037 

  5,999      1,975      118,449        6,380       2,638 

Consumer: 

Home equity lines and loans ......       36,493 
Automobile .................................       19,636 
9,218 
Other ...........................................      
Total ................................................    $ 769,259 

410      21,523       

  1,325     
  1,242     
440     

261 
905      
175 
99      25,675        1,619      
113 
729      
83      18,809       
  31,397      21,885      768,501       27,643       19,046  

Year Ended December 31, 2014 
Interest Income 
Recognized

Average 
Recorded 
Investment        Total 

(In thousands) 

Cash 
Basis

Commercial, financial, leasing, etc. ...................................................   $ 181,932        2,251       2,251 
Real estate: 

Commercial ...................................................................................     184,773        4,029       4,029 
91,149       
Residential builder and developer .................................................    
142 
Other commercial construction .....................................................    
62,734        1,893       1,893 
Residential .....................................................................................     126,005        9,180       6,978 
Residential-limited documentation ................................................     133,800        6,613       2,546 

142      

Consumer: 

Home equity lines and loans .........................................................    
Automobile ....................................................................................    
Other ..............................................................................................    

248 
295 
191 
Total ...................................................................................................   $ 852,027       27,799       18,573 

750      
18,083       
35,173        2,251      
690      
18,378       

In accordance with the previously described policies, the Company utilizes a loan grading 
system that is applied to all commercial loans and commercial real estate loans. Loan grades are 
utilized to differentiate risk within the portfolio and consider the expectations of default for each 
loan. Commercial loans and commercial real estate loans with a lower expectation of default are 
assigned one of ten possible “pass” loan grades and are generally ascribed lower loss factors when 
determining the allowance for credit losses. Loans with an elevated level of credit risk are classified 

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as “criticized” and are ascribed a higher loss factor when determining the allowance for credit losses. 
Criticized loans may be classified as “nonaccrual” if the Company no longer expects to collect all 
amounts according to the contractual terms of the loan agreement or the loan is delinquent 90 days or 
more. All larger-balance criticized commercial loans and commercial real estate loans are 
individually reviewed by centralized credit personnel each quarter to determine the appropriateness 
of the assigned loan grade, including whether the loan should be reported as accruing or nonaccruing. 
Smaller-balance criticized loans are analyzed by business line risk management areas to ensure 
proper loan grade classification. Furthermore, criticized nonaccrual commercial loans and 
commercial real estate loans are considered impaired and, as a result, specific loss allowances on 
such loans are established within the allowance for credit losses to the extent appropriate in each 
individual instance. 

The following table summarizes the loan grades applied to the various classes of the Company’s 

commercial loans and commercial real estate loans. 

  Commercial, 

Financial, 

  Leasing, etc. 

    Commercial 

Real Estate 
    Residential     
    Builder and      Commercial  
    Construction  
    Developer 

Other 

(In thousands) 

December 31, 2016 
Pass .........................................................................  $21,398,581   24,570,269    1,789,071     5,912,351
741,274     116,548      165,862
Criticized accrual ...................................................   
Criticized nonaccrual .............................................   
18,111
176,201    
Total .......................................................................  $22,610,047   25,487,744    1,922,326     6,096,324
December 31, 2015 
Pass .........................................................................  $19,442,183   22,697,398    1,497,465     3,834,137
59,779      228,877
Criticized accrual ...................................................   
16,363
28,429     
Criticized nonaccrual .............................................   
Total .......................................................................  $20,422,338   23,532,261    1,585,673     4,079,377  

655,257    
179,606    

738,238  
241,917  

950,032  
261,434  

16,707     

In determining the allowance for credit losses, residential real estate loans and consumer loans 

are generally evaluated collectively after considering such factors as payment performance and 
recent loss experience and trends, which are mainly driven by current collateral values in the market 
place as well as the amount of loan defaults. Loss rates on such loans are determined by reference to 
recent charge-off history and are evaluated (and adjusted if deemed appropriate) through 
consideration of other factors including near-term forecasted loss estimates developed by the 
Company’s credit department. In arriving at such forecasts, the Company considers the current 
estimated fair value of its collateral based on geographical adjustments for home price 
depreciation/appreciation and overall borrower repayment performance. With regard to collateral 
values, the realizability of such values by the Company contemplates repayment of any first lien 
position prior to recovering amounts on a second lien position. However, residential real estate loans 
and outstanding balances of home equity loans and lines of credit that are more than 150 days past 
due are generally evaluated for collectibility on a loan-by-loan basis giving consideration to 
estimated collateral values. The carrying value of residential real estate loans and home equity loans 
and lines of credit for which a partial charge-off has been recognized aggregated $44 million and $32 
million, respectively, at December 31, 2016 and $55 million and $21 million, respectively, at 
December 31, 2015. Residential real estate loans and home equity loans and lines of credit that were 
more than 150 days past due but did not require a partial charge-off because the net realizable value 
of the collateral exceeded the outstanding customer balance totaled $16 million and $39 million, 

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respectively, at December 31, 2016 and $20 million and $28 million, respectively, at December 31, 
2015. 

The Company also measures additional losses for purchased impaired loans when it is probable 
that the Company will be unable to collect all cash flows expected at acquisition plus additional cash 
flows expected to be collected arising from changes in estimates after acquisition. The determination 
of the allocated portion of the allowance for credit losses is very subjective. Given that inherent 
subjectivity and potential imprecision involved in determining the allocated portion of the allowance 
for credit losses, the Company also provides an inherent unallocated portion of the allowance. The 
unallocated portion of the allowance is intended to recognize probable losses that are not otherwise 
identifiable and includes management’s subjective determination of amounts necessary to provide for 
the possible use of imprecise estimates in determining the allocated portion of the allowance. 
Therefore, the level of the unallocated portion of the allowance is primarily reflective of the inherent 
imprecision in the various calculations used in determining the allocated portion of the allowance for 
credit losses. Other factors that could also lead to changes in the unallocated portion include the 
effects of expansion into new markets for which the Company does not have the same degree of 
familiarity and experience regarding portfolio performance in changing market conditions, the 
introduction of new loan and lease product types, and other risks associated with the Company’s loan 
portfolio that may not be specifically identifiable. 

The allocation of the allowance for credit losses summarized on the basis of the Company’s 

impairment methodology was as follows: 

Commercial,
Financial,

Real Estate 
  Leasing, etc.     Commercial    Residential      Consumer      

Total 

(In thousands) 

—     

1,918      3,677       

December 31, 2016 
Individually evaluated for impairment ...........   $ 48,480      12,500      9,457        12,543     $ 82,980 
Collectively evaluated for impairment ...........     282,353      348,301      47,993       143,745       822,392 
Purchased impaired ........................................    
5,595 
Allocated ........................................................   $ 330,833      362,719      61,127       156,288       910,967 
       78,030 
Unallocated ....................................................    
Total ...............................................................    
     $988,997 
December 31, 2015 
Individually evaluated for impairment ...........   $ 44,752      19,175      12,727        13,306     $ 89,960 
Collectively evaluated for impairment ...........     255,615      307,000      57,624       163,511       783,750 
Purchased impaired ........................................    
4,083 
Allocated ........................................................   $ 300,404      326,831      72,238       178,320       877,793 
       78,199 
Unallocated ....................................................    
     $955,992 
Total ...............................................................    

656      1,887        1,503      

—      

37     

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The recorded investment in loans and leases summarized on the basis of the Company’s 

impairment methodology was as follows: 

Commercial, 
Financial,
  Leasing, etc. 

Real Estate 

    Commercial      Residential 

    Consumer 

Total 

(In thousands) 

268,877  

201,479  

224,630  

December 31, 2016 
Individually evaluated for 
   impairment ..........................................    $
Collectively evaluated  for 
   impairment ..........................................      22,340,529   33,222,080   21,871,726   12,080,597      89,514,932
Purchased impaired ................................     
578,032
Total .......................................................    $22,610,047   33,506,394   22,590,912   12,146,063    $ 90,853,416
December 31, 2015 
Individually evaluated for 
   impairment ..........................................    $
Collectively evaluated for 
   impairment ..........................................      20,148,209   28,863,130   25,398,037   11,532,121      85,941,497
Purchased impaired ................................     
768,329
Total .......................................................    $20,422,338   29,197,311   26,270,103   11,599,747    $ 87,489,499  

65,466    $ 

65,365    $ 

100,049  

234,132  

207,949  

517,707  

664,117  

272,227  

2,261      

59,684  

760,452

779,673

1,902  

—      

641  

6.    Premises and equipment 
The detail of premises and equipment was as follows: 

December 31 

2016 

2015 

(In thousands) 

Land .................................................................................................................  $  104,671    $ 105,435
Buildings — owned .........................................................................................     448,442       443,507
Buildings — capital leases ...............................................................................    
1,108
Leasehold improvements .................................................................................     232,936       229,919
Furniture and equipment — owned..................................................................     636,219       614,591
12,019
Furniture and equipment — capital leases .......................................................    
   1,437,117      1,406,579

14,849      

—      

Less: accumulated depreciation and amortization 

Owned assets ...............................................................................................     756,245       732,315
7,582
Capital leases ...............................................................................................    
    761,854       739,897
Premises and equipment, net ............................................................................  $  675,263    $ 666,682  

5,609      

Net lease expense for all operating leases totaled $113,663,000 in 2016, $102,356,000 in 2015 

and $104,297,000 in 2014. Minimum lease payments under noncancelable operating leases are 
presented in note 21. Minimum lease payments required under capital leases are not material. 

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7.    Capitalized servicing assets 
Changes in capitalized servicing assets were as follows: 

For the Year Ended December 31, 

Residential Mortgage Loans 
2015 

2014 

2016 

Commercial Mortgage Loans 
2015 

2016 

2014 

(In thousands) 

Beginning balance ...........................   $ 118,303  $109,871  $126,377  $ 83,692    $  72,939    $ 72,499 
Originations .....................................      28,618    35,556    28,285    40,117       29,914      15,922 
730 
Purchases .........................................     
Amortization ...................................      (30,208)   (27,367)   (45,080)   (20,045 )     (19,161 )    (16,212)
   117,351    118,303    109,871    103,764       83,692      72,939 
— 
—   
Valuation allowance ........................     
Ending balance, net .........................   $ 117,351  $118,303  $109,871  $103,764    $  83,692    $ 72,939 

243   

289   

638   

—      

—      

—   

—     

—     

—   

For the Year Ended December 31, 

2016 

Beginning balance ...........................   $ 
Originations .....................................     
Purchases .........................................     
Amortization ...................................     

Valuation allowance ........................     
Ending balance, net .........................   $ 

729  $
—   
—   
(729)  
—   
—   
—  $

Other 
2015 

2014 

2016 

(In thousands) 

Total 
2015 

2014 

4,107  $ 11,225  $202,724    $ 186,917    $210,101 
—    68,735       65,470      44,207 
1,019 
—   
(7,118)   (50,982 )     (49,906 )    (68,410)
4,107    221,115      202,724      186,917 
— 
4,107  $221,115    $ 202,724    $186,917  

—   
—   
(3,378)  
729   
—   
729  $

638      

243     

—      

—   

—     

Residential mortgage loans serviced for others were $53.2 billion at December 31, 2016, $61.7 

billion at December 31, 2015 and $67.2 billion at December 31, 2014. Reflected in residential 
mortgage loans serviced for others were loans sub-serviced for others of $30.4 billion, $37.8 billion 
and $42.1 billion at December 31, 2016, 2015, and 2014, respectively. Commercial mortgage loans 
serviced for others were $11.8 billion at December 31, 2016, $11.0 billion at December 31, 2015 and 
$11.3 billion at December 31, 2014. 

The estimated fair value of capitalized residential mortgage loan servicing assets was 

approximately $235 million at December 31, 2016 and $249 million at December 31, 2015. The fair 
value of capitalized residential mortgage loan servicing assets was estimated using weighted-average 
discount rates of 12.2% and 12.4% at December 31, 2016 and 2015, respectively, and 
contemporaneous prepayment assumptions that vary by loan type. At December 31, 2016 and 2015, 
the discount rate represented a weighted-average option-adjusted spread (“OAS”) of 1095 basis 
points (hundredths of one percent) and 1119 basis points, respectively, over market implied forward 
London Interbank Offered Rates (“LIBOR”). The estimated fair value of capitalized residential 
mortgage loan servicing rights may vary significantly in subsequent periods due to changing interest 
rates and the effect thereof on prepayment speeds. The estimated fair value of capitalized commercial 
mortgage loan servicing assets was approximately $119 million and $99 million at December 31, 
2016 and 2015, respectively. An 18% discount rate was used to estimate the fair value of capitalized 
commercial mortgage loan servicing rights at December 31, 2016 and 2015 with no prepayment 
assumptions because, in general, the servicing agreements allow the Company to share in customer 
loan prepayment fees and thereby recover the remaining carrying value of the capitalized servicing 
rights associated with such loan. The Company’s ability to realize the carrying value of capitalized 
commercial mortgage servicing rights is more dependent on the borrowers’ abilities to repay the 
underlying loans than on prepayments or changes in interest rates. 

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The key economic assumptions used to determine the fair value of significant portfolios of 
capitalized servicing rights at December 31, 2016 and the sensitivity of such value to changes in 
those assumptions are summarized in the table that follows. Those calculated sensitivities are 
hypothetical and actual changes in the fair value of capitalized servicing rights may differ 
significantly from the amounts presented herein. The effect of a variation in a particular assumption 
on the fair value of the servicing rights is calculated without changing any other assumption. In 
reality, changes in one factor may result in changes in another which may magnify or counteract the 
sensitivities. The changes in assumptions are presumed to be instantaneous. 

Residential 

   Commercial 

Weighted-average prepayment speeds ..............................................    

11.30 %     
Impact on fair value of 10% adverse change ...............................   $ (8,525,000 )      
Impact on fair value of 20% adverse change ...............................     (16,390,000 )      
10.95 %     
Impact on fair value of 10% adverse change ...............................   $ (7,106,000 )      
Impact on fair value of 20% adverse change ...............................     (13,779,000 )      

Weighted-average OAS ....................................................................    

Weighted-average discount rate ........................................................    
Impact on fair value of 10% adverse change ...............................    
Impact on fair value of 20% adverse change ...............................    

18.00%
      $  (5,285,000) 
         (10,186,000) 

8.    Goodwill and other intangible assets 
In accordance with GAAP, the Company does not amortize goodwill, however, core deposit and 
other intangible assets are amortized over the estimated life of each respective asset. Total amortizing 
intangible assets were comprised of the following: 

Gross Carrying 
Amount

Accumulated 
Amortization 
(In thousands) 

Net Carrying 
Amount

December 31, 2016 

Core deposit .......................................................   $
Other ..................................................................    
Total ..................................................................   $

887,459    $
177,268     
1,064,727    $

789,988      $ 
177,084        
967,072      $ 

97,471 
184 
97,655 

December 31, 2015 

Core deposit .......................................................   $
Other ..................................................................    
Total ..................................................................   $

887,459    $
177,268     
1,064,727    $

750,624      $ 
173,835        
924,459      $ 

136,835 
3,433 
140,268  

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Amortization of core deposit and other intangible assets was generally computed using 
accelerated methods over original amortization periods of five to ten years. The weighted-average 
original amortization period was approximately eight years. The remaining weighted-average 
amortization period as of December 31, 2016 was approximately six years. Amortization expense for 
core deposit and other intangible assets was $42,613,000, $26,424,000 and $33,824,000 for the years 
ended December 31, 2016, 2015 and 2014, respectively. Estimated amortization expense in future 
years for such intangible assets is as follows: 

Year ending December 31: 

2017 ..............................................................................................................................     $ 
2018 ..............................................................................................................................       
2019 ..............................................................................................................................       
2020 ..............................................................................................................................       
2021 ..............................................................................................................................       
Later years ....................................................................................................................       
   $ 

30,305 
23,462 
18,026 
13,323 
8,621 
3,918 
97,655  

   (In thousands)  

In accordance with GAAP, the Company completed annual goodwill impairment tests as of 

October 1, 2016, 2015 and 2014. For purposes of testing for impairment, the Company assigned all 
recorded goodwill to the reporting units originally intended to benefit from past business 
combinations, which has historically been the Company’s core relationship business reporting units. 
Goodwill was generally assigned based on the implied fair value of the acquired goodwill applicable 
to the benefited reporting units at the time of each respective acquisition. The implied fair value of 
the goodwill was determined as the difference between the estimated incremental overall fair value 
of the reporting unit and the estimated fair value of the net assets assigned to the reporting unit as of 
each respective acquisition date. To test for goodwill impairment at each evaluation date, the 
Company compared the estimated fair value of each of its reporting units to their respective carrying 
amounts and certain other assets and liabilities assigned to the reporting unit, including goodwill and 
core deposit and other intangible assets. The methodologies used to estimate fair values of reporting 
units as of the acquisition dates and as of the evaluation dates were similar. For the Company’s core 
customer relationship business reporting units, fair value was estimated as the present value of the 
expected future cash flows of the reporting unit. Based on the results of the goodwill impairment 
tests, the Company concluded that the amount of recorded goodwill was not impaired at the 
respective testing dates. 

A summary of goodwill assigned to each of the Company’s reportable segments as of 

December 31, 2016 and 2015 for purposes of testing for impairment is as follows. 

   (In thousands)   

Business Banking ............................................................................................................     $ 
864,366 
Commercial Banking ......................................................................................................        1,401,873 
654,389 
Commercial Real Estate ..................................................................................................       
— 
Discretionary Portfolio ....................................................................................................       
Residential Mortgage Banking ........................................................................................       
— 
Retail Banking .................................................................................................................        1,309,191 
All Other .........................................................................................................................       
363,293 
Total ................................................................................................................................     $  4,593,112  

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

Federal Funds
Purchased 
and 
Repurchase 
Agreements 

Other 
Short-term 
Borrowings 
(Dollars in thousands) 

Total 

At December 31, 2016 

Amount outstanding ......................................................  $ 163,442     
0.32%  
Weighted-average interest rate ......................................   

—      $  163,442  
0.32%
—        

For the year ended December 31, 2016 

Highest amount at a month-end .....................................  $ 225,940    $ 1,974,013        
Daily-average amount outstanding ................................   
Weighted-average interest rate ......................................   

203,853     
0.28%  

689,969      $  893,822  
0.41%

0.44 %     

At December 31, 2015 

Amount outstanding ......................................................  $ 150,546    $ 1,981,636      $ 2,132,182  
0.40%
Weighted-average interest rate ......................................   

0.43 %     

0.06%  

For the year ended December 31, 2015 

Highest amount at a month-end .....................................  $ 202,951    $ 1,989,257        
Daily-average amount outstanding ................................   
Weighted-average interest rate ......................................   

187,167     
0.08%  

360,838      $  548,005  
0.31%

0.43 %     

At December 31, 2014 

Amount outstanding ......................................................  $ 192,676     
0.07%  
Weighted-average interest rate ......................................   

—      $  192,676  
0.07%
—        

For the year ended December 31, 2014 

Highest amount at a month-end .....................................  $ 280,350     
214,736     
Daily-average amount outstanding ................................   
0.05%  
Weighted-average interest rate ......................................   

—        
—      $  214,736  
0.05%
—        

Short-term borrowings have a stated maturity of one year or less at the date the Company enters 

into the obligation. In general, federal funds purchased and short-term repurchase agreements 
outstanding at December 31, 2016 matured on the next business day following year-end. Other short-
term borrowings at December 31, 2015 represent borrowings from the FHLB of New York that were 
assumed in the acquisition of Hudson City. Those borrowings matured at various dates during 2016. 
At December 31, 2016, M&T Bank had lines of credit under formal agreements as follows: 

(In thousands) 

Outstanding borrowings .................................................................................................    $  1,154,828 
Unused ...........................................................................................................................       32,573,956  

At December 31, 2016, M&T Bank had borrowing facilities available with the FHLBs whereby 

M&T Bank could borrow up to approximately $22.5 billion. Additionally, M&T Bank had an 
available line of credit with the Federal Reserve Bank of New York totaling approximately $11.2 
billion at December 31, 2016. M&T Bank is required to pledge loans and investment securities as 
collateral for these borrowing facilities. 

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Long-term borrowings were as follows: 

December 31, 

2016 

2015 

(In thousands) 

Senior notes of M&T Bank: 

Variable rate due 2016 ..................................................................   $
Variable rate due 2017 ..................................................................    
1.25% due 2017 .............................................................................    
1.40% due 2017 .............................................................................    
1.45% due 2018 .............................................................................    
2.25% due 2019 .............................................................................    
2.30% due 2019 .............................................................................    
2.10% due 2020 .............................................................................    
2.90% due 2025 .............................................................................    

