M&T Bank Annual Report 2022

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FY2022 Annual Report · M&T Bank

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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, 2022
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
Perpetual Fixed-to-Floating Rate

Non-Cumulative Preferred Stock, Series H

Trading Symbols
MTB

MTBPrH

Name of Each Exchange on Which Registered
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 every Interactive Data File required to be submitted pursuant to Rule 405 of
Regulation S-T (§ 232.405 of this chapter) during the preceding 12 months (or for such shorter period that the registrant was required to submit such files).
Yes ☒ No ☐

Indicate by check mark whether the registrant is a large accelerated filer, an accelerated filer, a non-accelerated filer, a smaller reporting company, or an
emerging growth company. See the definitions of “large accelerated filer,” “accelerated filer,” “smaller reporting company,” and “emerging growth company”
in Rule 12b-2 of the Exchange Act.
☒
Large accelerated filer
☐
Non-accelerated filer
☐
Emerging growth company

Accelerated filer
Smaller reporting company

☐
☐

If an emerging growth company, indicate by check mark if the registrant has elected not to use the extended transition period for complying with any

new or revised financial accounting standards provided pursuant to Section 13(a) of the Exchange Act. ☐

Indicate by check mark whether the registrant has filed a report on and attestation to its management’s assessment of the effectiveness of its internal
control over financial reporting under Section 404(b) of the Sarbanes-Oxley Act (15 U.S.C. 7262(b)) by the registered public accounting firm that prepared or
issued its audit report. ☒

If securities are registered pursuant to Section 12(b) of the Act, indicate by check mark whether the financial statements of the registrant included in the

filing reflect the correction of an error to previously issued financial statements. ☐

Indicate by check mark whether any of those error corrections are restatements that required a recovery analysis of incentive-based compensation received

by any of the registrant’s executive oﬃcers during the relevant recovery period pursuant to §240.10D-1(b). ☐

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, 2022: $27,304,085,267.

Number of shares of the Common Stock, $0.50 par value, outstanding as of the close of business on February 17, 2023: 167,792,740 shares.

Documents Incorporated By Reference:

(1)
Auditor Firm Id:

Portions of the Proxy Statement for the 2023 Annual Meeting of Shareholders of M&T Bank Corporation in Parts II and III.
PricewaterhouseCoopers LLP

Auditor Location: Buffalo, NY, United States

Auditor Name:

238

M&T BANK CORPORATION
Form 10-K for the year ended December 31, 2022
CROSS-REFERENCE SHEET

PART I

Item 1. Business ...............................................................................................................................................
Disclosure pursuant to subpart 1400 of Regulation S-K

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 and interest-bearing liabilities .................................................................................
C. Rate/volume variances...............................................................................................................
Investments in debt securities
A. Maturity schedule and weighted average yield ....................................................................

II.

III. Loan portfolio

A. Maturity schedule........................................................................................................................

IV. Allowance for credit losses

A. Credit ratios ..................................................................................................................................
Factors driving material changes in credit ratios or related components .......................

B. Allocation of the allowance for credit losses........................................................................

V. Deposits

Form 10-K
Page

63
23

75-79
74-84, 135, 139-
145
84, 139

A. Average balances and rates.......................................................................................................
B. Uninsured and time deposits over $250,000.........................................................................
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 .............................................................................................

63
70-71, 95
24
46
46
47
47
47

PART II

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

Purchases of Equity Securities ..................................................................................................
A. Principal market ..........................................................................................................................
B. Approximate number of holders at year-end ........................................................................
C. Frequency and amount of dividends declared ......................................................................
D. Restrictions on dividends ..........................................................................................................
E. Securities authorized for issuance under equity compensation plans .............................
F. Performance graph......................................................................................................................
G. Repurchases of common stock.................................................................................................
Item 6. Selected Financial Data....................................................................................................................
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 ..........................................................................

51
51
21
22-23, 109, 121
8
51
52
53
53

53
111
111

A. Report on Internal Control Over Financial Reporting........................................................
B. Report of Independent Registered Public Accounting Firm .............................................
C. Consolidated Balance Sheet — December 31, 2022 and 2021 ........................................
D. Consolidated Statement of Income — Years ended December 31, 2022, 2021 and

2020...........................................................................................................................................

E. Consolidated Statement of Comprehensive Income — Years ended December 31,

2022, 2021 and 2020 .............................................................................................................

F. Consolidated Statement of Cash Flows — Years ended December 31, 2022, 2021

and 2020 ..................................................................................................................................

G. Consolidated Statement of Changes in Shareholders’ Equity — Years ended

December 31, 2022, 2021 and 2020 ..................................................................................
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..............................................................................................................................
Item 9C. Disclosure Regarding Foreign Jurisdictions that Prevent Inspections ..................................

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

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

112
113
117

118

119

120

121
122
109

193
193

193
193
193
193
193
193

193
194

194
194
194

195
197
198

Item 1. Business.

PART I

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, 2022, the
Company had consolidated total assets of $200.7 billion, deposits of $163.5 billion and shareholders’
equity of $25.3 billion. The Company had 22,210 full-time and 598 part-time employees as of
December 31, 2022.

At December 31, 2022, 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, 2022, M&T Bank
represented over 99% of consolidated assets of the Company.

On April 1, 2022, M&T completed the acquisition of People's United Financial, Inc. (“People’s
United”). Through its subsidiaries, People's United provided commercial banking, retail banking and
wealth management services to individual, corporate and municipal customers through a network of
branches located in Connecticut, southeastern New York, Massachusetts, Vermont, New Hampshire
and Maine. Following the acquisition, People's United Bank, National Association, a national banking
association and a wholly owned subsidiary of People's United, merged with and into M&T Bank, with
M&T Bank as the surviving entity. The acquisition of People's United expanded the Company's
geographical footprint and management expects the Company will benefit from greater geographical
diversity and the advantages of scale associated with being a larger 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, reviews different opportunities from time to time 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”) through its Deposit
Insurance Fund (“DIF”) 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, 2022, M&T Bank had 1,010 domestic banking offices located in
New York State, Maryland, New Jersey, Pennsylvania, Delaware, Connecticut, Massachusetts, Maine,
Vermont, New Hampshire, Virginia, West Virginia, and the District of Columbia and a full-service
commercial banking office in Ontario, Canada. As of December 31, 2022, M&T Bank had consolidated
total assets of $200.3 billion, deposits of $166.0 billion and shareholder’s equity of $24.4 billion. 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 areas where M&T Bank maintains banking
offices, 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.

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. As of December 31, 2022, Wilmington
Trust, N.A. had total assets of $692 million, deposits of $10 million and shareholder’s equity of $585
million.

M&T Securities, Inc. (“M&T Securities”) is a wholly owned subsidiary of M&T 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. It provides institutional brokerage and
securities services. As of December 31, 2022, M&T Securities had assets and shareholder's equity of
$49 million. M&T Securities recorded $6 million of revenue during 2022. The headquarters of M&T
Securities are located at One Light Street, Baltimore, Maryland 21202.

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, 2022, WTIM had
assets of $7 million and shareholder’s equity of $5 million. WTIM recorded revenues of $2 million in
2022. WTIM’s headquarters is located at Terminus 27th Floor, 3280 Peachtree Road N.E., Atlanta,
Georgia 30305.

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, 2022, Wilmington Trust Company
had total assets of $1.2 billion and shareholder’s equity of $712 million. Revenues of Wilmington Trust
Company were $138 million in 2022. The headquarters of Wilmington Trust Company are located at
1100 North Market Street, Wilmington, Delaware 19890.

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, 2022, M&T Realty Capital serviced or sub-serviced $26.0 billion of
commercial mortgage loans for non-affiliates and had assets of $932 million and shareholder’s equity
of $179 million. M&T Realty Capital recorded revenues of $155 million in 2022. The headquarters of
M&T Realty Capital are located at One Light Street, Baltimore, Maryland 21202.

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, 2022, WT Investment Advisors had assets of $64 million and shareholder’s
equity of $52 million. WT Investment Advisors recorded revenues of $42 million in 2022. The
headquarters of WT Investment Advisors are located at 1100 North Market Street, Wilmington,
Delaware 19890.

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 $35 million and shareholder's equity of $34 million as of December 31, 2022. Wilmington
Funds Management recorded revenues of $24 million in 2022. The headquarters of Wilmington Funds
Management are located at 1100 North Market Street, Wilmington, Delaware 19890.

Following the acquisition of People’s United on April 1, 2022, M&T Bank's subsidiaries also
include People's United Advisors, Inc. ("PUA"), a Connecticut corporation formed in 2018 that
provides investment advisory services and financial management and planning services. As of
December 31, 2022 PUA had assets and shareholder's equity of $11 million and $10 million,
respectively. PUA recorded revenues of $23 million during the nine months ended December 31, 2022.
Other subsidiaries of M&T Bank obtained in the People's United acquisition include entities that
provide equipment leasing and financing services throughout the United States. Those subsidiaries are:
LEAF Commercial Capital, Inc., a Delaware corporation incorporated in 2010, M&T Capital and
Leasing Corp. (f/k/a People’s Capital and Leasing Corp.) a Connecticut corporation formed in 1997,
and M&T Equipment Finance Corp. (f/k/a People’s United Equipment Finance Corp.), a Texas
corporation formed in 1989. The combined assets and shareholders' equity of the three entities was
$5.9 billion and $482 million, respectively, at December 31, 2022. The combined revenues of the
equipment leasing and financing services subsidiaries were $280 million in the nine months following
their acquisition on April 1, 2022.

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,
2022.

Segment Information, Principal Products/Services and Foreign Operations
Information about the Registrant’s business segments is included in note 23 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 18 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, in 2021, trust income.
The amount of income from such sources during those years is recorded in various business segments
and is set forth in the Company’s Consolidated Statement of Income and Notes to Financial Statements
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 DIF 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 U.S. 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.

Described hereafter are material elements of the significant federal and state laws and regulations

applicable to M&T and its subsidiaries.

Overview
M&T is registered with the Board of Governors of the Federal Reserve System (“Federal Reserve”) as
a financial holding company and BHC under the BHCA. As such, M&T and its subsidiaries are subject
to the supervision, examination, reporting, capital and other requirements of the BHCA and the
regulations of the Federal Reserve. In addition, M&T’s banking subsidiaries are subject to regulation,
supervision and examination by, as applicable, the New York State Department of Financial Services
(“NYSDFS”), the Office of the Comptroller of the Currency (“OCC”), the FDIC and the Federal
Reserve, and their consumer financial products and services are regulated by the Consumer Financial
Protection Bureau (“CFPB”). Further, financial services entities such as M&T’s investment advisor
and broker-dealer subsidiaries are subject to regulation by the Securities and Exchange Commission
(“SEC”),
the Financial Industry Regulatory Authority (“FINRA”), and the Securities Investor
Protection Corporation (“SIPC”), among others. Other non-bank affiliates and activities, particularly
insurance brokerage and agency activities, are subject to other federal and state laws and regulations
as well as licensing and regulation by state insurance and bank regulatory agencies. Although the scope
of regulation and the 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 as well as regulations requiring, among
other things, maintenance of capital, record keeping, and reporting.

M&T Bank is a New York chartered bank and a member of the Federal Reserve. As a result, it is
subject to extensive regulation, examination and oversight by the NYSDFS and the Federal Reserve
Bank ("FRB") of New York. 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 with
respect to capital levels. Its deposits are insured by the FDIC, subject to certain limitations, which also
exercises regulatory oversight over certain aspects of M&T Bank’s operations.

Wilmington Trust, N.A. is a national bank with operations that include fiduciary and related
activities with limited lending and deposit business. It is subject to extensive regulation, examination
and oversight by the OCC which governs many aspects of its operations, including fiduciary activities,
capital levels, office locations, dividends and subsidiary activities. Its deposits are insured by the FDIC,
subject to certain limitations, which also exercises regulatory oversight over certain aspects of the
operations of Wilmington Trust, N.A.

Certain other subsidiaries are subject to regulation by other federal and state regulators as well.
For example, M&T Securities is regulated by the SEC, FINRA, SIPC, and state securities regulators,
and WT Investment Advisors and PUA are also subject to SEC regulation.

Permissible Activities under the BHC Act
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 obligated by a Federal Reserve policy
to serve as a managerial and financial source of strength to their subsidiary depository institutions,
including committing resources to support such subsidiaries. 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
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
merchant banking.

M&T elected to become a financial holding company in March 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 M&T’s ability to enter
into certain transactions, including acquisitions, or obtain necessary approvals in connection with those
transactions, as well as loss of financial holding company status. Additionally, if each of the
Company’s depository institution subsidiaries has not received at least a “satisfactory” rating on its
most recent examination under the Community Reinvestment Act of 1977 (the “CRA”), the Company
would not be able to commence any new financial activities or acquire a company that engages in such
activities, although it would still be allowed to engage in activities closely related to banking and make
investments in the ordinary course of conducting banking activities. For a further discussion of the
CRA, see the section captioned “Community Reinvestment Act” included herein.

Enhanced Prudential Standards
Under Section 165 of the Dodd-Frank Wall Street Reform and Consumer Protection Act (“Dodd-Frank
Act”), as amended by the Economic Growth, Regulatory Relief, and Consumer Protection Act of 2018
(“EGRRCPA”), U.S. bank holding companies with total consolidated assets of $100 billion or more,
including M&T, are subject to enhanced prudential standards. The enhanced prudential standards
include risk-based capital and leverage requirements, liquidity standards, risk management and risk
committee requirements, stress test requirements and a debt-to-equity limit for companies that the
Financial Stability Oversight Council has determined would pose a grave threat to systemic financial
stability were they to fail such limits. “Tailoring Rules” adopted by the Federal Reserve and other
federal bank regulators in 2019 assign each U.S. BHC with $100 billion or more in total consolidated
assets, as well as its bank subsidiaries, to one of four categories based on its size and five other risk-
based indicators: (i) cross-jurisdictional activity, (ii) weighted short-term wholesale funding, (iii)
nonbank assets, (iv) off-balance sheet exposure, and (v) status as a U.S. global systemically important

BHC (“G-SIB”). Under the Tailoring Rules, M&T and its depository institution subsidiaries are subject
to Category IV standards, which apply to banking organizations with at least $100 billion in total
consolidated assets that do not meet any of the thresholds specified for Categories I through III. The
threshold for Category III is $250 billion or more in total consolidated assets, or $100 billion or more
in total consolidated assets and at least $75 billion in weighted short-term wholesale funding, nonbank
assets or off-balance sheet exposures.

Under the Tailoring Rules, Category IV firms, among other things, (i) are not subject to any
Liquidity Coverage Ratio (“LCR”) or Net Stable Funding Ratio (“NSFR”) (or, in certain cases, are
subject to reduced requirements), (ii) remain eligible to opt-out of the requirement to recognize most
elements of Accumulated Other Comprehensive Income (“AOCI”) in regulatory capital, (iii) are no
longer subject to company-run stress testing requirements, (iv) are subject to supervisory stress testing
on at least a biennial basis rather than an annual basis, (v) are subject to requirements to develop and
maintain a capital plan on an annual basis and (vi) are subject to certain liquidity risk management and
risk committee requirements. The Federal Reserve may impose more stringent requirements (e.g.
frequency of supervisory stress tests or capital plan submissions) based on a company’s financial
condition, size, complexity, risk profile, scope of operations or activities, or risks to the U.S. economy.
Category IV firms continue not to be subject to (i) advanced approaches capital requirements, (ii) the
supplementary leverage ratio (“SLR”) and (iii) the countercyclical capital buffer (“CCyB”). Other
elements of the Tailoring Rules are discussed in further detail throughout this section. Compared with
Category IV firms, Category III firms are subject to the LCR and NSFR, company-run stress testing
requirements, annual (instead of biennial) supervisory stress tests, the SLR and the CCyB.

Capital Requirements
M&T and its subsidiary banks are required to comply with applicable capital adequacy standards
established by the federal banking agencies (the “Capital Rules”), which are based on the Basel
Committee’s December 2010 final capital framework for strengthening international capital standards,
referred to as “Basel III”. The Capital Rules include both risk-based requirements, which compare
three measures of capital to risk-weighted assets (“RWAs”), as well as leverage requirements, which,
in the case of Category IV bank holding companies such as M&T, consist of the Tier 1 leverage ratio
described below. Pursuant to the Capital Rules, the minimum capital ratios are as follows:

•
•
•
•

4.5% Common Equity Tier 1 Capital (“CET1”) to RWAs;
6.0% Tier 1 capital (that is, CET1 plus Additional Tier 1 capital) to RWAs;
8.0% Total capital (that is, Tier 1 plus Tier 2 capital) to RWAs; and
4.0% Tier 1 capital to average consolidated assets (the “leverage ratio”).

In calculating risk-based 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
these exposures that from time to time may affect how specific exposures are classified and could lead
to increases or decreases of the regulatory risk weights assigned to such exposures.

The Capital Rules also require firms to maintain a “buffer,” consisting solely of CET1 capital, in
addition to the minimum risk-based requirements. Failure to satisfy the buffer requirement in full
results in graduated constraints on capital distributions and discretionary executive compensation. The
severity of the constraints depends on the amount of the shortfall and the firm’s “eligible retained
income,” defined as the greater of (i) net income for the four preceding quarters net of distributions
and associated tax effects not reflected in net income and (ii) the average of net income over the
preceding four quarters.

As a Category IV BHC, M&T’s buffer requirement, referred to as the “Stress Capital Buffer,” is
determined through the Federal Reserve’s supervisory stress tests, discussed below. For M&T’s bank

subsidiaries, the buffer requirement consists of the static capital conservation buffer equal to 2.5% of
RWAs.

CET1 consists of common stock instruments that meet the eligibility criteria in the Capital Rules,
including common stock and related surplus, net of treasury stock, retained earnings, certain minority
interests and, for certain firms, AOCI. As permitted under the Capital Rules, M&T made a one-time
permanent election to neutralize certain AOCI components, with the result that those components are
not recognized in M&T’s CET1.

The Capital Rules provide for a number of deductions from and adjustments to CET1. As a “non-
advanced approaches” firm under the Capital Rules, M&T is subject to rules that provide for simplified
capital requirements relating to the threshold deductions for mortgage servicing assets, deferred tax
assets arising from temporary differences that a banking organization could not realize through net
operating loss carry backs, and investments in the capital of unconsolidated financial institutions, as
well as the inclusion of minority interests in regulatory capital. M&T’s and its subsidiary banks’
regulatory capital ratios are presented in note 24 of Notes to Financial Statements filed herewith in Part
II, Item 8, “Financial Statements and Supplementary Data.”

In December 2017, the Basel Committee published standards that it described as the finalization
of the Basel III post-crisis regulatory reforms. Among other things, these standards revise the Basel
Committee’s standardized approach for credit risk (including by recalibrating risk weights and
introducing new capital requirements for certain “unconditionally cancellable commitments,” such as
unused credit card lines of credit) and provide a new standardized approach for operational risk capital.
The federal bank regulators have not yet proposed rules implementing these standards. Under the
current U.S. capital rules, operational risk capital requirements and a capital floor apply only to
advanced approaches institutions, and not to the Company. The impact of these standards will depend
on the manner in which they are implemented by the federal banking regulators.

Stress Testing and Stress Capital Buffer
As part of the enhanced prudential requirements applicable to systemically important financial
institutions, the Federal Reserve conducts periodic analyses of bank holding companies with at least
$100 billion in total consolidated assets using baseline and severely adverse economic and financial
scenarios generated by the Federal Reserve. For Category IV firms, such as M&T, these supervisory
stress tests occur on a biennial basis, in even-numbered years. The Federal Reserve may also use
additional components in the severely adverse scenario or additional or more complex scenarios
designed to capture salient risks to specific business groups. A summary of results of the Federal
Reserve’s analysis under the severely adverse stress scenario is publicly disclosed. Under the Tailoring
Rules, Category IV firms, including M&T, are no longer subject to company-run stress testing
requirements.

Bank holding companies with total consolidated assets of $100 billion or more, including
Category IV bank holding companies such as M&T, must annually submit capital plans as part of the
Federal Reserve’s process. The comprehensive capital plans include a view of capital adequacy under
various scenarios — including a BHC-defined baseline scenario, a baseline scenario provided by the
Federal Reserve, at least one BHC-defined stress scenario, and any severely adverse scenario provided
by the Federal Reserve. The 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 process is also required to collect and report certain related data
to the Federal Reserve on a regular basis. The Stress Capital Buffer is based on a BHC’s stressed losses
in the supervisory stress test, plus four quarters of planned common stock dividends, subject to a floor
of 2.5% of RWAs. In June 2022, the Federal Reserve released the results of its most recent supervisory
stress tests. Based on those results, on October 1, 2022, M&T's stress capital buffer of 4.7% became

effective. Accordingly, it currently is subject to a CET1 capital requirement of 9.2% (a sum of the
Stress Capital Buffer and the minimum CET1 capital ratio).

In January 2021, the Federal Reserve issued a final rule to align its process with the categories
set forth in the Tailoring Rules. Under the final rule, for Category IV firms, the portion of the Stress
Capital Buffer based on the Federal Reserve’s supervisory stress tests will be calculated biennially, in
even-numbered years. During a year in which a Category IV firm does not undergo a supervisory stress
test, the firm will receive an updated Stress Capital Buffer that reflects the firm’s updated planned
common stock dividends. A Category IV firm is also able to elect to participate in the supervisory
stress test in a year in which the firm would not normally be subject to the supervisory stress test and
consequently receive an updated Stress Capital Buffer. The Federal Reserve may impose more
stringent requirements (e.g., frequency of supervisory stress tests or capital plan submissions) based
on various factors. In connection with the acquisition of People's United, M&T will be required to
participate in the 2023 supervisory stress test and receive an updated Stress Capital Buffer.

The Federal Reserve also incorporates an assessment of the qualitative aspects of the firm’s
capital planning process into regular, ongoing supervisory activities and through targeted, horizontal
assessments of particular aspects of capital planning. M&T’s annual capital plan is currently due in
April each year. The Federal Reserve publishes the results of its supervisory stress tests by June 30 of
each year.

A BHC’s planned capital distributions in its annual capital plan submissions must be consistent
with any effective distribution limitations that would apply under the firm’s own baseline projections,
including its Stress Capital Buffer.

Distributions
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 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 24 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 common
stock repurchases by M&T are subject to the oversight of the Federal Reserve. M&T’s ability to make
capital distributions would likely be impacted in the event that M&T fails to maintain its Stress Capital
Buffer above its minimum CET1 risk-based, Tier-1 risk-based and total
risk-based capital
requirements.

In addition, the Federal Reserve’s capital plan rule also provides that a BHC must receive prior
approval for any dividend, stock repurchase, or other capital distribution, other than a capital
distribution on a newly issued capital instrument, if the BHC is required to resubmit its capital plan.
Among other circumstances, a firm may be required to resubmit its capital plan in connection with
certain acquisitions or dispositions.

Liquidity
Under the Tailoring Rules, as a Category IV firm, the Company is not subject to the Federal Reserve
and other federal banking regulators rules that implement a U.S. version of the Basel Committee’s
LCR requirement, which 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 or the 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. The Federal Reserve’s
enhanced prudential standards, however, require the Company, as a BHC with $100 billion or more in
total consolidated assets, to comply with enhanced liquidity and overall risk management standards,
which include maintaining a level of highly liquid assets based on projected funding needs for 30 days,
and increased involvement by boards of directors in liquidity and overall risk management. Under the
Tailoring Rules, the liquidity risk management and reporting requirements are less stringent for
Category IV bank holding companies as compared with bank holding companies in a different
Category.

Cross Guaranty Provision
The cross guaranty provisions in the Federal Deposit Insurance Act (“FDIA”) require each insured
depository institution owned by the same BHC to be financially responsible for the failure or resolution
costs of any affiliated insured institution. Generally, the amount of the cross guaranty liability is equal
to the estimated loss to the DIF for the resolution of the affiliated institution(s) in default. The FDIC’s
claim under the cross guaranty provision 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 guaranty provision if it determines that a waiver is in the best interest of
the DIF.

Volcker Rule
The Volcker Rule limits proprietary trading and investing in 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 implemented the
required procedures for those areas in which trading does occur. In addition, the Company does not
engage in any significant covered fund activities that are impacted by the Volcker Rule.

internal audit

information systems,

relating to internal controls,

Safety and Soundness Standards
Guidelines adopted by the federal bank regulatory agencies pursuant to the FDIA establish general
standards
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.

systems,

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. The federal banking regulators have specified by regulation the relevant capital
levels for each category. The FDIA’s prompt corrective action provisions only apply to depository
institutions and not to bank holding companies. The Federal Reserve’s regulations applicable to bank
holding companies separately define “well capitalized.” A financial holding company that is not well-
capitalized and well-managed (or whose bank subsidiaries are not well capitalized and well managed)
under applicable prompt corrective action standards may be restricted in certain of its activities and
ultimately may lose financial holding company status. Under existing rules, a depository institution is
deemed to be “well capitalized” if it has (i) a CET1 ratio of at least 6.5%, (ii) a Tier 1 capital ratio of
at least 8%, (iii) a Total capital ratio of at least 10%, and (iv) a Tier 1 leverage ratio of at least 5%.

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. An undercapitalized institution is also generally prohibited
from increasing its average total assets, accepting brokered deposits or offering interest rates on any
deposits significantly higher than prevailing market rates, 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 or
affiliates (including M&T Realty Capital, M&T Securities, WT Investment Advisors and PUA) 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: (i) 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 (ii) 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. “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 terms and under circumstances including credit standards, (i)

that are substantially the same, or at least as favorable to such bank or its subsidiary, as those prevailing
at the time for comparable transactions with or involving other nonaffiliated companies, or in the
absence of comparable transactions, (ii) that in good faith would be offered to, or would apply to,
nonaffiliated companies.

FDIC Insurance Assessments
M&T Bank and Wilmington Trust, N.A. deposits are insured by the DIF of the FDIC up to the limits
set forth under applicable law. The FDIC imposes a risk-based premium assessment system that
determines assessment rates for financial institutions. 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 adjustments to the total score based upon
significant risk factors that are not adequately captured in the calculations. Under the current system,
premiums are assessed quarterly.

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.

On October 18, 2022, the FDIC finalized a rule that would increase initial base deposit insurance
assessment rates by 2 basis points, beginning with the first quarterly assessment period of 2023. The
FDIC, as required under the FDIA, established a plan in September 2020 to restore the DIF reserve
ratio to meet or exceed the statutory minimum of 1.35 percent within eight years. The increased
assessment is intended to improve the likelihood that the DIF reserve ratio would reach the required
minimum by the statutory deadline of September 30, 2028.

Acquisitions
Federal and state laws impose notice and approval requirements for mergers and acquisitions involving
depository institutions or bank holding companies. For example, the BHCA requires every BHC to
obtain the prior approval of the Federal Reserve before: (i) it may acquire direct or indirect ownership
or control of any voting shares of any bank or savings institution, if after such acquisition, the BHC
will directly or indirectly own or control 5% or more of the voting shares of the institution; (ii) it or
any of its subsidiaries, other than a bank, may acquire all or substantially all of the assets of any bank
or savings institution; or (iii) it may merge or consolidate with any other BHC. In addition, financial
holding companies are required to obtain prior approval from the Federal Reserve before acquiring
certain nonbank financial companies with assets exceeding $10 billion.

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 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 and includes
the parties’ performance under the CRA and compliance with laws, especially consumer protection
laws. When evaluating a transaction, the Federal Reserve must also take into account the institutions’

effectiveness in combating money laundering and 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 several 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 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 noted
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 states 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
rules to implement this requirement but these proposed rules have not been finalized.

In October 2022, the SEC adopted a final rule directing national securities exchanges and
associations, including the New York Stock Exchange, to require policies mandating the recovery or
“clawback” of excess incentive-based compensation earned by a current or former executive officer
during the three fiscal years preceding a required accounting restatement, including to correct an error
that would result in a material misstatement if the error were corrected in the current period or left
uncorrected in the current period. The excess compensation would be based on the amount the
executive officer would have received had the incentive-based compensation been determined using
the restated financials. The final rule requires the exchanges to propose conforming listing standards
by February 26, 2023 and requires the standards to become effective no later than November 28, 2023.
Each listed issuer, which includes M&T as a listed issuer on the New York Stock Exchange, would
then be required to adopt a clawback policy within 60 days after its exchange’s listing standard has
become effective. M&T will work to implement these new requirements as the rule becomes effective.
In addition, the NYSDFS 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.

Resolution Planning
Pursuant to the Dodd-Frank Act, as amended by EGRRCPA, certain bank holding companies are
required to report periodically to the Federal Reserve and the FDIC a resolution plan for their rapid
and orderly resolution in the event of material financial distress or failure. In late 2019, the Federal

Reserve and FDIC issued modified rules that, among other things, adjusted the review cycles and
applicability of the agencies’ resolution planning requirements. Under these rules, Category IV firms
such as M&T are not required to submit resolution plans.

The FDIC has separately required insured depository institutions (“IDIs”) with $50 billion or
more in total assets, such as M&T Bank, to submit to the FDIC periodic plans for resolution in the
event of the institution’s failure. In January 2021, the FDIC lifted its existing moratorium on resolution
plans, resuming the requirement for resolution plan submissions for IDIs with $100 billion or more in
assets. The FDIC also announced its intention to engage in targeted engagement and capabilities testing
related to resolution planning with select firms, for which M&T Bank most recently participated during
2021. In June 2021, the FDIC issued a Statement on Resolution Plans for IDI’s, which, among other
things, provides general information regarding the content that filers are expected to prepare and
extends the submission frequency for specified IDI’s to a three-year resolution plan filing cycle.
Pursuant to this filing cycle, M&T Bank submitted its most recent resolution plan to the FDIC in
November 2022.

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 without limitation, the
FDIC has the power:

•

to transfer any of the depository institution’s assets and liabilities to a new depository
institution, including a newly formed “bridge” bank without the approval of the insolvent
depository institution’s creditors or equity holders;
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 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 with 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
law, depositors and certain claims for administrative expenses and employee
Under federal
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 Cyber Security
The federal banking regulators have adopted rules that limit the ability of banks and other financial
institutions to disclose non-public and personally identifiable information about consumers to non-
affiliated third parties. These limitations require disclosure of privacy policies to consumers and, in
some circumstances, allow 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 November 2021,

the federal banking agencies issued a final rule requiring banking
organizations to notify their primary regulator as soon as possible and within 36 hours of determining
that a “notification incident” has occurred. A notification incident is a “computer-security incident”
that has materially disrupted or degraded, or is reasonably likely to materially disrupt or degrade, the

banking organization’s ability to deliver services to a material portion of its customer base, jeopardize
the viability of key operations of the banking organization, or impact the stability of the financial
sector. The final rule also requires specific and immediate notifications by bank service providers that
become aware of similar incidents. The rule was effective April 1, 2022, with compliance required by
May 1, 2022.

Financial institutions regulated by the NYSDFS, including M&T Bank, are also subject to
NYSDFS regulations on cybersecurity matters, including, among other things, requirements to (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.

On November 9, 2022, the NYSDFS released proposed amendments to its cybersecurity
regulations that represent a significant update to the regulation of cybersecurity practices. The
amendments generally fall within the following five categories: (i) increased mandatory controls
associated with common attack vectors, (ii) enhanced requirements for privileged accounts, (iii)
enhanced notification obligations, (iv) expansion of cyber governance practices and (v) additional
cybersecurity requirements for larger companies. Most amendments as proposed would become
effective within 180 days of adoption.

In March 2022, the SEC proposed new rules that would require registrants, such as M&T, to (i)
report material cybersecurity incidents on Form 8-K, (ii) include updated disclosure in Forms 10-K
and 10-Q of previously disclosed cybersecurity incidents and disclose previously undisclosed
individually immaterial incidents when a determination is made that they have become material on an
aggregated basis, (iii) disclose cybersecurity policies and procedures and governance practices,
including at the board and management levels in Form 10-K and (iv) disclose the board of directors’
cybersecurity expertise.

Many states and regulators have been increasingly active in implementing privacy and
cybersecurity standards and regulations, including implementing or modifying their data breach
notification and data privacy requirements. One example of recent state legislation is the California
Consumer Privacy Act (“CCPA”), which became effective on January 1, 2020 and applies to for-profit
businesses that conduct business in California and meet certain revenue or data collection thresholds.
November 2020 amendments expanding the scope of and requirements under the CCPA generally
became effective on January 1, 2023.

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 consumers and promote lending to various sectors of the economy. Such laws include: the
Electronic Signatures in Global and National Commerce Act, the Equal Credit Opportunity Act, the
Fair Credit Reporting Act, the Fair and Accurate Credit Transactions Act, the Gramm-Leach Bliley
Act, the Truth in Lending Act, the Home Mortgage Disclosure Act, the Electronic Fund Transfer Act,
the Real Estate Settlement Procedures Act, the Military Lending Act, the Servicemembers Civil Relief
Act, and various state law counterparts. Furthermore, the 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 consumers. There are also consumer protection laws governing
deposit taking activities (e.g. the Expedited Funds Availability Act and the Truth in Savings Act), as
well as securities and insurance laws governing certain aspects of the Company’s consolidated
operations.

The CFPB has 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 which violate the Consumer Financial Protection Act. The CFPB has examination and
enforcement authority over all banks and savings institutions with more than $10 billion in assets,
including M&T Bank.

In addition, federal law permits states to adopt consumer protection laws and standards that are
more stringent than those adopted at the federal level and, in certain circumstances, permits state
attorneys general to enforce compliance with both the state and federal laws and regulations.

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 the relevant depository institutions: the Federal Reserve, the FDIC and the
OCC. For purposes of the CRA, M&T is regulated by the Federal Reserve. 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. An unsatisfactory CRA evaluation could result in the delay or denial of acquisition or merger
applications, among other activities. M&T Bank has a current 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 currently has a rating of 1, or “Outstanding” from the NYSDFS. Wilmington Trust, N.A. has
been designated a special purpose trust company since March 3, 2016, and is therefore exempt from
the requirements of the CRA. In May 2022, the OCC, the Federal Reserve, and the FDIC jointly issued
a proposed rule to modernize Federal banking regulators’ regulations implementing the CRA. The
proposed rule would adjust CRA evaluations based on bank size and type, with many of the proposed
changes applying only to banks with over $2 billion in assets and several applying only to banks with
over $10 billion in assets, such as M&T. The effects on the Company of any potential change to the
CRA rules will depend on the final form of any Federal Reserve rulemaking.

Bank Secrecy Act Regulation and Anti-Money Laundering Obligations
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. These provisions also 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, including
the denial by federal regulators of proposed merger, acquisition, restructuring or other expansionary
activity.

The Financial Crimes Enforcement Network (“FinCEN”), which drafts regulations implementing
the USA PATRIOT Act and other anti-money laundering and Bank Secrecy Act legislation, has
adopted rules that require financial institutions to, among other things, obtain beneficial ownership
information with respect to legal entities with which such institutions conduct business, subject to
certain exclusions and exemptions. Bank regulators are focusing their examinations on anti-money

laundering compliance, and M&T continues to monitor and augment, where necessary, its Bank
Secrecy Act and Anti-Money Laundering (“BSA/AML”) Compliance Program.

The Anti-Money Laundering Act of 2020 (“AMLA”), which amends the BSA, was enacted in
January 2021. The AMLA is intended to comprehensively reform and modernize U.S. bank secrecy
and anti-money laundering laws. Among other things, it codifies a risk-based approach to anti-money
laundering compliance for financial institutions; requires the U.S. Department of the Treasury to
promulgate priorities for anti-money laundering and countering the financing of terrorism policy;
requires the development of standards for testing technology and internal processes for BSA
compliance; expands enforcement and investigation-related authority, including increasing available
sanctions for certain BSA violations; and expands BSA whistleblower incentives and protections. In
June 2021, FinCEN issued the priorities for anti-money laundering and countering the financing of
terrorism policy required under AMLA. The priorities include: corruption, cybercrime, terrorist
financing, fraud, transnational crime, drug trafficking, human trafficking and proliferation financing.
M&T reviews and monitors its anti-money laundering compliance program to ensure it complies with
the changes reflected in the AMLA and the regulations that implement it.

Office of Foreign Assets Control Regulation
The United States has imposed economic sanctions that prohibit 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,
including denial by federal regulators of proposed merger, acquisition, restructuring, or other
expansionary activity. The OFAC rules are included as part of M&T’s BSA/AML Compliance
Program, which M&T continues to monitor and augment, where necessary.

Regulation of Insurers and Insurance Brokers
The Company’s operations in the areas of insurance agency/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
subsidiaries that are engaged in insurance-related activities 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.

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: Audit Committee Charter; Compensation
and Human Capital Committee Charter; Executive Committee Charter; Nomination and Governance
Committee Charter; Risk Committee Charter; Disclosure and Regulation FD Policy; Code of Ethics
for CEO and Senior Financial Officers; and Code of Business Conduct and Ethics. In accordance with
SEC rules, M&T will post on its website or file a Form 8-K to report any amendment to or waiver from
any provision of the Code of Ethics for CEO and Senior Financial Officers or the Code of Business
Conduct and Ethics that applies to our Chief Executive Officer, Chief Financial Officer, Controller, or
persons performing similar functions. 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).

Human Capital Resources
M&T recognizes employees are the difference makers that drive its success. The Company’s talent
strategy focuses on recruiting, engaging, developing and retaining high-performing individuals whose
strengths align with M&T’s values, purpose and leadership competencies to create and maintain a
highly competitive and diverse workforce.

As of December 31, 2022, the Company employed 22,808 full-time and part-time employees.
The Company’s current employee base is concentrated in the Northeast and Mid-Atlantic United
States, with approximately 51% of employees residing in New York, followed by approximately 10%
in Connecticut and 9% in each of Delaware and Maryland. The remainder are primarily concentrated
in other states where M&T Bank maintains a retail bank branch presence. Approximately 4% of the
Company’s employee base resides outside of its retail banking footprint. Inclusive in the above, as of
December 31, 2022, the Company employed 118 international employees based in the UK, Ireland,
Canada, Germany and France. The Company’s employee base includes 6,022 employees that support
customers in the retail branch network. Overall, the average tenure of the Company’s employees is 9.5
years and the average tenure of the Company’s executive officers is 19.5 years.

Talent Attraction and Diversity, Equity and Inclusion

The Company leverages various channels to effectively identify, develop and recruit high-caliber
talent throughout its footprint including its current employee base. The Employee Referral Program is
a powerful tool for generating applicants and accounted for 23% of new hires in 2022. In addition, the
Company’s Talent Acquisition Ambassador Program, which was implemented in 2020 and currently
includes 48 employees throughout different business lines, dedicated over 800 hours towards
promoting awareness of M&T career opportunities within the Company’s communities.

The Company’s recruitment team strives to create and maintain diverse representation at all levels
and in all areas of the organization to promote a sense of belonging among employees and maintain a
workforce that reflects the communities the Company serves. Employees attended 70 individual
diversity-based recruiting events in 2022 with target audiences crossing many diversity dimensions,
such as people of color, veterans, LGBTQ+, individuals with disabilities and women. The Company
also works with diversity-focused schools and organizations as part of its efforts to recruit and maintain
a diverse workforce. In 2022, 45% of total corporate hires were people of color and 61% were women,
40% of summer interns were people of color, and 53% of the participants in the Company’s
Technology Internship Program were people of color. As of December 31, 2022, the entire Company’s
workforce consisted of approximately 60% women and 27% people of color. This year, M&T also
partnered with the Department of Defense to further the development of two programs focused on
providing active members approaching the end of their service with civilian work experience, industry
training, and career development opportunities, post military.

To further drive diversity within the Company, M&T also supports several employee resource
group charters and chapters, which are voluntary, employee-driven groups organized around a
particular shared interest and characteristic, such as race, ethnicity, gender, sexual orientation or
differing abilities. Approximately 30% of the Company’s employees and 46% of managers are
involved in these groups. The Company’s diversity efforts are led by its Chief Diversity Officer, who
is a member of senior leadership, and the Senior Leadership Diversity & Inclusion Council, both of
which champion inclusion efforts throughout the Company. M&T’s Board of Directors also receives
regular updates on the Company’s diversity, inclusion and belonging efforts.

Engagement and Development

M&T’s commitment to recruiting top talent and regularly soliciting their feedback helps to create
a highly engaged employee base that drives the Company’s success. Since 2001, the Company has
conducted 17 “Engagement Surveys,” with average participation rates above 90%, demonstrating a
commitment to fostering candid, open and honest two-way communication with employees to enhance
the workplace. All survey results are reviewed with senior management and shared with individual
managers, who identify and implement improvements based on employees’ feedback, as well as
presented to M&T's Board of Directors. Employees also participate in action planning within
individual work groups. In addition, M&T conducts other surveys to monitor and guide the employee
experience throughout an employee’s time with the Company. Surveys are conducted at various times,
such as new hire onboarding or separation from the Company, as well as in connection with key events,
such as acquisitions.

The Company also encourages engagement with communities through the allotment of 40 hours
of paid volunteer time. In 2022, M&T employees volunteered approximately 159,000 hours and served
on the boards of 831 non-profit organizations.

Another key pillar of engagement, employee development and growth, is fostered through the
Company's strong performance management philosophy focused on reinforcing corporate values,
providing continuous, transparent feedback and recognizing and rewarding outstanding performance.
Additional employee development is cultivated through a variety of learning offerings on topics such
as technical skills, job-specific knowledge and professional development, including courses aligned
with the Company's enterprise-wide leadership competencies. Training content is made available as
synchronous, asynchronous, and blended learning solutions to promote employee access. The
Company also invests in creating its leaders of tomorrow through various internal programs including
its Manager Acceleration Program, Management Development Program, Executive Associate
Program, Technology Development Program and two additional programs focused on the Company's
high-performing diverse employees - the Rising Leadership Development Program and Equity One.

Compensation, Health and Wellness

The Company provides comprehensive compensation and benefits programs intended to attract,
retain and incentivize its employees. In addition to base pay, these programs (which vary by country
and region) include cash incentives, long term equity-based awards, an Employee Stock Purchase Plan,
a 401(k) Plan, healthcare and insurance benefits, health savings and flexible spending accounts, paid
time off, parental leave, family care resources, flexible work schedules, employee assistance programs
and tuition assistance, among others. Over the past year, the Company has also implemented an
educational program to provide transparency to employees around the different processes completed
to ensure fair and equitable compensation for all team members.

The Company’s wellness programs provide employees and their families with resources that may
be helpful in navigating life events and are designed to provide support to help improve their well-
being. In addition to addressing employees’ physical needs through flexible and convenient medical
plan and telemedicine options, M&T supports employees’ emotional health and social well-being
through various programs offered to employees. The Company joins with several of its medical
partners to offer sponsored events and courses, led by medical experts, and also works to help
employees manage their financial wellness through free educational resources.

Competition
The Company faces extensive and intensive competition in the products and services it offers. The
Company competes in offering commercial and personal financial and wealth services with other
banking institutions and thrifts and with firms in a number of other industries, such as credit unions,
personal loan companies, sales finance companies, leasing companies, securities brokerage firms,
mutual fund companies, hedge funds, wealth and investment advisory firms, insurance companies and
other financial services-related entities. Furthermore, diversified financial services companies are able
to offer a combination of these services to their customers on a nationwide basis. Financial technology
companies, using digital, mobile and other technologies, also are increasingly offering traditional
banking products and services, which has resulted in the Company contending with a broader range of
competitors, including many that are not located within the geographic footprint of the Company’s
banking office network.

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).

Disclosure Pursuant to Subpart 1400 of Regulation S-K
See cross-reference sheet for disclosures incorporated elsewhere in this Annual Report on Form 10-K.

Table 1

SELECTED CONSOLIDATED YEAR-END BALANCES

Interest-bearing deposits at banks ................. $
Federal funds sold ....................................
Trading account .......................................
Investment securities

U.S. Treasury and federal agencies ...........
Obligations of states and political

subdivisions ....................................
Other.................................................
Total investment securities .................

Loans and leases

Commercial, financial, leasing, etc............
Commercial real estate ..........................
Residential real estate............................
Consumer...........................................
Total loans and leases........................
Unearned discount................................

Loans and leases, net of unearned

discount .....................................
Allowance for credit losses .....................
Loans and leases, net.........................
Goodwill................................................
Core deposit and other intangible assets .........
Real estate and other assets owned................
Total assets .............................................

Noninterest-bearing deposits .......................
Savings and interest-checking deposits ..........
Time deposits..........................................
Deposits at Cayman Islands office ................
Total deposits..................................
Short-term borrowings...............................
Long-term borrowings...............................
Total liabilities ........................................
Shareholders’ equity .................................