—      $ 
550,000        
499,999        
749,946        
501,829        
649,012        
749,473        
749,735        
749,320        

300,000 
550,000 
499,984 
749,851 
503,527 
648,628 
749,219 
749,650 
749,236 

Advances from FHLB: 

Fixed rates .....................................................................................    
Agreements to repurchase securities ..................................................    
Subordinated notes of Wilmington Trust Corporation (a wholly 
   owned subsidiary of M&T): 

1,154,737        
1,084,694        

1,158,216 
1,899,281 

8.50% due 2018 .............................................................................    

207,651        

213,417 

Subordinated notes of M&T Bank: 

6.625% due 2017 ...........................................................................    
5.585% due 2020, variable rate commenced 2015 ........................    
5.629% due 2021, variable rate commenced 2016 ...........................    

409,526        
409,361        
500,000        

419,800 
409,361 
518,797 

Junior subordinated debentures of M&T associated with preferred 
   capital securities: 
Fixed rates: 

BSB Capital Trust I — 8.125%, due 2028 ...............................    
Provident Trust I — 8.29%, due 2028 ......................................    
Southern Financial Statutory Trust I — 10.60%, due 2030 .....    

15,659        
26,293        
6,620        

15,635 
25,817 
6,583 

Variable rates: 

First Maryland Capital I — due 2027 .......................................    
First Maryland Capital II — due 2027 .....................................    
Allfirst Asset Trust — due 2029 ...............................................    
BSB Capital Trust III — due 2033 ...........................................    
Provident Statutory Trust III — due 2033 ................................    
Southern Financial Capital Trust III — due 2033 ....................    
Other ...................................................................................................    
  $

146,256        
147,954        
96,494        
15,464        
53,834        
7,968        
12,010        

145,717 
147,291 
96,349 
15,464 
53,244 
7,889 
20,902 
9,493,835      $  10,653,858  

The variable rate senior notes of M&T Bank pay interest quarterly at rates that are indexed to the 

three-month LIBOR. The contractual interest rates for those notes ranged from 1.18% to 1.26% at 
December 31, 2016 and from 0.62% to 0.75% at December 31, 2015. The weighted-average contractual 
interest rates payable were 1.22% at December 31, 2016 and 0.69% at December 31, 2015. 

Long-term fixed rate advances from the FHLB had contractual interest rates ranging from 1.17% to 

7.32% with a weighted-average contractual interest rate of 1.65% at December 31, 2016 and 1.66% at 

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December 31, 2015. Advances from the FHLB mature at various dates through 2035 and are secured by 
residential real estate loans, commercial real estate loans and investment securities. 

Long-term agreements to repurchase securities had contractual interest rates that ranged from 3.65% 

to 4.58% at December 31, 2016 and from 3.61% to 4.58% at December 31, 2015. The weighted-average 
contractual interest rates payable were 4.05% at December 31, 2016 and 4.00% at December 31, 2015. 
The agreements reflect various repurchase dates through 2020, however, the contractual maturities of the 
underlying investment securities extend beyond such repurchase dates. The agreements are subject to 
legally enforceable master netting arrangements, however, the Company has not offset any amounts 
related to these agreements in its consolidated financial statements. The Company posted collateral 
consisting primarily of government guaranteed mortgage-backed securities of $1.1 billion and $2.0 billion 
at December 31, 2016 and 2015, respectively. 

The subordinated notes of M&T Bank and Wilmington Trust Corporation are unsecured and are 

subordinate to the claims of other creditors of those entities. The subordinated notes of M&T Bank that 
mature in 2020 converted to variable rate notes in December 2015. These notes now pay interest monthly 
at a rate that is indexed to the one-month LIBOR. The contractual interest rates were 1.97% and 1.64% at 
December 31, 2016 and 2015, respectively. The subordinated notes of M&T Bank that mature in 2021 
converted to variable rate notes in December 2016. These notes now pay interest quarterly at a rate that is 
indexed to the three-month LIBOR. The contractual interest rate was 1.57% at December 31, 2016. 

The fixed and variable rate junior subordinated deferrable interest debentures of M&T (“Junior 
Subordinated Debentures”) are held by various trusts and were issued in connection with the issuance by 
those trusts of preferred capital securities (“Capital Securities”) and common securities (“Common 
Securities”). The proceeds from the issuances of the Capital Securities and the Common Securities were 
used by the trusts to purchase the Junior Subordinated Debentures. The Common Securities of each of 
those trusts are wholly owned by M&T and are the only class of each trust’s securities possessing general 
voting powers. The Capital Securities represent preferred undivided interests in the assets of the 
corresponding trust. Under the Federal Reserve Board’s risk-based capital guidelines, in 2015 only 25% 
of then-outstanding Capital Securities were included in Tier 1 capital and beginning in 2016 none of the 
securities were included in M&T’s Tier 1 regulatory capital, but do qualify for inclusion in Tier 2 
regulatory capital. The variable rate Junior Subordinated Debentures pay interest quarterly at rates that are 
indexed to the three-month LIBOR. Those rates ranged from 1.74% to 4.23% at December 31, 2016 and 
from 1.18% to 3.67% at December 31, 2015. The weighted-average variable rates payable on those Junior 
Subordinated Debentures were 2.33% at December 31, 2016 and 1.78% at December 31, 2015. 

Holders of the Capital Securities receive preferential cumulative cash distributions unless M&T 
exercises its right to extend the payment of interest on the Junior Subordinated Debentures as allowed by 
the terms of each such debenture, in which case payment of distributions on the respective Capital 
Securities will be deferred for comparable periods. During an extended interest period, M&T may not pay 
dividends or distributions on, or repurchase, redeem or acquire any shares of its capital stock. In general, 
the agreements governing the Capital Securities, in the aggregate, provide a full, irrevocable and 
unconditional guarantee by M&T of the payment of distributions on, the redemption of, and any 
liquidation distribution with respect to the Capital Securities. The obligations under such guarantee and 
the Capital Securities are subordinate and junior in right of payment to all senior indebtedness of M&T. 
The Capital Securities will remain outstanding until the Junior Subordinated Debentures are repaid at 
maturity, are redeemed prior to maturity or are distributed in liquidation to the trusts. The Capital Securities 
are mandatorily redeemable in whole, but not in part, upon repayment at the stated maturity dates (ranging 
from 2027 to 2033) of the Junior Subordinated Debentures or the earlier redemption of the Junior 
Subordinated Debentures in whole upon the occurrence of one or more events set forth in the indentures 
relating to the Capital Securities, and in whole or in part at any time after an optional redemption prior to 
contractual maturity contemporaneously with the optional redemption of the related Junior Subordinated 
Debentures in whole or in part, subject to possible regulatory approval. 

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Long-term borrowings at December 31, 2016 mature as follows: 

Year ending December 31: 

2017 ..............................................................................................................................     $ 3,442,484 
2018 ..............................................................................................................................        714,358 
2019 ..............................................................................................................................        2,299,502 
2020 ..............................................................................................................................        1,269,939 
2021 ..............................................................................................................................        500,144 
Later years ....................................................................................................................        1,267,408 
   $ 9,493,835  

   (In thousands)  

10.    Shareholders’ equity 
M&T is authorized to issue 1,000,000 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. 

Issued and outstanding preferred stock of M&T is presented below: 

December 31, 2016 

December 31, 2015 

Shares 
Issued and 
Outstanding    

Shares 
Issued and 
Outstanding     

Carrying 
value 
(Dollars in thousands) 

Carrying 
value 

Series A (a) 
Fixed Rate Cumulative Perpetual Preferred Stock, 
   $1,000 liquidation preference per share ..............................     230,000    $ 230,000       230,000     $ 230,000 
Series C (a) 
Fixed Rate Cumulative Perpetual Preferred Stock, 
   $1,000 liquidation preference per share ..............................     151,500    $ 151,500       151,500     $ 151,500 
Series D (b) 
Fixed Rate Non-cumulative Perpetual Preferred Stock, 
   $10,000 liquidation preference per share ............................    
Series E (c) 
Fixed-to-Floating Rate Non-cumulative Perpetual Preferred
   Stock, $1,000 liquidation preference per share ...................     350,000    $ 350,000       350,000     $ 350,000 
Series F (d) 
Fixed-to-Floating Rate Non-cumulative Perpetual Preferred
   Stock, $10,000 liquidation preference per share .................    

50,000    $ 500,000      

50,000     $ 500,000 

—       

—      

—     

—  

(a)  Dividends, if declared, are paid at 6.375%. Warrants to purchase M&T common stock at $73.86 per share issued in 
connection with the Series A preferred stock expire in 2018 and totaled 631,794 and 719,175 at December 31, 2016 
and 2015, respectively. 
The shares were fully redeemed in December 2016, having received the approval of the Federal Reserve to redeem 
such shares after issuing the Series F preferred stock. 

(b) 

(c)  Dividends, if declared, are paid semi-annually at a rate of 6.45% through February 14, 2024 and thereafter will be 
paid quarterly at a rate of the three-month LIBOR plus 361 basis points (hundredths of one percent). The shares are 
redeemable in whole or in part on or after February 15, 2024. Notwithstanding M&T’s option to redeem the shares, 
if an event occurs such that the shares no longer qualify as Tier 1 capital, M&T may redeem all of the shares within 
90 days following that occurrence. 

(d)  Dividends, if declared, are paid semi-annually at a rate of 5.125% through October 31, 2026 and thereafter will be 
paid quarterly at a rate of the three-month LIBOR plus 352 basis points.  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. 

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In addition to the Series A warrants mentioned in (a) above, a warrant to purchase 95,383 shares 

of M&T common stock at $518.96 per share was outstanding at each of December 31, 2016 and 
2015. The obligation under that warrant was assumed by M&T in an acquisition. 

11.    Stock-based compensation plans 
Stock-based compensation expense was $65 million in 2016 and 2014, and $67 million in 2015. The 
Company recognized income tax benefits related to stock-based compensation of $31 million in 
2016, $29 million in 2015 and $31 million in 2014. 

The Company’s equity incentive compensation plan allows for the issuance of various forms of 

stock-based compensation, including stock options, restricted stock, restricted stock units and 
performance-based awards. At December 31, 2016 and 2015, respectively, there were 3,667,800 and 
3,954,712 shares available for future grant under the Company’s equity incentive compensation plan. 

Restricted stock awards 
Restricted stock awards are comprised of restricted stock and restricted stock units. Restricted stock 
awards granted since 2014 vest over three years. Restricted stock awards granted prior to 2014 vest 
over four years. A portion of restricted stock awards granted after 2013 require a performance 
condition to be met before such awards vest. Unrecognized compensation expense associated with 
restricted stock was $12 million as of December 31, 2016 and is expected to be recognized over a 
weighted-average period of approximately one year. The Company may issue restricted shares from 
treasury stock to the extent available or issue new shares. The number of restricted shares issued was 
218,341 in 2016, 218,183 in 2015 and 221,822 in 2014, with a weighted-average grant date fair value 
of $24,085,000 in 2016, $24,726,000 in 2015 and $24,765,000 in 2014. Unrecognized compensation 
expense associated with restricted stock units was $5 million as of December 31, 2016 and is 
expected to be recognized over a weighted-average period of approximately one year. The number of 
restricted stock units issued was 348,297 in 2016, 324,772 in 2015 and 299,525 in 2014, with a 
weighted-average grant date fair value of $38,795,000, $37,070,000 and $33,406,000, respectively. 

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

Restricted 
Stock Units
Outstanding    

Weighted- 
Average 
Grant Price    

Restricted 
Stock 
Outstanding     

Weighted- 
Average 
Grant Price  

Unvested at January 1, 2016 ...................................     968,498    $ 109.38       625,888     $ 103.82 
111.38       218,341        110.31 
Granted ....................................................................     348,297     
108.21      (324,981 )     
Vested ......................................................................     (570,509)   
98.55 
Cancelled .................................................................    
110.90       (19,924 )      108.15 
(6,936)   
Unvested at December 31, 2016 .............................     739,350    $ 111.21       499,324     $ 109.92  

Stock option awards 
Stock options issued generally vested over four years and are exercisable over terms not exceeding 
ten years and one day. The Company used an option pricing model to estimate the grant date present 
value of stock options granted. Stock options granted in 2016, 2015 and 2014 were not significant. 

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A summary of stock option activity follows: 

Weighted-Average 

Stock 
Options 

Outstanding    

Exercise 
Price

Life 

(In Years)      

Aggregate 
Intrinsic Value
(In thousands)  

Outstanding at January 1, 2016 ...............................     4,223,710   $ 126.65     
110.18     
Granted ....................................................................    
200    
106.68     
Exercised .................................................................    (1,694,440)  
Expired ....................................................................    
140.75     
(934,879)  
Outstanding at December 31, 2016 .........................     1,594,591   $ 139.60     
Exercisable at December 31, 2016 ..........................     1,594,149   $ 139.60     

1.5     $ 
1.5     $ 

39,326 
39,305  

For 2016, 2015 and 2014, M&T received $172 million, $93 million and $127 million, 
respectively, in cash and realized tax benefits from the exercise of stock options of $15 million, $6 
million and $9 million, respectively. The intrinsic value of stock options exercised during those 
periods was $42 million, $17 million and $26 million, respectively. As of December 31, 2016, the 
amount of unrecognized compensation cost related to non-vested stock options was not significant. 
The total grant date fair value of stock options vested during 2016, 2015 and 2014 was not 
significant. Upon the exercise of stock options, the Company may issue shares from treasury stock to 
the extent available or issue new shares. 

Stock purchase plan 
The stock purchase plan provides eligible employees of the Company with the right to purchase 
shares of M&T common stock at a discount through accumulated payroll deductions. In connection 
with the employee stock purchase plan, 2,500,000 shares of M&T common stock were authorized for 
issuance under a plan adopted in 2013. There were 97,880 shares issued in 2016, 89,384 shares 
issued in 2015 and 85,761 shares issued in 2014.  For 2016, 2015 and 2014, M&T received 
$9,528,000, $9,296,000 and $8,607,000, respectively, in cash for shares purchased through the 
employee stock purchase plan. Compensation expense recognized for the stock purchase plan was 
not significant in 2016, 2015 or 2014. 

Deferred bonus plan 
The Company provided a deferred bonus plan pursuant to which eligible employees could elect to 
defer all or a portion of their annual incentive compensation awards and allocate such awards to 
several investment options, including M&T common stock. Participants could elect the timing of 
distributions from the plan. Such distributions are payable in cash with the exception of balances 
allocated to M&T common stock which are distributable in the form of M&T common stock. Shares 
of M&T common stock distributable pursuant to the terms of the deferred bonus plan were 23,188 
and 26,365 at December 31, 2016 and 2015, respectively. The obligation to issue shares is included 
in “common stock issuable” in the consolidated balance sheet. 

Directors’ stock plan 
The Company maintains a compensation plan for non-employee members of the Company’s boards 
of directors and directors advisory councils that allows such members to receive all or a portion of 
their compensation in shares of M&T common stock. Through December 31, 2016, 243,652 shares 
had been issued in connection with the directors’ stock plan. 

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Through acquisitions, the Company assumed obligations to issue shares of M&T common stock 

related to deferred directors compensation plans. Shares of common stock issuable under such plans 
were 9,215 and 10,279 at December 31, 2016 and 2015, respectively. The obligation to issue shares 
is included in “common stock issuable” in the consolidated balance sheet. 

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

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

2016 

Year Ended December 31 
2015 
(In thousands) 

2014 

Service cost ........................................................................   $
Interest cost on benefit obligation ......................................    
Expected return on plan assets ...........................................    
Amortization of prior service credit ...................................    
Recognized net actuarial loss .............................................    
Net periodic pension expense.............................................   $

25,037    $
83,410     
(108,473)   
(3,228)   
30,145     
26,891    $

24,372     $ 
72,731       
(96,155 )     
(6,005 )     
44,825       
39,768     $ 

20,520 
69,162 
(91,568)
(6,552)
14,494 
6,056  

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

2016 

Year Ended December 31 
2015 
(In thousands) 

2014 

Service cost ........................................................................   $
Interest cost on benefit obligation ......................................    
Amortization of prior service credit ...................................    
Recognized net actuarial loss .............................................    
Net other postretirement benefits expense .........................   $

1,595    $
4,971     
(1,359)   
60     
5,267    $

914     $ 
2,995       
(1,359 )     
106       
2,656     $ 

605 
2,778 
(1,359)
— 
2,024  

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

Change in benefit obligation: 

Pension Benefits 

2016 

2015 

Other 
Postretirement Benefits
2015 

2016 

(In thousands) 

Benefit obligation at beginning of year ..............   $2,004,531   $1,813,409  $  121,497    $ 67,502 
914 
Service cost ........................................................    
2,995 
Interest cost ........................................................    
2,619 
Plan participants’ contributions ..........................    
— 
Amendments and curtailments ...........................    
(2,431)
Actuarial (gain) loss ...........................................    
—       56,539 
Business combinations .......................................    
420 
Medicare Part D reimbursement .........................    
592      
(7,061)
(69,728)    (11,265 )    
Benefits paid .......................................................    
Benefit obligation at end of year ........................     2,007,158     2,004,531     109,922       121,497 

1,595      
4,971      
3,085      
—      
(83,593)    (10,553 )    
247,340    
—    

25,037    
83,410    
—    
(28,308)  
4,827    
—    
—    
(82,339)  

24,372    
72,731    
—    
—    

Change in plan assets: 

Fair value of plan assets at beginning of year ....     1,625,134     1,505,661    
(14,069)   
Actual return on plan assets................................    
8,367    
Employer contributions ......................................    
Plan participants’ contributions ..........................    
—    
194,903    
Business combinations .......................................    
Medicare Part D reimbursement .........................    
—    
Benefits paid .......................................................    
Fair value of plan assets at end of year ..............     1,642,131     1,625,134    

— 
— 
4,022 
2,619 
— 
420 
(7,061)
— 
Funded status ...........................................................   $ (365,027) $ (379,397) $ (109,922 )  $(121,497)
Accrued liabilities recognized in the consolidated 
   balance sheet ........................................................   $ (365,027) $ (379,397) $ (109,922 )  $(121,497)
Amounts recognized in accumulated other 
   comprehensive income (“AOCI”) were: 

—      
—      
7,588      
3,085      
—      
592      
(69,728)    (11,265 )    
—      

88,564    
10,772    
—    
—    
—    
(82,339)  

(6,413 )  $
Net loss (gain) ....................................................   $ 460,562   $ 494,279  $ 
(7,737 )    
Net prior service cost (credit) .............................    
277    
494,556     (14,150 )    
Pre-tax adjustment to AOCI ...............................    
5,568      
Taxes ..................................................................    
(194,608)   
(8,582 )  $
Net adjustment to AOCI .....................................   $ 281,456   $ 299,948  $ 

3,505    
464,067    
(182,611)  

4,200 
(9,096)
(4,896)
1,927 
(2,969)

The Company has an unfunded supplemental pension plan for certain key executives and 
others. The projected benefit obligation and accumulated benefit obligation included in the preceding 
data related to such plan were $160,433,000 as of December 31, 2016 and $161,657,000 as of 
December 31, 2015. 

The accumulated benefit obligation for all defined benefit pension plans was $1,979,225,000 

and $1,951,425,000 at December 31, 2016 and 2015, respectively. 

157 

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GAAP requires an employer to recognize in its balance sheet as an asset or liability the 
overfunded or underfunded status of a defined benefit postretirement plan, measured as the 
difference between the fair value of plan assets and the benefit obligation. For a pension plan, the 
benefit obligation is the projected benefit obligation; for any other postretirement benefit plan, such 
as a retiree health care plan, the benefit obligation is the accumulated postretirement benefit 
obligation. Gains or losses and prior service costs or credits that arise during the period, but are not 
included as components of net periodic benefit expense, are recognized as a component of other 
comprehensive income. As indicated in the preceding table, as of December 31, 2016 the Company 
recorded a minimum liability adjustment of $449,916,000 ($464,066,000 related to pension plans and 
$(14,150,000) related to other postretirement benefits) with a corresponding reduction of 
shareholders’ equity, net of applicable deferred taxes, of $272,874,000. In aggregate, the benefit 
plans realized a net gain during 2016 that allowed the Company to decrease its minimum liability 
adjustment from that which was recorded at December 31, 2015 by $39,743,000 with a 
corresponding increase to shareholders’ equity that, net of applicable deferred taxes, was 
$24,105,000. The net gain reflects the amortization of unrealized losses previously recorded in other 
comprehensive income and the reduction of future benefit accruals under the former Hudson City 
retirement plan upon its merger with the Company’s qualified pension plan as of December 31, 2016.  
The table below reflects the changes in plan assets and benefit obligations recognized in other 
comprehensive income related to the Company’s postretirement benefit plans. 