Table 2

2022

2021

2020
(In thousands)

2019

2018

24,958,719
3,000
117,847

41,872,304
—
49,745

23,663,810
—
50,060

7,190,154
3,500
59,329

8,105,197
—
56,348

21,476,761

6,504,382

6,360,218

8,746,749

11,746,240

2,577,078
1,157,032
25,210,871

42,277,041
45,444,010
23,773,842
20,579,263
132,074,156
(509,993)

131,564,163
(1,925,331)
129,638,832
8,490,089
209,374
41,375
200,729,841

65,501,860
87,911,463
10,101,545
—
163,514,868
3,554,951
3,964,537
175,411,851
25,317,990

177
651,301
7,155,860

23,621,188
35,473,884
16,077,275
17,964,331
93,136,678
(224,226)

92,912,452
(1,469,226)
91,443,226
4,593,112
3,998
23,901
155,107,160

60,131,480
68,603,966
2,807,963
—
131,543,409
47,046
3,485,369
137,203,755
17,903,405

1,531
683,948
7,045,697

27,801,382
37,728,844
16,786,673
16,558,889
98,875,788
(339,921)

98,535,867
(1,736,387)
96,799,480
4,593,112
14,165
34,668
142,601,105

47,572,884
67,680,840
3,899,910
652,104
119,805,738
59,482
4,382,193
126,413,822
16,187,283

4,915
745,587
9,497,251

23,987,897
35,633,593
16,193,154
15,373,881
91,188,525
(265,656)

90,922,869
(1,051,071)
89,871,798
4,593,112
29,034
85,646
119,872,757

32,396,407
54,932,162
5,757,456
1,684,044
94,770,069
62,363
6,986,186
104,156,108
15,716,649

9,153
937,420
12,692,813

23,136,913
34,448,927
17,191,566
13,956,086
88,733,492
(267,015)

88,466,477
(1,019,444)
87,447,033
4,593,112
47,067
78,375
120,097,403

32,256,668
50,963,744
6,124,254
811,906
90,156,572
4,398,378
8,444,914
104,637,212
15,460,191

SHAREHOLDERS, EMPLOYEES AND OFFICES

Number at Year-End

2022

2021

2020

2019

2018

Shareholders..............................................................
Employees .................................................................
Offices ........................................................................

32,493
22,808
1,043

16,099
17,569
724

16,797
17,373
751

17,333
17,773
771

18,099
17,267
794

Table 3

CONSOLIDATED EARNINGS

Interest income
Loans and leases, including fees............... $
Investment securities

Fully taxable ......................................
Exempt from federal taxes...................
Deposits at banks....................................
Other.....................................................
Total interest income ..........................

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 non-hedging

derivative gains..................................

Gain (loss) on bank investment securities
Other revenues from operations ...............
Total other income..............................

Other expense
Salaries and employee benefits ................
Equipment and net occupancy..................
Outside data processing and software .......
FDIC assessments...................................
Advertising and marketing ......................
Printing, postage and supplies..................
Amortization of core deposit and other

intangible assets.................................
Other costs of operations .........................
Total other expense.............................
Income before income taxes ....................
Income taxes ..........................................
Net income............................................ $
Dividends declared

Common............................................ $
Preferred............................................

2022

2021

2020
(In thousands)

2019

2018

5,237,405

3,748,988

3,975,053

4,442,182

4,164,561

447,646
51,113
509,030
1,926
6,247,120

270,765
23,867
—
19,426
111,106
425,164
5,821,956
517,000

141,046
116
47,491
1,143
3,938,784

32,998
18,635
201
7
62,165
114,006
3,824,778
(75,000)

176,469
183
32,956
8,051
4,192,712

146,701
66,280
4,054
28
109,332
326,395
3,866,317
800,000

288,532
321
141,397
7,161
4,879,593

368,003
95,426
21,917
24,741
239,242
749,329
4,130,264
176,000

323,912
665
108,182
1,391
4,598,711

215,411
51,423
5,633
5,386
248,556
526,409
4,072,302
132,000

5,304,956

3,899,778

3,066,317

3,954,264

3,940,302

356,636
446,604
740,717
87,877

26,786
(5,686)
703,669
2,356,603

2,787,351
474,316
376,493
90,274
90,748
55,570

55,624
1,120,060
5,050,436
2,611,123
619,460
1,991,663

786,245
96,587

571,329
402,113
644,716
62,791

24,376
(21,220)
482,889
2,166,994

2,045,677
326,698
291,839
69,704
64,428
36,507

10,167
766,603
3,611,623
2,455,149
596,403
1,858,746

582,967
72,915

566,641
370,788
601,884
47,428

40,536
(9,421)
470,588
2,088,444

1,950,692
322,037
258,480
53,803
61,904
39,869

14,869
683,586
3,385,240
1,769,521
416,369
1,353,152

569,076
68,228

457,770
432,978
572,608
48,922

62,044
18,037
469,320
2,061,679

1,900,797
324,079
229,731
41,535
93,472
39,893

19,490
819,685
3,468,682
2,547,261
618,112
1,929,149

552,216
72,482

360,442
429,337
537,585
51,069

32,547
(6,301)
451,321
1,856,000

1,752,264
298,828
199,025
68,526
85,710
35,658

24,522
823,529
3,288,062
2,508,240
590,160
1,918,080

510,458
72,521

Table 4

Per share

Net income

COMMON SHAREHOLDER DATA

2022

2021

2020

2019

2018

Basic ......................................................... $
Diluted ......................................................
Cash dividends declared ...............................
Common shareholders’ equity at year-end
Tangible common shareholders’ equity at

year-end ...................................................
Dividend payout ratio ...................................

11.59
11.53
4.80
137.68

13.81
13.80
4.50
125.51

9.94
9.94
4.40
116.39

13.76
13.75
4.10
110.78

12.75
12.74
3.55
102.69

86.59
41.56%

89.80
32.69%

80.52
44.32%

75.44
29.70%

69.28
27.66%

Table 5

CHANGES IN INTEREST INCOME AND EXPENSE (a)

2022 Compared with 2021

2021 Compared with 2020

Resulting from
Changes in:

Total
Change

Volume

Rate

Total
Change

Volume

Rate

(Increase (decrease) in thousands)

Interest income (a)
Loans and leases, including fees .... $ 1,495,960
Deposits at banks ...........................
461,539
Federal funds sold and

960,566
(3,446)

535,394 $ (228,557)
14,535
464,985

313
30,322

(228,870)
(15,787)

agreements to resell securities
Trading account..............................
Investment securities

U.S. Treasury and federal

96
687

(172)
923

268
(236)

(6,783)
(169)

(4,294)
(60)

(2,489)
(109)

agencies.................................

281,472

270,334

11,138

(35,670)

(38,576)

2,906

Obligations of states and

71,171
political subdivisions.............
Other...........................................
21,852
Total interest income.................. $ 2,332,777

71,183
6,385

(12)
15,467

(95)
255
$ (256,484)

(105)
(642)

10
897

Interest expense
Interest-bearing deposits

Savings and interest-checking

deposits.................................. $

Time deposits .............................
Deposits at Cayman Islands

office .....................................
Short-term borrowings ...................
Long-term borrowings ...................

Total interest expense................. $

237,767
5,232

(201)
19,419
48,941
311,158

8,121
8,107

(201)
1,162
(1,744)

229,646 $ (113,703)
(47,645)

(2,875)

14,603
(17,823)

(128,306)
(29,822)

—
18,257
50,685

(3,853)
(21)
(47,167)
$ (212,389)

(2,100)
4
(40,540)

(1,753)
(25)
(6,627)

Interest income data are on a taxable-equivalent basis. The apportionment of changes resulting from the

(a)
combined effect of both volume and rate was based on the separately determined volume and rate changes.

Item 1A. Risk Factors.

Risk Factors Summary
Risks Relating to the Acquisition of People’s United

• M&T may fail to realize the anticipated benefits of the acquisition of People’s United and
integrating People’s United may be more difficult, costly or time-consuming than expected.

• M&T may be unable to retain personnel successfully.
•

Litigation related to the acquisition has been filed in the past and additional litigation may
be filed in the future, which could result in the payment of damages or otherwise negatively
impact the business and operations of M&T.

Market Risk

• Weakness in the economy has adversely affected the Company in the past and may

•

adversely affect the Company in the future.
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.
The discontinuation of LIBOR as a permissible rate index in new contracts, the formal
announcement of LIBOR’s cessation date, and the development of SOFR and other
alternative benchmark indices to replace LIBOR could adversely impact the Company’s
business and results of operations.
The Company’s business and performance is vulnerable to the impact of volatility in debt
and equity markets.
The Company’s regional concentrations expose it to adverse economic conditions in its
primary retail banking office footprint.

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 may be subject to more stringent capital and liquidity requirements.

•
• 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 the results of supervisory stress tests administered by the Federal Reserve.
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”).

•

Credit Risk
•
•

Deteriorating credit quality could adversely impact the Company.
The Company may be adversely affected by the soundness of other financial institutions.

Liquidity Risk

•
•

The Company must maintain adequate sources of funding and liquidity.
If the Company is unable to maintain or grow its deposits, it may be subject to paying higher
funding costs.

• M&T relies on dividends from its subsidiaries for its liquidity.

Strategic Risk

•

The financial services industry is highly competitive and creates competitive pressures that
could adversely affect the Company’s revenue and profitability.

•

Difficulties in obtaining regulatory approval for acquisitions and 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 could suffer if the Company fails to attract and retain skilled personnel.

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.
The Company’s information systems may experience interruptions or breaches in security,
including due to events beyond the Company’s control.
The Company could incur higher costs, experience lower revenue, and suffer reputational
damage in the event of the theft, loss or misuse of information, including due to a cyber
security attack.
The Company is subject to laws and regulations relating to the privacy of the information
of customers, clients, employees or others, and any failure to comply with these laws and
regulations could expose the Company to liability and/or reputational damage.

• M&T relies on other companies to provide key components of the Company’s business

•

infrastructure.
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.

Business Risk

•

•
•
•

•

Changes in accounting standards could impact the Company’s reported financial condition
and results of operations.
The Company’s reported financial condition and results of operations depend on
management’s selection of accounting methods and require management to make estimates
about matters that are uncertain.
The Company’s models used for business planning purposes could perform poorly or
provide inadequate information.
The Company is exposed to reputational risk.
The Company’s framework for managing risks may not be effective.
Pandemics, including COVID-19, acts of war or terrorism and other adverse external events
could significantly impact the Company’s business.
The Company’s assets, communities, operations, reputation and customers could be
adversely affected by the impacts of climate risk.

Risk Factors
M&T and its subsidiaries face a number of potential 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, liquidity and results of operations, as well as on the values
of the Company’s financial instruments and M&T’s securities, including its common stock. The
following risk factors set forth some of the risks that could materially and adversely impact the
Company, although there may be additional risks that are not presently material or known that may
adversely affect the Company.

Risks Related to the Acquisition of People’s United

M&T may fail to realize the anticipated benefits of the acquisition of People’s United and integrating
People’s United may be more difficult, costly or time-consuming than expected.

In connection with the acquisition of People’s United that was completed on April 1, 2022, M&T has
incurred and may further incur costs as M&T continues to integrate the People’s United business. The
success of the acquisition depends, in part, on the ability to realize the anticipated cost savings from
combining the businesses of M&T and People’s United. To realize the anticipated benefits and cost
savings from the acquisition, M&T must integrate and combine People’s United’s businesses in a
manner that permits cost savings to be realized, without adversely affecting revenues and future
growth. If M&T is not able to successfully achieve these objectives, the anticipated benefits of the
acquisition may not be realized fully or at all or may take longer to realize than expected. In addition,
the actual cost savings of the acquisition could be less than anticipated.

There can be no assurances that the expected benefits and efficiencies related to the acquisition
will be realized to offset the transaction and integration costs over time. M&T may also incur additional
costs to retain legacy People’s United customers, maintain employee morale and to retain key
employees. M&T has waived certain fees following conversion of customer deposit accounts to
M&T’s deposit servicing system, and similar or other costs related to integration of People's United or
operations as a combined company may be incurred in the future.

It is possible that challenges related to operating as a combined company could result in the loss
of key employees, the disruption of ongoing businesses or inconsistencies in standards, controls,
procedures and policies that adversely affect M&T’s abilities to maintain relationships with clients,
customers, depositors and employees or to achieve the anticipated benefits and cost savings of the
acquisition. An inability to realize the full extent of the anticipated benefits of the acquisition could
have an adverse effect upon the revenues, levels of expenses and operating results of M&T, which may
adversely affect the value of M&T’s common stock.

M&T may be unable to retain personnel successfully.

The success of the acquisition will depend in part on the Company’s ability to retain the talents and
dedication of key employees. It is possible that these employees, including key legacy People’s United
employees, may decide not to remain with the Company. If the Company is unable to retain key
employees, including management, who are critical to the successful future operations of the combined
company, the Company could face disruptions in its operations, loss of existing customers, loss of key
information, expertise or know-how and unanticipated additional recruitment costs. If key employees
terminate their employment, the Company’s business activities may be adversely affected and the
Company may not be able to locate or retain suitable replacements.

Litigation related to the acquisition has been filed in the past and additional litigation may be filed in
the future, which could result in the payment of damages or otherwise negatively impact the business
and operations of the Company.

Although not currently active, litigation related to the acquisition was filed against People’s United,
the People’s United board of directors and M&T prior to the completion of the acquisition. Additional
litigation may be filed against M&T and the M&T board of directors in the future. Among other
remedies, litigation that was filed sought damages, and additional litigation by shareholders of M&T
in the future may seek damages or other remedies. The outcome of any litigation is uncertain. Such
lawsuits and the defense or settlement of any such lawsuits may have an adverse effect on the financial
condition and results of operations of M&T.

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 adverse effects on the Company’s business including:

•
•

•

•
•
•

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.
A decrease in fees from the Company’s brokerage, trust, and investment management
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 as well
as impairment write-downs of certain investment securities and valuation adjustments on
loans held for sale.

If recessionary economic conditions develop, they would likely have a negative financial impact
across the financial services industry, including on the Company. If recessionary economic conditions
are more severe, the extent of the negative impact on the Company’s business and financial
performance can increase and be more severe, including the adverse effects listed above and discussed
throughout this “Risk Factors” section.

Supply chain constraints, robust demand and labor shortages have led to persistent inflationary
pressures throughout the economy. Volatility and uncertainty related to inflation and the effects of
inflation, which may lead to increased costs for businesses and consumers and potentially contribute
to poor business and economic conditions generally, may also enhance or contribute to some of the
risks discussed herein. For example, higher inflation, or volatility and uncertainty related to inflation,
could reduce demand for the Company’s products, adversely affect the creditworthiness of the
Company’s borrowers, result in lower values for the Company’s investment securities and other
interest-earning assets and increase expense related to talent acquisition and retention.

Additionally, economic conditions, financial markets and inflationary pressures may be adversely
affected by the impact of current or anticipated geopolitical uncertainties, military conflicts, including
Russia’s invasion of Ukraine, pandemics, including the COVID-19 pandemic, and global, national and
local responses thereto by governmental authorities and other third parties. These unpredictable events
could create, increase or prolong economic and financial disruptions and volatility that adversely
affects the Company’s business, financial condition, capital and results of operations.

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.

The Federal Reserve raised benchmark interest rates throughout 2022 and may continue to raise interest
rates in response to economic conditions, particularly inflationary pressures. 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, including in the shape of the yield curve or in spreads
between different market interest rates, as well as changes linked to inflation, 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 may:

•

Affect the difference between the interest that the Company earns on assets and the interest
that the Company pays on liabilities, which impacts the Company’s overall net interest
income and profitability.
Adversely affect the ability of borrowers to meet obligations under variable or adjustable-
rate loans and other debt instruments, which, in turn, affects the Company’s loss rates on
those assets.
Decrease the demand for interest rate-based products and services, including loans and
deposits.
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.
Affect mortgage prepayment speeds and 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 organizations
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. Interest rate increases have recently reduced the value of the Company’s
investment portfolio, for example, by decreasing the estimated fair value of fixed income securities.
Furthermore, as interest rates rise, the Company’s unrealized gains on fixed income securities would
ordinarily decrease and unrealized losses would ordinarily increase, which occurred in 2022 and could
continue to occur in 2023. Also, due to the impact on rates for short-term funding, the Federal
Reserve’s policies influence, to a significant extent, the Company’s cost of such funding, and increases
in short-term interest rates have in the past increased, and may in the future increase, the Company’s
cost of short-term 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 discontinuation of LIBOR as a permissible rate index in new contracts, the formal announcement
of LIBOR’s cessation date, and the development of SOFR and other alternative benchmark indices to
replace LIBOR could adversely impact the Company’s business and results of operations.

The Company’s floating-rate funding, certain hedging transactions and a significant portion of the
Company’s products, such as floating-rate loans and mortgages, determine the applicable interest rate
or payment amount by reference to a benchmark rate, such as the London Interbank Offered Rate
(“LIBOR”), or to an alternative index.

With respect to LIBOR, the United Kingdom’s Financial Conduct Authority (“FCA”), which
regulates LIBOR, and the ICE Benchmark Administration (“IBA”), the administrator of LIBOR, have
announced that the publication of all tenors of USD LIBOR, which to date have been calculated and
determined by the IBA based on the required submissions by independent panel banks, will cease to
exist and/or cease to be “representative” after June 30, 2023. In response and in coordination, U.S.
federal bank regulators, including the Federal Reserve, required U.S. banks to cease using USD LIBOR
as a reference rate in new contracts by December 31, 2021.

Concurrently, the Federal Reserve-sponsored Alternative Reference Rates Committee (“ARRC”)
finalized and issued recommendations for the use of so-called “hardwired” LIBOR fallback language
that, when incorporated into existing LIBOR-based loan documents, provides for, upon LIBOR’s
permanent cessation (or an announcement from LIBOR’s administrator or certain governmental
authorities that LIBOR is no longer representative of the underlying market), the replacement of
LIBOR with the Secured Overnight Financing Rate (“SOFR”) as the benchmark index, with an
appropriate spread adjustment that is representative of the historical difference between LIBOR and
SOFR, which when added to SOFR would be intended to facilitate a value-neutral transition.
Subsequently, the ARRC expanded its recommendation to include CME Term SOFR, a derivative of
SOFR that is currently administered and published by the CME Group Benchmark Administration
Limited.
the ARRC
recommendations for use in all new commercial LIBOR loans, and continues to proactively seek
amendments to its existing LIBOR-based commercial loan contracts to incorporate such hardwired
fallback language or move to an alternative index prior to the cessation of LIBOR.

In 2021 M&T adopted hardwired fallback language modeled after

SOFR is a measure of the cost of borrowing cash overnight, collateralized by U.S. Treasury
securities, and is based on directly observable U.S. Treasury-based repurchase transactions. The fact
that SOFR is a secured overnight rate and considered a “risk free” rate, while LIBOR is an unsecured
term rate that factors in credit risk, means that SOFR may perform differently than LIBOR, and those
differences may be material, particularly in times of economic stress, negatively impacting the
Company’s profitability.

While the ARRC has maintained its recommendation that SOFR is the preferred replacement for
LIBOR, some industry participants have questioned whether a “risk free” SOFR-based rate is an ideal
replacement for LIBOR in the commercial lending market and suggesting that a credit-sensitive
component or alternative be considered and developed. One such credit sensitive alternative is the
Bloomberg Short-Term Bank Yield Index (BSBY), which gained some modest attention and use in the
commercial lending market in the latter half of 2021 (primarily in syndicated loans), but has since
gained little traction. Whether BSBY or other alternatives to SOFR develop and gain any significant
market traction in the future are unknown and unpredictable at this time, and this adds further market
uncertainty with respect to introducing alternative benchmark rates for new contracts.

LIBOR cessation is also impacting the derivatives market. In October 2020, The International
Swaps and Derivatives Association, Inc. (ISDA), published the IBOR Fallbacks Supplement
(Supplement) and IBOR Fallbacks Protocol (Protocol). The Supplement, which became effective on
January 25, 2021, amends existing standard definitions for interest rate derivatives to incorporate
robust fallbacks to the SOFR benchmark for derivatives linked to LIBOR. The Protocol enables market

participants to incorporate these revisions into their legacy non-cleared derivatives trades with other
counterparties that choose to adhere to the Protocol. The fallbacks apply following a permanent
cessation of LIBOR or following a determination by the FCA that LIBOR is no longer representative
of the underlying market. M&T and M&T Bank adhered to the Protocol on November 5, 2020, and
the Company is in the process of remediating its interest rate swap hedging transactions with certain
of its end user customers, (i.e., borrowers that have hedged their interest rate payment obligations) who
have not already adhered to, or amended their legacy derivatives transactions consistent with, the
Protocol. If the Company is not able to agree to appropriate LIBOR fallbacks with these customers,
there will be uncertainty as to how to value and determine the Company’s rights and obligations under
legacy derivatives contracts. With respect to the Company’s cleared interest rate derivatives that
reference LIBOR, both the CME and LCH clearinghouses have adopted the same relevant SOFR
benchmark fallbacks of the Supplement and Protocol which also became effective on January 25, 2021.
The Company has outstanding issuances, or acts as an administrative (or calculation) agent or in
other capacities, across various maturities of securities referencing LIBOR in which the underlying
contracts do not contemplate cessation or contemplate cessation but do so in a manner that may create
other risks (“Tough Legacy Contracts”). Some of these contracts provide for selecting replacement
rates in a manner that presents significant challenges or that gives the Company or another party
discretion to select a rate or provide for determination of a reference rate. In March 2022, the United
States Congress enacted the Adjustable Interest Rate (LIBOR) Act ("LIBOR Act") which provides
both a statutory framework to replace USD LIBOR with a benchmark rate based on SOFR for Tough
Legacy Contracts governed by U.S. law and a safe harbor provision for those entities selecting a SOFR-
based rate identified by the Federal Reserve. Under the LIBOR Act, the Federal Reserve must adopt
rules to, among other things, identify the applicable SOFR-based replacement rate. In December 2022,
the Federal Reserve adopted rules, which identify different SOFR-based replacement rates for
derivative contracts, for cash instruments such as floating-rate notes and preferred stock, for consumer
loans, for certain government-sponsored enterprise contracts and for certain asset-backed securities.
Notwithstanding this availability of statutory frameworks to address Tough Legacy Contracts, there
will likely be continued uncertainty surrounding the transition as these frameworks have not been
tested, and the finalized regulations from the Federal reserve have not been issued and their
effectiveness and ultimate impact is not certain.

A substantial portion of the Company’s on- and off-balance sheet financial instruments (many of
which have terms that extend beyond 2023) are indexed to LIBOR, including interest rate swap
agreements and other contracts used for hedging and non-hedging purposes, loans to commercial
customers and consumers (including mortgage loans and other loans), and long-term borrowings.
Uncertainty as to the impact of the discontinuation of LIBOR and the replacement of LIBOR with a
SOFR-based index or any alternative index could result in pricing volatility, loss of market share in
certain products, adverse tax or accounting impacts under certain circumstances, and compliance, legal
and operational costs and risks.

The market’s transition from LIBOR to an alternative reference rate will be complex and
unpredictable, giving rise to a variety of risks, including operational risks, risks of value transfer
between contract parties, the potential for customer disputes and litigation, as well as regulatory
scrutiny.

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 is
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 may:

•

•
•

•

Affect the value or liquidity of the Company’s on-balance sheet and off-balance sheet
financial instruments.
Affect the value of capitalized servicing assets.
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.
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.
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. In
addition, unfavorable or uncertain economic and market conditions can be caused by supply chain
disruptions, the imposition of tariffs or other limitations on international trade and travel, as well as
elevated inflation, which can result in market volatility, negatively impact client activity, and adversely
affect the Company’s financial condition and results of operations.

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 the Northeast and Mid-Atlantic regions. 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. The credit quality of the Company’s borrowers may
deteriorate for a number of reasons that are outside the Company’s control, including as a result of
prevailing economic and market conditions and asset valuations. The trends and risks affecting
borrower credit quality, particularly in the Northeast and Mid-Atlantic regions, have caused, and in the
future may cause, the Company to experience impairment charges, which are reductions in the
recoverable value of an asset, increased purchase demands, wherein customers make withdrawals with
minimum notice, higher costs (e.g. servicing, foreclosure, property maintenance), additional write-
downs and losses and a potential impact to engage in lending transactions based on a reduction of
customer deposits, which could have a material adverse effect on the Company’s business, financial
condition and results of operations.

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 consumers, depositors and the financial system as a whole, not
securities holders, including the holders of common stock. These regulations and supervisory guidance
affect the Company’s sale and lending practices, capital structure, capital distributions and dividend
policy, investment practices, growth and expansionary activity, among other things. Failure to comply
with laws, regulations or policies, or to meet supervisory expectations, 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 reputational 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, can pursue 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. In general, the amounts paid by
financial institutions in settlement of proceedings or investigations have increased substantially and
are likely to remain elevated. In some cases, governmental authorities have required criminal pleas or
admissions of wrongdoing as part of such settlements, which could have significant collateral
consequences for a financial institution, including loss of customers, restrictions on the ability to access
the capital markets, and the inability to operate certain businesses or offer certain products for a period
of time. In addition, enforcement matters could impact the Company’s supervisory and CRA ratings,
which may in turn restrict or limit the Company’s activities. A prior enforcement action also increases
the risk that regulators and governmental authorities pursue formal enforcement actions in connection
with the resolution of an inquiry or investigation, even if unrelated to the prior enforcement action.

Any new regulatory requirements, changes to existing requirements, or changes to interpretations
of requirements could require changes to the Company’s businesses, result in increased compliance
costs and affect the profitability of such businesses. Additionally, such activity could affect the
behaviors of third parties with which the Company deals in the ordinary course of business, such as
rating agencies, insurance companies and investors. Heightened regulatory scrutiny, requirements or
expectations could have significant effects on the Company, including through restrictions on growth
or required remediation activities and associated resource requirements, and, in turn, could have a
material adverse effect on the Company’s business, financial condition and results of operations.

There have been significant revisions to the laws and regulations applicable to the Company that
have been enacted or proposed in recent years, and additional proposed changes are anticipated. Many
of these and other rules to implement the changes have yet to be finalized, and the final timing, scope
and impact of these changes to the regulatory framework applicable to financial institutions remain
uncertain. For more information on the regulations to which the Company is subject and recent
initiatives to reform financial institution regulation, see Part I, Item 1 — Business.

The Company may be subject to more stringent capital and liquidity requirements.

Bank holding companies, including M&T, are subject to capital and liquidity requirements and
standards imposed as a result of the Dodd-Frank Act (as amended by EGRRCPA) and the U.S. Basel
III-based capital rules. For additional information, see “Capital Requirements” under Part I, Item 1 —
Business.

Regulators have implemented and may, from time to time, implement changes to these regulatory
capital adequacy and liquidity requirements. If the Company fails to meet these minimum capital
its business activities,
adequacy and liquidity requirements and other regulatory requirements,
including lending, and its ability to expand, either organically or through acquisitions, could be limited.
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. In addition, the liquidity-related provisions of the Federal
Reserve’s liquidity-related enhanced prudential supervision requirements may reduce the Company’s
ability to invest in other longer-term assets even if deemed more desirable from a balance sheet
management perspective, which could adversely affect its net interest income and net interest margin.
The federal bank regulators have not yet released a proposal to implement the significant revisions
of the Basel capital framework announced by the Basel Committee in December 2017, and the impact

on the Company of these revisions will depend on the manner in which they are implemented in the
U.S. with respect to firms such as M&T.

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 the
results of supervisory stress tests administered by the Federal Reserve.

Any decision by M&T to return capital to shareholders, whether through a common stock dividend or
a common stock share repurchase program, requires the approval of M&T’s Board of Directors and
must comply with applicable capital regulations, including the maintenance of capital ratios exceeding
specified minimum levels and applicable buffers.

For bank holding companies designated as Category IV institutions under the Tailoring Rules,
including M&T, the Federal Reserve conducts biennial supervisory stress tests required under the
Dodd-Frank Act whereby the BHC’s financial position is tested under assumed severely adverse
economic conditions. The results of those stress tests are incorporated in the determination of M&T’s
Stress Capital Buffer. As a general matter, if M&T is unable to maintain capital in excess of regulatory
minimum levels inclusive of its Stress Capital Buffer, it would be subject to limitations on its ability
to make capital distributions, including paying dividends and repurchasing stock. In June 2022, the
Federal Reserve released the results of its most recent supervisory stress tests, and based on those
results, on October 1, 2022, M&T’s stress capital buffer of 4.7% became effective. The results of future
supervisory stress tests are uncertain, and a more severe outcome may result in a higher Stress Capital
Buffer and an increase in M&T’s effective capital requirements. An increased Stress Capital Buffer
may restrict M&T’s ability to return capital to shareholders, including through paying dividends,
entering into acquisitions or repurchasing its common stock, which in turn could negatively impact
market and investor perceptions of M&T.

The Federal Reserve has in the past implemented, and may in the future implement, restrictions
on share repurchase programs and common stock dividends at large bank holding companies such as
M&T, including in response to adverse or uncertain economic conditions.

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 created a mechanism, the OLF, for liquidation of systemically important bank
holding companies and non-bank financial companies. The OLF is administered by the FDIC and is
based on the FDIC’s bank resolution model. The Secretary of the U.S. Treasury may trigger a
liquidation under this authority 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 first
made 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 and
other obligations in accordance with the terms of the relevant agreements, and that any collateral
securing the loans and obligations may be insufficient to assure full repayment. Credit losses are
inherent in the business of making loans and entering into other financial arrangements.

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,
including in the New York City area; (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. The Company’s credit risk and the performance of its lending portfolios may be affected
by concentration in an industry, geography or asset type. As described further in this “Risk Factors”
section, the Company’s credit risks may be increased by the impacts of inflation, poor or recessionary
economic conditions and financial market volatility. The COVID-19 pandemic created economic and
financial disruptions that adversely affected, and may continue to adversely affect, customers.

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. Emerging and evolving factors such
as the shift
to work-from-home or hybrid-work arrangements, changing consumer preferences
(including for online shopping), COVID-19-related restrictions and resulting changes in occupancy
rates as a result of these and other trends can also impact such valuations over relatively short periods.
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, as described above.

The Company maintains an allowance for credit losses which represents, in management’s
judgment, the amount of losses expected 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.
Management believes that the allowance for credit losses as of December 31, 2022 appropriately
reflects expected credit losses in the loan and lease portfolio. However, there is no assurance that the
allowance is sufficient to cover all credit losses that may occur.

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 due
to or derivative exposure of the Company. Any resulting 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 requirements and supervisory
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
securities dealers, various Federal Home Loan Banks and the Federal Reserve Bank of New York, as
well as the debt and equity capital markets.

The Company’s liquidity and ability to fund and operate 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. Negative news about the Company or the financial services
industry generally may reduce market or customer confidence in the Company, which could in turn
materially adversely affect the Company’s liquidity and funding. Such reputational damage may result
in the loss of customer deposits, the inability to sell or securitize loans or other assets, and downgrades
in one or more of the Company’s credit ratings, and may also negatively affect the Company’s ability
to access the capital markets. 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, including by raising 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.

Regulatory changes relating to liquidity and risk management may also negatively impact the
Company’s results of operations and competitive position. Various regulations have been adopted to
impose more stringent liquidity requirements for large financial institutions, including the Company.
These regulations address, among other matters, liquidity stress testing and minimum liquidity
requirements. The application of certain of these regulations to banking organizations, such as the
Company, have been modified, including in connection with the implementation of the tailoring rules
in the EGRRCPA.

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. The Company may also need
to raise additional capital and liquidity through the issuance of stock, which could dilute the ownership
of existing stockholders, or reduce or even eliminate common stock dividends or share repurchases to
preserve capital and liquidity.

If the Company is unable to maintain or grow its deposits, it may be subject to paying higher funding
costs.

The total amount that the Company pays for funding costs is dependent, in part, on the Company’s
ability to maintain or grow its deposits. If the Company is unable to sufficiently maintain or grow its
deposits to meet liquidity objectives, it may be subject to paying higher funding costs. The Company
competes with banks and other financial services companies for deposits. Recent increases in short-

term interest rates have resulted in and may continue to result in more intense competition in deposit
pricing. If competitors raise the rates they pay on deposits, the Company’s funding costs may increase,
either because the Company raises rates to avoid losing deposits or because the Company loses deposits
and must rely on more expensive sources of funding. Customers may also move noninterest-bearing
deposits to interest bearing accounts, increasing the cost of those deposits. Checking and savings
account balances and other forms of customer deposits may decrease when customers perceive
alternative investments, such as the stock market, as providing a better risk/return tradeoff. The
Company’s bank customers could withdraw their money and put it in alternative investments, causing
the Company to lose a lower cost source of funding. Higher funding costs could reduce the Company’s
net interest margin and net interest income.

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 M&T’s principal source of funds to
pay dividends on common and preferred stock, pay interest and principal on its debt, and fund
purchases of its common stock. 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 non-bank
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, Supervision and Regulation
of the Company, Distributions” 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, and ability to fund
purchases of its common stock.

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 private credit funds,
insurance companies, mutual funds, hedge funds, securities brokerage firms, financial technology
companies 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 is, 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 has
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 have and could
continue to 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 has and may continue
to experience pricing pressures as a result of these factors and as some of its competitors seek to
increase market share.

Finally, technological change is influencing how individuals and firms conduct their financial
affairs and is changing the delivery channels for financial services. Financial technology providers,
who invest substantial resources in developing and designing new technology (in particular digital and
mobile technology) are beginning to offer more traditional banking products (either directly or through
bank partnerships) and may in the future be able to provide additional services by obtaining a bank-
like charter, such as the OCC’s fintech charter. In addition, the emergence, adoption and evolution of
new technologies that do not require intermediation, including distributed ledgers such as digital assets
and blockchain, as well as advances in robotic process automation, could significantly affect the
competition for financial services. As a result, the Company has had and will likely continue to have
to contend with a broader range of competitors including many that are not located within the
geographic footprint of its banking office network. Further, 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 allow it to remain competitive or be successful in marketing these products and services
to its customers.

Difficulties in obtaining regulatory approval for acquisitions and 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. The Company’s
ability to complete acquisitions is in many instances subject to regulatory approval, and the Company
cannot be certain when or if, or on what terms and conditions, any required regulatory approvals would
be granted. Any requisite approval could be delayed or not obtained at all, including due to, among
other factors, an adverse development in either party’s regulatory standing or in any other factors
considered by regulators when granting such approval, including factors not known at the time of
entering into the definitive agreement for the acquisition or submission of the related application for
regulatory approval, and factors that may arise subsequently; governmental, political or community
group inquiries, investigations or opposition; or changes in legislation or the political environment
more generally.

In addition, inherent uncertainties exist when integrating the operations of an acquired entity.
Acquiring other entities involves potential risks that could have a material adverse impact on the
Company’s business, financial condition and results of operations, including:

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Inability to fully achieve the Company’s strategic objectives and planned operating
efficiencies in an acquisition.
Issues arising during transition and integration.
Disruption of the Company’s business and diversion of management’s time and attention.
Exposure to unknown or contingent liabilities of acquired institutions.
Loss of key employees and customers of acquired institutions.
Dilution in the ownership percentage of holders of M&T common stock.
Payment of a premium over book and market values that may dilute the Company’s tangible
book value and earnings per common share in the short and long-term.
Inability to 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).
Changes in banking or tax laws or regulations that could impair or eliminate the expected
benefits of merger and acquisition activities.

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 and to have a
diverse workforce. Competition for qualified and diverse candidates in the activities in which the
Company engages 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. The Company is increasingly
competing for personnel with financial technology providers and other less regulated entities who may
not have the same limitations on compensation as the Company does. Recruiting and compensation
costs may increase as a result of changes in the marketplace, which may increase costs and adversely
impact the Company. The increase in remote and hybrid work arrangements and opportunities in
regional, national and global labor markets has also increased competition for the Company to attract
and retain skilled personnel. The Company’s current or future approach to in-office and remote-work
arrangements may not meet the needs or expectations of current or prospective employees or may not
be perceived as favorable as compared with the arrangements offered by other companies, which could
adversely affect the Company’s ability to attract and retain employees. If the Company is not able to
hire or retain highly skilled, qualified and diverse 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 Company’s compensation practices are subject to review and oversight by the Federal
Reserve, the OCC, the FDIC and other regulators. 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.

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 or misconduct, inadequate or failed internal processes and systems, and
external events, including the risk of loss resulting from fraud by employees or persons outside the
company, and breaches in data security. 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. 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.

The Company’s information systems may experience interruptions or breaches in security, including
due to events beyond the Company’s control.

The Company relies heavily on communications and information systems, including those of third-
party service providers, 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. Disruption of operating systems caused by events beyond
the Company’s control may include computer viruses, electrical or telecommunications outages,
quality of vulnerability patches, cyber security attacks (including Distributed Denial of Service attacks,
which occur when legitimate users are unable to access information systems, devices, or other network
resources due to the actions of a malicious cyber threat actor), damage to property or physical assets,
or events arising from political protests or terrorist acts. 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, disruption, 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 digital
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 security attacks, to breach data
security at financial institutions or with respect to financial transactions. There have been numerous
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, or the freezing of operating systems and
databases making them inaccessible or unusable. There have also been several highly publicized cases
where hackers have requested “ransom” payments in exchange for not disclosing customer information
or for restoring access to, or the usage of, operating systems and databases. Ransomware is a form of
malicious software, known as “malware,” designed to block access to, and often encrypt, computer
systems or data. Once the victim’s computer system or data is locked down and encrypted, rendering
it essentially useless, the malicious cyber actor then extorts the victim by demanding a ransom payment
in exchange for providing a method to decrypt it. The attacker may also copy the victim’s data in the
course of the attack and threaten to sell or publish the data if the ransom is not paid. Ransomware
attacks can result in a loss of business functionality and of sensitive data.

As cyber security threats continue to evolve, the Company expects to continue to expend
significant additional resources to modify or enhance its layers of defense or to investigate and
remediate any information security vulnerabilities. The techniques used by cyber security criminals
change frequently, may not be recognized until launched and can be initiated by a variety of actors,
including terrorist organizations and hostile foreign governments. These techniques may include
attempts to fraudulently induce employees, customers or others to disclose sensitive information in
order to gain access to data or systems. These risks may increase as the use of mobile payment and
other Internet-based applications expands.

Further, third parties with which the Company does business, as well as vendors and other third
parties with which the Company’s customers do business, can also be sources of information security
risk to the Company, particularly where activities of customers are beyond the Company’s security
and control systems, such as through the use of the Internet, personal computers, tablets, smart phones
and other mobile services. Risks relating to cyber attacks on vendors and other third parties, including
supply chain attacks affecting software and information technology service providers, have been rising
as such attacks become increasingly frequent and severe. Security breaches affecting the Company’s
customers, or systems breakdowns, failures, security breaches or employee misconduct affecting such

other third parties, may require the Company to take steps to protect the integrity of its own systems
or to safeguard confidential information of the Company or its customers, thereby increasing the
Company’s operational costs and adversely affecting its business. Additionally, successful cyber
security attacks at other large financial institutions, whether or not the Company is impacted, could
lead to a general loss of customer confidence in financial institutions that could negatively affect M&T,
including harming the market perception of the effectiveness of the Company’s security measures or
the financial system in general which could result in reduced use of the Company’s financial products.
Though the Company has insurance against some cyber security risks and attacks, it may not be
sufficient to offset the impact of a material loss event.

The Company, as well as third parties with which the Company does business, has expanded the
use of cloud service providers, which could experience system breakdowns or failures, outages,
downtime, cyber security-attacks, negative changes to financial condition, bankruptcy, or other adverse
conditions, which could have a material adverse effect on the Company’s business and reputation. For
example, during 2021, there were a number of widely publicized cases of outages in connection with
access to cloud service providers. Thus, increasing the amount of infrastructure that the Company or
its vendors and service providers outsource to the cloud or to other parties may increase M&T’s risk
exposure. The failure to properly upgrade or maintain the computer systems could result in greater
susceptibility to attacks, particularly in light of the greater frequency and severity of attacks in recent
years, as well as the growing prevalence of supply chain attacks affecting software and information
technology service providers. Failures related to upgrades and maintenance also increase risks related
to unauthorized access and misuse, as well as the Company’s ability to achieve its business continuity
and resiliency objectives.

The Company could incur higher costs, experience lower revenue, and suffer reputational damage in
the event of the theft, loss or misuse of information, including due to a cyber security attack.

Like other financial services firms, the systems, networks and devices of the Company, its customers,
employees, service providers or other third parties with whom the Company interacts continue to be
the subject of attempted unauthorized access, denial-of-service attacks, computer viruses, hacking,
malware, ransomware, phishing or other forms of social engineering, and cyber security attacks
designed to obtain confidential information, destroy data, disrupt or degrade service, eliminate access
or cause other damage. These threats may arise from human error, fraud on the part of employees,
insiders or third parties or may result from accidental technology failure or vulnerabilities of suppliers
through supply chain attacks. Further, cyber security and information security risks for financial
institutions have generally increased because of, among other things, the growth of new technologies,
the use of the Internet and telecommunications technologies (including computers, smartphones, and
other mobile devices outside the Company’s systems) by customers to conduct financial transactions,
and the increased sophistication and activities of organized crime, fraudsters, hackers, terrorists,
activists, instrumentalities of foreign governments and other external parties.

Although the Company believes that a robust suite of authentication and layered security controls,
data encryption and tokenization,
intelligence, anti-malware defenses and vulnerability
management tools exist, the failure of any of these controls could result in a failure to detect, mitigate
or remediate these risks in a timely manner. Moreover, potential new regulations may require the
Company to disclose information about a cybersecurity event before it has been resolved or fully
investigated. Further, as the Company expands its mobile and digital capabilities, cyber security risks
increase.

threat

A disruption or breach, including as a result of a cyber security attack, or media reports of
perceived security vulnerabilities at the Company or at third-party service providers could result in
significant
legal and financial exposure, regulatory intervention, remediation costs, damage to
reputation or loss of confidence in the security of systems, products and services that could adversely

affect the Company’s business. Like other U.S. financial services providers, the Company continues
to be targeted with evolving and adaptive cyber security threats from sophisticated third parties.
Although the Company is not aware of any material losses relating to cyber security incidents, there
can be no assurance that unauthorized access or cyber security incidents will not become known or
occur or that the Company will not suffer such losses in the future.

The Company is subject to laws and regulations relating to the privacy of the information of customers,
clients, employees or others, and any failure to comply with these laws and regulations could expose
the Company to liability and/or reputational damage

The Company is also subject to laws and regulations relating to the privacy of the information of
customers, clients, employees or others, and any failure to comply with these laws and regulations
could expose the Company to liability and/or reputational damage. New privacy and data protection
initiatives will impose additional operational burdens on the Company, may limit the Company’s
ability to pursue desirable business initiatives and increase the risks associated with any future use of
customer data. Significant examples include the General Data Protection Regulation ("GDPR"), the
UK GDPR, known as The Data Protection Act of 2018, and the California Consumer Privacy Act.
Compliance with these and other laws and regulations may require changes to policies, procedures and
technology for information security and segregation of data, which could, among other things, make
the Company more vulnerable to operational failures, and to monetary penalties, litigation or
regulatory enforcement actions for breach of such laws and regulations.

As privacy-related laws and regulations are implemented, they may also limit how companies
like M&T can use personal data and impose obligations on companies in their management of such
data. The time and resources needed for the Company to comply with such laws and regulations, as
well as its potential liability for non-compliance and reporting obligations in the case of data breaches,
may significantly increase. The impacts will be greater to the extent requirements vary across
jurisdictions.

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.

Additionally, the Company is exposed to the risk that a service disruption at a common service
provider to the Company’s third-party service providers could impede their ability to provide services
to the Company. Notwithstanding any attempts to diversify its reliance on third parties, the Company
may not be able to effectively mitigate operational risks relating to its vendors’ use of common service
providers.

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 and operations 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 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 with respect to its obligations to indemnify directors and officers of it
and its subsidiaries in connection with certain legal matters as well as in situations where 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
loss
losses may be higher, and possibly significantly so,
contingencies, which could adversely affect
the Company’s financial condition and results of
operations.

than the amounts accrued for legal

Business Risk

Changes in accounting standards could impact the Company’s reported 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
difficult 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. Information about recently adopted and not as yet adopted accounting standards
is included in note 27 of Notes to Financial Statements included in Part II, Item 8 — Financial
Statements and Supplemental Data of this Form 10-K.

The Company’s reported financial condition and results of operations depend on management’s
selection of accounting methods and 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.

to ascertain the valuations of assets,

Management has identified certain accounting policies as being critical because they require
management’s judgment
liabilities, commitments and
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.

The Company’s models used for business planning purposes could perform poorly or provide
inadequate information.

The Company uses quantitative models to assist in measuring risks and estimating or predicting certain
financial values, among other uses. The Company uses models throughout many of its business lines,
relying on them, along with its judgement, for many decision making processes. Examples of areas
where the Company uses models include determining the pricing of various products, grading loans
and extending credit, measuring interest rate and other market risks, predicting or estimating losses,
assessing capital adequacy, and calculating economic and regulatory capital levels. The Company also
uses models to estimate the value of financial instruments and balance sheet items. Models generally
evaluate the performance of various factors under anticipated future conditions, relying on historical
data to help build the model and in part on assumptions as to the future, often with respect to macro-
economic conditions, in order to generate the output. The models used may not accurately account for
all variables and may fail to predict outcomes accurately and/or may overstate or understate certain
effects. Poorly designed, implemented, or managed models or misused models, including in the choice
of relevant historical data or future-looking assumptions, present the risk that the Company’s business
decisions that consider information based on such models will be adversely affected due to inadequate
or inaccurate information, which may damage the Company’s reputation and adversely affect its
reported financial condition and results of operations. Even if the underlying assumptions used in the
Company’s models are adequate, the models may be deficient due to errors in computer code, use of
bad data during development or input into the model during model use, or the use of a model for a
purpose outside the scope of the model’s design. As a result, the Company’s models may not fully
capture or express the risks the Company faces, may suggest that the Company has sufficient capital
when it may not, or may lead the Company to misjudge the business and economic environment in
which it operates. If the models fail to produce reliable results on an ongoing basis, the Company may
not make appropriate risk management, capital planning, or other business or financial decisions.
Furthermore, strategies that the Company employs to manage and govern the risks associated with its
use of models may not be effective or fully reliable, and as a result, the Company may realize losses
or other lapses. Finally, information the Company provides to the public or to its regulators based on
poorly designed, implemented, or managed models or misused models could be inaccurate or
misleading. Some of the decisions that the Company’s regulators make, including those related to
capital distributions to M&T’s stockholders, could be affected adversely due to their perception that
the quality of the models used to generate the relevant information is insufficient.