  Pension Plans     

Other 
Postretirement 
Benefit Plans      
(In thousands) 

Total 

2016 
Net loss (gain) ....................................................................   $
Amendments and curtailments ...........................................    
Amortization of prior service credit ...................................    
Amortization of actuarial loss ............................................    
Total recognized in other comprehensive income, 
   pre-tax .............................................................................   $
2015 
Net loss (gain) ....................................................................   $
Amortization of prior service credit ...................................    
Amortization of actuarial loss ............................................    
Total recognized in other comprehensive income, 
   pre-tax .............................................................................   $

24,736    $
(28,308)   
3,228     
(30,145)   

(10,553 )   $ 
—       
1,359       
(60 )     

14,183 
(28,308)
4,587 
(30,205)

(30,489)  $

(9,254 )   $ 

(39,743)

26,631    $
6,005     
(44,825)   

(2,431 )   $ 
1,359       
(106 )     

24,200 
7,364 
(44,931)

(12,189)  $

(1,178 )   $ 

(13,367)

The following table reflects the amortization of amounts in accumulated other comprehensive 

income expected to be recognized as components of net periodic benefit expense during 2017: 

Amortization of net prior service cost (credit) ...................................   $
Amortization of net loss (gain) ..........................................................    

557      $ 
27,196        

(1,359)
(44)

Pension Plans 

Other 
Postretirement 
Benefit Plans

(In thousands) 

158 

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The Company also provides a qualified defined contribution pension plan to eligible employees 

who were not participants in the defined benefit pension plan as of December 31, 2005 and to other 
employees who have elected to participate in the defined contribution plan. The Company makes 
contributions to the defined contribution plan each year in an amount that is based on an individual 
participant’s total compensation (generally defined as total wages, incentive compensation, 
commissions and bonuses) and years of service. Participants do not contribute to the defined 
contribution pension plan. Pension expense recorded in 2016, 2015 and 2014 associated with the 
defined contribution pension plan was approximately $25 million, $23 million and $22 million, 
respectively. 

Assumptions 

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

Pension 
Benefits

Other 
Postretirement 
Benefits

2016 

2015 

   2016 

2015 

Discount rate ..........................................................................    4.00%   4.25 %      4.00 %   4.25%
Rate of increase in future compensation levels ......................    4.39%   4.37 %      —       —   

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

December 31 were: 

Pension Benefits 
  2015    

  2016    

  2014    

  2016    

Other 
Postretirement Benefits
   2015    

  2014    

Discount rate ........................................................    4.25%   4.00%   4.75%   4.25 %     4.00 %   4.75%
Long-term rate of return on plan assets ................    6.50%   6.50%   6.50%   —        —       —  
Rate of increase in future compensation 
   levels .................................................................    4.37%   4.39%   4.42%   —        —       —   

The expected long-term rate of return assumption as of each measurement date was developed 

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

For measurement of other postretirement benefits, a 6.50% annual rate of increase in the per 

capita cost of covered health care benefits was assumed for 2017. The rate was assumed to decrease 
to 5.00% over 12 years. A one-percentage point change in assumed health care cost trend rates would 
have had the following effects: 

Increase (decrease) in: 
Service and interest cost .........................................................................................     $  106     $
(87)
Accumulated postretirement benefit obligation .....................................................        1,548       (1,400)

+1% 

-1% 

(In thousands) 

159 

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Plan assets 

The Company’s policy is to invest the pension plan assets in a prudent manner for the purpose of 
providing benefit payments to participants and mitigating reasonable expenses of administration. The 
Company’s investment strategy is designed to provide a total return that, over the long-term, places 
an emphasis on the preservation of capital. The strategy attempts to maximize investment returns on 
assets at a level of risk deemed appropriate by the Company while complying with applicable 
regulations and laws. The investment strategy utilizes asset diversification as a principal determinant 
for establishing an appropriate risk profile while emphasizing total return realized from capital 
appreciation, dividends and interest income. The target allocations for plan assets are generally 25 to 
60 percent equity securities, 10 to 65 percent debt securities, and 10 to 85 percent money-market 
funds/cash equivalents and other investments, although holdings could be more or less than these 
general guidelines based on market conditions at the time and actions taken or recommended by the 
investment managers providing advice to the Company. Assets are managed by a combination of 
internal and external investment managers. Equity securities may include investments in domestic 
and international equities, through individual securities, mutual funds and exchange-traded funds. 
Debt securities may include investments in corporate bonds of companies from diversified industries, 
mortgage-backed securities guaranteed by government agencies and U.S. Treasury securities, 
through individual securities and mutual funds. Additionally, the Company’s defined benefit pension 
plan held $234,969,000 (14.3% of total assets) of real estate, private investments, hedge funds and 
other investments at December 31, 2016. Returns on invested assets are periodically compared with 
target market indices for each asset type to aid management in evaluating such returns. Furthermore, 
management regularly reviews the investment policy and may, if deemed appropriate, make changes 
to the target allocations noted above. 

160 

160

 
The fair values of the Company’s pension plan assets at December 31, 2016, by asset category, 

were as follows: 

  Fair Value Measurement of Plan Assets At December 31, 2016 

Quoted Prices 
in Active 
Markets 
for Identical Assets 
(Level 1) 

Significant 
Observable 
Inputs 
(Level 2) 

Significant 
Unobservable
Inputs 
(Level 3) 

(In thousands) 

Total 

Asset category: 
Money-market funds ..............................................  $
Equity securities: 

M&T ..................................................................   
Domestic(a) .......................................................   
International(b) ..................................................   
Mutual funds: 

Domestic(a) ..................................................   
International(b) .............................................   

Debt securities: 

Corporate(c) ......................................................   
Government .......................................................   
International ......................................................   
Mutual funds: 

Domestic(d) ..................................................   

39,556  $

35,562   $  3,994   $

164,474   
200,595   
14,364   

250,472   
290,172   
920,077   

104,909   
121,869   
13,073   

164,474     
200,595     
14,364     

250,472     
290,172     
920,077     

—     
—     
—     

—     
—     
—     

—      104,909     
—      121,869     
—      13,073     

205,847   
445,698   

205,847     
—     
205,847      239,851     

—

—
—
—

—
—
—

—
—
—

—
—

Other: 

Diversified mutual fund.....................................   
Real estate partnerships .....................................   
Private equity .....................................................   
Hedge funds .......................................................   
Guaranteed deposit fund ....................................   

92,691   
3,112   
21,924   
106,250   
10,992   
234,969   
Total(e) ...................................................................  $1,640,300  $

92,691     
768     
—     
85,270     
—     
178,729     

—     
—     
—     
—     
—     
—     
1,340,215   $ 243,845   $

—
2,344
21,924
20,980
10,992
56,240
56,240  

161 

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The fair values of the Company’s pension plan assets at December 31, 2015, by asset category, 

were as follows: 

  Fair Value Measurement of Plan Assets At December 31, 2015 

Quoted Prices 
in Active 
Markets 
for Identical Assets 
(Level 1)

Significant 
Observable 
Inputs 
(Level 2) 

Significant 
Unobservable
Inputs 
(Level 3)

(In thousands) 

Total 

Asset category: 
Money-market funds ..............................................  $
Equity securities: 

M&T ..................................................................   
Domestic(a) .......................................................   
International(b) ..................................................   
Mutual funds: 

69,634  $

37,958   $  31,676   $

148,800   
106,993   
9,433   

148,800     
106,993     
9,433     

Domestic(a) ..................................................   
International(b) .............................................   

445,663   
348,869   
   1,059,758   

445,663     
348,869     
1,059,758     

Debt securities: 

Corporate(c) ......................................................   
Government .......................................................   
International ......................................................   
Mutual funds: 

Domestic(d) ..................................................   

105,499   
120,346   
7,492   

51,028   
284,365   

—      105,499     
—      120,346     
7,492     
—     

51,028     
—     
51,028      233,337     

—     
—     
—     

—     
—     
—     

—

—
—
—

—
—
—

—
—
—

—
—

Other: 

Diversified mutual fund.....................................   
Real estate partnerships .....................................   
Private equity .....................................................   
Hedge funds .......................................................   
Guaranteed deposit fund ....................................   

70,343   
2,787   
5,603   
119,549   
11,596   
209,878   
Total(e) ...................................................................  $1,623,635  $

70,343     
—     
—     
81,861     
—     
152,204     

—     
—     
—     
—     
—     
—     
1,300,948   $ 265,013   $

—
2,787
5,603
37,688
11,596
57,674
57,674  

(a)  This category is comprised of equities of companies primarily within the mid-cap and large-cap 

sectors of the U.S. economy and range across diverse industries. 

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

(c)  This category represents investment grade bonds of U.S. issuers from diverse industries. 
(d)  Approximately 75% of the mutual funds were invested in investment grade bonds and 25% in 
high-yielding bonds at December 31, 2016. Approximately 33% of the mutual funds were 
invested in investment grade bonds and 67% in high-yielding bonds at December 31, 2015. The 
holdings within the funds were spread across diverse industries. 

(e)  Excludes dividends and interest receivable totaling $1,831,000 and $1,499,000 at 

December 31, 2016 and 2015, respectively. 

162 

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Pension plan assets included common stock of M&T with a fair value of $164,474,000 (10.0% 

of total plan assets) at December 31, 2016 and $148,800,000 (9.2% of total plan assets) at 
December 31, 2015. No other investment in securities of a non-U.S. Government or government 
agency issuer exceeded ten percent of plan assets at December 31, 2016. Assets subject to Level 3 
valuations did not constitute a significant portion of plan assets at December 31, 2016 or 
December 31, 2015. 

The changes in Level 3 pension plan assets measured at estimated fair value on a recurring basis 

during the year ended December 31, 2016 were as follows: 

Balance – 
January 1, 
2016 

Purchases 
(Sales) 

Total 
Realized/ 
Unrealized 
Gains 
(Losses) 

Balance – 
December 31,
2016 

(In thousands) 

Other 
Private real estate ....................................................   $
Private equity ..........................................................    
Hedge funds ............................................................    
Guaranteed deposit fund .........................................    

2,787    $
5,603     
37,688     
11,596     
Total ...................................................................   $ 57,674    $

(1,111)  $ 
17,177      
(16,337)    
(540)    
(811)  $ 

2,344 
668     $
(856 )      21,924 
(371 )      20,980 
(64 )      10,992 
(623 )   $ 56,240 

The Company makes contributions to its funded qualified defined benefit pension plan as 
required by government regulation or as deemed appropriate by management after considering 
factors such as the fair value of plan assets, expected returns on such assets, and the present value of 
benefit obligations of the plan. Subject to the impact of actual events and circumstances that may 
occur in 2017, the Company may make contributions to the qualified defined benefit pension plan in 
2017, but the amount of any such contribution has not yet been determined. The Company did not 
make any contributions to the plan in 2016 or 2015. The Company regularly funds the payment of 
benefit obligations for the supplemental defined benefit pension and postretirement benefit plans 
because such plans do not hold assets for investment. Payments made by the Company for 
supplemental pension benefits were $10,772,000 and $8,367,000 in 2016 and 2015, respectively. 
Payments made by the Company for postretirement benefits were $7,588,000 and $4,022,000 in 2016 
and 2015, respectively. Payments for supplemental pension and other postretirement benefits for 
2017 are not expected to differ from those made in 2016 by an amount that will be material to the 
Company’s consolidated financial position. 

Estimated benefits expected to be paid in future years related to the Company’s defined benefit 

pension and other postretirement benefits plans are as follows: 

Pension 
Benefits 

Other 
Postretirement
Benefits

(In thousands) 

Year ending December 31: 

2017 ......................................................................................................   $
2018 ......................................................................................................    
2019 ......................................................................................................    
2020 ......................................................................................................    
2021 ......................................................................................................    
2022 through 2026................................................................................    

81,927     $ 
85,715       
91,819       
96,465       
101,698       
568,830       

8,142 
8,220 
8,251 
8,259 
8,235 
40,282  

163 

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The Company has a retirement savings plan (“RSP”) that is a defined contribution plan in 
which eligible employees of the Company may defer up to 50% of qualified compensation via 
contributions to the plan. The Company makes an employer matching contribution in an amount 
equal to 75% of an employee’s contribution, up to 4.5% of the employee’s qualified compensation. 
Employees’ accounts, including employee contributions, employer matching contributions and 
accumulated earnings thereon, are at all times fully vested and nonforfeitable. Employee benefits 
expense resulting from the Company’s contributions to the RSP totaled $36,766,000, $34,145,000 
and $32,466,000 in 2016, 2015 and 2014, respectively. 

13.    Income taxes 
The components of income tax expense were as follows: 

2016 

Year Ended December 31 
2015 
(In thousands) 

2014 

Current 

Federal ..................................................................................................  $428,750    $ 130,349    $378,978
State and city ........................................................................................ 
50,790
Total current ....................................................................................  524,176      151,898    429,768

95,426       21,549   

Deferred 

Federal ..................................................................................................  147,662      324,317   
26,351       72,279   
State and city ........................................................................................ 
Total deferred ..................................................................................  174,013      396,596   
45,095       46,531   

65,503
27,345
92,848
53,383
Total income taxes applicable to pre-tax income ............................  $743,284    $ 595,025    $575,999  

Amortization of investments in qualified affordable housing projects ..... 

The Company files a consolidated federal income tax return reflecting taxable income earned 

by all domestic subsidiaries. In prior years, applicable federal tax law allowed certain financial 
institutions the option of deducting as bad debt expense for tax purposes amounts in excess of actual 
losses. In accordance with GAAP, such financial institutions were not required to provide deferred 
income taxes on such excess. Recapture of the excess tax bad debt reserve established under the 
previously allowed method will result in taxable income if M&T Bank fails to maintain bank status 
as defined in the Internal Revenue Code or charges are made to the reserve for other than bad debt 
losses. At December 31, 2016, M&T Bank’s tax bad debt reserve for which no federal income taxes 
have been provided was $137,121,000. No actions are planned that would cause this reserve to 
become wholly or partially taxable. 

Income taxes attributable to gains or losses on bank investment securities were an expense of 

$11,929,000 in 2016. There were no significant gains or losses on bank investment securities in 2015 
or 2014. No alternative minimum tax expense was recognized in 2016, 2015 or 2014. 

164 

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Total income taxes differed from the amount computed by applying the statutory federal 

income tax rate to pre-tax income as follows: 

2016 

Year Ended December 31 
2015 
(In thousands) 

2014 

Income taxes at statutory federal income tax rate ...............................  $720,439    $ 586,142    $574,786 
Increase (decrease) in taxes: 

Tax-exempt income ........................................................................    (35,364 )     (33,102 )    (31,752)
State and city income taxes, net of federal income tax effect ........    79,155       60,988      50,788 
Qualified affordable housing project federal tax credits, net .........    (15,091 )     (15,297 )    (14,827)
(2,996)
Other ...............................................................................................   
$743,284    $ 595,025    $575,999  

(5,855 )    

(3,706 )   

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

2016 

2015 
(In thousands) 

2014 

590,288    $
143,067     
52,512     
36,616     
61,266     
52,181     
10,741     
—     
106,876     

Losses on loans and other assets ........................................   $
Retirement benefits ............................................................    
Postretirement and other employee benefits ......................    
Incentive and other compensation plans ............................    
Interest on loans .................................................................    
Stock-based compensation .................................................    
Unrealized investment losses .............................................    
Depreciation and amortization ...........................................    
Other ...................................................................................    

637,955     $  605,273 
120,222 
148,722       
34,052 
55,962       
36,450 
60,337       
79,147 
57,640       
64,017 
72,090       
— 
—       
3,527 
—       
100,999 
162,086       
Gross deferred tax assets ...............................................     1,053,547      1,194,792        1,043,687 
(280,596)
(285,074 )     
(82,065)
(31,121 )     
(46,393)
(59,171 )     
— 
(56,731 )     
(66,939)
(55,611 )     
(487,708 )     
(475,993)
707,084     $  567,694  

Leasing transactions ...........................................................    
Unrealized investment gains ..............................................    
Capitalized servicing rights ................................................    
Depreciation and amortization ...........................................    
Other ...................................................................................    
Gross deferred tax liabilities..........................................    
Net deferred tax asset .........................................................   $

(266,268)   
—     
(71,108)   
(63,959)   
(87,200)   
(488,535)   
565,012    $

The Company believes that it is more likely than not that the deferred tax assets will be realized 

through taxable earnings or alternative tax strategies. 

The income tax credits shown in the statement of income of M&T in note 25 arise principally 

from operating losses before dividends from subsidiaries. 

165 

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

Federal, 
State and
Local Tax     

Unrecognized
Income Tax 
Benefits

Accrued 
Interest 
(In thousands) 

—       
453       

769      
—      

Gross unrecognized tax benefits at January 1, 2014 .........................   $ 14,611    $  14,696     $ 29,307 
   Increases as a result of tax positions taken during 2014 ................    
769 
453 
   Increases as a result of tax positions taken in prior years ..............    
   Decreases as a result of settlements with taxing authorities ..........     (4,668)     (11,280 )      (15,948)
Gross unrecognized tax benefits at December 31, 2014 ...................     10,712       3,869        14,581 
8,108 
   Increases as a result of tax positions taken during 2015 ................     8,108      
807 
   Increases as a result of tax positions taken in prior years ..............    
—      
   Decreases as a result of settlements with taxing authorities ..........     (1,515)    
(1,789)
   Unrealized tax benefits acquired in a business combination .........     7,232       3,567        10,799 
Gross unrecognized tax benefits at December 31, 2015 ...................     24,537       7,969        32,506 
—        12,237 
   Increases as a result of tax positions taken during 2016 ................     12,237      
656 
656       
—      
   Increases as a result of tax positions taken in prior years ..............    
(1,595)
(710 )    
(885)    
   Decreases as a result of tax positions taken in prior years .............    
Gross unrecognized tax benefits at December 31, 2016 ...................   $ 35,889    $  7,915        43,804 
Less: Federal, state and local income tax benefits ............................    
        (15,332)
Net unrecognized tax benefits at December 31, 2016 that, 
   if recognized, would impact the effective income tax rate ............    

—       
807       
(274 )    

     $ 28,472  

The Company’s policy is to recognize interest and penalties, if any, related to unrecognized tax 
benefits in income taxes in the consolidated statement of income. The balance of accrued interest at 
December 31, 2016 is included in the table above. The Company’s federal, state and local income tax 
returns are routinely subject to examinations from various governmental taxing authorities. Such 
examinations may result in challenges to the tax return treatment applied by the Company to specific 
transactions. Management believes that the assumptions and judgment used to record tax-related 
assets or liabilities have been appropriate. Should determinations rendered by tax authorities 
ultimately indicate that management’s assumptions were inappropriate, the result and adjustments 
required could have a material effect on the Company’s results of operations. Examinations by the 
Internal Revenue Service of the Company’s federal income tax returns have been largely concluded 
through 2015, although under statute the income tax returns from 2010 and 2013 through 2015 could 
be adjusted. The Company also files income tax returns in over forty states and numerous local 
jurisdictions. Substantially all material state and local matters have been concluded for years through 
2012. It is not reasonably possible to estimate when examinations for any subsequent years will be 
completed. 

166 

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14.    Earnings per common share 
The computations of basic earnings per common share follow: 

Income available to common shareholders: 

2016 

Year Ended December 31 
2015 
(In thousands, except per share) 

2014 

Net income ....................................................................   $ 1,315,114    $ 1,079,667     $  1,066,246 
(75,878)
(81,270)   
Less: Preferred stock dividends(a) ................................    
Net income available to common equity .......................     1,233,844     
990,368 
Less: Income attributable to unvested stock-based 
   compensation awards .................................................    

(81,270 )     
998,397       

(10,385)   
Net income available to common shareholders .................   $ 1,223,459    $
Weighted-average shares outstanding: 

(10,708 )     
(11,837)
987,689     $  978,531 

Common shares outstanding (including common stock
   issuable) and unvested stock-based compensation 
   awards .........................................................................    
Less: Unvested stock-based compensation awards .......    
Weighted-average shares outstanding ................................    

158,121     
(1,341)   
156,780     

138,285       
(1,482 )     
136,803       

132,532 
(1,582)
130,950 

Basic earnings per common share ......................................   $

7.80    $

7.22     $ 

7.47  

(a) 

Including impact of not as yet declared cumulative dividends. 

The computations of diluted earnings per common share follow: 

2016 

Year Ended December 31 
2015 
(In thousands, except per share) 

2014 

Net income available to common equity ............................   $ 1,233,844    $

998,397     $  990,368 

Less: Income attributable to unvested stock-based 
   compensation awards .................................................    