The Company is exposed to reputational risk.

A negative public opinion of the Company and its business can result from any number of activities,
including the Company’s lending practices, corporate governance and regulatory compliance,
acquisitions and actions taken by regulators or by community organizations in response to these
activities. Significant harm to the Company’s reputation could also arise as a result of regulatory or
governmental actions, litigation, employee misconduct or the activities of customers, other participants
in the financial services industry or the Company’s contractual counterparties, such as service
providers and vendors. A service disruption of the Company’s technology platforms or an impact to
the Company’s branches could have a negative impact on a customer’s access to banking services and
harm the Company’s reputation with customers. In particular, a cyber security event impacting the
Company’s or its customers’ data could have a negative impact on the Company’s reputation and
customer confidence in the Company and its cyber security. Damage to the Company’s reputation
could also adversely affect its credit ratings and access to the capital markets.

Additionally, whereas negative public opinion once was primarily driven by adverse news
coverage in traditional media, the increased use of social media platforms facilitates the rapid
dissemination of information or misinformation, which magnifies the potential harm to the Company’s
reputation.

The Company’s framework for managing risks may not be effective.

The Company’s risk management framework is made up of various processes and strategies to manage
its risk exposure. The framework to manage risk, including the framework’s underlying assumptions,
may not be effective under all conditions and circumstances. If the risk management framework proves
ineffective, the Company could suffer unexpected losses and could be materially adversely affected.

The Company has established processes and procedures intended to identify, measure, monitor,
report, and analyze the types of risk to which it is subject, including liquidity risk, credit risk, market
risk, interest rate risk, compliance risk, strategic risk, reputational risk, and operational risk related to
its employees, systems and vendors, among others. There are inherent limitations to the Company’s
risk management strategies as there may exist, or develop in the future, risks that it has not
appropriately anticipated or identified. In addition, the Company relies on both qualitative and
quantitative factors, including models, to monitor, measure and analyze certain risks and to estimate
certain financial values, which are subject to error. The Company must also develop and maintain a
culture of risk management among its employees, as well as manage risks associated with third parties,
and could fail to do so effectively. If the Company’s risk management framework proves ineffective,
the Company could incur litigation and negative regulatory consequences, and suffer unexpected losses
that could affect its financial condition or results of operations.

Pandemics, including COVID-19, acts of war or terrorism and other adverse external events could
significantly impact the Company’s business.

Pandemics, including the COVID-19 pandemic, acts of war, military conflicts, including Russia’s
invasion of Ukraine, or terrorism and other adverse external events, including severe weather and other
natural disasters, 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.

For example, the COVID-19 pandemic created economic and financial disruptions that adversely
affected, and may in the future adversely affect, the Company’s business, financial condition, capital
and results of operations. The extent to which the COVID-19 pandemic will in the future negatively
affect the Company’s business, financial condition, capital and results of operations will depend on
highly uncertain and unpredictable developments, including the scope and duration of any surges in
the pandemic, the emergence of new variants, the effectiveness and distribution of vaccines and other
public health measures, the continued effectiveness of M&T’s business continuity plans, the direct and
indirect impact of the pandemic on the Company’s employees, customers, clients, counterparties,
vendors, service providers and other market participants, and actions taken by governmental authorities
and other third parties in response to the pandemic.

Depending on the impact of pandemics, such as the COVID-19 pandemic, military conflicts such
as Russia’s invasion of Ukraine, terrorism and other detrimental or destabilizing global and national
events on general economic and market conditions, consumer and corporate spending and investment
and borrowing patterns, there is a risk that adverse conditions could occur, including supply chain
disruptions; higher inflation; decreased demand for the Company’s products and services or those of
its borrowers, which could increase credit risk; challenges related to maintaining sufficient qualified
personnel due to labor shortages, talent attrition, employee illness, willingness to return to work; and
disruptions to business operations at the Company and at counterparties, vendors and other service
providers. Even after such events fully subside, the U.S. economy may experience a prolonged
economic slowdown or recession, and M&T anticipates the Company’s businesses would be materially
and adversely affected by a prolonged economic slowdown or recession.

The escalation or continuation of the war between Russia and Ukraine or other hostilities could
result in, among other things, further increased risk of cyber attacks, supply chain disruptions, higher
inflation, lower consumer demand and increased volatility in commodity, currency and other financial
markets.

To the extent that pandemics, including the COVID-19 pandemic, acts of war, including Russia’s
invasion of Ukraine, or terrorism and other detrimental external events adversely affect the Company’s
business, financial condition, liquidity, capital or results of operations, such factors may also have the
effect of heightening many of the other risks described in this “Risk Factors” section.

The Company’s assets, communities, operations, reputation and customers could be adversely affected
by the impacts of climate risk.

The Company operates in regions where its businesses and the activities of its customers could be
negatively impacted by climate risk. This includes the physical risks resulting from chronic shifts in
climate, such as rising average global temperatures, rising sea levels and acute climate events, such as
an increase in the frequency and severity of extreme weather events and natural disasters, including
floods, wildfires, hurricanes and tornados. Such chronic shifts and events could damage or otherwise
impact the value or productivity of customers’ assets and disrupt the Company’s operations and the
operations of customers or third parties on which the Company relies. They could also result in market
volatility, negatively impact the Company’s customers’ ability to repay outstanding loans, and damage
or deteriorate the value of collateral. Over time such risks may result in both increasing premiums for
and reduced availability of insurance and have a broader impact on the economy.

Further, climate risk may manifest from efforts to transition to a low-carbon economy. Transition
risks may arise from changes in consumer and business preferences, legislation, regulation, policy, and
technological advancement associated with the changes necessary to limit climate change. Such risks
may result in increased expenses or otherwise adversely impact the Company and its customers,
including the ability of customers to repay outstanding loans. The Company could experience increased
expenses resulting from climate-related strategic planning and market changes, as well as litigation
and reputational harm as a result of negative public sentiment, regulatory scrutiny and reduced investor

and stakeholder confidence due to its climate change strategy and responses. For example, the
Company’s reputation may be damaged and its financial condition could suffer as a result of the
ineffective identification, monitoring or management of risks relating to providing financial services
to certain industries or projects that are sensitive to a transition to a lower carbon economy, as well as
any decisions the Company makes to continue to conduct or change its activities in response to
considerations relating to climate change.

Ongoing legislative or regulatory uncertainties and changes regarding appropriate climate risk
management, practices and disclosures, such as the climate-related disclosure rules proposed by the
SEC in 2022, may also result in higher regulatory, compliance and other expenses. In addition, the
expectations of federal and state banking regulators, investors and other stakeholders are continuously
evolving and may require financial institutions including the Company, to adhere to increased
requirements and expectations regarding the disclosure and management of their climate risks and
related lending, investment, operations and advisory activities.

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.

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 by M&T Bank. M&T, M&T Bank and their subsidiaries occupy 100% of the
building. At December 31, 2022, the cost of this property (including improvements subsequent to the
initial construction), net of accumulated depreciation, was $25.9 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, 2022, the cost of
this building (including improvements subsequent to acquisition), net of accumulated depreciation,
was $11.9 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 $24.6 million at December 31, 2022.

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 100% of Wilmington Center and approximately 23%
of Wilmington Plaza. At December 31, 2022, the cost of these buildings (including improvements

subsequent to acquisition), net of accumulated depreciation, was $39.1 million and $14.5 million,
respectively.

M&T Bank also owns facilities in Millsboro, Delaware and Harrisburg, Pennsylvania with
approximately 325,000 and 220,000 rentable square feet of space, respectively. M&T Bank occupies
100% and approximately 29% of those facilities, respectively. At December 31, 2022, the cost of those
buildings (including improvements subsequent to acquisition), net of accumulated depreciation, was
$15.9 million and $8.0 million, respectively.

The Company obtained facilities in connection with the People's United acquisition, including a
building in Bridgeport, Connecticut, (known as Bridgeport Center) with approximately 450,000
rentable square feet of space. The Company occupies approximately 89% of that facility. At
December 31, 2022, the cost of that building (including improvements subsequent to acquisition), net
of accumulated depreciation, was $35.7 million.

M&T owns many other properties none which have more than 100,000 square feet of space. The
Company also leases office space and other facilities to support its business operations. The cost and
accumulated depreciation and amortization of the Company’s premises and equipment and information
regarding the Company’s lease arrangements is detailed in note 6 of Notes to Financial Statements
filed herewith in Part II, Item 8, “Financial Statements and Supplementary Data.”

Of the 1,010 domestic banking office locations of M&T’s subsidiary banks at December 31,

2022, 366 are owned and 644 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 probable that the
Company will incur losses and the amounts of the losses can be reasonably estimated, the Company
records an expense and corresponding liability in its consolidated financial statements. To the extent
the pending or threatened litigation could result in exposure in excess of that liability, the amount of
such excess is not currently estimable. Although not considered probable, the range of reasonably
possible losses for such matters in the aggregate, beyond the existing recorded liability, was between
$0 and $25 million as of December 31, 2022. Although the Company does not believe that the outcome
of pending legal matters will be material to the Company’s consolidated financial position, it cannot
rule out the possibility that such outcomes will be material to the consolidated results of operations for
a particular reporting period in the future.

Item 4. Mine Safety Disclosures.

Not applicable.

Executive Officers of the Registrant
Information concerning M&T’s executive officers is presented below. 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.

René F. Jones, age 58, is chief executive officer, chairman of the board and a director of M&T
and M&T Bank (2017). Previously, he was a senior executive vice president of M&T and a vice
chairman of M&T Bank with responsibility for the Company’s Wealth and Institutional Services
Division, Treasury Division, and Mortgage and Consumer Lending Divisions. Mr. Jones had also

served as chairman of the board and a director of Wilmington Trust Investment Advisors, a director of
M&T Insurance Agency, chief financial officer of M&T, M&T Bank and Wilmington Trust, N.A. and
held a number of management positions within M&T Bank’s Finance Division since 1992.

Richard S. Gold, age 62, is president and chief operating officer of M&T (2017) and president,
chief operating officer and a director of M&T Bank (2017). Mr. Gold oversees the Consumer Banking,
Business Banking, Legal and Human Resources Divisions. Previously, he was a senior executive vice
president, chief risk officer and director of M&T and was a vice chairman and chief risk officer of
M&T Bank. Mr. Gold had been responsible for overseeing the Company’s governance and strategy
for risk management, as well as relationships with key regulators and supervisory agencies. He is a
senior executive vice president (2021) of Wilmington Trust, N.A. and Wilmington Trust Company.
Mr. Gold had served as chairman, president and chief executive officer of Wilmington Trust, N.A., 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. In June 2022 Mr. Gold announced his
intention to retire effective after the first quarter of 2023, and his plans to remain a director of M&T
Bank.

Kevin J. Pearson, age 61, is vice chairman (2020) of M&T and is vice chairman (2014) and a
director (2018) of M&T Bank. Mr. Pearson has oversight of the Commercial Banking, Technology
and Banking Operations, and Wealth and Institutional Services Divisions. Previously, Mr. Pearson
served as a director of M&T, chairman of the board of Wilmington Trust Company and chairman of
the board of Wilmington Trust, N.A. He also previously served as a senior executive vice president of
M&T and M&T Bank and has held a number of management positions since he began his career with
M&T Bank in 1989. Mr. Pearson is a director (2018) of Wilmington Trust Company, WT Investment
Advisors, Wilmington Funds Management, and WTIM. He is a director (2014) of Wilmington Trust,
N.A. and a director (2022) of PUA.

Robert J. Bojdak, age 67, is a senior executive vice president and chief credit officer (2004) of
M&T and M&T Bank where he is responsible for managing the overall risk involving M&T Bank’s
loan portfolio, monitoring portfolio metrics and workout activities. He is a senior executive vice
president (2004) of Wilmington Trust, N.A. and a senior executive vice president (2020) of
Wilmington Trust Company. Mr. Bojdak joined M&T Bank in 2002 and previously served as senior
vice president and credit deputy for M&T Bank and as a director of Wilmington Trust, N.A.

Peter G. D'Arcy, age 49, is a senior executive vice president (2022) of M&T and M&T Bank and
is the head of Commercial Banking. In his current role, Mr. D'Arcy is responsible for directing strategic
growth and business line development activities across M&T’s footprint for commercial clients. He is
a director and chairman (2022) of M&T Realty Capital. Previously, Mr. D'Arcy served as an Area
Executive, was co-head of M&T Bank’s Senior Loan Committee, and supervised M&T Bank’s
commercial real estate segment, Capital Markets and Corporate and Institutional Banking Divisions.
He began his career with M&T Bank in 1995.

Christopher E. Kay, age 57, is a senior executive vice president (2018) of M&T and M&T Bank,
and is responsible for all aspects of Consumer Banking, including the Mortgage, Consumer Lending
and Retail businesses. He is also responsible for Business Banking, Customer Experience, Digital,
Strategy and Transformation, Marketing and Enterprise Platforms. Prior to joining M&T in 2018, Mr.
Kay served as chief innovation officer at Humana from 2014 to 2018 and as managing director of Citi
Ventures from 2007 to 2013.

Darren J. King, age 53, is a senior executive vice president (2010) and chief financial officer
(2016) of M&T and senior 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 and oversees
the Finance and Treasury Divisions. 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 a senior executive vice president (2009) and chief financial officer (2016) of
Wilmington Trust, N.A.

Doris P. Meister, age 68, is a senior executive vice president (2016) of M&T and M&T Bank and
is responsible for overseeing the Company’s wealth management business, including Wilmington
Trust Wealth Management, M&T Securities and WT Investment Advisors. Ms. Meister is the chair of
the board, president and chief executive officer (2022) and a director (2016) of Wilmington Trust, N.A.
and Wilmington Trust Company, and the chair of the board, chief executive officer and a director
(2017) of WT Investment Advisors. She is a director (2017), chair of the board and chief executive
officer (2018) of Wilmington Funds Management and WTIM. Ms. Meister is a director, chair of the
board and chief executive officer (2022) of PUA. Ms. Meister joined Wilmington Trust N.A. in 2016
and has over four decades of financial and executive management experience.

Laura P. O’Hara, age 63, is a senior executive vice president (2020) and chief legal officer (2017)
of M&T and M&T Bank. In this role, she oversees all of the Company’s legal affairs, as well as the
Office of the Corporate Secretary. Ms. O’Hara is a senior executive vice president (2020) and chief
legal officer (2018) of Wilmington Trust, N.A., and senior executive vice president and chief legal
officer (2020) of Wilmington Trust Company. She has almost 40 years of litigation, regulatory
compliance and risk management experience, including time spent at Santander Bank, where she
served as executive vice president and general counsel from 2015 until she joined M&T in 2017.

Michael J. Todaro, age 61, is a senior executive vice president (2015) and chief risk officer (2021)
of M&T and M&T Bank where he is responsible for overseeing the Company’s governance and
strategy for risk management as well as relationships with the Company’s regulators and supervisory
agencies. He is a senior executive vice president (2015) and chief risk officer (2021) of Wilmington
Trust, N.A., and is a senior executive vice president (2021) of Wilmington Trust Company. Mr. Todaro
began his career with M&T in 1995, and previously served as senior vice president of M&T Bank and
held a number of management positions within M&T Bank’s Mortgage, Consumer Lending and
recently he was responsible for Enterprise
Customer Asset Management Divisions. Most
Transformation activities.

Michele D. Trolli, age 61, is a senior executive vice president (2005) and head of corporate
operations and enterprise initiatives (2018) of M&T and M&T Bank. Previously, she was chief
information officer of M&T and M&T Bank. Ms. Trolli has led a wide range of the Company’s
Banking Operations, which includes Banking Services, Corporate Services, Business Continuity and
Enterprise Transformation and Change Management and overseeing the Environmental, Social and
Governance ("ESG") initiative. In December 2022 Ms. Trolli announced her plans to retire from M&T
Bank effective in March of 2023.

Julianne Urban, age 50, is a senior executive vice president (2020) and chief auditor (2017) of
M&T and M&T Bank. She is responsible for the audit division’s strategic development and execution
of assurance services. During her tenure, she has served as audit manager and audit director responsible
for examining various business lines including Commercial Banking, Consumer Banking, Credit,
Finance, Mortgage, Operations, Regulatory, Retail, Risk Management, and Treasury. Ms. Urban is a
senior executive vice president (2020) and chief auditor (2018) of Wilmington Trust, N.A. and a senior
executive vice president (2020) and chief auditor (2017) of Wilmington Trust Company.

D. Scott N. Warman, age 57, is a senior executive vice president (2009) and treasurer (2008) of
M&T and M&T Bank. He is responsible for managing the Company’s Treasury Division, including
asset/liability management, funding, investment and derivative portfolio management, capital markets
foreign exchange trading and sales. 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 a senior
executive vice president and treasurer of Wilmington Trust, N.A. (2008) and is a senior executive vice
president and treasurer of Wilmington Trust Company (2012).

Jennifer Warren, age 58, is a senior executive vice president (2022) of M&T and M&T Bank.
Ms. Warren is responsible for managing administrative and business development functions of
Institutional Client Services within the Wealth and Institutional Services Division. She is a senior
executive vice president and director (2022) of Wilmington Trust, N.A. and Wilmington Trust
Company. Ms. Warren is a director (2022) of Wilmington Funds Management, WTIM and PUA. Prior
to joining the Company, Ms. Warren was chief executive officer of Issuer Services, North America for
Computershare from 2018 to 2021. Ms. Warren previously served as head of the U.S. region and
president and chief executive officer of CIBC World Markets Corp., where she worked for nearly 12
years.

Tracy S. Woodrow, age 49, is a senior executive vice president (2020), chief human resources
officer (2020) and chief administrative officer (2023) of M&T and M&T Bank. Ms. Woodrow is
responsible for managing the Company’s Human Resources, Banking Services and Corporate Services
Divisions, and leading the ESG initiative. She is a senior executive vice president (2015) of
Wilmington Trust, N.A. and Wilmington Trust Company. Ms. Woodrow previously served as the Bank
Secrecy Act / Anti-Money Laundering / Office of Foreign Assets Control Officer for M&T, M&T
Bank and Wilmington Trust, N.A. upon joining M&T Bank in 2013.

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
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 2022, 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, 2022 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 2019 Equity Incentive Compensation Plan,
which has been previously approved by shareholders and the M&T Bank Corporation Deferred Bonus
Plan, 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, 2022, 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)

729,771 $

11,725
741,496 $

164.12

80.46
162.79

1,650,696

—
1,650,696

As of December 31, 2022, a total of 1,612,597 shares of M&T common stock were issuable upon exercise of

(1)
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 $139.36 per common share.

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, 2017 and ending on December 31, 2022. The KBW
Nasdaq Bank Index is a modified market capitalization weighted index consisting of 25 banking stocks
representing leading large U.S. national money centers, regional banks and thrift institutions.

Comparison of Five-Year Cumulative Return*

Shareholder Value at Year End*

M&T Bank Corporation
KBW Nasdaq Bank Index
S&P 500 Index

2017

2018

2019

2020

2021

2022

100
100
100

85
82
96

104
112
126

81
100
149

101
139
192

98
109
157

* Assumes a $100 investment on December 31, 2017 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 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
During the fourth quarter of 2022, M&T purchased shares of its common stock as follows:

Issuer Purchases of Equity Securities

(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, 2022...................................
November 1 - November 30, 2022...........................
December 1 - December 31, 2022............................
Total .........................................................................

211,886 $

2,125,262
1,340,649
3,677,797 $

169.42
167.80
156.55
163.79

200,000 $ 2,366,318,142
2,009,747,682
1,800,000,226

2,125,000
1,339,887
3,664,887

(1)

(2)

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.
In July 2022, M&T's Board of Directors authorized a program under which $3.0 billion of common shares
may be repurchased with the exact number, timing, price and terms of such repurchases to be determined at
the discretion of management and subject to all regulatory limitations. That authorization replaces the
previous program.

Item 6.

Selected Financial Data [Reserved].

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 $200.7 billion at December 31, 2022. 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 Manufacturers and Traders Trust
Company (“M&T Bank”) and Wilmington Trust, National Association (“Wilmington Trust, N.A.”).
Among other subsidiaries of M&T is M&T Securities, Inc. which provides institutional brokerage and
securities services and had total assets of $49 million at December 31, 2022.

M&T Bank, with total assets of $200.3 billion at December 31, 2022, is a New York-chartered
commercial bank with 1,010 domestic banking offices in New York State, Maryland, New Jersey,
Pennsylvania, Delaware, Connecticut, Massachusetts, Maine, Vermont, New Hampshire, Virginia,
West Virginia, and the District of Columbia, and a full-service commercial banking office in Ontario,
Canada. 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. M&T Bank lends to consumers residing in the states noted above and to small and
medium-size businesses based in those areas, although loans are also 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
Realty Capital Corporation, a multifamily commercial mortgage lender; 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 entities obtained in the People's United
acquisition including LEAF Commercial Capital, Inc., M&T Capital and Leasing Corp. (formerly
known as People's Capital and Leasing Corp.) and M&T Equipment Finance Corp. (formerly known
as People's United Equipment Finance Corp.) that provide equipment leasing and financing services.
Wilmington Trust, N.A. is a national bank with total assets of $692 million at December 31, 2022.

Wilmington Trust, N.A. and its subsidiaries offer various trust and wealth management services.

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

In connection with the acquisition of People's United, M&T issued 50,325,004 common shares
on April 1, 2022. Pursuant to the terms of the merger agreement, People’s United shareholders received
consideration valued at .118 of an M&T common share in exchange for each common share of People’s
United. The purchase price totaled approximately $8.4 billion (with the price based on M&T’s closing
price of $164.66 per share as of April 1, 2022). Additionally, People’s United outstanding preferred
stock was converted into new shares of Series H preferred stock of M&T.

The People's United transaction has been 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. M&T preliminarily recorded assets acquired
of $64.2 billion, including $35.8 billion of loans and leases and $11.6 billion of investment securities,
and liabilities assumed totaling $55.5 billion, including $53.0 billion of deposits. The transaction added
$8.4 billion to M&T's common shareholders' equity and $261 million to preferred equity. In connection
with the acquisition the Company recorded $3.9 billion of goodwill and $261 million of core deposit
and other intangible assets. The acquisition of People's United formed a banking franchise with
approximately $200 billion in assets serving communities in the Northeast and Mid-Atlantic from
Maine to Virginia, including Washington D.C.