(10,363)   
Net income available to common shareholders .................   $ 1,223,481    $
Adjusted weighted-average shares outstanding: 

(11,787)
(10,673 )     
987,724     $  978,581 

Common and unvested stock-based compensation 
   awards .........................................................................    
Less: Unvested stock-based compensation awards .......    
Plus: Incremental shares from assumed conversion of 
   stock-based compensation awards and warrants to 
   purchase common stock .............................................    
Adjusted weighted-average shares outstanding .................    

158,121     
(1,341)   

138,285       
(1,482 )     

132,532 
(1,582)

524     
157,304     

730       
137,533       

894 
131,844 

Diluted earnings per common share ...................................   $

7.78    $

7.18     $ 

7.42  

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. 

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Stock-based compensation awards and warrants to purchase common stock of M&T 

representing common shares of approximately 2,171,000 in 2016, 2,268,000 in 2015 and 2,017,000 
in 2014 were not included in the computations of diluted earnings per common share because the 
effect on those years would have been antidilutive. 

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

  Investment Securities   Defined 
Benefit 
All 
Plans
Other

With
OTTI (a)

  Other 

Total 
Amount 
Before Tax   

Income 
Tax 

Net 

(In thousands) 

Balance — January 1, 2016 ..............   $ 16,359 $ 62,849  $(489,660) $(4,093) $(414,545 ) 
Other comprehensive income 
   before reclassifications: 

  $ 162,918   $(251,627)

Unrealized holding gains 
   (losses), net ...............................     30,366   (110,316)  
Foreign currency translation 
   adjustment ................................      —  
Current year benefit plans 
   gains .........................................      —  

—   

—   

Total other comprehensive income 
   (loss) before reclassifications .........     30,366   (110,316)  
Amounts reclassified from 
   accumulated other comprehensive 
   income that (increase) decrease 
   net income: 

—    —   

(79,950 ) 

     31,509    

(48,441)

—    (4,020)  

(4,020 ) 

1,406    

(2,614)

14,125    —   

14,125   

(5,557 )  

8,568 

14,125    (4,020)  

(69,845 ) 

     27,358    

(42,487)

3,996   
(30,314)  

Amortization of unrealized 
   holding losses on held-to- 
   maturity ("HTM") securities .....      —  
Gains realized in net income .......      —  
Accretion of net gain on 
   terminated cash flow hedges ....      —  
Amortization of prior service 
   credit .........................................      —  
Amortization of actuarial 
—   
   losses ........................................      —  
(855 ) 
Total reclassifications .......................      —  
(26,318)  
Total gain (loss) during the period ....     30,366   (136,634)  
(70,700 ) 
Balance — December 31, 2016 ........   $ 46,725 $ (73,785) $(449,917) $(8,268) $(485,245 ) 

30,205    —   
25,618   
(155)  
39,743    (4,175)  

—    —   
—    —   

(4,587)   —   

(155)  

—   

—   

—   

3,996   (b)    

(1,572 )  
(30,314 ) (c)     11,925    

2,424 
(18,389)

(155 ) (d)    

(4,587 ) (e)    

61    

(94)

1,805    

(2,782)

18,319 
30,205   (e)     (11,886 )  
(522)
333    
     27,691    
(43,009)
  $ 190,609   $(294,636)

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  Investment Securities   Defined 
Benefit 
All 
Plans
Other

With
OTTI (a)

  Other 

Total 
Amount 
Before Tax   

Income 
Tax 

Net 

(In thousands) 

Balance — January 1, 2015 ..............   $  7,438 $ 201,828  $(503,027) $(4,082) $(297,843 ) 
Other comprehensive income 
   before reclassifications: 

  $ 116,849   $(180,994)

Unrealized holding gains 
   (losses), net ...............................      8,921   (142,623)  
Foreign currency translation 
   adjustment ................................      —  
Gains on cash flow hedges ..........      —  
Current year benefit plans 
   losses ........................................      —  

—   
—   

—   

Total other comprehensive income 
   (loss) before reclassifications .........      8,921   (142,623)  
Amounts reclassified from 
   accumulated other comprehensive 
   income that (increase) decrease 
   net income: 

—    —    (133,702 ) 

     52,376    

(81,326)

—    (1,323)  
—    1,453   

(1,323 ) 
1,453   

398    
(572 )  

(925)
881 

(24,200)   —   

(24,200 ) 

8,612    

(15,588)

(24,200)  

130    (157,772 )   

    60,814    

(96,958)

3,514   
130   

Amortization of unrealized 
   holding losses on HTM 
   securities ...................................      —  
Losses realized in net income ......      —  
Accretion of net gain on 
   terminated cash flow hedges ....      —  
Amortization of prior service 
   credit .........................................      —  
Amortization of actuarial 
28,942 
44,931   (e)     (15,989 )  
—   
   losses ........................................      —  
26,325 
    (14,745 )  
41,070     
Total reclassifications .......................      —  
3,644   
    46,069    
Total gain (loss) during the period ....      8,921   (138,979)  
(70,633)
(11)   (116,702 )   
 $ 162,918   $(251,627)
Balance — December 31, 2015 ........   $ 16,359 $ 62,849  $(489,660) $(4,093) $(414,545 )   

44,931    —   
37,567   
(141)  
13,367   

—    —   
—    —   

3,514   (b)    
130   (c)    

(1,383 )  
(49 )  

(7,364)   —   

2,131 
81 

(7,364 ) (e)    

(141 ) (d)    

2,620    

(4,744)

(141)  

—   

—   

—   

56    

(85)

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  Investment Securities 

With
OTTI (a)  

All 
Other

Defined 
Benefit 
Plans

  Other 

Total 
Amount 
Before Tax   

Income 
Tax 

Net 

(In thousands) 

Balance — January 1, 2014 ..............   $  37,255  $ 18,450 $(161,617) $
Other comprehensive income before 
   reclassifications: 

115  $(105,797 )   

 $  41,638   $ (64,159)

Unrealized holding gains 
   (losses), net ...............................     (29,818)   180,005  
Foreign currency translation 
   adjustment ................................     
Unrealized losses on cash flow 
   hedges .......................................     
Current year benefit plans 
   losses ........................................     

—   

—   

—   

—  

—  

—    —    150,187     

    (58,962 )  

91,225 

—    (4,039)  

(4,039 )   

1,432    

(2,607)

—   

(165)  

(165 )   

65    

(100)

—   (347,993)   —    (347,993 )   

Total other comprehensive income 
   (loss) before reclassifications .........     (29,818)   180,005   (347,993)   (4,204)   (202,010 )   
Amounts reclassified from 
   accumulated other comprehensive 
   income that (increase) decrease 
   net income: 

1   

3,373  

Amortization of unrealized 
   holding losses on HTM 
   securities ...................................     
Amortization of losses on 
   terminated cash flow hedges ....     
Amortization of prior service 
   credit .........................................     
Amortization of actuarial 
14,494   (e)    
—   
   losses ........................................     
Total reclassifications .......................     
9,964     
1   
Total gain (loss) during the period ....     (29,817)   183,378   (341,410)   (4,197)   (192,046 )   
Balance — December 31, 2014 ........   $  7,438  $201,828 $(503,027) $(4,082) $(297,843 )   

14,494    —   
7   
6,583   

(7,911)   —   

—  
3,373  

—    —   

(7,911 ) (e)    

3,374   (b)    

7   (d)    

—   

—   

—   

—  

—  

7   

   136,587     (211,406)

    79,122     (122,888)

(1,324 )  

2,050 

(3 )  

4 

3,105    

(4,806)

(5,689 )  
(3,911 )  

8,805 
6,053 
    75,211     (116,835)
 $ 116,849   $(180,994)

(a)  Other-than-temporary impairment. 
Included in interest income. 
(b) 
Included in gain (loss) on bank investment securities. 
(c) 
Included in interest expense. 
(d) 
Included in salaries and employee benefits expense. 
(e) 

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

Investment securities 

  With OTTI

All Other 

Defined 
Benefit

Plans 
(In thousands) 

     Other 

Total 

Balance at January 1, 2014.............................  $ 22,632  $ 11,294  $ (98,182 )  $ 
97    $ (64,159)
Net gain (loss) during 2014 ............................    (18,114)   111,389    (207,407 )     (2,703 )    (116,835)
4,518    122,683    (305,589 )     (2,606 )    (180,994)
Balance at December 31, 2014.......................   
5,403    (84,517)  
Net gain (loss) during 2015 ............................   
(129 )     (70,633)
8,610      
9,921    38,166    (296,979 )     (2,735 )    (251,627)
Balance at December 31, 2015.......................   
24,105       (2,708 )     (43,009)
Net gain (loss) during 2016 ............................    18,417    (82,823)  
Balance at December 31, 2016.......................  $ 28,338  $ (44,657) $(272,874 )  $  (5,443 )  $(294,636)

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

2016 

Year Ended December 31 
2015 
(In thousands) 

2014 

Other income: 

Credit-related fee income ...............................................................  $ 70,424    $  81,558   $ 72,454
       52,724     56,708
Letter of credit fees.........................................................................   
       52,984     50,004
Bank owned life insurance .............................................................   

Other expense: 

Professional services ......................................................................    268,060      267,540     324,460
       49,906     68,410  
Amortization of capitalized servicing rights ..................................   

17.    International activities 
The Company engages in limited international activities including certain trust-related services in 
Europe, collecting Eurodollar deposits, engaging in foreign currency transactions associated with 
customer activity, providing credit to support the international activities of domestic companies and 
holding certain loans to foreign borrowers. Assets and revenues associated with international 
activities represent less than 1% of the Company’s consolidated assets and revenues. International 
assets included $292 million and $265 million of loans to foreign borrowers at December 31, 2016 
and 2015, respectively. Deposits at M&T Bank’s Cayman Islands office were $202 million and $170 
million at December 31, 2016 and 2015, respectively. The Company uses such deposits to facilitate 
customer demand and as an alternative to short-term borrowings when the costs of such deposits 
seem reasonable. Deposits at M&T Bank’s office in Ontario, Canada were $50 million at December 
31, 2016 and $35 million at December 31, 2015. Revenues from providing international trust-related 
services were approximately $25 million in 2016, $26 million in 2015 and $31 million in 2014. 

18.    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 

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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 and collateral provisions protecting the at-risk party. Based on adherence 
to the Company’s credit standards and the presence of the netting and collateral provisions, the 
Company believes that the credit risk inherent in these contracts was not significant as of 
December 31, 2016. 

The net effect of interest rate swap agreements was to increase net interest income by $37 
million in 2016, $44 million in 2015 and $45 million in 2014. The average notional amounts of 
interest rate swap agreements impacting net interest income that were entered into for interest rate 
risk management purposes were $1.4 billion in each of 2016, 2015 and 2014. 

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 
(In thousands)

Average
Maturity Fixed 
(In years)

Weighted- 
Average Rate 

 Variable   

  Estimated Fair
  Value Gain 
 (In thousands)

December 31, 2016 
Fair value hedges: 

Fixed rate long-term borrowings(a) ................. $ 900,000   

1.1

3.75%     2.08 %  $

11,892

December 31, 2015 
Fair value hedges: 

Fixed rate long-term borrowings(a) ................. $1,400,000   

1.7

4.42%     1.39 %  $

43,892  

(a)  Under the terms of these agreements, the Company receives settlement amounts at a fixed rate 

and pays at a variable rate. 

The notional amount of interest rate swap agreements entered into for risk management 

purposes that were outstanding at December 31, 2016 mature as follows: 

Year ending December 31: 

2017 ..............................................................................................................................     $  400,000 
2018 ..............................................................................................................................        500,000 
   $  900,000  

(In thousands) 

The Company utilizes commitments to sell residential and commercial real estate loans to hedge the 
exposure to changes in the fair value of real estate loans held for sale. Such commitments have generally 
been designated as fair value hedges. The Company also utilizes commitments to sell real estate loans to 
offset the exposure to changes in fair value of certain commitments to originate real estate loans for sale. 
Derivative financial instruments used for trading account purposes included interest rate 
contracts, foreign exchange and other option contracts, foreign exchange forward and spot contracts, 
and financial futures. Interest rate contracts entered into for trading account purposes had notional 
values of $21.6 billion and $18.4 billion at December 31, 2016 and 2015, respectively. The notional 
amounts of foreign currency and other option and futures contracts entered into for trading account 
purposes aggregated $471 million and $1.6 billion at December 31, 2016 and 2015, respectively. 

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Information about the fair values of derivative instruments in the Company’s consolidated 

balance sheet and consolidated statement of income follows: 

Derivatives designated and qualifying as hedging instruments 
Fair value hedges: 

Interest rate swap agreements(a) .......................................................   $
Commitments to sell real estate loans(a) ...........................................    

Derivatives not designated and qualifying as hedging instruments 
Mortgage-related commitments to originate real estate loans for 
   sale(a) ...................................................................................................    
Commitments to sell real estate loans(a) .................................................    
Trading: 

Asset Derivatives 
Fair Value 
December 31 

Liability Derivatives 
Fair Value 
December 31 

2016 

2015 

2016 

2015 

(In thousands) 

11,892    $
33,189     
45,081     

43,892      $ 
1,844        
45,736        

—      $
1,347       
1,347       

8,060     
5,210     

10,282        
533        

735       
399       

— 
656 
656 

403 
846 

Interest rate contracts(b)....................................................................    
Foreign exchange and other option and futures contracts(b) .............    

153,723 
7,022 
161,994 
Total derivatives .....................................................................................   $ 295,069    $ 268,637      $  176,857      $ 162,650  

203,517         167,737       
6,639       
222,901         175,510       

228,810     
7,908     
249,988     

8,569        

(a)  Asset derivatives are reported in other assets and liability derivatives are reported in other liabilities. 
(b)  Asset derivatives are reported in trading account assets and liability derivatives are reported in other 

liabilities. 

Year Ended 
December 31, 2016   

Amount of Gain (Loss) Recognized 
Year Ended 

December 31, 2015      

 Derivative  

Hedged 
Item 

   Derivative  

Hedged 
Item 

(In thousands) 

Year Ended 
December 31, 2014  
Hedged 
Item 

    Derivative  

Derivatives in fair value hedging relationships 
Interest rate swap agreements: 

Fixed rate long-term borrowings(a) ...........................  $(32,000)  30,906   $(29,359)  28,719     $ (29,624)  28,870 

Derivatives not designated as hedging instruments 
Trading: 

Interest rate contracts(b) ............................................  $ 14,042   
Foreign exchange and other option and futures 
   contracts(b) .............................................................   

7,665   
Total ................................................................................  $ 21,707   

   $ 10,755   

     $  3,398   

9,337   
   $ 20,092   

        7,670   
     $  11,068   

(a)  Reported as other revenues from operations. 
(b)  Reported as trading account and foreign exchange gains. 

The Company also has commitments to sell and commitments to originate residential and 
commercial real estate loans that are considered derivatives. The Company designates certain of the 
commitments to sell real estate loans as fair value hedges of real estate loans held for sale. The 
Company also utilizes commitments to sell real estate loans to offset the exposure to changes in the 
fair value of certain commitments to originate real estate loans for sale. As a result of these activities, 
net unrealized pre-tax gains related to hedged loans held for sale, commitments to originate loans for 
sale and commitments to sell loans were approximately $28 million and $18 million at December 31, 
2016 and 2015, respectively. Changes in unrealized gains and losses are included in mortgage 

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banking revenues and, in general, are realized in subsequent periods as the related loans are sold and 
commitments satisfied. 

The Company does not offset derivative asset and liability positions in its consolidated financial 

statements. The Company’s exposure to credit risk by entering into derivative contracts is mitigated 
through master netting agreements and collateral posting requirements. Master netting agreements 
covering interest rate and foreign exchange contracts with the same party include a right to set-off 
that becomes enforceable in the event of default, early termination or under other specific conditions. 
The aggregate fair value of derivative financial instruments in a liability position, which are 

subject to enforceable master netting arrangements, was $34 million and $59 million at 
December 31, 2016 and 2015, respectively. After consideration of such netting arrangements, the net 
liability positions with counterparties aggregated $30 million and $55 million at December 31, 2016 
and 2015, respectively. The Company was required to post collateral relating to those positions of 
$27 million and $52 million at December 31, 2016 and 2015, respectively. 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 to the derivative 
financial instruments could demand immediate incremental collateralization on those instruments in a 
net liability position. The aggregate fair value of all derivative financial instruments with such credit 
risk-related contingent features in a net liability position on December 31, 2016 was $2 million, for 
which the Company was not required to post collateral in the normal course of business. If the credit 
risk-related contingent features had been triggered on December 31, 2016, the maximum amount of 
additional collateral the Company would have been required to post with counterparties was $2 
million. 

The aggregate fair value of derivative financial instruments in an asset position, which are 

subject to enforceable master netting arrangements, was $15 million and $23 million at 
December 31, 2016 and 2015, respectively. After consideration of such netting arrangements, the net 
asset positions with counterparties aggregated $11 million and $19 million at December 31, 2016 and 
2015, respectively. Counterparties posted collateral relating to those positions of $9 million and $22 
million at December 31, 2016 and 2015, respectively. Trading account 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 additional collateral depending 
on the contracts being in a net asset or liability position. The amount of initial margin posted by the 
Company was $111 million and $52 million at December 31, 2016 and 2015, respectively. The net 
fair values of derivative instruments cleared through clearinghouses for which variation margin is 
required was a net asset position of $63 million at December 31, 2016. Collateral posted by the 
clearinghouses associated with that net asset position was $81 million at December 31, 2016. The net 
fair values of derivative instruments cleared through clearinghouses for which variation margin is 
required was a net liability position of $50 million at December 31, 2015. Collateral posted by the 
Company associated with that net liability position was $47 million at December 31, 2015. 

19.    Variable interest entities and asset securitizations 
In accordance with GAAP, the Company determined that it was the primary beneficiary of a 
residential mortgage loan securitization trust considering its role as servicer and its retained 
subordinated interests in the trust. As a result, the Company had included the one-to-four family 
residential mortgage loans that were included in the trust in its consolidated financial statements. In 

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the first quarter of 2016, the securitization trust was terminated as the Company exercised its right to 
purchase the underlying mortgage loans pursuant to the clean-up call provisions of the trust.  At 
December 31, 2015, the carrying value of the loans in the securitization trust was $81 million. The 
outstanding principal amount of mortgage-backed securities issued by the qualified special purpose 
trust that was held by parties unrelated to M&T at December 31, 2015 was $13 million.  

During the years ended December 31, 2016, 2015 and 2014, the Company securitized one-to-

four family residential real estate loans that had been originated for sale in guaranteed mortgage 
securitizations with Ginnie Mae totaling $24 million, $65 million and $135 million, respectively, and 
retained those securities in its investment securities portfolio. Pre-tax gains on such transactions were 
not material. As a result of the securitization structures, the Company does not have effective control 
over the underlying loans and expects no material credit-related losses on the retained securities as a 
result of the guarantees by Ginnie Mae. 

As described in note 9, M&T has issued junior subordinated debentures payable to various 

trusts that have issued Capital Securities. M&T owns the common securities of those trust entities. 
The Company is not considered to be the primary beneficiary of those entities and, accordingly, the 
trusts are not included in the Company’s consolidated financial statements. At December 31, 2016 
and 2015, the Company included the junior subordinated debentures as “long-term borrowings” in its 
consolidated balance sheet and recognized $24 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 described in note 9. 

The Company has invested as a limited partner in various partnerships that collectively had total 

assets of approximately $1.0 billion at December 31, 2016 and $1.1 billion at December 31, 2015. 
Those partnerships generally construct or acquire properties for which the investing partners are 
eligible to receive certain federal income tax credits in accordance with government guidelines. Such 
investments may also provide tax deductible losses to the partners. The partnership investments also 
assist the Company in achieving its community reinvestment initiatives. As a limited partner, there is 
no recourse to the Company by creditors of the partnerships. However, the tax credits that result from 
the Company’s investments in such partnerships are generally subject to recapture should a 
partnership fail to comply with the respective government regulations. The Company’s maximum 
exposure to loss of its investments in such partnerships was $294 million, including $102 million of 
unfunded commitments, at December 31, 2016 and $295 million, including $78 million of unfunded 
commitments, at December 31, 2015. Contingent commitments to provide additional capital 
contributions to these partnerships were not material at December 31, 2016. The Company has not 
provided financial or other support to the partnerships that was not contractually required. 
Management currently estimates that no material losses are probable as a result of the Company’s 
involvement with such entities. The Company, in its position as limited partner, does not direct the 
activities that most significantly impact the economic performance of the partnerships and, therefore, 
in accordance with the accounting provisions for variable interest entities, the partnership entities are 
not included in the Company’s consolidated financial statements. The Company’s investment cost is 
amortized to income taxes in the consolidated statement of income as tax credits and other tax 
benefits resulting from deductible losses associated with the projects are received. 