Net acquisition and integration-related expenses (included herein as merger-related expenses)
associated with the People's United acquisition totaled $432 million after tax-effect, or $2.63 of diluted
earnings per common share in 2022, and $34 million after tax-effect, or $0.25 of diluted earnings per
common share in 2021. M&T completed the transfer of most financial records of People’s United to
M&T’s core operating systems in the third quarter of 2022. The Company does not expect any People's
United merger-related expenses to be material during 2023.

On September 29, 2022 M&T Bank announced it had entered into a definitive agreement to sell
M&T Insurance Agency, Inc. ("MTIA"), a wholly owned insurance agency subsidiary of M&T Bank
to Arthur J. Gallagher & Co. The transaction was completed on October 31, 2022 and resulted in a pre-
tax gain of $136 million. On December 19, 2022 Wilmington Trust, N.A. announced it had entered
into an agreement to sell its Collective Investment Trust ("CIT") business to a private equity firm. That
sale is expected to close in the first half of 2023 and result in recognition of a gain at that time.

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. The more significant areas in which management of the Company applies
critical assumptions and estimates include the following:

•

losses with various macroeconomic assumptions

Accounting for credit losses — Effective January 1, 2020 the Company adopted amended
accounting guidance that impacts how the allowance for credit losses is determined. Under
that accounting guidance, the allowance for credit losses represents a valuation account that
is deducted from the amortized cost basis of certain financial assets, including loans and
leases, to present the net amount expected to be collected at 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 expected losses in the loan and lease portfolio,
borrower-specific financial data and macro-economic assumptions are utilized to project
losses over a reasonable and supportable forecast period. For certain loan pools that share
similar risk characteristics, the Company utilizes statistically developed models to estimate
amounts and timing of expected future cash flows, collateral values and other factors used
to determine the borrowers’ abilities to repay obligations. Such models consider historical
including
correlations of credit
unemployment, gross domestic product and real estate prices. These forecasts may be
adjusted for inherent limitations or biases of the models. Subsequent to the forecast period,
the Company utilizes longer-term historical loss experience to estimate losses over the
remaining contractual life 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 could result in adjustment of the allowance for credit
losses in future periods. A 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. Prior to 2020,
the allowance for credit losses represented the amount that in management’s judgment
reflected incurred credit losses inherent in the loan and lease portfolio as of the balance sheet
date. The estimation of the allowance for credit losses prior to 2020 did not consider
reasonable and supportable forecasts that could have affected the collectability of the
reported amounts.
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
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 require recognition of a loss in the consolidated statement of
income. Examples include certain investments, capitalized servicing assets, goodwill and
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, 13, 19, 20
and 21 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 22 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 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 14 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 20 of Notes to Financial Statements.

Overview
During 2022 the Federal Reserve took steps to address rising inflation, including several increases in
the target Federal funds rate totaling 4.25%. Those actions have led to an expansion of the Company's
net interest margin, or taxable-equivalent net interest income expressed as a percentage of average
earning assets. A higher level of earning assets associated with the People's United acquisition and the
expanded net interest margin have increased taxable-equivalent net interest income in 2022 as
compared with 2021 and 2020. The Company's estimates of expected credit losses at December 31,
2022 reflected risks including inflation, a projected rise in unemployment, reduction of economic
growth projections, decreasing residential real estate values as compared with December 31, 2021 and
continued concerns about commercial real estate values in the hospitality and office building sectors.
The Company recognized a $136 million gain on the sale of MTIA in the fourth quarter of 2022. Also
during the fourth quarter of 2022, the Company made a $135 million tax-deductible contribution to
The M&T Charitable Foundation.

Net income recorded by the Company in 2022 was $1.99 billion or $11.53 of diluted earnings per
common share, compared with $1.86 billion or $13.80 of diluted earnings per common share in 2021.
Basic earnings per common share were $11.59 in 2022 and $13.81 in 2021. In connection with M&T’s
acquisition of People’s United, the after-tax impact of merger-related expenses was $432 million ($580
million pre-tax), or $2.63 of diluted earnings per common share in 2022, compared with $34 million
($44 million pre-tax), or $0.25 of diluted earnings per common share in 2021. Merger-related expenses
largely consisted of professional services, temporary help fees and other costs associated with actual
or planned conversions of systems and/or integration of operations and the introduction of the
Company to its new customers, costs related to terminations of existing contractual arrangements to
purchase various services, severance, travel costs, and, in the second quarter of 2022, an initial
provision for credit losses on loans not deemed to be purchased credit deteriorated ("PCD") on the
April 1, 2022 acquisition date of People's United. GAAP requires that acquired loans be recorded at
estimated fair value, which includes the use of interest rate and expected credit loss assumptions to
forecast estimated cash flows. GAAP also provides that an allowance for credit losses on loans

acquired, but not classified as PCD also be recognized. Given the requirement to recognize such losses
above and beyond the impact of forecasted losses used in determining the fair value of acquired loans,
M&T considers that initial provision to be a merger-related expense. There were no merger-related
expenses during 2020. Net income in 2020 totaled $1.35 billion, while diluted and basic earnings per
common share were each $9.94. Expressed as a rate of return on average assets, net income in 2022
was 1.05%, compared with 1.22% in 2021 and 1.00% in 2020. The return on average common
shareholders’ equity was 8.67% in 2022, 11.54% in 2021 and 8.72% in 2020.

Table 1

EARNINGS SUMMARY
Dollars in millions

$ 2,332.8
311.2
2,021.6
592.0
15.5
174.1

741.7
697.1
180.4

24.4
23.1
132.9

(a)
(b)

Increase (Decrease) (a)
2021 to 2022

Amount

2020 to 2021
%

Amount

59
273
53
—
—
8

36
45
7

166
4
7

$ (256.5)
(212.4)
(44.1)
(875.0)
(11.8)
90.3

95.0
131.4
683.0

(2.6)
180.0
505.6

Interest income (b) .................................
(6)
Interest expense....................................
(65)
(1) Net interest income (b) .............................
(109) Less: provision for credit losses.....................
— Gain (loss) on bank investment securities............
Other income ......................................
4
Less:
Salaries and employee benefits .................
Other expense .................................
Income before income taxes ........................
Less:
Taxable-equivalent adjustment(b)...............
Income taxes...................................
Net income ........................................

(15)
43
37

5
9
38

2022

2021

2020

2019

2018

6,286.3
425.2
5,861.1
517.0
(5.7)
2,362.3

2,787.4
2,263.0
2,650.3

39.1
619.5
1,991.7

3,953.5
114.0
3,839.5
(75.0)
(21.2)
2,188.2

2,045.7
1,565.9
2,469.9

14.7
596.4
1,858.8

4,210.0
326.4
3,883.6
800.0
(9.4)
2,097.9

1,950.7
1,434.5
1,786.9

17.3
416.4
1,353.2

4,902.4
749.3
4,153.1
176.0
18.0
2,043.7

1,900.8
1,567.9
2,570.1

22.9
618.1
1,929.1

$ 4,620.6
526.4
4,094.2
132.0
(6.3)
1,862.3

1,752.3
1,535.8
2,530.1

21.9
590.1
$ 1,918.1

Compound
Growth Rate
5 Years
2017 to 2022

8 %
2
9
25
—
5

11
9
2

3
(8)
7 %

Changes were calculated from unrounded amounts.
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 26%.

The financial results associated with the acquired operations of People's United have been
included in the Company's consolidated statement of income since April 1, 2022. Reflecting earning
assets obtained in the acquisition of People's United and an expanded net interest margin the
Company's taxable-equivalent net interest income increased by 53% to $5.86 billion in 2022 from
$3.84 billion in 2021. That increase includes the impact of a 63 basis point (hundredths of one percent)
widening of the net interest margin to 3.39% in 2022 from 2.76% in 2021 and a growth in average
earning assets to $172.8 billion in 2022 from $139.1 billion in 2021. That growth includes increases in
average loans and investment securities of $22.7 billion and $13.5 billion, respectively. Earning assets
of People's United totaled $56.6 billion on April 1, 2022 and included loans and investment securities
of $35.8 billion and $11.6 billion, respectively. Taxable-equivalent net interest income was $3.88
billion in 2020. The decrease in 2021 as compared with 2020 resulted from a 40 basis point narrowing
of the net interest margin from 3.16% in 2020, partially offset by the impact of an increase in average
earning assets from $122.9 billion in 2020 that reflected higher balances of amounts held at the Federal
Reserve Bank ("FRB") of New York.

The provision for credit losses was $517 million in 2022 reflecting the $242 million People's
United-related provision for non-PCD loans acquired in the acquisition and a forecasted weakening of
macroeconomic conditions as of December 31, 2022, as compared with forecasts in 2021 during which
a recapture of previously recorded provisions of $75 million was recorded. The provision in 2020 was
$800 million. Net charge-offs in 2022, 2021 and 2020 were $160 million, $192 million and $247
million, respectively.

Other income totaled $2.36 billion in 2022, $2.17 billion in 2021 and $2.09 billion in 2020.
Comparing the recent year with 2021, acquired operations associated with the People's United

acquisition (predominantly reflected in trust income, service charges on deposit accounts and other
revenues from operations, including credit-related fees), higher trust income from legacy operations
and the $136 million gain on sale of MTIA were most impactful to the higher levels of noninterest
income in 2022. Those increases were partially offset by lower mortgage banking revenues reflecting
the Company's decision late in the third quarter of 2021 to retain the substantial majority of recently
originated mortgage loans in portfolio rather than sell such loans, and a planned reduction of
insufficient funds fees reflected in service charges on deposit accounts. As compared with 2020, higher
amounts of trust income, service charges on deposit accounts, and brokerage services income in 2021
were partially offset by lower trading account and non-hedging derivative gains, a higher loss on bank
investment securities and less in distributions from Bayview Lending Group LLC ("BLG").

Other expense totaled $5.05 billion in 2022, compared with $3.61 billion in 2021 and $3.39
billion in 2020. 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 $56 million, $10 million
and $15 million in 2022, 2021 and 2020, respectively, and merger-related expenses of $338 million
and $44 million in 2022 and 2021, respectively. No merger-related expenses were recorded in 2020.
Exclusive of those nonoperating expenses, noninterest operating expenses totaled $4.66 billion in
2022, compared with $3.56 billion in 2021 and $3.37 billion in 2020. Acquired operations from
People's United were the predominant factor for increased noninterest operating expenses in 2022. In
addition to the People's United acquisition, factors contributing to the higher level of expenses included
higher costs for salaries and employee benefits, outside data processing and software, equipment and
net occupancy and professional services expenses, and (in the fourth quarter of 2022) a contribution to
The M&T Charitable Foundation. Those higher expenses were partially offset by lower defined benefit
pension-related expenses included in other costs of operations. The higher level of such expenses in
2021 as compared with 2020 was due to increased costs for salaries and employee benefits, outside
data processing and software, FDIC assessments, and professional services.

The efficiency ratio measures the relationship of noninterest 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 56.6% in 2022, compared with 59.0% and 56.3% in 2021 and
2020, respectively. The calculations of the efficiency ratio are presented in table 2.

The Company’s effective tax rate was 23.7% in 2022, compared with 24.3% and 23.5% in 2021

and 2020, respectively.

Under approved capital plans and programs authorized by M&T's Board of Directors, M&T
repurchased a total of 10,453,282 shares of M&T's common stock in 2022 at an average cost per share
of $172.19 resulting in a total cost of $1.8 billion. M&T repurchased 2,577,000 common shares for
$374 million in 2020. No common shares were repurchased in 2021.

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 $8.7 billion at
December 31, 2022 and $4.6 billion at each of December 31, 2021 and 2020, consisting predominantly
of goodwill. Amortization of core deposit and other intangible assets, after-tax effect, totaled $43
million, $8 million and $11 million during 2022, 2021 and 2020, 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
other intangible assets (and the related goodwill, core deposit intangible and other intangible asset
balances, net of applicable deferred tax amounts) and expenses (when incurred) associated with
merging acquired or to be acquired operations with and into the Company, since such items are
considered by management to be “nonoperating” in nature. In 2022 and 2021, those merger-related

expenses generally consisted of professional services, temporary help fees and other costs associated
with actual or planned conversions of systems and/or integration of operations and the introduction of
M&T to its new customers; costs related to terminations of existing contractual arrangements to
purchase various services; severance; travel costs; legal expenses; printing costs associated with
communications with shareholders and customers; and in the second quarter of 2022, an initial
provision for credit losses on loans not deemed to be PCD on April 1, 2022. Such expenses totaled
$580 million ($432 million after-tax) in 2022 and $44 million ($34 million after-tax) in 2021. There
were no merger-related expenses in 2020. 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 $2.47 billion in 2022, $1.90 billion in 2021, and $1.36 billion in 2020.
Diluted net operating earnings per common share were $14.42 in 2022, $14.11 in 2021 and $10.02 in
2020.

Net operating income expressed as a rate of return on average tangible assets was 1.35% in 2022,
compared with 1.28% in 2021 and 1.04% in 2020. Net operating income represented a return on
average tangible common equity of 16.70% in 2022, compared with 16.80% in 2021 and 12.79% in
2020.

Reconciliations of GAAP amounts with corresponding non-GAAP amounts are presented in

table 2.

Table 2

RECONCILIATION OF GAAP TO NON-GAAP MEASURES

2022

2021

2020

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 ............................... $

Other expense
Other expense....................................................................... $
Amortization of core deposit and other intangible assets ...........................
Merger-related expenses ............................................................

Noninterest operating expense................................................... $

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 ............................................................................. $

Efficiency ratio
Noninterest operating expense (numerator) ......................................... $
Taxable-equivalent net interest income ............................................. $
Other income .......................................................................
Less: Gain (loss) on bank investment securities.....................................
Denominator ........................................................................ $
Efficiency ratio .....................................................................
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......................................................................
Common equity..................................................................
Goodwill............................................................................
Core deposit and other intangible assets ............................................
Deferred taxes ......................................................................

Total tangible common equity ................................................... $

(a)

After any related tax effect.

1,991,663
42,771
431,576
2,466,010

11.53
.26
2.63
14.42

5,050,436
(55,624)
(338,321)
4,656,491

102,150
6,709
5,438
9,262
6,786
207,976
338,321
242,000
580,321

4,656,491
5,861,128
2,356,603
(5,686)
8,223,417

56.6%

190,252
(7,537)
(179)
43
182,579

23,810
(1,946)
21,864
(7,537)
(179)
43
14,191

200,730
(8,490)
(209)
51
192,082

25,318
(2,011)
23,307
(8,490)
(209)
51
14,659

$
$

1,858,746
7,532
33,560
1,899,838

13.80
.06
.25
14.11

3,611,623
(10,167)
(43,860)
3,557,596

176
341
1,119
866
2,965
38,393
43,860
—
43,860

3,557,596
3,839,509
2,166,994
(21,220)
6,027,723

59.0%

152,669
(4,593)
(8)
2
148,070

16,909
(1,438)
15,471
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$
$

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—
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—
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3,370,371
3,883,605
2,088,444
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135,480
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4
10,334

Net Interest Income/Lending and Funding Activities
Taxable-equivalent net interest income was $5.86 billion in 2022, a 53% increase from $3.84 billion
in 2021. That increase reflects the impact of $33.7 billion in additional average earning assets,
predominantly resulting from the People's United transaction, and a 63 basis point widening of the net
interest margin to 3.39% in 2022 from 2.76% in 2021. The higher net interest margin in 2022 is
generally reflective of a rising interest rate environment resulting from actions taken by the Federal
Reserve to temper inflationary pressures on the U.S. economy. The Federal Reserve raised its target
Federal funds rate through multiple hikes that totaled 4.25% during 2022.

Average earnings assets were $172.8 billion in 2022 and $139.1 billion in 2021. Average loans
and leases were $119.3 billion in 2022, up from $96.6 billion in 2021. Included in average loans and
leases in the recent year were loans obtained in the People's United acquisition. Loans acquired from
People's United totaled $35.8 billion on the April 1, 2022 acquisition date and consisted of
approximately $13.6 billion of commercial loans and leases, $13.5 billion of commercial real estate
loans, $7.1 billion of residential real estate loans and $1.6 billion of consumer loans. Including the
three quarter impact of the acquired loan balances, average balances of commercial loans and leases
increased $9.7 billion or 39% to $34.9 billion in 2022 from $25.2 billion in 2021. Partially offsetting
the increase from acquired loans was a reduction in average balances of Paycheck Protection Program
(“PPP”) loans, reflecting loan repayments by the Small Business Administration. PPP loans averaged
$446 million in 2022 compared with $4.1 billion in 2021. Average commercial real estate loan balances
were up $6.3 billion or 17% to $43.6 billion in 2022 from $37.3 billion in 2021. That increase was
predominantly due to the impact of loans obtained in the acquisition of People's United partially offset
by a reduction in average balances of legacy construction and permanent mortgage loans, reflecting
repayments by customers. Consumer loans averaged $19.5 billion in 2022, an increase of $2.2 billion
or 13% from $17.3 billion in 2021, reflecting the impact of loans obtained in the acquisition of People's
United (that consisted predominantly of outstanding balances of home equity lines of credit) and
growth in average recreational finance loans (consisting predominantly of loans secured by recreational
vehicles and boats). Average residential real estate loans were $21.3 billion and $16.8 billion in 2022
and 2021, respectively. The growth in residential real estate loans was largely attributable to the
acquisition of loans from People's United and the Company's decision in the third quarter of 2021 to
retain rather than sell most originated residential mortgage loans. Partially offsetting those increases
was the impact of ongoing repayments of loans by customers.

Net interest income expressed on a taxable-equivalent basis aggregated $3.84 billion in 2021,
compared with $3.88 billion in 2020. The decrease in 2021 was primarily attributable to a 40 basis
point narrowing of the net interest margin to 2.76% in 2021 from 3.16% in 2020 reflecting lower yields
on loans offset, in part, by lower rates paid on deposits, and reduced balances of investment securities.
Those net impacts were partially offset by increased deposits held at the FRB of New York that served
to increase net interest income, but, due to their low yield, reduced the reported net interest margin.

Average earnings assets were $139.1 billion and $122.9 billion in 2021 and 2020, respectively.
Average loans and leases were $96.6 billion in each of 2021 and 2020. Average balances of commercial
loans and leases decreased $2.3 billion or 8% to $25.2 billion in 2021 from $27.5 billion in 2020. That
decrease was largely the result of a decline in average balances of PPP loans due to loan forgiveness
by the SBA, lower dealer floor plan balances reflecting automobile production and inventory issues
experienced by the industry and subdued loan demand by commercial customers, in general. PPP loans
averaged $4.1 billion in 2021 compared with $4.4 billion in 2020. Average commercial real estate loan
balances were up $336 million or 1% to $37.3 billion in 2021 from $37.0 billion in 2020. Consumer
loans averaged $17.3 billion in 2021, an increase of $1.4 billion or 9% from $15.9 billion in 2020, due
to growth in recreational finance loans and, to a lesser extent, automobile loans that was partially offset
by declines in average outstanding balances of home equity loans and lines of credit. Average
residential real estate loans were $16.8 billion and $16.2 billion in 2021 and 2020, respectively,

reflecting repurchases of government-guaranteed loans from Ginnie Mae pools that are serviced by the
Company. The Company repurchased government-guaranteed loans to reduce associated servicing
costs, namely a requirement to advance principal and interest payments that had not been received
from individual mortgagors. The loans repurchased from Ginnie Mae pools averaged $3.3 billion in
2021 and $2.6 billion in 2020. Additionally, late in the third quarter of 2021, the Company began to
retain recently originated residential mortgage loans in portfolio rather than sell such loans. Those
increases were offset by the ongoing repayments of loans by customers.

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Table 4 summarizes average loans and leases outstanding in 2022 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)

Commercial, financial, etc........................................................................
Real estate — commercial ........................................................................
Real estate — consumer ...........................................................................
Consumer

Recreational finance .............................................................................
Automobile ...........................................................................................
Home equity lines and loans.................................................................
Other .....................................................................................................
Total consumer .................................................................................
Total..............................................................................................

Percent Increase
(Decrease) from

2021 to
2022

2020 to
2021

39 %
17
27

11
2
25
25
13
23 %

(8) %
1
3

21
14
(12)
5
9
— %

2022
(In millions)

34,926
43,576
21,257

8,500
4,527
4,669
1,842
19,538
119,297

Commercial loans and leases, excluding loans secured by real estate, totaled $41.9 billion at
December 31, 2022, representing 32% of total loans and leases. Table 5 presents information on
commercial loans and leases as of December 31, 2022 relating to geographic area, size, borrower
industry and whether the loans are secured by collateral or unsecured. Of the $41.9 billion of
commercial loans and leases outstanding at the end of 2022, approximately $37.8 billion, or 90%, were
secured, while 25%, 33% and 13% were granted to businesses in New York State, the Mid-Atlantic
area (which includes Delaware, Maryland, New Jersey, Pennsylvania, Virginia, West Virginia and the
District of Columbia) and the New England area (which includes Connecticut, Maine, Massachusetts,
New Hampshire, Rhode Island and Vermont), 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, 2022 aggregated $2.4 billion, of which 23% were
secured by collateral located in New York State, 24% were secured by collateral in the Mid-Atlantic
area and 5% were secured by collateral in New England. The Company acquired $1.3 billion of
commercial leases on April 1, 2022 as a result of the People's United transaction.

International loans included in commercial loans and leases totaled $241 million and $116 million
at December 31, 2022 and 2021, respectively. Included in such amounts were $227 million and $94
million of loans, respectively, at M&T Bank’s commercial banking office in Ontario, Canada. The
remaining international loans were predominantly to domestic companies with foreign operations.

Table 5

COMMERCIAL LOANS AND LEASES, NET OF UNEARNED DISCOUNT
(Excludes Loans Secured by Real Estate)

December 31, 2022

Financial and insurance ................................
Services ....................................................
Manufacturing............................................
Motor vehicle and recreational

finance dealers .........................................
Wholesale .................................................
Transportation, communications,

utilities...................................................
Retail .......................................................
Construction ..............................................
Health services ...........................................
Real estate investors.....................................
Public administration ...................................
Agriculture, forestry, fishing, etc. ....................
Other........................................................
Total ........................................................
Percent of total ...........................................
Percent of dollars outstanding
Secured.....................................................
Unsecured .................................................
Leases ......................................................
Total ........................................................
Percent of dollars outstanding by

size of loan

Less than $1 million.....................................
$1 million to $10 million...............................
$10 million to $30 million .............................
$30 million to $50 million .............................
$50 million to $100 million............................
Greater than $100 million..............................
Total ........................................................