The Company serves as investment advisor for certain registered money-market funds. The 

Company has no explicit arrangement to provide support to those funds, but may waive portions of 
its allowable management fees as a result of market conditions. 

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20.    Fair value measurements 
GAAP permits an entity to choose to measure eligible financial instruments and other items at fair 
value. The Company has not made any fair value elections at December 31, 2016. 

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

 

 

 

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

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

Trading account assets and liabilities 
Trading account assets and liabilities consist primarily of interest rate swap agreements 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 derivative trading account assets and liabilities using externally 
developed pricing models based on market observable inputs and, therefore, classifies such 
valuations as Level 2. Mutual funds held in connection with deferred compensation and other 
arrangements have been classified as Level 1 valuations. Valuations of investments in municipal and 
other bonds can generally be obtained through reference to quoted prices in less active markets for 
the same or similar securities or through model-based techniques in which all significant inputs are 
observable and, therefore, such valuations have been classified as Level 2. 

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

Included in collateralized debt obligations at December 31, 2015 were securities backed by trust 

preferred securities issued by financial institutions and other entities. As disclosed in note 3, the 
Company sold its collateralized debt obligations in 2016. The Company performed internal modeling 

176 

176

 
to estimate the cash flows and fair value of its portfolio of securities backed by trust preferred 
securities at December 31, 2015. The modeling techniques included estimating cash flows using 
bond-specific assumptions about future collateral defaults and related loss severities. The resulting 
cash flows were then discounted by reference to market yields observed in the single-name trust 
preferred securities market. In determining a market yield applicable to the estimated cash flows, a 
margin over LIBOR, ranging from 4% to 10% with a weighted-average of 8% was used. Significant 
unobservable inputs used in the determination of estimated fair value of collateralized debt 
obligations are included in the accompanying table of significant unobservable inputs to Level 3 
measurements. At December 31, 2015, the total amortized cost and fair value of securities backed by 
trust preferred securities issued by financial institutions and other entities were $28 million and $47 
million, respectively. 

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 considered to be 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. 

177 

177

 
The following tables present assets and liabilities at December 31, 2016 and 2015 measured at 

estimated fair value on a recurring basis: 

Fair Value 
Measurements at 
December 31, 
2016 

    Level 1 (a) 

Level 2 (a) 

Level 3 

(In thousands) 

Trading account assets .....................................   $
Investment securities available for sale: 

323,867   $

46,135   $

277,732    $ 

U.S. Treasury and federal agencies .............     1,902,544   
Obligations of states and political 
   subdivisions ..............................................    
Mortgage-backed securities: 

3,641   

—    1,902,544      

—   

3,641      

—    10,954,861      
Government issued or guaranteed ..........     10,954,861   
—      
—   
44   
Privately issued .......................................    
118,516      
118,516   
Other debt securities ....................................    
—   
50,755      
352,466    301,711   
Equity securities ..........................................    
    13,332,072    301,711    13,030,317      
—    1,056,180      
50,291      
—   
Total assets ..................................................   $ 14,770,470   $ 347,846   $14,414,520    $ 
174,376    $ 
1,746      
176,122    $ 

Trading account liabilities ................................   $
Other liabilities(b) ............................................    
Total liabilities .............................................   $

Real estate loans held for sale ..........................     1,056,180   
58,351   
Other assets(b) ..................................................    

174,376   $
2,481   
176,857   $

—   $
—   
—   $

— 

— 

— 

— 
44 
— 
— 
44 
— 
8,060 
8,104 
— 
735 
735  

178 

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Fair Value 
Measurements at 
December 31, 
2015 

    Level 1(a) 

Level 2(a) 

Level 3 

(In thousands) 

Trading account assets .....................................   $
Investment securities available for sale: 

U.S. Treasury and federal agencies .............    
Obligations of states and political 
   subdivisions ..............................................    
Mortgage-backed securities: 

273,783   $

56,763   $

217,020    $ 

299,997   

—   

299,997      

6,028   

—   

6,028      

— 

— 

— 

Government issued or guaranteed ..........     11,686,628   
74   
Privately issued .......................................    
47,393    
Collateralized debt obligations ....................    
118,880   
Other debt securities ....................................    
83,671   
Equity securities ..........................................    
    12,242,671   
392,036   
56,551   

— 
74 
47,393 
— 
— 
47,467 
— 
10,282 
Total assets ..................................................   $ 12,965,041   $ 121,941   $12,785,351    $  57,749 
— 
403 
403  

—    11,686,628      
—      
—   
—   
—      
—   
118,880      
18,493      
65,178   
65,178    12,130,026      
392,036      
46,269      

Trading account liabilities ................................   $
Other liabilities(b) ............................................    
Total liabilities .............................................   $

Real estate loans held for sale ..........................    
Other assets(b) ..................................................    

160,745    $ 
1,502      
162,247    $ 

160,745   $
1,905   
162,650   $

—   $
—   
—   $

—   
—   

(a)  There were no significant transfers between Level 1 and Level 2 of the fair value hierarchy 

during the years ended December 31, 2016 and 2015. 

(b)  Comprised predominantly of interest rate swap agreements used for interest rate risk 

management (Level 2), commitments to sell real estate loans (Level 2) and commitments to 
originate real estate loans to be held for sale (Level 3). 

179 

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The changes in Level 3 assets and liabilities measured at estimated fair value on a recurring 

basis during the year ended December 31, 2016 were as follows: 

  Investment Securities Available for Sale   

Privately Issued 
Mortgage-Backed
Securities

Collateralized 
Debt Obligations   
(In thousands) 

Other Assets 
and Other 
Liabilities

Balance - January 1, 2016 ...................................   $
Total gains (losses) realized/unrealized: 

Included in earnings .......................................    
Included in other comprehensive income .......    
Sales ....................................................................    
Settlements ..........................................................    
Transfers out of Level 3(a) ..................................    
Balance — December 31, 2016 ..........................   $
Changes in unrealized gains included in 
   earnings related to assets still held at 
   December 31, 2016 ..........................................   $

74    $

47,393     

 $ 

9,879    

—     
—     
—     
(30)   
—     
44    $

30,041   (c)    
(18,268 ) (d)    
(58,296 )   
(870 ) 
—   
—   

  $ 

110,937  (b)

—    
—    
—    

(113,491)(e)
7,325    

—    $

—   

  $ 

7,256  (b)

The changes in Level 3 assets and liabilities measured at estimated fair value on a recurring 

basis during the year ended December 31, 2015 were as follows: 

  Investment Securities Available for Sale   

Privately Issued 
Mortgage-Backed
Securities

Collateralized 
Debt Obligations    
(In thousands) 

Other Assets 
and Other 
Liabilities

Balance — January 1, 2015 ................................   $
Total gains realized/unrealized: 

Included in earnings .......................................    
Included in other comprehensive income .......    
Settlements ..........................................................    
Transfers out of Level 3(a) ..................................    
Balance — December 31, 2015 ..........................   $
Changes in unrealized gains included in 
   earnings related to assets still held at 
   December 31, 2015 ..........................................   $

103    $

50,316     

  $ 

17,347    

—     
—     
(29)   
—     
74    $

—     
3,254   (d)     
(6,177 )   
—     
47,393     

  $ 

87,061  (b)

—    
—    

(94,529)(e)
9,879    

—    $

—     

  $ 

8,850  (b)

180 

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The changes in Level 3 assets and liabilities measured at estimated fair value on a recurring 

basis during the year ended December 31, 2014 were as follows: 

  Investment Securities Available for Sale    

Privately Issued 
Mortgage-Backed
Securities

Collateralized 
Debt Obligations   
(In thousands) 

Other Assets 
and Other 
Liabilities

Balance – January 1, 2014 ...............................   $
Total gains realized/unrealized: 

Included in earnings ....................................    
Included in other comprehensive income ....    
Settlements .......................................................    
Transfers out of Level 3(a) ...............................    
Balance – December 31, 2014 .........................   $
Changes in unrealized gains included in 
   earnings related to assets still held at 
   December 31, 2014 .......................................   $

1,850     $

63,083     

  $ 

3,941 

—    
271  (d) 

(2,018)  
—    
103     $

—   
8,209   (d)     

(20,976 ) 
—   
50,316     

83,417  (b)

—    
—    

(70,011)(e)
17,347    

  $ 

—     $

—     

  $ 

18,196  (b)

(a)  The Company’s policy for transfers between fair value levels is to recognize the transfer as of 

the actual date of the event or change in circumstances that caused the transfer. 

(b)  Reported as mortgage banking revenues in the consolidated statement of income and includes 

the fair value of commitment issuances and expirations. 

(c)  Reported as gain (loss) on bank investment securities in the consolidated statement of income. 
(d)  Reported as net unrealized gains (losses) on investment securities in the consolidated statement 

of comprehensive income. 

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

The Company is required, on a nonrecurring basis, to adjust the carrying value of certain assets 

or provide valuation allowances related to certain assets using fair value measurements. The more 
significant of those assets follow. 

Loans 
Loans are generally not recorded at fair value on a recurring basis. Periodically, the Company records 
nonrecurring adjustments to the carrying value of loans based on fair value measurements for partial 
charge-offs of the uncollectible portions of those loans. Nonrecurring adjustments also include 
certain impairment amounts for collateral-dependent loans when establishing the allowance for credit 
losses. Such amounts are generally based on the fair value of the underlying collateral supporting the 
loan and, as a result, the carrying value of the loan less the calculated valuation amount does not 
necessarily represent the fair value of the loan. Real estate collateral is typically valued using 
appraisals or other indications of value based on recent comparable sales of similar properties or 
assumptions generally observable in the marketplace and the related nonrecurring fair value 
measurement adjustments have generally been classified as Level 2, unless significant adjustments 
have been made to the valuation that are not readily observable by market participants. Non-real 
estate collateral supporting commercial loans generally consists of business assets such as 
receivables, inventory and equipment. Fair value estimations are typically determined by discounting 
recorded values of those assets to reflect estimated net realizable value considering specific borrower 
facts and circumstances and the experience of credit personnel in their dealings with similar borrower 
collateral liquidations. Such discounts were generally in the range of 15% to 90% at December 31, 

181 

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2016. As these discounts are not readily observable and are considered significant, the valuations 
have been classified as Level 3. Automobile collateral is typically valued by reference to independent 
pricing sources based on recent sales transactions of similar vehicles, and the related non-recurring 
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. 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 $293 million at December 31, 2016, ($153 million and $140 million of which 
were classified as Level 2 and Level 3, respectively), $210 million at December 31, 2015 ($106 
million and $104 million of which were classified as Level 2 and Level 3, respectively), and $173 
million at December 31, 2014 ($94 million and $79 million of which were classified as Level 2 and 
Level 3, respectively). Changes in fair value recognized during the years ended December 31, 2016, 
2015 and 2014 for partial charge-offs of loans and loan impairment reserves on loans held by the 
Company at the end of each of those years were decreases of $71 million, $75 million and $55 
million, respectively. 

Assets taken in foreclosure of defaulted loans 
Assets taken in foreclosure of defaulted loans are primarily comprised of commercial and residential 
real property and are generally measured at the lower of cost or fair value less costs to sell. The fair 
value of the real property is generally determined using appraisals or other indications of value based 
on recent comparable sales of similar properties or assumptions generally observable in the 
marketplace, and the related nonrecurring fair value measurement adjustments have generally been 
classified as Level 2. Assets taken in foreclosure of defaulted loans subject to nonrecurring fair value 
measurement were $56 million and $29 million at December 31, 2016 and December 31, 2015, 
respectively. Changes in fair value recognized during the years ended December 31, 2016, 2015 and 
2014 for foreclosed assets held by the Company at the end of each of those years were not material. 

182 

182

 
Significant unobservable inputs to level 3 measurements 
The following tables present quantitative information about significant unobservable inputs used in 
the fair value measurements for Level 3 assets and liabilities at December 31, 2016 and 2015: 

Fair Value at
December 31,
2016
   (In thousands)  

Valuation 
Technique

Unobservable 
Inputs/Assumptions   

Range 
(Weighted- 
Average)

Recurring fair value measurements:      

Privately issued mortgage-backed 
   securities ......................................     $ 

Two independent 
pricing quotes 

44    

Net other assets (liabilities)(a) ........       

7,325     Discounted cash flow  

— 

Commitment 
expirations 

— 

     0%-77% (30%)  

Fair Value at
December 31,
2015
   (In thousands)  

Valuation 
Technique

Unobservable 
Inputs/Assumptions   

Range 
(Weighted- 
Average)

Recurring fair value measurements:      

Privately issued mortgage-backed 
   securities ......................................     $ 

Two independent 
pricing quotes 

74    

— 

— 

Collateralized debt obligations .......       

47,393     Discounted cash flow  

Probability of 
default 
  Loss severity 

     10%-56% (31%)  

100% 

Net other assets (liabilities)(a) ........       

9,879     Discounted cash flow  

Commitment 
expirations 

     0%-60% (39%)  

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

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

An increase (decrease) in the probability of default and loss severity for collateralized debt 

securities would generally result in a lower (higher) fair value measurement. 

183 

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

December 31, 2016 

Carrying 
Amount

Estimated 
Fair Value

Level 1 

Level 2 

Level 3 

(In thousands) 

Financial assets: 

1,320,549 1,249,654
Cash and cash equivalents ................. $ 1,320,549
5,000,638
5,000,638
Interest-bearing deposits at banks ..... 
Trading account assets ...................... 
323,867
323,867
Investment securities .........................  16,250,468 16,244,412
Loans and leases: 

70,895     
— 5,000,638     
46,135
277,732     
301,711 15,821,176     

—
—
—
121,525

Commercial loans and leases .......  22,610,047 22,239,428
Commercial real estate loans .......  33,506,394 33,129,428
Residential real estate loans .........  22,590,912 22,638,167
Consumer loans ............................  12,146,063 12,061,590
—
Allowance for credit losses .......... 
Loans and leases, net ...............  89,864,419 90,068,613
308,805

Accrued interest receivable ............... 

(988,997)

308,805

—     22,239,428
—
— 642,590     32,486,838
— 4,912,488     17,725,679 
—     12,061,590
—
—
—
—     
— 5,555,078     84,513,535 
—
— 308,805     

Financial liabilities: 

Noninterest-bearing deposits ............. $(32,813,896) (32,813,896)
Savings and interest-checking 
   deposits ...........................................  (52,346,207) (52,346,207)
Time deposits ....................................  (10,131,846) (10,222,585)
(201,927)
Deposits at Cayman Islands office .... 
(163,442)
Short-term borrowings ...................... 
(9,473,844)
Long-term borrowings ...................... 
(75,172)
Accrued interest payable ................... 
(174,376)
Trading account liabilities ................. 

(201,927)
(163,442)
(9,493,835)
(75,172)
(174,376)

— (32,813,896 )   

— (52,346,207 )   
— (10,222,585 )   
— (201,927 )   
— (163,442 )   
— (9,473,844 )   
—
(75,172 )   
— (174,376 )   

—

—
—
—
—
—
—
—

Other financial instruments: 

Commitments to originate real 
   estate loans for sale ........................ $
Commitments to sell real estate 
   loans ............................................... 
Other credit-related commitments ..... 
Interest rate swap agreements used 
   for interest rate risk management ... 

7,325

7,325

36,653
(136,295)

36,653
(136,295)

11,892

11,892

—

—
—

—

—     

7,325

36,653     
—     

—
(136,295)

11,892     

—  

184 

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December 31, 2015 

Carrying 
Amount

Estimated 
Fair Value

Level 1 
(In thousands) 

Level 2 

Level 3 

Financial assets: 

1,368,040 1,276,678
Cash and cash equivalents ................. $ 1,368,040
7,594,350
7,594,350
Interest-bearing deposits at banks ..... 
Trading account assets ...................... 
273,783
273,783
Investment securities .........................  15,656,439 15,660,877
Loans and leases: 

91,362    
— 7,594,350    
56,763
217,020    
65,178 15,406,404     

—
—
—
189,295

Commercial loans and leases .......  20,422,338 20,146,201
Commercial real estate loans .......  29,197,311 29,044,244
Residential real estate loans .........  26,270,103 26,267,771
Consumer loans ............................  11,599,747 11,550,270
—
Allowance for credit losses .......... 
Loans and leases, net ...............  86,533,507 87,008,486
306,496

Accrued interest receivable ............... 

(955,992)

306,496

Financial liabilities: 

Noninterest-bearing deposits ............. $(29,110,635) (29,110,635)
Savings and interest-checking 
   deposits ...........................................  (49,566,644) (49,566,644)
Time deposits ....................................  (13,110,392) (13,135,042)
(170,170)
Deposits at Cayman Islands office .... 
(2,132,182)
Short-term borrowings ...................... 
Long-term borrowings ......................  (10,653,858) (10,639,556)
(85,145)
Accrued interest payable ................... 
(160,745)
Trading account liabilities ................. 

(170,170)
(2,132,182)

(85,145)
(160,745)

—     20,146,201
—
38,774     29,005,470
—
— 4,727,816     21,539,955
—     11,550,270
—
—
—
—     
— 4,766,590     82,241,896
—
— 306,496    

— (29,110,635 )  

— (49,566,644 )  
— (13,135,042 )  
— (170,170 )  
— (2,132,182 )  
— (10,639,556 )  
—
(85,145 )  
— (160,745 )  

—

—
—
—
—
—
—
—

Other financial instruments: 

Commitments to originate real 
   estate loans for sale ........................ $
Commitments to sell real estate 
   loans ............................................... 
Other credit-related commitments ..... 
Interest rate swap agreements used 
   for interest rate risk management ... 

9,879

9,879

875
(122,334)

875
(122,334)

43,892

43,892

—

—
—

—

—     

9,879

875    
—     

—
(122,334)

43,892    

—  

With the exception of marketable securities, certain off-balance sheet financial instruments and 

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

185 

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Cash and cash equivalents, interest-bearing deposits at banks, deposits at Cayman Islands office, 
short-term borrowings, accrued interest receivable and accrued interest payable 
Due to the nature of cash and cash equivalents and the near maturity of interest-bearing deposits at 
banks, deposits at Cayman Islands office, short-term borrowings, accrued interest receivable and 
accrued interest payable, the Company estimated that the carrying amount of such instruments 
approximated estimated fair value. 

Investment securities 
Estimated fair values of investments in readily marketable securities were generally based on quoted 
market prices. Investment securities that were not readily marketable were assigned amounts based 
on estimates provided by outside parties or modeling techniques that relied upon discounted 
calculations of projected cash flows or, in the case of other investment securities, which include 
capital stock of the Federal Reserve Bank of New York and the Federal Home Loan Bank of New 
York, at an amount equal to the carrying amount. 

Loans and leases 
In general, discount rates used to calculate values for loan products were based on the Company’s 
pricing at the respective period end. A higher discount rate was assumed with respect to estimated 
cash flows associated with nonaccrual loans. Projected loan cash flows were adjusted for estimated 
credit losses. However, such estimates made by the Company may not be indicative of assumptions 
and adjustments that a purchaser of the Company’s loans and leases would seek. 

Deposits 
Pursuant to GAAP, the estimated fair value ascribed to noninterest-bearing deposits, savings deposits 
and interest-checking deposits must be established at carrying value because of the customers’ ability 
to withdraw funds immediately. Time deposit accounts are required to be revalued based upon 
prevailing market interest rates for similar maturity instruments. As a result, amounts assigned to 
time deposits were based on discounted cash flow calculations using prevailing market interest rates 
based on the Company’s pricing at the respective date for deposits with comparable remaining terms 
to maturity. 

The Company believes that deposit accounts have a value greater than that prescribed by 

GAAP. The Company feels, however, that the value associated with these deposits is greatly 
influenced by characteristics of the buyer, such as the ability to reduce the costs of servicing the 
deposits and deposit attrition which often occurs following an acquisition. 

Long-term borrowings 
The amounts assigned to long-term borrowings were based on quoted market prices, when available, 
or were based on discounted cash flow calculations using prevailing market interest rates for 
borrowings of similar terms and credit risk. 

Other commitments and contingencies 
As described in note 21, in the normal course of business, various commitments and contingent 
liabilities are outstanding, such as loan commitments, credit guarantees and letters of credit. The 
Company’s pricing of such financial instruments is based largely on credit quality and relationship, 
probability of funding and other requirements. Loan commitments often have fixed expiration dates 
and contain termination and other clauses which provide for relief from funding in the event of 
significant deterioration in the credit quality of the customer. The rates and terms of the Company’s 

186 

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loan commitments, credit guarantees and letters of credit are competitive with other financial 
institutions operating in markets served by the Company. The Company believes that the carrying 
amounts, which are included in other liabilities, are reasonable estimates of the fair value of these 
financial instruments. 

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. 

21.    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. 

Commitments to extend credit 

December 31 

2016 

2015 

(In thousands) 

Home equity lines of credit ...............................................................   $ 5,499,609      $  5,631,680 
Commercial real estate loans to be sold ............................................    
57,597 
Other commercial real estate .............................................................     6,451,709         5,949,933 
Residential real estate loans to be sold ..............................................    
488,621 
212,619 
Other residential real estate ...............................................................    
Commercial and other .......................................................................     12,298,473         11,802,850 
Standby letters of credit .........................................................................     2,987,091         3,330,013 
55,559 
Commercial letters of credit ...................................................................    
Financial guarantees and indemnification contracts ..............................     3,043,580         2,794,322 
782,885  
Commitments to sell real estate loans ....................................................     1,489,237        

478,950        
232,721        

44,723        

70,100     

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. 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. 

187 

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Financial guarantees and indemnification contracts are oftentimes similar to standby letters of 

credit and include mandatory purchase agreements issued to ensure that customer obligations are 
fulfilled, recourse obligations associated with sold loans, and other guarantees of customer 
performance or compliance with designated rules and regulations. 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 $2.8 billion and $2.5 
billion at December 31, 2016 and 2015, respectively. 

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 considered derivatives and along 
with commitments to originate real estate loans to be held for sale are generally recorded in the 
consolidated balance sheet at estimated fair market value. 

The Company occupies certain banking offices and uses certain equipment under noncancelable 

operating lease agreements expiring at various dates over the next 22 years. Minimum lease 
payments under noncancelable operating leases are summarized in the following table: 

Year ending December 31: 

2017 ................................................................................................................................  $ 
2018 ................................................................................................................................    
2019 ................................................................................................................................    
2020 ................................................................................................................................    
2021 ................................................................................................................................    
Later years ......................................................................................................................    

99,847 
94,448 
74,814 
58,216 
44,508 
94,825 
$  466,658  

(In thousands)  

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. Nevertheless, 
given the outcome of the matter discussed in the following paragraph, at December 31, 2016 the 
Company’s remaining obligation to loan purchasers was not considered material to the Company’s 
consolidated financial position. 

The Company was the subject of an investigation by government agencies relating to the 

origination of Federal Housing Administration (“FHA”) insured residential home loans and 
residential home loans sold to The Federal Home Loan Mortgage Corporation (“Freddie Mac”) and 
Fannie Mae. A number of other U.S. financial institutions have announced similar investigations. 
Regarding FHA loans, the U.S. Department of Housing and Urban Development (“HUD”) Office of 
Inspector General and the U.S. Department of Justice (collectively, the “Government”) investigated 
whether the Company complied with underwriting guidelines concerning certain loans where HUD 
paid FHA insurance claims. The Company fully cooperated with the investigation. The Government 
advised the Company that based upon its review of a sample of loans for which an FHA insurance 

188 

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claim was paid by HUD, some of the loans did not meet underwriting guidelines. The Company, 
based on its own review of the sample, did not agree with the sampling methodology and loan 
analysis employed by the Government. Regarding loans originated by the Company and sold to 
Freddie Mac and Fannie Mae, the investigation concerned whether the mortgages sold to Freddie 
Mac and Fannie Mae complied with applicable underwriting guidelines. The Company also 
cooperated with that portion of the investigation. In order to bring those investigations to a close, 
M&T Bank entered into a settlement agreement with the Government under which M&T Bank paid 
$64 million on May 12, 2016, without admitting liability. As a result, on May 20, 2016, a Joint 
Stipulation of Dismissal was filed with the United States District Court for the Western District of 
New York. The settlement did not have a material impact on the Company’s consolidated financial 
condition or results of operations in the year ended December 31, 2016. 

M&T and its subsidiaries are subject in the normal course of business to various pending and 
threatened legal proceedings and other matters in which claims for monetary damages are asserted. 
On an on-going basis management, after consultation with legal counsel, assesses the Company’s 
liabilities and contingencies in connection with such proceedings. For those matters where it is 
probable that the Company will incur losses and the amounts of the losses can be reasonably 
estimated, the Company records an expense and corresponding liability in its consolidated financial 
statements. To the extent the pending or threatened litigation could result in exposure in excess of 
that liability, the amount of such excess is not currently estimable. Although not considered probable, 
the range of reasonably possible losses for such matters in the aggregate, beyond the existing 
recorded liability, was between $0 and $40 million. Although the Company does not believe that the 
outcome of pending litigations will be material to the Company’s consolidated financial position, it 
cannot rule out the possibility that such outcomes will be material to the consolidated results of 
operations for a particular reporting period in the future. 

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

The financial information of the Company’s segments was compiled utilizing the accounting 

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

189 

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capital requirements and in proportion to an assessment of the inherent risks associated with the 
business of the segment (including interest, credit and operating risk). 

The management accounting policies and processes utilized in compiling segment financial 
information are highly subjective and, unlike financial accounting, are not based on authoritative 
guidance similar to GAAP. As a result, reported segment results are not necessarily comparable with 
similar information reported by other financial institutions. Furthermore, changes in management 
structure or allocation methodologies and procedures may result in changes in reported segment 
financial data. During 2016, the Company revised its funds transfer pricing allocation related to 
borrowings and to the residential real estate loans obtained in the acquisition of Hudson City, 
retroactive to 2015. Accordingly, segment financial information for the year ended December 31, 
2015 has been reclassified to conform to the current methodology. As a result, net interest income, 
income tax expense and net income increased in the Discretionary Portfolio segment and decreased 
in the “All Other” category by $12 million, $5 million and $7 million, respectively, for the year 
ended December 31, 2015 from that which was previously reported.   

Information about the Company’s segments is presented in the accompanying table. Income 

statement amounts are in thousands of dollars. Balance sheet amounts are in millions of dollars. 

Business Banking 

  2016 

    2015 

    2014 

For the Years Ended December 31, 2016, 2015 and 2014 
Commercial Real Estate 
2015 

Commercial Banking 
2015 

2014 

2016 

2014 

2016 

Discretionary Portfolio 
2015 

2016 

2014 

290,142  

274,923  

Net interest income(a) ...............   $ 354,333    $ 338,855    $ 345,773   $ 785,874 $ 753,604 $ 746,344 $ 608,385   $ 577,922   $ 555,358    $  345,926   $ 
26,075     
Noninterest income ...................      108,783       108,195       105,149    

97,626 $
28,114  
    463,116       447,050       450,922     1,060,797   1,043,746   1,000,639   788,091     720,870     680,445       372,001      125,740  
7,599  

254,295   179,706     142,948     125,087      

Provision for credit losses ..........      12,709       15,513       18,883    
Amortization of core deposit 
   and other intangible assets ......     
Depreciation and other 
   amortization ...........................     
472     
16,300      
405    
284,091   204,965     169,688     169,039      
95,300     
Other noninterest expense .........      292,124       264,163       263,734    
682,747   566,453     539,938     502,445       243,304     
Income (loss) before taxes .........      157,879       166,967       167,900    
Income tax expense (benefit) .....      64,533       68,209       68,630    
79,766     
279,819   216,095     199,297     186,485      
Net income (loss) ......................   $  93,346    $  98,758    $  99,270   $ 411,696 $ 431,030 $ 402,928 $ 350,358   $ 340,641   $ 315,960    $  163,538   $ 

520  
327,616  
697,758  
286,062  

566  
288,303  
729,788  
298,758  

—  

—

679  
49,839  
67,623  
8,351  
59,272 $

891
33,522
50,708
2,365
48,343

74,204
27,464
101,668
16,547

(7,339 )    

20,120    

19,247    

32,925     

(3,447 )  

(8,003 )  

34,903  

33,213  

25,089  

404      

407      

—      

—      

—      

588  

—    

—    

—    

—     

—  

—  

—  

Average total assets 
   (in millions) ............................   $  5,456    $  5,339    $  5,278   $
Capital expenditures 
   (in millions) ............................   $ 

—    $ 

—    $ 

2   $

Residential Mortgage 
Banking 
    2015 

    2014 

  2016 

25,592 $

24,143 $

22,860 $ 21,131   $ 18,827   $ 17,405    $ 

40,867   $ 

26,648 $

20,798

— $

— $

— $

—   $

—   $

—    $ 

—   $ 

— $

—

For the Years Ended December 31, 2016, 2015 and 2014 

Retail Banking 
2015 

2016 

2014 

2016 

All Other 
2015 

2014 

2016 

Total 
2015 

2014 

(3,617 )    

323,176  

Net interest income(a) ...............   $  70,655    $  63,939    $  67,482   $ 1,074,125 $ 917,041 $ 908,828 $ 230,589   $ 93,600   $ (21,543 )  $ 3,469,887   $ 2,842,587 $ 2,676,446
336,042   570,475     594,586     599,870       1,825,996      1,825,037   1,779,273
324,953  
Noninterest income ...................      342,858       336,099       331,366    
    413,513       400,038       398,848     1,397,301   1,241,994   1,244,870   801,064     688,186     578,327       5,295,883      4,667,624   4,455,719
124,000

Provision for credit losses ..........     
Amortization of core deposit 
   and other intangible assets ......     
Depreciation and other 
   amortization ...........................      30,264       27,883       47,086    
37,788  
164,906
35,291  
668,919   892,625     959,345     854,883       2,846,894      2,647,583   2,490,744
682,594  
Other noninterest expense .........      258,141       233,651       216,556    
461,005   (198,805 )   (424,509 )   (359,274 )     2,058,398      1,674,692   1,642,245
451,156  
Income (loss) before taxes .........      128,725       143,729       136,714    
Income tax expense (benefit) .....      49,047       55,151       52,172    
575,999
187,647   (140,657 )   (218,379 )   (201,119 )     743,284      595,025  
183,638  
Net income (loss) ......................   $  79,678    $  88,578    $  84,542   $ 274,646 $ 267,518 $ 273,358 $ (58,148 ) $ (206,130 ) $ (158,155 )  $ 1,315,114   $ 1,079,667 $ 1,066,246

37,657  
776,123  
463,084  
188,438  

(12,954 )     190,000      170,000  

61,848       157,978      148,925  

33,824      

120,437  

(5,225 )    

68,541    

42,613    

26,424    

64,852    

62,074    

42,613     

(1,508 )  

(3,910 )  

26,424  

77,158  

72,953  

33,824

—      

—      

—    

—  

—  

—  

Average total assets 
   (in millions) ............................   $  2,569    $  2,918    $  3,076   $
Capital expenditures 
   (in millions) ............................   $ 

—    $ 

—    $ 

—   $

11,840 $

11,035 $

10,449 $ 16,885   $ 12,870   $ 12,277    $  124,340   $  101,780 $

92,143

46 $

14 $

14 $

62   $

68   $

57    $ 

108   $ 

82 $

73  

(a) 

Net interest income is the difference between actual taxable-equivalent interest earned on assets and interest paid on liabilities by a segment and a funding charge 
(credit) based on the Company’s internal funds transfer pricing 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 $26,962,000 in 2016, $24,463,000 in 2015 and $23,642,000 in 2014 and is 
eliminated in “All Other” net interest income and income tax expense (benefit). 

190 

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The Business Banking segment provides deposit, lending, cash management and other financial 

services to small businesses and professionals through the Company’s banking office network and 
several other delivery channels, including business banking centers, telephone banking, Internet 
banking and automated teller machines. The Commercial Banking segment provides a wide range of 
credit products and banking services to middle-market and large commercial customers, mainly 
within the markets the Company serves. Among the services provided by this segment are 
commercial lending and leasing, letters of credit, deposit products and cash management services. 
The Commercial Real Estate segment provides credit services which are secured by various types of 
multifamily residential and commercial real estate and deposit services to its customers. Activities of 
this segment include the origination, sales and servicing of commercial real estate loans. Commercial 
real estate loans held for sale are included in the Commercial Real Estate Segment. The 
Discretionary Portfolio segment includes securities; residential real estate loans and other assets; 
short-term and long-term borrowed funds; brokered deposits; and Cayman Islands branch deposits. 
This segment also provides foreign exchange services to customers. Residential real estate loans 
obtained in the Hudson City acquisition on November 1, 2015 are included in this segment. The 
Residential Mortgage Banking segment originates and services residential real estate loans for 
consumers and sells substantially all of those loans in the secondary market to investors or to the 
Discretionary Portfolio segment. The segment periodically purchases servicing rights to loans that 
have been originated by other entities. Residential real estate loans held for sale are included in the 
Residential Mortgage Banking segment. The Retail Banking segment offers a variety of services to 
consumers through several delivery channels that include banking offices, automated teller machines, 
and telephone, mobile and Internet banking. Consumer loans and deposits obtained in the acquisition 
of Hudson City have been included in this segment. The “All Other” category includes other 
operating activities of the Company that are not directly attributable to the reported segments; the 
difference between the provision for credit losses and the calculated provision allocated to the 
reportable segments; goodwill and core deposit and other intangible assets resulting from 
acquisitions of financial institutions; merger-related gains and expenses resulting from acquisitions; 
the net impact of the Company’s internal funds transfer pricing methodology; eliminations of 
transactions between reportable segments; certain nonrecurring transactions; the residual effects of 
unallocated support systems and general and administrative expenses; and the impact of interest rate 
risk management strategies. The amount of intersegment activity eliminated in arriving at 
consolidated totals was included in the “All Other” category as follows: 

2016 

Year Ended December 31 
2015 
(In thousands) 

2014 

Revenues ............................................................................   $
Expenses .............................................................................    
Income taxes (benefit) ........................................................    
Net income (loss) ...............................................................    

(48,625)  $
(40,422)   
(3,338)   
(4,865)   

(48,972 )   $ 
(13,332 )     
(14,503 )     
(21,137 )     

(49,800)
(12,014)
(15,375)
(22,411)

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

191 

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23.    Regulatory matters 
Payment of dividends by M&T’s banking subsidiaries is restricted by various legal and regulatory 
limitations. Dividends from any banking subsidiary to M&T are limited by the amount of earnings of 
the banking subsidiary in the current year and the preceding two years. For purposes of this test, at 
December 31, 2016, approximately $627 million was available for payment of dividends to M&T 
from banking subsidiaries. Additionally, the Federal Reserve Board requires bank holding companies 
with $50 billion or more of total consolidated assets to submit annual capital plans. Such bank 
holding companies may pay dividends and repurchase stock only in accordance with a capital plan 
that the Federal Reserve Board has not objected to. 

Banking regulations prohibit extensions of credit by the subsidiary banks to M&T unless 
appropriately secured by assets. Securities of affiliates are not eligible as collateral for this purpose. 
The bank subsidiaries are required to maintain reserves against certain deposit liabilities. 

During the maintenance periods that included December 31, 2016 and 2015, cash and due from 
banks and interest-earning deposits at banks included a daily average of $594,831,000 and 
$664,586,000, respectively, for such purpose. 

M&T and its subsidiary banks are required to comply with applicable capital adequacy 

regulations established by the federal banking agencies. Failure to meet minimum capital 
requirements can result in certain mandatory, and possibly additional discretionary, actions by 
regulators that, if undertaken, could have a material effect on the Company’s financial statements. 
Pursuant to the rules in effect as of December 31, 2016, the required minimum and well capitalized 
capital ratios are as follows: 

   Capitalized 
6.5% 
●   Common equity Tier 1 ("CET1") to risk-weighted assets ........................        4.5 %        
●   Tier 1 capital to risk-weighted assets ........................................................        6.0 %        
8.0% 
●   Total capital to risk-weighted assets .........................................................        8.0 %         10.0% 
5.0% 
●   Leverage — Tier 1 capital to average total assets, as defined ..................        4.0 %        

  Minimum 

Well 

In addition, capital regulations provide for the phase-in of a “capital conservation buffer” 
composed entirely of CET1 on top of these minimum risk-weighted asset ratios. When fully phased-
in on January 1, 2019 the capital conservation buffer will be 2.5%. For 2016, the phase-in transition 
portion of that buffer was .625%.  

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The capital ratios and amounts of the Company and its banking subsidiaries as of December 31, 

2016 and 2015 are presented below: 

M&T 
(Consolidated)   

M&T Bank 
(Dollars in thousands) 

Wilmington 
Trust, N.A.

December 31, 2016: 
Common equity Tier 1 capital 

Amount ......................................................................... $10,849,642   $10,115,688     $  496,801  
57.08%
Ratio(a) .........................................................................  
44,607  
Minimum required amount(b) ......................................   5,195,288  

10.02 %    
  5,175,310       

10.70%  

Tier 1 capital 

Amount .........................................................................   12,083,948  
Ratio(a) .........................................................................  
Minimum required amount(b) ......................................   6,715,859  

11.92%  

  10,115,688        496,801  
57.08%
57,662  

10.02 %    
  6,690,035       

Total capital 

Amount .........................................................................   14,282,492  
Ratio(a) .........................................................................  
Minimum required amount(b) ......................................   8,743,289  

14.09%  

  11,812,114        501,111  
57.57%
75,070  

11.70 %    
  8,709,668       

Leverage 

Amount .........................................................................   12,083,948  
Ratio(c) .........................................................................  
Minimum required amount(b) ......................................   4,836,901  

9.99%  

  10,115,688        496,801  
15.31%
  4,812,685        129,774  

8.41 %    

December 31, 2015: 
Common equity Tier 1 capital 

Amount ......................................................................... $10,485,426   $10,680,827     $  476,106  
86.87%
Ratio(a) .........................................................................  
24,664  
Minimum required amount(b) ......................................   4,259,977  

11.33 %    
  4,242,817       

11.08%  

Tier 1 capital 

Amount .........................................................................   12,008,232  
Ratio(a) .........................................................................  
Minimum required amount(b) ......................................   5,679,969  

12.68%  

  10,680,827        476,106  
86.87%
32,886  

11.33 %    
  5,657,089       

Total capital 

Amount .........................................................................   14,128,454  
Ratio(a) .........................................................................  
Minimum required amount(b) ......................................   7,573,292  

14.92%  

  12,589,917        480,415  
87.65%
43,848  

13.35 %    
  7,542,786       

Leverage 

Amount .........................................................................   12,008,232  
Ratio(c) .........................................................................  
Minimum required amount(b) ......................................   4,408,971  

10.89%  

  10,680,827        476,106  
22.38%
85,082   

9.75 %    
  4,381,617       

(a)  The ratio of capital to risk-weighted assets, as defined by regulation. 
(b)  Minimum amount of capital to be considered adequately capitalized, as defined by regulation 

and including transition portion of the capital conservation buffer for 2016. 

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

193 

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24.    Relationship with Bayview Lending Group LLC and Bayview Financial Holdings, L.P. 
M&T holds a 20% minority interest in Bayview Lending Group LLC (“BLG”), a privately-held 
commercial mortgage company. M&T recognizes income or loss from BLG using the equity method 
of accounting. The carrying value of that investment was $12 million at December 31, 2016. 

Bayview Financial Holdings, L.P. (together with its affiliates, “Bayview Financial”), a privately-
held specialty financial company, is BLG’s majority investor. In addition to their common investment 
in BLG, the Company and Bayview Financial conduct other business activities with each other. The 
Company has obtained loan servicing rights for mortgage loans from BLG and Bayview Financial 
having outstanding principal balances of $3.5 billion and $4.1 billion at December 31, 2016 and 2015, 
respectively. Revenues from those servicing rights were $19 million, $23 million and $26 million 
during 2016, 2015 and 2014, respectively. The Company sub-services residential real estate loans for 
Bayview Financial having outstanding principal balances totaling $30.4 billion and $37.7 billion at 
December 31, 2016 and 2015, respectively. Revenues earned for sub-servicing loans for Bayview 
Financial were $98 million in 2016 and $115 million in each of 2015 and 2014. In addition, the 
Company held $158 million and $181 million of mortgage-backed securities in its held-to-maturity 
portfolio at December 31, 2016 and 2015, respectively, that were securitized by Bayview Financial. 

25.    Parent company financial statements 

Condensed Balance Sheet 

Assets 
Cash in subsidiary bank .....................................................................   $
Due from consolidated bank subsidiaries 

December 31 

2016 

2015 

(In thousands) 

15,003      $ 

19,874 

Money-market savings ..................................................................    
Current income tax receivable .......................................................    
Other ..............................................................................................    
Total due from consolidated bank subsidiaries ........................    

1,767,184        
3,061        
—        
1,770,245        

865,274 
572 
10 
865,856 

Investments in consolidated subsidiaries 

Banks .............................................................................................     15,003,964         15,581,931 
149,178 
Other ..............................................................................................    
23,824 
Investments in unconsolidated subsidiaries (note 19) ........................    
30,264 
Investment in Bayview Lending Group LLC .....................................    
73,147 
Other assets ........................................................................................    
Total assets ...............................................................................   $ 17,057,651      $  16,744,074 

161,201        
23,643        
11,908        
71,687        

Liabilities 
Accrued expenses and other liabilities ...............................................   $
Long-term borrowings .......................................................................    
Total liabilities ..........................................................................    