New York

Mid-
Atlantic (a)

New
England (b)
(Dollars in millions)

Other

Total

Percent of
Total

2,379
1,416
1,470

1,065
937

359
568
532
639
751
156
25
255
$ 10,552

1,511
2,547
1,929

1,372
1,762

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978
921
698
691
92
90
275
$ 13,685

532
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873

505
841

478
234
211
343
81
83
38
62
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1,252

1,855
600

1,422
745
660
292
359
—
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600
$ 12,153

7,428
6,494
5,524

4,797
4,140

3,078
2,525
2,324
1,972
1,882
331
163
1,192
$ 41,850

18%
16%
13%

11%
10%

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6%
6%
5%
4%
1%

—
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100%

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17
5
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36
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9
4
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32
23
12
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4
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—
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14
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10
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5
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(a)

(b)

Includes Delaware, Maryland, New Jersey, Pennsylvania, Virginia, West Virginia and the District of
Columbia.
Includes Connecticut, Maine, Massachusetts, New Hampshire, Rhode Island and Vermont.

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 58% of the loan
and lease portfolio during 2022, compared with 59% in each of 2021 and 2020. At December 31, 2022,
the Company held approximately $45.4 billion of commercial real estate loans (including $131 million
held for sale), $23.8 billion of consumer real estate loans secured by one-to-four family residential
properties (including $32 million of loans held for sale) and $5.0 billion of outstanding balances of
home equity loans and lines of credit, compared with $35.4 billion, $16.1 billion and $3.6 billion,
respectively, at December 31, 2021. Included in commercial real estate loans at December 31, 2022
and 2021 were construction loans of $8.6 billion and $9.3 billion, respectively, including amounts due
from builders and developers of residential real estate aggregating $1.3 billion and $1.4 billion at
December 31, 2022 and 2021, respectively. Commercial real estate loans included loans held for sale
totaling $131 million and $425 million at December 31, 2022 and 2021, respectively. International
loans included in commercial real estate loans totaled $69 million at December 31, 2022 and $74
million at December 31, 2021.

Commercial real estate loans originated by the Company include both fixed and variable rate
instruments with monthly payments and a balloon payment of the remaining unpaid principal at
maturity. Maturity dates generally range from five to ten years and, for borrowers in good standing,
the terms of such loans may be extended by the customer following maturity at the then-current market
rate of interest. Adjustable-rate commercial real estate loans represented approximately 77% of the
commercial real estate loan portfolio at the 2022 year-end. Table 6 presents commercial real estate
loans by geographic area, type of collateral and size of the loans outstanding at December 31, 2022.
New York City commercial real estate loans totaled $5.8 billion at December 31, 2022. The $5.3 billion
of investor-owned commercial real estate loans in New York City 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 64% of the aggregate dollar amount of New York City loans were for loans with
outstanding balances of $30 million or less, while loans of more than $50 million made up
approximately 25% of the total.

Commercial real estate loans secured by properties located in other parts of New York State, the
New England area 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 90% of the aggregate dollar amount of commercial real
estate loans in New York State secured by properties located outside of New York City were for loans
with outstanding balances of $30 million or less. Of the outstanding balances of commercial real estate
loans in the New England and Mid-Atlantic areas, approximately 86% and 78%, respectively, were for
loans with outstanding balances of $30 million or less.

Commercial real estate loans secured by properties located outside of the New England area, the
Mid-Atlantic area and New York State comprised 16% of total commercial real estate loans as of
December 31, 2022.

Commercial real estate construction and development loans made to investors presented in table
6 totaled $8.3 billion at December 31, 2022, or 6% of total loans and leases. Approximately 98% of
those construction loans had adjustable interest rates. Included in such loans at the 2022 year-end were
$1.3 billion of loans to builders and developers of residential real estate properties. 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 $3.9 billion at December 31, 2022 and $4.0
billion at December 31, 2021. There have been no material losses incurred as a result of those recourse
arrangements. At December 31, 2022 and 2021, commercial real estate loans serviced by the Company
for other investors were $26.0 billion and $23.7 billion, respectively. Reflected in commercial real
estate loans serviced for others were loans sub-serviced for others that had outstanding balances of
$3.8 billion and $3.5 billion at December 31, 2022 and 2021, respectively.

Table 6

COMMERCIAL REAL ESTATE LOANS, NET OF UNEARNED DISCOUNT

December 31, 2022

New York State

New York
City

Mid-

New

Other

Atlantic (a) England (b)

Other

Total

Percent of
Total

(Dollars in millions)

$ 1,178
1,154
732
224
301
137
189
3,915

1,132
149

101
—

1,382
5,297

193

12
40
80
57
26
55
54
517
$ 5,814

$ 1,364
1,115
1,168
887
565
379
51
5,529

774
42

27
26

869
6,398

677

369
380
260
162
284
328
328
2,788
$ 9,186

$ 1,606
838
1,333
1,324
910
647
123
6,781

2,203
174

136
125

2,638
9,419

821

713
737
322
544
251
211
559
4,158
$ 13,577

$ 1,510
1,625
1,480
687
577
518
158
6,555

875
31

9
—

915
7,470

479

333
400
294
164
236
117
206
2,229
$ 9,699

638
1,156
473
545
457
557
6
3,832

1,435
128

582
308

2,453
6,285

$ 6,296
5,888
5,186
3,667
2,810
2,238
527
26,612

6,419
524

855
459

8,257
34,869

2,253

421
131
33
51
44
21
20
804
$ 7,089

1,848
1,688
989
978
841
732
1,167
10,496
$45,365

13%

20%

30%

21%

16%

100%

14%
13
12
8
6
5
1
59%

14%
1

2
1

18%
77%

4
4
2
2
2
2
2
23%
100%

Investor-owned

Permanent finance by property

type
Retail/Service .............................
Apartments/Multifamily ................
Office .......................................
Health facilities ...........................
Hotel ........................................
Industrial/Warehouse ....................
Other ........................................
Total permanent ........................

Construction/Development

Commercial
Construction .............................
Land/Land development ..............
Residential builder and developer
Construction .............................
Land/Land development ..............
Total construction/

development ........................
Total investor-owned ........................
Owner-occupied by industry (c)

Other services .............................
Motor vehicle and recreational
finance dealers...........................
Retail........................................
Health services............................
Wholesale ..................................
Manufacturing ............................
Real estate investors .....................
Other ........................................
Total owner-occupied .................
Total commercial real estate ...............
Percent of total ................................
Percent of dollars outstanding by

size of loan

Less than $1 million .........................
$1 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%
28
33
11
19
6
100%

13%
46
31
7
3
—
100%

10%
35
33
15
6
1
100%

10%
42
34
12
1
1
100%

9%
23
26
19
13
10
100%

9%
36
32
13
7
3
100%

(a)
(b)
(c)

Includes Delaware, Maryland, New Jersey, Pennsylvania, Virginia, West Virginia and the District of Columbia.
Includes Connecticut, Maine, Massachusetts, New Hampshire, Rhode Island and Vermont.
Includes $359 million of construction loans.

Real estate loans secured by one-to-four family residential properties were $23.8 billion at
December 31, 2022, including approximately 31% secured by properties located in New York State,
30% secured by properties located in the Mid-Atlantic area and 27% secured by properties located in
New England. The Company’s portfolio of limited documentation residential real estate loans held for
investment totaled $1.1 billion at December 31, 2022, compared with $1.3 billion at December 31,
2021. That portfolio consisted predominantly of limited documentation loans acquired in a prior
business combination. Such loans represent loans that at origination typically included some form of
limited borrower documentation requirements as compared with more traditional residential real estate

loans. The acquired loans that were eligible for limited documentation processing were available in
amounts up to 65% of the lower of the appraised value or purchase price of the property. Loans to
individuals to finance the construction of one-to-four family residential properties totaled $55 million
at December 31, 2022 and $57 million at December 31, 2021, 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 16% of total loans and leases at December 31, 2022
and 19% at December 31, 2021. Outstanding balances of recreational finance loans represented the
largest component of the consumer loan portfolio at December 31, 2022 and totaled $9.1 billion or
approximately 7% of total loans, compared with $8.1 billion or 9% at December 31, 2021. Outstanding
automobile loan balances were $4.5 billion at December 31, 2022, compared with $4.7 billion at
December 31, 2021. Home equity loans and lines of credit outstanding at December 31, 2022 and
December 31, 2021 were $5.0 billion and $3.6 billion, respectively. Consumer loans obtained in the
acquisition of People's United were predominantly home equity lines of credit.

Table 7 presents the composition of the Company’s loan and lease portfolio at the end of 2022,
including outstanding balances to businesses and consumers in New York State, the Mid-Atlantic area,
the New England region and other states.

Table 7

December 31, 2022

LOANS AND LEASES, NET OF UNEARNED DISCOUNT

Real estate

Residential ...........................................................
Commercial ..........................................................
Total real estate................................................
Commercial, financial, etc..............................................
Consumer

Recreational finance ...............................................
Home equity lines and loans .....................................
Automobile...........................................................
Other secured or guaranteed......................................
Other unsecured.....................................................
Total consumer ................................................
Total loans ................................................
Commercial leases .......................................................
Total loans and leases ..................................

Outstandings
(In millions)

23,756
45,365
69,121
39,435

9,073
5,007
4,477
800
1,236
20,593
129,149
2,415
131,564

Percent of Dollars Outstanding

New
York

Mid-
Atlantic (a)

New
England (b)

Other

31%
33
32%
25%

34
26
31
37
21%
28%
23%
28%

30%
30
30%
33%

17%
41
50
37
57
33%
32%
24%
32%

27%
21
23%
14%

7%
24
6
8
3
11%
18%
5%
18%

12%
16
15%
28%

67%
1
18
24
3
35%
22%
48%
22%

(a)

(b)

Includes Delaware, Maryland, New Jersey, Pennsylvania, Virginia, West Virginia and the District of
Columbia.
Includes Connecticut, Maine, Massachusetts, New Hampshire, Rhode Island and Vermont.

The investment securities portfolio averaged $19.9 billion in 2022, up from $6.4 billion and $8.2
billion in 2021 and 2020, respectively. The higher average balance in 2022 reflects the acquisition of
People's United, which added approximately $11.6 billion to the investment securities portfolio on
April 1, 2022, and purchases of approximately $9.1 billion of investment securities in 2022 consisting
predominantly of U.S. Treasury notes and fixed rate residential mortgage-backed securities. The
decline in average balances of investment securities in 2021 as compared with 2020 was predominantly
due to maturities and pay downs of mortgage-backed securities and maturities of U.S. Treasury notes.
During 2022 and 2021 the Company purchased approximately $1.9 billion and $1.6 billion of fixed
rate residential mortgage-backed securities, respectively, and approximately $7.3 billion and $680
million of U.S. Treasury notes, respectively. There were no significant sales of investment securities

in either year. The Company routinely has increases and decreases in its holdings of capital stock of
the Federal Home Loan Bank (“FHLB”) of New York and the FRB of New York. Those holdings are
accounted for at cost and are adjusted based on the amounts of outstanding borrowings and available
lines of credit with those entities.

The investment securities portfolio is largely comprised of residential mortgage-backed securities
and shorter-term U.S. Treasury and federal agency notes and, following the acquisition of People's
United, municipal securities. When purchasing investment securities, the Company considers its
liquidity position and its overall interest-rate risk profile as well as the adequacy of expected returns
relative to risks assumed, including prepayments. The Company may occasionally sell investment
securities as a result of 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 amounts of investment securities held by the
Company are influenced by such factors as available yield in comparison with alternative investments,
demand for loans, which generally yield more than investment securities, ongoing repayments, the
levels of deposits, and management of liquidity and balance sheet size and resulting capital ratios.

Fair value changes in equity securities with readily determinable fair values are recognized in the
consolidated statement of income. Net unrealized losses on such equity securities were $6 million in
2022, $21 million in 2021 and $9 million in 2020. Those losses include changes in value of the
Company’s holdings of Fannie Mae and Freddie Mac preferred stock.

The Company regularly reviews its debt investment securities for declines in value below
amortized cost that might be indicative of credit-related losses. In light of such reviews, there were no
credit-related losses on debt investment securities recognized in 2022, 2021 or 2020. 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 21 of Notes
to Financial Statements.

Other earning assets include interest-bearing balances at the FRB of New York and other banks,
trading account assets, federal funds sold and agreements to resell securities. Those other earning assets
in the aggregate averaged $33.6 billion in 2022, $36.0 billion in 2021 and $18.1 billion in 2020.
Interest-bearing deposits at banks averaged $33.4 billion in 2022, compared with $35.8 billion in 2021
and $15.3 billion in 2020. The amounts of interest-bearing deposits at banks at the respective dates
were predominantly comprised of deposits held at the FRB of New York. In general, the levels of those
deposits often fluctuate due to changes in deposits of retail and commercial customers, trust-related
deposits and additions to or maturities of investment securities or borrowings. Agreements to resell
securities averaged $69 million, $167 million and $2.7 billion in 2022, 2021 and 2020, respectively.
The higher average balance in 2020 reflects the temporary investment by the Company of increased
customer deposit levels.

Table 8

AVERAGE CORE DEPOSITS

Percent Increase
(Decrease) from

2021 to 2022

2020 to 2021

2022
(In millions)

Savings and interest-checking deposits .................................. $
Time deposits..........................................................................
Noninterest-bearing deposits ..................................................
Total........................................................................................ $

81,123
3,838
68,888
153,849

21 %
34
24
23 %

12 %
(33)
34
19 %

The most significant source of funding for the Company is core deposits. The Company considers
noninterest-bearing deposits, interest-bearing transaction accounts, savings deposits and time deposits

of $250,000 or less as core deposits. The Company’s branch network is its principal source of core
deposits, which generally carry lower interest rates than wholesale funds of comparable maturities.
Average core deposits were $153.8 billion in 2022, up from $125.6 billion in 2021 and $105.7 billion
in 2020. Average balances of savings and interest-checking core deposits rose $14.1 billion or 21% in
2022 to $81.1 billion from $67.0 billion in 2021. Average noninterest-bearing deposits increased $13.2
billion or 24% to $68.9 billion in 2022 from $55.7 billion in 2021. The People's United acquisition
added approximately $50.8 billion of core deposits on April 1, 2022, including $30.8 billion of savings
and interest-checking deposits, $2.6 billion of time deposits and $17.4 billion of noninterest-bearing
deposits. The increase in core deposits resulting from the acquisition of People's United in 2022 was
partially offset by the Company's initiative to reduce certain historically higher-cost deposits as well
as customer reactions to the generally rising interest rate environment. Average balances of savings
and interest-checking core deposits rose $7.3 billion or 12% in 2021 to $67.0 billion from $59.8 billion
in 2020. Average noninterest-bearing deposits increased $14.0 billion or 34% to $55.7 billion in 2021
from $41.7 billion in 2020. A continuance of the trend observed in 2020, the increase in average core
deposits in 2021 as compared with 2020 was largely due to higher average deposits of commercial and
consumer customers. Funding provided by core deposits represented 89% of average earning assets in
2022, compared with 90% in 2021 and 86% in 2020. Table 8 summarizes average core deposits in
2022 and percentage changes in the components of such deposits over the past two years. Core deposits
totaled $154.6 billion and $128.0 billion at December 31, 2022 and 2021, respectively.

Table 9

AVERAGE DEPOSITS

Retail

Trust

Commercial
and Other

Total

(In millions)

2022
Savings and interest-checking deposits ............... $ 47,049
Time deposits.............................................................
4,257
Noninterest-bearing deposits .................................
13,394
Total............................................................................. $ 64,700

6,848
13
11,663
$ 18,524

2021
Savings and interest-checking deposits ............... $ 33,964
Time deposits.............................................................
3,062
Noninterest-bearing deposits .................................
8,379
Deposits at Cayman Islands office .......................
—
Total............................................................................. $ 45,405

2020
Savings and interest-checking deposits ............... $ 29,072
Time deposits.............................................................
4,657
Noninterest-bearing deposits .................................
6,572
Deposits at Cayman Islands office .......................
—
Total............................................................................. $ 40,301

6,021
25
10,529
—
$ 16,575

5,631
50
5,406
—
$ 11,087

30,856
580
43,831
75,267

$ 84,753
4,850
68,888
$ 158,491

30,894
176
36,758
181
68,009

$ 70,879
3,263
55,666
181
$ 129,989

28,887
253
29,705
1,117
59,962

$ 63,590
4,960
41,683
1,117
$ 111,350

The Company also receives funding from other deposit sources, including branch-related time
deposits over $250,000, brokered deposits and, prior to June 30, 2021, deposits associated with the
Company’s Cayman Islands office. Time deposits over $250,000 averaged $762 million in 2022, $402

million in 2021 and $683 million in 2020. The increase in such deposits in 2022 as compared with
2021 resulted from the acquisition of People's United and higher demand for time deposit products as
interest rates rose during the course of 2022. Contrasting that increase, the decline in such deposits in
2021 from 2020 was predominantly the result of maturities of time deposits and, due to the low interest
rate environment in that period, a reduced demand from customers for time deposit products. Cayman
Islands office deposits averaged $181 million in 2021 and $1.1 billion in 2020. Those deposits
consisted predominantly of balances swept from lower-yielding commercial customer accounts.
During the second quarter of 2021, the Company introduced a new interest-bearing sweep product
(included in savings and interest-checking deposits) that replaced the Eurodollar sweep product
previously recorded as Cayman Islands office deposits. As a result, there were no outstanding Cayman
Islands deposits at each of December 31, 2022 and 2021, and the office was closed. The Company had
brokered savings and interest-bearing transaction accounts that averaged $3.6 billion in 2022,
compared with $3.8 billion in each of 2021 and 2020. Brokered time deposits averaged $250 million
in 2022 and were not a significant source of funding in 2021 and 2020. Additional brokered deposits
may be added in the future depending on market conditions, including demand by customers and other
investors for those deposits, and the cost of funds available from alternative sources at the time. Time
deposits over $250,000 were $1.0 billion and $345 million at December 31, 2022 and 2021,
respectively. Total uninsured deposits, were estimated to be $74.2 billion at December 31, 2022,
compared with $69.1 billion at December 31, 2021.

The Company also uses borrowings from banks, the FHLB of New York, the FRB of New York
and others as sources of funding. Short-term borrowings represent arrangements that at the time they
were entered into had a contractual maturity of one year or less. Average short-term borrowings were
$936 million in 2022, compared with $68 million in 2021 and $62 million in 2020. Short-term
borrowings assumed in connection with the People's United acquisition totaled $895 million on April
1, 2022. In October 2022 M&T redeemed $500 million of unsecured senior notes due to mature in
December 2022 that had been assumed in the acquisition of People's United and included in short-term
borrowings. Short-term borrowings were $3.6 billion at December 31, 2022, compared with $47
million at December 31, 2021. The comparative increase in short-term borrowings reflects the
Company's liquidity ratio management.

Long-term borrowings averaged $3.4 billion in 2022, $3.5 billion in 2021 and $5.8 billion in
2020. As of April 1, 2022, long-term borrowings assumed in the People's United acquisition totaled
$494 million and included $483 million of fixed-rate subordinated notes and $11 million of FHLB
advances. Average balances of outstanding senior notes were $2.0 billion in 2022, compared with $2.4
billion and $3.8 billion in 2021 and 2020, respectively. Unsecured senior notes totaled $2.5 billion and
$2.4 billion at December 31, 2022 and 2021, respectively. In November 2022 M&T Bank issued $500
million of fixed rate senior notes that pay a rate of 5.4% semi-annually and mature in November 2025.
In August 2022 M&T issued $500 million of senior notes that mature in August 2028 and pay a fixed
rate of 4.553% semi-annually until August 2027 after which the Secured Overnight Financing Rate
("SOFR") plus 1.78% will be paid quarterly until maturity. In April 2022, M&T Bank redeemed $650
million of fixed rate senior notes that were due to mature on May 18, 2022. During May 2022, $250
million of variable rate senior notes of M&T Bank matured. In January 2021, $350 million of variable
rate senior notes of M&T Bank matured. During 2020, M&T Bank redeemed $2.1 billion of fixed rate
senior notes that were within thirty days of scheduled maturity and, thereby, eligible for redemption.
Also included in average long-term borrowings were amounts borrowed from FHLBs of $6 million in
2022 compared with $2 million in 2021 and 2020 and subordinated capital notes of $863 million in
2022 compared with $581 million in 2021 and $1.4 billion in 2020. In March 2021, M&T Bank
redeemed $500 million of subordinated capital notes that were due to mature on December 1, 2021
and during December 2020, $409 million of subordinated capital notes of M&T Bank matured. Junior
subordinated debentures associated with trust preferred securities that were included in average long-

term borrowings were $534 million in 2022, $530 million in 2021 and $527 million in 2020. Additional
information regarding long-term borrowings, including information regarding contractual maturities
of such borrowings, is provided in note 9 of Notes to Financial Statements.

The Company has utilized interest rate swap agreements to modify the repricing characteristics
of certain components of its loans and long-term debt. As of December 31, 2022, interest rate swap
agreements were used as fair value hedges of approximately $1.5 billion of outstanding fixed rate long-
term borrowings. Additionally, interest rate swap agreements with a notional amount of $11.25 billion
were used as cash flow hedges of interest payments associated with variable rate commercial real estate
loans. Further information on interest rate swap agreements is provided herein and in note 19 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 3.19% in 2022, compared with 2.70% in 2021 and 3.00% in
2020. The yield on the Company’s earning assets increased 80 basis points to 3.64% in 2022 from
2.84% in 2021 and the rate paid on interest-bearing liabilities increased 31 basis points to .45% in 2022
from .14% in 2021. The increase in the net interest spread in 2022 as compared with 2021 reflects the
impact of generally rising interest rates that resulted in higher yields on loans and leases, deposits at
the FRB of New York and investment securities, partially offset by higher rates on interest-bearing
liabilities. The Federal Reserve raised its target Federal funds rate 4.25% since December 31, 2021.
During 2020, the yield on earning assets was 3.43% and the rate paid on interest-bearing liabilities was
.43%. The lower net interest spread in 2021 as compared with 2020 reflects the effect of decreases in
short-term interest rates initiated by the Federal Reserve and the impact of a higher proportion of low-
yielding balances at the FRB of New York to total average earning assets. While those low-yielding
balances added to net interest income, they had the effect of reducing the yield on total average earning
assets and, as a result, the net interest spread.