56,796 
513,989 
570,785 
Shareholders’ equity ........................................................................     16,486,622         16,173,289 
Total liabilities and shareholders’ equity ..................................   $ 17,057,651      $  16,744,074  

54,487      $ 
516,542        
571,029        

194 

194

 
 
 
 
 
  
  
 
  
  
    
 
  
  
 
   
        
 
   
        
 
   
        
 
   
        
 
 
Condensed Statement of Income 

2016 

Year Ended December 31 
2015 
(In thousands, except per share) 

2014 

Income 
Dividends from consolidated bank subsidiaries .................   $ 1,930,000    $
(10,752)   
Equity in earnings of Bayview Lending Group LLC .........    
5,530     
Other income ......................................................................    
Total income ..................................................................     1,924,778     

480,000     $  480,000 
(16,672)
(14,267 )     
7,755 
2,364       
471,083 
468,097       

Expense 
Interest on long-term borrowings .......................................    
Other expense .....................................................................    
Total expense .................................................................    

18,963     
21,361     
40,324     

24,453       
16,793       
41,246       

47,700 
15,107 
62,807 

Income before income taxes and equity in undistributed 
   income of subsidiaries .....................................................     1,884,454     
Income tax credits ..............................................................    
17,247     
Income before equity in undistributed income of 
   subsidiaries .....................................................................     1,901,701     
Equity in undistributed income of subsidiaries 
Net income of subsidiaries .................................................     1,343,413      1,112,851        1,110,686 
(480,000)
Less: dividends received ....................................................     (1,930,000)   
630,686 
(586,587)   
Equity in undistributed income of subsidiaries ..................    
Net income ..........................................................................   $ 1,315,114    $ 1,079,667     $  1,066,246 
Net income per common share 

(480,000 )     
632,851       

426,851       
19,965       

408,276 
27,284 

446,816       

435,560 

Basic ..............................................................................   $
Diluted ...........................................................................    

7.80    $
7.78     

7.22     $ 
7.18       

7.47 
7.42  

195 

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Condensed Statement of Cash Flows 

2016 

Year Ended December 31 
2015 
(In thousands) 

2014 

Cash flows from operating activities 
Net income .........................................................................   $ 1,315,114    $ 1,079,667     $  1,066,246 
Adjustments to reconcile net income to net cash provided
   by operating activities 

586,587     
Equity in undistributed income of subsidiaries .............    
(3,157)   
Provision for deferred income taxes ..............................    
12,898     
Net change in accrued income and expense ..................    
Loss (gain) on sale of assets ..........................................    
(2,342)   
Net cash provided by operating activities .....................     1,909,100     

(632,851 )     
(3,655 )     
21,780       
119       
465,060       

(630,686)
(6,522)
23,419 
— 
452,457 

Cash flows from investing activities 
Proceeds from sales or maturities of 
   investment securities .......................................................    
Other, net ............................................................................    
Net cash provided by investing activities ......................    

51     
13,619     
13,670     

755       
14,038       
14,793       

— 
10,721 
10,721 

Cash flows from financing activities 
Payments on long-term borrowings ...................................    
Purchases of treasury stock ................................................    
Dividends paid — common ...............................................    
Dividends paid — preferred ...............................................    
Redemption of Series D preferred stock ............................    
Proceeds from issuance of preferred stock .........................    
Other, net ............................................................................    

(322,621 )     
—     
—       
(641,334)   
(375,017 )     
(441,891)   
(81,270 )     
(81,270)   
—       
(500,000)   
—       
495,000     
76,364       
143,764     
(702,544 )     
Net cash used by financing activities ............................     (1,025,731)   
897,039     
(222,691 )     
885,148      1,107,839       

Net increase (decrease) in cash and cash equivalents ........    
Cash and cash equivalents at beginning of year .................    
Cash and cash equivalents at end of year ...........................   $ 1,782,187    $
Supplemental disclosure of cash flow information 
Interest received during the year ........................................   $
Interest paid during the year ...............................................    
Income taxes received during the year ...............................    

(350,010)
— 
(371,199)
(70,234)
— 
346,500 
110,601 
(334,342)
128,836 
979,003 
885,148     $  1,107,839 

1,905     $ 
30,420       
16,696       

2,094 
47,003 
24,588  

1,931    $
15,918     
8,877     

196 

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26.    Recent accounting developments 
Effective January 1, 2016, the Company adopted amended accounting guidance relating to the 
consolidation of variable interest entities that modifies the evaluation of whether limited partnerships 
and similar legal entities are variable interest entities or voting interest entities and eliminates the 
presumption that a general partner should consolidate a limited partnership. The amended guidance 
also eliminates certain conditions in the assessment of whether fees paid by a legal entity to a 
decision maker or a service provider represent a variable interest in the legal entity and reduces the 
extent to which related party arrangements cause an entity to be considered a primary beneficiary. 
The new guidance eliminates the indefinite deferral of existing consolidation guidance for certain 
investment funds, but provides a scope exception for reporting entities with interests in legal entities 
that are required to comply with or operate in accordance with requirements similar to those in Rule 
2a-7 of the Investment Company Act of 1940 for registered money market funds. The adoption of 
this guidance did not have a material effect on the Company’s consolidated financial position or 
results of operations.   

In January 2016, the Company also adopted amended accounting guidance for debt issuance 

costs. The guidance requires that debt issuance costs related to a recognized debt liability be 
presented in the balance sheet as a direct deduction from the carrying amount of that debt liability. 
The adoption of this guidance did not have a material effect on the Company’s consolidated financial 
position at January 1, 2016. 

In the first quarter of 2016, the Company adopted amended accounting guidance for share-

based payments when the terms of an award provide that a performance target could be achieved 
after the requisite service period. The amended guidance requires that a performance target that 
affects vesting and that could be achieved after the requisite service period be treated as a 
performance condition. The performance target should not be reflected in estimating the grant-date 
fair value of the award. Compensation cost should be recognized in the period in which it becomes 
probable that the performance target will be achieved and should represent the compensation cost 
attributable to the period(s) for which the requisite service has already been rendered. If the 
performance target becomes probable of being achieved before the end of the requisite service 
period, the remaining unrecognized compensation cost should be recognized prospectively over the 
remaining requisite service period. The total amount of compensation cost recognized during and 
after the requisite service period should reflect the number of awards that are expected to vest and 
should be adjusted to reflect those awards that ultimately vest. The requisite service period ends 
when the employee can cease rendering service and still be eligible to vest in the award if the 
performance target is achieved. The adoption of this guidance did not have a material effect on the 
Company’s consolidated financial position or results of operations. 

Amended accounting guidance for measurement-period adjustments related to business 
combinations was also adopted by the Company in the first quarter of 2016. The amended guidance 
requires that an acquirer recognize adjustments to provisional amounts that are identified during the 
measurement period in the reporting period in which the adjustment amounts are determined. The 
acquirer is now required to record, in the same period’s financial statements, the effect on earnings of 
changes in depreciation, amortization, or other income effects, if any, as a result of the change to the 
provisional amounts, calculated as if the accounting had been completed at the acquisition date. The 
adoption of this guidance did not have a material effect on the Company’s consolidated financial 
position or results of operations.  

In January 2017, the Financial Accounting Standards Board (“FASB”) issued amended 
guidance eliminating Step 2 from the goodwill impairment test. Under the amendments to the 
guidance, an entity should perform its goodwill impairment test by comparing the fair value of a 
reporting unit with its carrying amount. An entity should recognize an impairment charge for the 
amount by which the carrying amount exceeds the reporting unit’s fair value. The loss recognized, 

197 

197

 
however, should not exceed the total amount of goodwill allocated to that reporting unit. 
Additionally, an entity should consider income tax effects from any tax deductible goodwill on the 
carrying amount of the reporting unit when measuring the goodwill impairment loss, if applicable.  
The guidance is effective for annual periods or any interim goodwill impairment tests beginning after 
December 15, 2019 using a prospective transition method. Early adoption is permitted. The 
Company does not expect the guidance will have a material impact on its consolidated financial 
statements, unless at some point in the future one of its reporting units were to fail step 1 of the 
goodwill impairment test. 

In January 2017, the FASB issued amended guidance clarifying the definition of a business for 
purposes of evaluating whether transactions would be accounted for as acquisitions (or disposals) of 
assets or businesses. The amendments provide a screen to determine when a set of assets and 
activities (collectively referred to as a “set”) is not a business. The screen requires that when 
substantially all of the fair value of the gross assets acquired (or disposed of) is concentrated in a 
single identifiable asset or group of similar assets, the set is not a business. If the screen is not met, 
the amendments (1) require that to be considered a business, a set must include, at a minimum, an 
input and a substantive process that together significantly contribute to the ability to create output, 
and (2) remove the evaluation of whether a market participant could replace missing elements. The 
guidance is effective for annual periods and interim periods within those annual periods beginning 
after December 15, 2017 using a prospective transition method. The Company does not expect the 
guidance to have a material impact on its consolidated financial statements. 

In November 2016, the FASB issued amended guidance for the presentation of restricted cash 

in the statement of cash flows.  The guidance requires that restricted cash and restricted cash 
equivalents be included with cash and cash equivalents when reconciling the beginning-of-period and 
end-of-period total amounts shown on the statement of cash flows.  In addition, when cash, cash 
equivalents, and restricted cash or restricted cash equivalents are presented in more than one line 
item within the statement of financial position, the line items and amounts must be presented on the 
face of the statement of cash flows or disclosed in the notes to the financial statements.  Information 
about the nature of restrictions on an entity’s cash and cash equivalents must also be disclosed.  The 
guidance is effective for annual periods and interim periods within those annual periods beginning 
after December 15, 2017, using a retrospective transition method.  The Company is evaluating the 
impact the guidance may have on the presentation of its consolidated statement of cash flows.  

In August 2016, the FASB issued amended guidance for how certain cash receipts and cash 
payments are presented and classified in the statement of cash flows.  The guidance addresses the 
following eight specific cash flow issues: 1) cash payments for debt extinguishment costs should be 
classified as cash outflows for financing activities; 2) for zero-coupon debt instruments, the portion 
of the cash payment attributable to the accreted interest should be classified as a cash outflow for 
operating activities; 3) contingent consideration payments made after a business combination should 
be classified based on the timing of the payment; 4) cash proceeds received from the settlement of 
insurance claims should be classified on the basis of the related insurance coverage; 5)  cash 
proceeds received from the settlement of corporate-owned and bank-owned life insurance policies 
should be classified as cash inflows from investing activities; 6) when the equity method is applied, 
an accounting policy election should be made to classify distributions received using either the 
cumulative earnings approach or the nature of the distribution approach; 7) cash receipts from 
payments on a transferor’s beneficial interests obtained in a securitization of financial assets should 
be classified as cash inflows from investing activities; and 8) the classification of cash receipts and 
payments that have aspects of more than one class of cash flows should be determined by applying 
specific guidance in GAAP.  The guidance is effective for annual periods and interim periods within 
those annual periods beginning after December 15, 2017.  The Company is evaluating the impact the 
guidance may have on the presentation within its consolidated statement of cash flows. 

198 

198

 
In June 2016, the FASB issued amended guidance for the measurement of credit losses on 
certain financial assets. The amended guidance requires financial assets measured at amortized cost 
to be presented at the net amount expected to be collected.  The allowance for credit losses will 
represent a valuation account that is deducted from the amortized cost basis of the financial assets to 
present their net carrying value at the amount expected to be collected. The income statement will 
reflect the measurement of credit losses for newly recognized financial assets as well as expected 
increases or decreases of expected credit losses that have taken place during the period. When 
determining the allowance, expected credit losses over the contractual term of the financial asset(s) 
(taking into account prepayments) will be estimated considering relevant information about past 
events, current conditions, and reasonable and supportable forecasts that affect the collectibility of 
the reported amount.  The amended guidance also requires recording an allowance for credit losses 
for purchased financial assets with a more-than-insignificant amount of credit deterioration since 
origination.  The initial allowance for these assets will be added to the purchase price at acquisition 
rather than being reported as an expense.  Subsequent changes in the allowance will be recorded 
through the income statement as an expense adjustment.  In addition, the amended guidance requires 
credit losses relating to available-for-sale debt securities to be recorded through an allowance for 
credit losses. The calculation of credit losses for available-for-sale securities will be similar to how it 
is determined under existing guidance.  The guidance is effective for annual periods and interim 
periods within those annual periods beginning after December 15, 2019.  The Company is assessing 
the new guidance to determine what modifications to existing credit estimation processes may be 
required.  The Company expects that the new guidance will result in an increase in its allowance for 
credit losses as a result of considering credit losses over the expected life of its loan portfolios. 
Increases in the level of the allowance for credit losses will also reflect new requirements to include 
the nonaccretable principal difference on purchased credit impaired loans and estimated credit losses 
on investment securities classified as held-to-maturity, if any.  The Company is still evaluating the 
extent of the increase to the allowance for credit losses and the impact to its financial statements. 

In March 2016, the FASB issued amended accounting guidance for share-based 

transactions.  The amended guidance requires that all excess tax benefits and tax deficiencies be 
recognized as income tax expense or benefit in the income statement and that such amounts be 
recognized in the period in which the tax deduction arises or in the period in which an expiration of 
an award occurs.  The guidance allows an entity to make an accounting policy election to either 
estimate the number of awards that are expected to vest or account for forfeitures when they 
occur.  The guidance permits share-based awards that allow for the withholding of shares up to the 
maximum statutory tax rate in applicable jurisdictions to qualify for equity classification.  The 
previous GAAP threshold was restricted to the employer’s minimum statutory withholding 
requirements.   The guidance also specifies certain changes to the reporting of share-based 
transactions on the statement of cash flows and is effective for annual periods and interim periods 
within those annual periods beginning after December 15, 2016.  The Company expects adoption of 
the guidance will result in increased volatility to reported income tax expense related to excess tax 
benefits and tax deficiencies for share-based transactions, but the actual amounts recognized in tax 
expense will be dependent on the amount of share-based transactions entered into and the stock price 
at the time of vesting. 

In March 2016, the FASB issued amended accounting guidance for the transition to the equity 
method of accounting.  The amended guidance eliminates the requirement that when an investment 
qualifies for use of the equity method as a result of an increase in the level of ownership interest or 
degree of influence, an investor must adjust the investment, results of operations, and retained 
earnings retroactively on a step-by-step basis as if the equity method has been in effect during all 
previous periods that the investment had been held.  Instead, the amended guidance requires the 
investor to adopt the equity method of accounting as of the date the investment first qualifies for such 

199 

199

 
accounting.  The guidance is effective for annual periods and interim periods within those annual 
periods beginning after December 15, 2016.  The Company does not expect the guidance to have a 
material impact on its consolidated financial statements. 

In March 2016, the FASB issued two amendments to its rules on accounting for derivatives and 

hedging.  The first amendment clarifies that a change in the counterparty to a derivative instrument 
that has been designated as the hedging instrument does not, in and of itself, require dedesignation of 
that hedging relationship provided that all other hedge accounting criteria continue to be met.  The 
second amendment clarifies the requirements for assessing whether contingent call (put) options that 
can accelerate the payment of principal on debt instruments are clearly and closely related to their 
debt hosts.  An entity performing the assessment is required to assess the embedded call (put) options 
solely in accordance with a four-step decision sequence and no longer has to assess whether the event 
that triggers the ability to exercise the option is related to interest rates or credit risks.  Both 
amendments are effective for annual periods and interim periods within those annual periods 
beginning after December 15, 2016, with early adoption permitted.  The Company does not expect 
the guidance to have a material impact on its consolidated financial statements.   

In February 2016, the FASB issued guidance related to the accounting for leases.  The core 
principle of the guidance is that all leases create an asset and a liability for the lessee and, therefore, 
lease assets and lease liabilities should be recognized in the balance sheet.  Lease assets will be 
recognized as a right-of-use asset and lease liabilities will be recognized as a liability to make lease 
payments.  While the guidance requires all leases to be recognized in the balance sheet, there 
continues to be a differentiation between finance leases and operating leases for purposes of income 
statement recognition and cash flow statement presentation.  For finance leases, interest on the lease 
liability and amortization of the right-of-use asset will be recognized separately in the statement of 
income.  Repayments of principal on those lease liabilities will be classified within financing 
activities and payments of interest on the lease liability will be classified within operating activities 
in the statement of cash flows.  For operating leases, a single lease cost is recognized in the statement 
of income and allocated over the lease term, generally on a straight-line basis.  All cash payments are 
presented within operating activities in the statement of cash flows.  The accounting applied by 
lessors is largely unchanged from existing GAAP, however, the guidance eliminates the accounting 
model for leveraged leases for leases that commence after the effective date of the guidance.  The 
guidance is effective for annual periods beginning after December 15, 2018, including interim 
periods within those fiscal years.  The Company occupies certain banking offices and uses certain 
equipment under noncancelable operating lease agreements, which currently are not reflected in its 
consolidated balance sheet.  Upon adoption of the guidance, the Company expects to report increased 
assets and increased liabilities as a result of recognizing right-of-use assets and lease liabilities on its 
consolidated balance sheet. As described in note 21 of the Notes to Financial Statements, the 
Company is committed to $467 million of minimum lease payments under noncancelable operating 
lease agreements at December 31, 2016.  The Company does not expect the new guidance will have a 
material impact to its consolidated statement of income. 

In January 2016, the FASB issued amended guidance related to recognition and measurement of 

financial assets and liabilities. The amended guidance requires that equity investments (excluding 
those accounted for under the equity method of accounting or those that result in consolidation of the 
investee) be measured at fair value with changes in fair value recognized in net income. An entity 
can elect to measure equity investments that do not have readily determinable fair values at cost less 
impairment, plus or minus changes resulting from observable price changes in orderly transactions 
for the identical or similar investment of the same issuer. The impairment assessment of equity 
investments without readily determinable fair values is simplified by requiring a qualitative 
assessment to identify impairment. When a qualitative assessment indicates impairment exists, an 
entity is required to measure the investment at fair value. The guidance eliminates the requirement 

200 

200

 
for public business entities to disclose the method and significant assumptions used to estimate the 
fair value that is required to be disclosed for financial instruments measured at amortized cost on the 
balance sheet. Further, the guidance requires public entities to use the exit price when measuring the 
fair value of financial instruments for disclosure purposes. The guidance also requires an entity to 
present separately in other comprehensive income, a change in the instrument-specific credit risk 
when the entity has elected to measure a liability at fair value in accordance with the fair value 
option. Separate presentation of financial assets and liabilities by measurement category and type of 
instrument on the balance sheet or accompanying notes to the financial statements is required. The 
guidance also clarifies that an entity should evaluate the need for a valuation allowance on a deferred 
tax asset related to available-for-sale securities in combination with the entity’s other deferred tax 
assets. This guidance is effective for annual periods and interim periods within those annual periods 
beginning after December 15, 2017. The Company is still evaluating the impact the guidance could 
have on its consolidated financial statements, however, it does hold certain equity securities in its 
available-for-sale portfolio.  Upon adoption of this guidance, fair value changes in such equity 
securities will be recognized in the consolidated statement of income as opposed to accumulated 
other comprehensive income where they are recognized under current accounting guidance. 

In May 2014, the FASB issued amended accounting and disclosure guidance for revenue from 

contracts with customers. The core principle of the accounting guidance is that an entity should 
recognize revenue to depict the transfer of promised goods or services to customers in an amount that 
reflects the consideration to which the entity expects to be entitled in exchange for those goods or 
services. To achieve that core principle, an entity should apply the following steps: (1) identify the 
contract(s) with a customer; (2) identify the performance obligations in the contract; (3) determine 
the transaction price; (4) allocate the transaction price to the performance obligations in the contract; 
(5) recognize revenue when (or as) the entity satisfies a performance obligation. The guidance also 
specifies the accounting for some costs to obtain or fulfill a contract with a customer. The amended 
disclosure guidance requires sufficient information to enable users of financial statements to 
understand the nature, amount, timing, and uncertainty of revenue and cash flows arising from 
contracts with customers. In August 2015, the FASB deferred the effective date of this guidance by 
one year. The amended guidance is now effective for annual reporting periods beginning after 
December 15, 2017, including interim periods within that reporting period. The guidance should be 
applied either retrospectively to each prior reporting period presented or retrospectively with the 
cumulative effect of initially applying this guidance recognized at the date of initial application (the 
“modified retrospective approach”).  At present, the Company expects to adopt the revenue 
recognition guidance in the first quarter of 2018 using the modified retrospective approach.  A 
significant amount of the Company’s revenues are derived from net interest income on financial 
assets and liabilities, which are excluded from the scope of the amended guidance.  With respect to 
noninterest income, the Company has identified revenue streams within the scope of the guidance, 
and is performing an evaluation of the underlying revenue contracts.  To date, the Company has not 
yet identified any material changes in the timing of revenue recognition when considering the 
amended accounting guidance, however, the Company’s implementation efforts are ongoing and 
such assessments may change prior to the January 1, 2018 implementation date. 