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 $78.8 billion in 2022, $61.1
billion in 2021 and $47.3 billion in 2020. The increase in net interest-free funds in 2022 as compared
with 2021 reflects higher average balances of noninterest-bearing deposits and shareholders' equity
that include the impact of the acquisition of People's United. In connection with the People's United
acquisition, the Company added noninterest-bearing deposits of $17.4 million at the acquisition date.
Noninterest-bearing deposits averaged $68.9 billion in 2022, $55.7 billion in 2021 and $41.7 billion in
2020. The growth from 2021 to 2022 reflects the impact of the People's United acquisition and from
2020 to 2021 reflects higher levels of deposits of commercial customers. Shareholders’ equity averaged
$23.8 billion in 2022, compared with $16.9 billion and $16.0 billion in 2021 and 2020, respectively.
The higher amounts of shareholders' equity in 2022 as compared with 2021 and 2020 reflect retained
earnings and additional equity issued in connection with the People's United acquisition, partially offset
by share repurchase activity. M&T issued $8.4 billion of common equity and $261 million of preferred
equity in completing the acquisition of People's United on April 1, 2022. M&T also repurchased $1.8
billion of its common stock in 2022. Goodwill and core deposit and other intangible assets averaged
$7.7 billion in 2022 and $4.6 billion in each of 2021 and 2020. The Company recorded $3.9 billion of
goodwill on April 1, 2022 which represents excess consideration over the fair value of net assets
acquired in the People's United transaction. As part of the transaction, intangible assets were identified,
thereby increasing the balance of core deposit and other intangible assets on the Company's balance
sheet by $261 million on April 1, 2022. Reflecting the impact of the People's United acquisition, the
cash surrender value of bank owned life insurance averaged $2.42 billion in 2022, compared with $1.86
billion in 2021 and $1.84 billion in 2020. 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 .20% in 2022, .06%
in 2021 and .16% in 2020. The increased contribution of net-interest free funds in 2022 as compared
with 2021 reflects the higher rates on interest-bearing liabilities used to value net interest-free funds.
Conversely, the reduced contribution of net interest-free funds to net interest margin in 2021 as
compared with 2020 reflects the lower rates on interest-bearing liabilities in that year.

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 3.39% in 2022, 2.76% in 2021 and 3.16% in
2020. 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 impact the Company’s net interest income and net interest margin. The Federal Open
Market Committee has conducted a series of basis point increases in short-term interest rates totaling
4.25% during 2022. These actions have led to generally higher interest rates overall and, accordingly,
have contributed to the Company's higher net interest margin in 2022 as compared with 2021.

Management assesses the potential impact of future changes in interest rates and spreads by
projecting net interest income under several interest rate scenarios. In managing interest rate risk, the
Company has utilized interest rate swap agreements to modify the repricing characteristics of certain
portions of its earning assets and interest-bearing liabilities. Periodic settlement amounts arising from
these agreements are reflected in either the yields on earning assets or the rates paid on interest-bearing
liabilities. The notional amount of interest rate swap agreements entered into for interest rate risk
management purposes was $12.75 billion (excluding $4.65 billion of forward-starting swap
agreements) at December 31, 2022, $15.0 billion (excluding $8.4 billion of forward-starting swap
agreements) at December 31, 2021 and $19.0 billion (excluding $32.1 billion of forward-starting swap
agreements) at December 31, 2020. 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. At December 31, 2022, interest rate swap agreements with notional amounts
of $11.25 billion were serving as cash flow hedges of interest payments associated with variable rate
commercial real estate loans, compared with $13.35 billion at December 31, 2021 and $17.35 billion
at December 31, 2020. Interest rate swap agreements with notional amounts of $1.5 billion at
December 31, 2022 and $1.65 billion at each of December 31, 2021 and 2020 were serving as fair
value hedges of fixed rate long-term borrowings. The Company enters into forward-starting interest
rate swap agreements predominantly to extend the term of its interest rate swap agreements serving as
cash flow hedges and provide a hedge against changing interest rates on certain of its variable rate
loans.

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 as an adjustment to the interest income or interest expense of the
respective hedged item. The amounts of hedge ineffectiveness recognized in 2022, 2021 and 2020 were
not material to the Company’s consolidated results of operations. In a cash flow hedge, the derivative’s
gain or loss is initially reported as a component of other comprehensive income and subsequently
reclassified into earnings when the forecasted transaction affects earnings. Information regarding the
valuation of cash flow hedges included in other comprehensive income is presented in note 16 of Notes
to Financial Statements. Information regarding the fair value of interest rate swap agreements and
hedge ineffectiveness is presented in note 19 of Notes to Financial Statements. 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 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 10.

Table 10

INTEREST RATE SWAP AGREEMENTS

2022

Amount

Rate
(a)

Year Ended December 31
2021

Rate
(a)

Amount
(Dollars in thousands)

2020

Amount

Rate
(a)

Increase (decrease) in:

Interest income........................................ $
Interest expense ......................................
Net interest income/margin..................... $

(36,338)
(10,045)
(26,293)
Average notional amount (c) ...................... $15,487,397
Rate received (b).........................................
Rate paid (b) ...............................................

(.02)%$
(.01)
(.02)%$

252,397
(34,810)
287,207
$18,282,192

.18 %$
(.03)
.20 %$

271,971
(40,145)
312,116
$16,985,246

1.73 %
1.90 %

1.75 %
.18 %

.22 %
(.05)
.25 %

2.51 %
.67 %

(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 the

year.

Provision for Credit Losses
Effective January 1, 2020 the Company adopted amended accounting guidance for the measurement
of credit losses on financial instruments. That guidance requires an allowance for credit losses to be
deducted from the amortized cost basis of financial assets to present the net carrying value that is
expected to be collected over the contractual term of the assets considering relevant information about
past events, current conditions, and reasonable and supportable forecasts that affect the collectability
of the reported amount. The guidance replaced the previous incurred loss model for determining the
allowance for credit losses. The adoption of the amended guidance resulted in a $132 million increase
in the allowance for credit losses at January 1, 2020. After giving appropriate income tax effect, the
adoption reduced retained earnings by $92 million.

In accordance with the current expected credit loss guidance, a provision for credit losses is
recorded to adjust the level of the allowance to reflect expected credit losses that are based on economic
forecasts as of each reporting date. A provision for credit losses of $517 million and $800 million was
recorded in 2022 and 2020, respectively, compared with a recapture of previously recorded provision
of $75 million in 2021. The provision recorded in 2022 included $242 million on loans obtained in the
acquisition of People's United not deemed to be PCD. GAAP requires a provision for credit losses to
be recorded beyond the recognition of the fair value of the loans at the acquisition date. In addition to
the recorded provision, the allowance for credit losses was also increased by $99 million in the second
quarter of 2022 to reflect the expected credit losses on loans obtained in the acquisition of People's
United deemed to be PCD. That addition represents an increase of the carrying values of loans
identified as PCD at the time of the acquisition. The Company's estimates of expected credit losses at
December 31, 2022 reflect assumptions spurred by Federal Reserve initiatives to curb high rates of
inflation that could lead to overall deterioration of economic conditions and, thus, credit quality during
an eight-quarter forecast period. Risks considered included inflation, a projected rise in unemployment,
reduction of economic growth projections, decreasing residential real estate prices as compared with
2021 and continued concerns about commercial real estate values in the hospitality, health care and
office building sectors. Macroeconomic assumptions used to estimate credit losses on loans acquired
from People's United at the April 1, 2022 acquisition date were consistent with those used by the

Company to estimate credit losses at March 31, 2022. The recapture of provision for credit losses in
2021 as compared with the provision for credit losses recorded in 2020 reflected economic assumptions
and projections that considered the macroeconomic outlook associated with the COVID-19 pandemic
in 2020 and subsequent recovery in 2021. The Company’s estimates of expected losses reflect the
impacts of the pandemic and other factors on economic activity, generally, and concerns about
commercial real estate values in the hospitality, health care and office building sectors.

Net charge-offs of loans were $160 million in 2022, $192 million in 2021 and $247 million in
2020. Net charge-offs as a percentage of average loans and leases outstanding were .13% in 2022,
compared with .20% in 2021 and .26% in 2020. A summary of the Company’s loan charge-offs,
provision and allowance for credit losses is presented in table 11 and in note 5 of Notes to Financial
Statements.

Table 11

LOAN CHARGE-OFFS, PROVISION AND ALLOWANCE FOR CREDIT LOSSES

Allowance for credit losses beginning balance ............ $ 1,469,226
Adoption of new accounting standard.........................
—
Charge-offs during year

Commercial, financial, leasing, etc. ......................
Commercial real estate ........................................
Residential real estate..........................................
Consumer...........................................................
Total charge-offs...........................................

117,223
61,641
11,783
112,310
302,957

Recoveries during year

Commercial, financial, leasing, etc. ......................
58,772
Commercial real estate ........................................
24,829
Residential real estate..........................................
9,742
Consumer...........................................................
49,719
Total recoveries ............................................
143,062
Net charge-offs (a)....................................................
159,895
Allowance on acquired PCD loans .............................
99,000
Provision for credit losses (b) ....................................
517,000
Allowance for credit losses ending balance ................. $ 1,925,331
Net charge-offs as a percent of:

2022

2021

2019

2018

2020
(Dollars in thousands)
$ 1,051,071
132,457

$ 1,019,444
—

$ 1,736,387
—

122,651
101,306
10,904
103,293
338,154

135,083
35,891
10,283
152,250
333,507

58,244
12,664
12,711
154,089
237,708

$ 1,017,198
—

60,414
12,286
15,345
143,196
231,241

41,082
30,651
8,857
65,403
145,993
192,161
—
(75,000)
$ 1,469,226

15,765
4,550
7,116
58,935
86,366
247,141
—
800,000
$ 1,736,387

24,581
3,936
8,204
56,614
93,335
144,373
—
176,000
$ 1,051,071

27,903
21,037
6,664
45,883
101,487
129,754
—
132,000
$ 1,019,444

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

30.93%

NM (c)

30.89%

82.03%

98.30%

.13%

.20%

.26%

.16%

.15%

discount, at year-end.........................................
Nonaccrual loans, at year-end ..............................

1.46%
78.96%

1.58%
71.32%

1.76%
91.71%

1.16%
109.13%

1.15%
114.08%

(a)

(b)
(c)

For the year ended December 31,2022 net charge-offs do not reflect $33 million of charge-offs related to
PCD loans acquired on April 1, 2022.
Includes $242 million related to non-PCD acquired loans recorded on April 1, 2022.
Not meaningful.

Nonaccrual loans aggregated $2.44 billion at December 31, 2022, compared with $2.06 billion
and $1.89 billion at December 31, 2021 and 2020, respectively. As a percentage of total loans and
leases outstanding, nonaccrual loans represented 1.85% at December 31, 2022, compared with 2.22%
and 1.92% at December 31, 2021 and 2020, respectively. Loans obtained in the acquisition of People's
United that have been classified as nonaccrual totaled $572 million at December 31, 2022. The level
of nonaccrual loans reflects the continuing impact of economic conditions on borrowers' abilities to
make contractual payments on their loans, most notably commercial real estate loans in the hospitality,

office and health care-related sectors. A summary of nonperforming assets and certain past due,
renegotiated and impaired loan data and credit quality ratios is presented in table 12.

Table 12

NONPERFORMING ASSET AND PAST DUE, RENEGOTIATED AND IMPAIRED LOAN DATA

December 31

2022

2021

2020

2019

2018

(Dollars in thousands)

Nonaccrual loans .................................................................
Real estate and other foreclosed assets ......................................
Total nonperforming assets ....................................................
Accruing loans past due 90 days or more (a)...............................
Government guaranteed loans included in totals above:

Nonaccrual loans .............................................................
Accruing loans past due 90 days or more (a)...........................
Renegotiated loans ...............................................................
Acquired accruing loans past due 90 days or more (b)...................
Purchased impaired loans (c):

Outstanding customer balance.............................................
Carrying amount..............................................................

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 .......................

$ 2,438,435
41,375
$ 2,479,810
491,018
$

43,536
363,409
422,186
N/A

N/A
N/A

1.85%

1.88%

.37%

2,060,083
23,901
2,083,984
963,399

1,893,299
34,668
1,927,967
859,208

963,112
85,646
1,048,758
518,728

51,429
927,788
230,408
N/A

N/A
N/A

48,820
798,121
238,994
N/A

50,891
479,829
234,424
39,632

N/A
N/A

415,413
227,545

529,520
303,305

893,608
78,375
971,983
222,527

34,667
192,443
245,367
39,750

2.22%

2.24%

1.04%

1.92%

1.96%

.87%

1.06%

1.01%

1.15%

1.10%

.57%

.25%

(a)
(b)

(c)

Predominantly residential real estate loans. Prior to 2020, excludes loans acquired at a discount.
Prior to 2020, 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.
Prior to 2020, accruing loans acquired at a discount that were impaired at acquisition date and recorded at
fair value.

ineligible for treatment under the CARES act,

Accruing loans past due 90 days or more were $491 million or .37% of total loans and leases at
December 31, 2022, $963 million or 1.04% at December 31, 2021 and $859 million or .87% at
December 31, 2020. Accruing loans past due 90 days or more were predominantly residential real
estate loans and included loans guaranteed by government-related entities of $363 million, $928
million and $798 million at December 31, 2022, 2021 and 2020, respectively. The lower balance at
December 31, 2022 compared with December 31, 2021 and 2020 reflects residential real estate loans
guaranteed by government-related entities receiving payment deferrals during the COVID-19
pandemic, but
that subsequently exited those
arrangements and became less than 90 days past due. Guaranteed loans included one-to-four family
residential mortgage loans serviced by the Company that were repurchased to reduce associated
servicing costs, including a requirement to advance principal and interest payments that had not been
received from individual mortgagors. Despite the loans being purchased by the Company, the
insurance or guarantee by the applicable government-related entity remains in force. The outstanding
principal balances of the repurchased loans included in the amounts noted above that are guaranteed
by government-related entities totaled $294 million at December 31, 2022, $889 million at December
31, 2021 and $764 million at December 31, 2020. 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.

Loans that were 30-89 days past due were $1.8 billion at December 31, 2022, or 1.35% of total
loans outstanding, compared with $846 million or .91% at December 31, 2021 and $662 million or

.67% at December 31, 2020. Loans subject to COVID-19 related payment deferrals were classified as
current in accordance with regulatory guidance and, as a result, did not contribute to past due loan
categories. Information about delinquent loans at December 31, 2022 and 2021 is included in note 4
of Notes to Financial Statements.

The direct and indirect effects of the COVID-19 pandemic resulted in a dramatic reduction in
2020 in economic activity that severely hampered the ability of some businesses and consumers to
meet their repayment obligations. The CARES Act, in addition to providing financial assistance to
both businesses and consumers, created a forbearance program for federally-backed mortgage loans,
protected borrowers from negative credit reporting due to loan accommodations related to the
pandemic, and provided financial institutions the option to temporarily suspend certain requirements
under GAAP related to troubled debt restructurings for a limited period of time to account for the
effects of COVID-19. The banking regulatory agencies likewise issued guidance encouraging financial
institutions to work prudently with borrowers who are, or may be, unable to meet their contractual
payment obligations because of the effects of COVID-19. That guidance, with concurrence of the
Financial Accounting Standards Board and provisions of the CARES Act, allowed modifications made
on a good faith basis in response to COVID-19 to borrowers who were generally current with their
payments prior to any relief, to not be treated as delinquent or as troubled debt restructurings.
Modifications included payment deferrals (including extensions of maturity dates), covenant waivers
and fee waivers. The Company worked with its customers affected by COVID-19 and granted
modifications across many of its loan portfolios. To the extent that such modifications met the criteria
previously described, such modifications were not classified as delinquent or as troubled debt
restructurings. Loans for which payment deferrals were in effect totaled $19 million at December 31,
2022, compared with $1.2 billion and $3.8 billion at December 31, 2021 and 2020, respectively. At
December 31, 2022 such loans were predominantly secured by residential real estate.

The Company also modified the terms of select loans in an effort to assist borrowers that were
not related to the COVID-19 pandemic. 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. 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 that were not related to the COVID-19 pandemic 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 $399 million and $425 million at December 31, 2022 and December 31, 2021, respectively.

Charge-offs of commercial loans and leases, net of recoveries, aggregated $58 million in 2022,
$82 million in 2021 and $119 million in 2020. As a percentage of average commercial loans, those net
charge-offs were .17%, .32%, and .43% in 2022, 2021 and 2020, respectively. Commercial loans and
leases in nonaccrual status were $347 million at December 31, 2022, $221 million at December 31,
2021 and $307 million at December 31, 2020. Net charge-offs of commercial real estate loans totaled
$37 million during 2022, compared with $71 million during 2021 and $31 million in 2020 or .08% in
2022, .19% in 2021 and .08% in 2020 of average commercial real estate loans. The net charge-offs of
commercial loans and commercial real estate loans reflect the impact of economic conditions on
borrowers’ abilities to repay loans. In the commercial real estate portfolio, the higher net charge-offs
in 2021 were mostly associated with the retail, office building and hospitality sectors. Commercial real
estate loans classified as nonaccrual were $1.5 billion at December 31, 2022, $1.2 billion at December
31, 2021 and $891 million at December 31, 2020. Nonaccrual commercial real estate loans included
construction-related loans of $126 million, $114 million and $115 million at the end of 2022, 2021 and

2020, respectively. Commercial loans and leases and commercial real estate loans acquired from
People's United and classified as nonaccrual totaled $118 million and $401 million, respectively, at
December 31, 2022. Hotel-related commercial real estate loans (including construction) in nonaccrual
status at December 31, 2022, 2021, and 2020 were $512 million, $696 million, and $607 million,
respectively.

Net charge-offs of residential real estate loans were $2 million in each of 2022 and 2021, and $3
million in 2020 representing .01% of average residential real estate loans in each of 2022 and 2021
compared with .02% in 2020. Residential real estate loans in nonaccrual status at December 31, 2022
were $350 million, compared with $479 million and $513 million at December 31, 2021 and 2020,
respectively. Nonaccrual limited documentation first mortgage loans aggregated $78 million at
December 31, 2022, compared with $123 million and $147 million at December 31, 2021 and 2020,
respectively. Limited documentation first mortgage loans represent loans secured by residential real
estate that at origination typically included some form of limited borrower documentation requirements
as compared with more traditional loans. The Company no longer originates limited documentation
loans. Residential real estate loans past due 90 days or more and accruing interest totaled $345 million
at December 31, 2022, $920 million at December 31, 2021 and $793 million at December 31, 2020. A
substantial portion of such amounts related to government-guaranteed loans. The lower balance at
December 31, 2022 reflects improved borrower repayment performance. Information about the
location of nonaccrual and charged-off residential real estate loans as of and for the year ended
December 31, 2022 is presented in table 13.

Table 13

SELECTED RESIDENTIAL REAL ESTATE-RELATED LOAN DATA

December 31, 2022

Nonaccrual

Outstanding
Balances

Balances

Percent of
Outstanding
Balances

(Dollars in thousands)

Year Ended
December 31, 2022
Net Charge-offs (Recoveries)

Percent of
Average
Outstanding
Balances

Balances

Residential mortgages:

New York ..................................... $
Mid-Atlantic (a)..............................
New England (b).............................
Other ...........................................
Total ............................................ $

Residential construction loans:

Limited documentation first lien mortgages:

First lien home equity loans and lines of

credit:

Junior lien home equity loans and lines of

credit:

6,746,440
6,709,208
6,308,974
2,885,633
22,650,255

21,115
16,675
13,833
3,017
54,640

482,967
428,506
97,023
42,556
1,051,052

987,075
1,151,160
560,036
15,839
2,714,110

740,218
887,073
644,607
20,878
2,292,776

102,226
91,235
57,631
20,540
271,632

176
282
—
—
458

33,036
28,798
10,885
5,095
77,814

16,706
22,128
4,659
1,151
44,644

17,041
16,876
5,333
894
40,144

1.52%
1.36
.91
.71
1.20%

.83%

1.69
—
—
.84%

6.84%
6.72
11.22
11.97
7.40%

1.69%
1.92
.83
7.27
1.64%

2.30%
1.90
.83
4.28
1.75%

1,818
615
403
(210)
2,626

—
—
—
—
—

95
112
(103)
(689)
(585)

615
16
(7)
43
667

(626)
(1,027)
(31)
(66)
(1,750)

.03%
.01
.01
(.01)
.01%

—%
—
—
—
—%

.02%
.02
(.10)
(1.47)
.05%

.08%
—
—
.01
.03%

(.11%)
(.15)
(.01)
—
(.08%)

(a)
(b)

Includes Delaware, Maryland, New Jersey, Pennsylvania, Virginia, West Virginia and the District of Columbia.
Includes Connecticut, Maine, Massachusetts, New Hampshire, Rhode Island and Vermont.

Net charge-offs of consumer loans aggregated $63 million in 2022, compared with $38 million
in 2021 and $93 million in 2020. As a percentage of average consumer loans those net charge-offs
were .32% in 2022, .22% in 2021 and .59% in 2020. Included in net charge-offs of consumer loans
were: net charge-offs of automobile loans of $1 million in 2022 and $22 million in 2020, compared
with net recoveries of $2 million in 2021; recreational finance loan net charge-offs of $21 million, $13
million and $27 million during 2022, 2021 and 2020, respectively; and net recoveries of home equity
loans and lines of credit secured by one-to-four family residential properties of $1 million in 2022 and
$3 million in 2021, compared with net charge-offs of $3 million in 2020. Net charge-offs associated
with other consumer loans, including credit cards and installment loans, totaled $42 million, $30
million and $41 million in 2022, 2021 and 2020, respectively. The reduced level of net charge-offs of
consumer loans in 2022 and 2021 as compared with 2020 reflects an improved economy, in general,
and the level of prices associated with motor vehicles, recreational vehicles and residential real estate.
Nonaccrual consumer loans were $218 million at December 31, 2022, compared with $177 million
and $183 million at December 31, 2021 and 2020, respectively. Included in nonaccrual consumer loans

at the 2022, 2021 and 2020 year-ends were: automobile loans of $40 million, $34 million and $39
million, respectively; recreational finance loans of $45 million, $28 million and $26 million,
respectively; and outstanding balances of home equity loans and lines of credit of $85 million, $70
million and $79 million, respectively. Consumer loans acquired from People's United and classified as
nonaccrual at December 31, 2022 totaled $17 million and consisted predominantly of home equity
loans and lines of credit. 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, 2022 is presented in table 13.
Information about past due and nonaccrual loans as of December 31, 2022 and 2021 is also included
in note 4 of Notes to Financial Statements.

Real estate and other foreclosed assets totaled $41 million at December 31, 2022, compared with
$24 million at December 31, 2021 and $35 million at December 31, 2020. Net gains or losses
associated with real estate and other foreclosed assets were not material in 2022, 2021 or 2020. At
December 31, 2022, foreclosed assets were comprised predominantly of the Company’s holding of
residential real estate-related properties.

In establishing the allowance for credit losses subsequent to December 31, 2019, the Company
estimates losses attributable to specific troubled credits identified through both normal and targeted
credit review processes and also estimates losses for other loans and leases with similar risk
characteristics on a collective basis. For purposes of determining the level of the allowance for credit
losses, the Company evaluates its loan and