201 

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Item 9.  Changes in and Disagreements with Accountants on Accounting and Financial 

Disclosure. 

None. 

Item 9A.  Controls and Procedures. 

(a) Evaluation of disclosure controls and procedures. Based upon their evaluation of the 
effectiveness of M&T’s disclosure controls and procedures (as defined in Exchange Act rules 13a-
15(e) and 15d-15(e)), Robert G. Wilmers, Chairman of the Board and Chief Executive Officer, and 
Darren J. King, Executive Vice President and Chief Financial Officer, concluded that M&T’s 
disclosure controls and procedures were effective as of December 31, 2016. 

(b) Management’s annual report on internal control over financial reporting. Included under the 

heading “Report on Internal Control Over Financial Reporting” at Item 8 of this Annual Report on 
Form 10-K. 

(c) Attestation report of the registered public accounting firm. Included under the heading 
“Report of Independent Registered Public Accounting Firm” at Item 8 of this Annual Report on 
Form 10-K. 

(d) Changes in internal control over financial reporting. M&T regularly assesses the adequacy 

of its internal control over financial reporting and enhances its controls in response to internal control 
assessments and internal and external audit and regulatory recommendations. No changes in internal 
control over financial reporting have been identified in connection with the evaluation of disclosure 
controls and procedures during the quarter ended December 31, 2016 that have materially affected, 
or are reasonably likely to materially affect, M&T’s internal control over financial reporting. 

Item 9B.  Other Information. 

None. 

PART III 

Item 10.  Directors, Executive Officers and Corporate Governance. 

The information required to be furnished pursuant to Items 401, 405, 406 and 407(c)(3), (d)(4) and 
(d)(5) of Regulation S-K will be included in M&T’s Proxy Statement for the 2017 Annual Meeting 
of Shareholders, to be filed with the SEC pursuant to Regulation 14A on or about March 7, 2017 (the 
“2017 Proxy Statement”).  The information concerning M&T’s directors will appear under the 
caption “NOMINEES FOR DIRECTOR” in the 2017 Proxy Statement. The information regarding 
compliance with Section 16 of the Securities Exchange Act will appear under the caption “Section 
16(a) Beneficial Ownership Reporting Compliance” in the 2017 Proxy Statement. The information 
concerning M&T’s Code of Ethics for CEO and Senior Financial Officers will appear under the 
caption “CORPORATE GOVERNANCE OF M&T BANK CORPORATION” in the 2017 Proxy 
Statement.  The information regarding M&T’s Audit Committee will appear under the caption 
“CORPORATE GOVERNANCE OF M&T BANK CORPORATION.” Such information is 
incorporated herein by reference. 

The information concerning M&T’s executive officers is presented under the caption 
“Executive Officers of the Registrant” contained in Part I of this Annual Report on Form 10-K. 

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Item 11.  Executive Compensation. 

The information required to be furnished pursuant to Items 402 and 407 of Regulation S-K will 
appear under the captions “COMPENSATION DISCUSSION AND ANALYSIS,” “EXECUTIVE 
COMPENSATION,” “DIRECTOR COMPENSATION,” “NOMINATION, COMPENSATION 
AND GOVERNANCE COMMITTEE INTERLOCKS AND INSIDER PARTICIPATION,” and 
“NOMINATION, COMPENSATION AND GOVERNANCE COMMITTEE REPORT” in the 2017 
Proxy Statement.  Such information is incorporated herein by reference. 

Item 12.  Security Ownership of Certain Beneficial Owners and Management and Related 

Stockholder Matters. 

The information required to be furnished pursuant to Item 403 of Regulation S-K will appear under 
the caption “STOCK OWNERSHIP INFORMATION” in the 2017 Proxy Statement.  Such 
information is incorporated herein by reference. 

The information required to be furnished pursuant to Item 201(d) concerning equity 

compensation plans is presented under the caption “Market for Registrant’s Common Equity, Related 
Stockholder Matters and Issuer Purchases of Equity Securities” contained in Part II, Item 5 of this 
Annual Report on Form 10-K. 

Item 13.  Certain Relationships and Related Transactions, and Director Independence. 

The information required to be furnished pursuant to Items 404 and 407 of Regulation S-K will 
appear under the caption “TRANSACTIONS WITH DIRECTORS AND EXECUTIVE OFFICERS” 
and “CORPORATE GOVERNANCE OF M&T BANK CORPORATION” in the 2017 Proxy 
Statement.  Such information is incorporated herein by reference. 

Item 14.  Principal Accountant Fees and Services. 

The information required to be furnished by Item 9 of Schedule 14A will appear under the caption 
“PROPOSAL TO RATIFY THE APPOINTMENT OF PRICEWATERHOUSECOOPERS LLP AS 
THE INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM OF M&T BANK 
CORPORATION FOR THE YEAR ENDING DECEMBER 31, 2017” in the 2017 Proxy Statement.  
Such information is incorporated herein by reference. 

PART IV 

Item 15.  Exhibits and Financial Statement Schedules. 

(a) Financial statements and financial statement schedules filed as part of this Annual Report on 
Form 10-K. See Part II, Item 8. “Financial Statements and Supplementary Data.” Financial statement 
schedules are not required or are inapplicable, and therefore have been omitted. 

(b) Exhibits required by Item 601 of Regulation S-K. The exhibits listed on the Exhibit Index of 

this Annual Report on Form 10-K have been previously filed, are filed herewith or are incorporated 
herein by reference to other filings. 

(c) Additional financial statement schedules. None. 

Item 16.  Form 10-K Summary. 

None. 

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Signatures 

Pursuant to the requirements of Section 13 or 15(d) of the Securities Exchange Act of 1934, the 
Registrant has duly caused this report to be signed on its behalf by the undersigned, thereunto duly 
authorized, on the 22nd day of February, 2017. 

M&T BANK CORPORATION 

By:

/S/ ROBERT G. WILMERS 
Robert G. Wilmers 
Chairman of the Board and 
Chief Executive Officer 

Pursuant to the requirements of the Securities Exchange Act of 1934, this report has been 
signed below by the following persons on behalf of the Registrant and in the capacities and on the 
dates indicated. 

Signature 

Principal Executive Officer: 

/S/ ROBERT G. WILMERS 
Robert G. Wilmers 

Principal Financial Officer: 

/S/ DARREN J. KING 
Darren J. King 
Principal Accounting Officer: 

/S/ MICHAEL R. SPYCHALA 
Michael R. Spychala 

A majority of the board of directors: 

Edward G. Amoroso 

/S/ BRENT D. BAIRD 
Brent D. Baird 

/S/ C. ANGELA BONTEMPO 
C. Angela Bontempo 

Robert T. Brady 

/S/ T. JEFFERSON CUNNINGHAM III 
T. Jefferson Cunningham III 

204 

204

Title

Date

Chairman of the Board 
and Chief Executive Officer 

February 22, 2017

Executive Vice President 
and Chief Financial Officer 

February 22, 2017

Senior Vice President and 
Controller 

February 22, 2017

February 22, 2017

February 22, 2017

February 22, 2017

 
 
 
 
 
 
 
 
 
 
 
 
  
 
 
 
 
 
 
 
 
 
 
  
 
 
 
 
 
  
  
 
 
 
 
 
  
 
 
 
 
 
  
 
 
 
 
 
  
 
 
 
 
 
 
  
 
 
Mark J. Czarnecki 

/S/ GARY N. GEISEL 
Gary N. Geisel 

/S/ RICHARD A. GROSSI 
Richard A. Grossi 

/S/ JOHN D. HAWKE, JR. 
John D. Hawke, Jr. 

/S/ NEWTON P.S. MERRILL  
Newton P. S. Merrill 

 /S/ MELINDA R. RICH 
Melinda R. Rich 

/S/ ROBERT E. SADLER, JR. 
Robert E. Sadler, Jr. 

/S/ DENIS J. SALAMONE 
Denis J. Salamone 

/S/ HERBERT L. WASHINGTON 
Herbert L. Washington 

/S/ ROBERT G. WILMERS 
Robert G. Wilmers 

February 22, 2017

February 22, 2017

February 22, 2017

February 22, 2017

February 22, 2017

February 22, 2017

February 22, 2017

February 22, 2017

February 22, 2017

205 

205

 
 
 
 
  
  
 
 
 
 
 
 
  
 
 
 
 
 
  
 
 
 
 
 
  
 
 
 
 
 
  
 
 
 
 
 
  
 
 
 
 
 
  
 
 
 
 
 
  
 
 
 
 
 
  
 
 
 
 
 
  
 
 
   
3.1 

3.2 

3.3 

3.4 

3.5 

3.6 

4.1 

4.2 

4.3 

4.4 

10.1 

10.2 

10.3 

10.4 

EXHIBIT INDEX 

  Restated Certificate of Incorporation of M&T Bank Corporation dated November 18, 
2010. Incorporated by reference to Exhibit 3.1 to the Form 8-K dated November 19, 2010 
(File No. 1-9861). 
  Amended and Restated Bylaws of M&T Bank Corporation, effective November 16, 2010. 
Incorporated by reference to Exhibit 3.2 to the Form 8-K dated November 19, 2010 (File 
No. 1-9861). 
  Certificate of Amendment to Certificate of Incorporation with respect to Perpetual 6.875% 
Non-Cumulative Preferred Stock, Series D, dated May 26, 2011. Incorporated by 
reference to Exhibit 3.1 of M&T Bank Corporation’s Form 8-K dated May 26, 2011 (File 
No. 1-9861). 
  Certificate of Amendment to Restated Certificate of Incorporation of M&T Bank 
Corporation, dated April 19, 2013. Incorporated by reference to Exhibit 3.1 to the Form 8-
K dated April 22, 2013 (File No. 1-9861). 
  Certificate of Amendment to Restated Certificate of Incorporation of M&T Bank 
Corporation, dated February 11, 2014. Incorporated by reference to Exhibit 3.1 to the 
Form 8-K dated February 11, 2014 (File No. 1-9861). 
  Certificate of Amendment to Certificate of Incorporation with respect to Perpetual Fixed-
to-Floating Rate Non-Cumulative Preferred Stock, Series F, dated October 27, 2016. 
Incorporated by reference to Exhibit 3.1 of M&T Bank Corporation’s Form 8-K dated 
October 28, 2016 (File No. 1-9861). 
  There are no instruments with respect to long-term debt of M&T Bank Corporation and its 
subsidiaries that involve securities authorized under the instrument in an amount 
exceeding 10 percent of the total assets of M&T Bank Corporation and its subsidiaries on 
a consolidated basis. M&T Bank Corporation agrees to provide the SEC with a copy of 
instruments defining the rights of holders of long-term debt of M&T Bank Corporation 
and its subsidiaries on request. 
  Warrant to purchase shares of M&T Bank Corporation Common Stock dated as of March 
26, 2010. Incorporated by reference to Exhibit 4.2 to the Form 10-K for the year ended 
December 31, 2012 (File No. 1-9861). 
  Warrant to purchase shares of M&T Bank Corporation Common Stock effective May 16, 
2011. Incorporated by reference to Exhibit 4.1 to the Form 8-K dated May 19, 2011 (File 
No. 1-9861). 
  Warrant Agreement (including Form of Warrant), dated as of December 11, 2012, 
between M&T Bank Corporation and Registrar and Transfer Company. Incorporated by 
reference to Exhibit 4.1 to the Form 8-A 12B dated December 12, 2012 (File No. 1-9861).
  M&T Bank Corporation Annual Executive Incentive Plan. Incorporated by reference to 
Exhibit No. 10.3 to the Form 10-Q for the quarter ended June 30, 1998 (File No. 1-
9861).* 
  Supplemental Deferred Compensation Agreement between Manufacturers and Traders 
Trust Company and Brian E. Hickey dated as of July 21, 1994, as amended. Filed 
herewith.* 
  Consulting Agreement, dated as of June 14, 2016, between M&T Bank Corporation and 
Robert E. Sadler, Jr. Incorporated by reference to Exhibit 10.1 to the Form 10-Q for the 
quarter ended June 30, 2016 (File No. 1-9861).* 
  M&T Bank Corporation Supplemental Pension Plan, as amended and restated. 
Incorporated by reference to Exhibit 10.1 to the Form 10-Q for the quarter ended March 
31, 2016 (File No. 1-9861).* 

206 

206

 
 
10.5 

10.6 
10.7 

10.8 

10.9 

10.10 

10.11 

10.12 

10.13 

10.14 

10.15 

10.16 

10.17 

10.18 

10.19 

10.20 

10.21 

  M&T Bank Corporation Supplemental Retirement Savings Plan. Incorporated by 
reference to Exhibit 10.2 to the Form 10-Q for the quarter ended March 31, 2016 (File No. 
1-9861).* 
  M&T Bank Corporation Deferred Bonus Plan, as amended and restated. Filed herewith.* 
  M&T Bank Corporation 2008 Directors’ Stock Plan, as amended. Incorporated by 
reference to Exhibit 4.1 to the Form S-8 dated October 19, 2012 (File No. 333-184504).* 
  Keystone Financial, Inc. 1992 Director Fee Plan. Incorporated by reference to Exhibit 
10.11 to the Form 10-K of Keystone Financial, Inc. for the year ended December 31, 1999 
(File No. 000-11460).* 
  M&T Bank Corporation Employee Stock Purchase Plan. Incorporated by reference to 
Exhibit 10.22 to the Form 10-K for the year ended December 31, 2012 (File No. 1-9861).*
  M&T Bank Corporation 2005 Incentive Compensation Plan. Incorporated by reference to 
Appendix A to the definitive Proxy Statement of M&T Bank Corporation dated March 4, 
2005 (File No. 1-9861).* 
  M&T Bank Corporation 2009 Equity Incentive Compensation Plan. Incorporated by 
reference to Appendix A to the Proxy Statement of M&T Bank Corporation dated March 
5, 2015 (File No. 1-9861).* 
  M&T Bank Corporation Form of Restricted Stock Award Agreement. Incorporated by 
reference to Exhibit 10.25 to the Form 10-K for the year ended December 31, 2013 (File 
No. 1-9861).* 
  M&T Bank Corporation Form of Restricted Stock Unit Award Agreement. Incorporated 
by reference to Exhibit 10.26 to the Form 10-K for the year ended December 31, 2013 
(File No. 1-9861).* 
  M&T Bank Corporation Form of Performance-Vested Restricted Stock Unit Award 
Agreement. Incorporated by reference to Exhibit 10.27 to the Form 10-K for the year 
ended December 31, 2013 (File No. 1-9861).* 
  M&T Bank Corporation Form of Performance-Vested Restricted Stock Unit Award 
Agreement (for named executive officers (“NEOs”) subject to Section 162 (m) of the 
Internal Revenue Code of 1986, as amended from time to time). Incorporated by reference 
to Exhibit 10.1 to the Form 10-Q for the quarter ended March 31, 2014 (File No. 1-
9861).* 
  Provident Bankshares Corporation Amended and Restated Stock Option Plan. 
Incorporated by reference to Exhibit 4.1 to M&T Bank Corporation’s Registration 
Statement on Form S-8 dated June 5, 2009 (File No. 333-159795).* 
  Provident Bankshares Corporation 2004 Equity Compensation Plan. Incorporated by 
reference to Exhibit 4.2 to M&T Bank Corporation’s Registration Statement on Form S-8 
dated June 5, 2009 (File No. 333-159795).* 
  Wilmington Trust Corporation Amended and Restated 2002 Long-Term Incentive Plan. 
Incorporated by reference to Exhibit 10.64 to the Form 10-Q of Wilmington Trust 
Corporation filed on November 9, 2004 (File No. 1-14659).* 
  Wilmington Trust Corporation Amended and Restated 2005 Long-Term Incentive Plan. 
Incorporated by reference to Exhibit 10.21 to the Form 10-K of Wilmington Trust 
Corporation filed on February 29, 2008 (File No. 1-14659).* 
  Wilmington Trust Corporation 2009 Long-Term Incentive Plan. Incorporated by reference 
to Exhibit D to the definitive Proxy Statement of Wilmington Trust Corporation filed on 
March 16, 2009 (File No. 1-14659).* 
  Hudson City Bancorp, Inc. Amended and Restated 2011 Stock Incentive Plan. 
Incorporated by reference to Exhibit 4.6 to the Form S-8 dated November 2, 2015 (File 
No. 333-184411).* 

207 

207

 
10.22 

11.1 

12.1 
21.1 

23.1 

31.1 

31.2 

32.1 

32.2 

  Hudson City Bancorp, Inc. 2006 Stock Incentive Plan. Incorporated by reference to 
Exhibit 4.7 to the Form S-8 dated November 2, 2015 (File No. 333-184411).* 
  Statement re: Computation of Earnings Per Common Share. Incorporated by reference to 
note 14 of Notes to Financial Statements filed herewith in Part II, Item 8, “Financial 
Statements and Supplementary Data.” 
  Ratio of Earnings to Fixed Charges. Filed herewith. 
  Subsidiaries of the Registrant. Incorporated by reference to the caption “Subsidiaries” 
contained in Part I, Item 1 hereof. 
  Consent of PricewaterhouseCoopers LLP re: Registration Statements on Form S-8 (Nos. 
33-32044, 333-43175, 333-16077, 333-40640, 333-84384, 333-127406, 333-150122, 333-
164015, 333-163992, 333-160769, 333-159795, 333-170740, 333-189099, 333-184504, 
333-189097 and 333-184411) and Form S-3 (Nos. 333-182348 and 333-207030). Filed 
herewith. 
  Certification of Chief Executive Officer under Section 302 of the Sarbanes-Oxley Act of 
2002. Filed herewith. 
  Certification of Chief Financial Officer under Section 302 of the Sarbanes-Oxley Act of 
2002. Filed herewith. 
  Certification of Chief Executive Officer under 18 U.S.C. §1350 pursuant to Section 906 of 
the Sarbanes-Oxley Act of 2002. Filed herewith. 
  Certification of Chief Financial Officer under 18 U.S.C. §1350 pursuant to Section 906 of 
the Sarbanes-Oxley Act of 2002. Filed herewith. 

101.INS    XBRL Instance Document. Filed herewith. 
101.SCH   XBRL Taxonomy Extension Schema. Filed herewith. 
101.CAL   XBRL Taxonomy Extension Calculation Linkbase. Filed herewith. 
101.LAB   XBRL Taxonomy Extension Label Linkbase. Filed herewith. 
101.PRE   XBRL Taxonomy Extension Presentation Linkbase. Filed herewith. 
101.DEF   XBRL Taxonomy Definition Linkbase. Filed herewith. 

*  Management contract or compensatory plan or arrangement. 

208 

208

 
 
   
 
Direct Stock Purchase 

A plan is available to common shareholders and the general public whereby  

and Dividend 

 shares of M&T Bank Corporation’s common stock may be purchased directly 

Reinvestment Plan  

 through the transfer agent noted below and common shareholders may also  

invest their dividends and voluntary cash payments in additional shares of 

M&T Bank Corporation’s common stock.

Inquiries 

 Requests for information about the Direct Stock Purchase and Dividend 

Reinvestment Plan and questions about stock certificates, dividend checks,  

direct deposit of dividends or other account information should be addressed to 

M&T Bank Corporation’s transfer agent, registrar and dividend disbursing agent:

(First Class, Registered and Certified Mail)

(Overnight and Courier Mail) 

Computershare  

P.O. Box 30170

Computershare  

211 Quality Circle, Suite 210

College Station, TX 77842-3170

College Station, TX 77845

866-293-3379

E-mail address: web.queries@computershare.com

Internet address: www.computershare.com/investor

 Requests for additional copies of this publication or annual or quarterly 

reports filed with the United States Securities and Exchange Commission 

(SEC Forms 10-K and 10-Q), which are available at no charge, may be 

directed to:

M&T Bank Corporation

Shareholder Relations Department

One M&T Plaza, 8th Floor

Buffalo, NY 14203-2399

716-842-5138

E-mail address: ir@mtb.com

All other general inquiries may be directed to: 716-635-4000

Internet Address 

www.mtb.com

Quotation and Trading 

 M&T Bank Corporation’s common stock is traded under the

of Common Stock  

symbol MTB on the New York Stock Exchange (“NYSE”).

 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
mtb.com 

COVER & SEC 10-K:

10%

NARRATIVE: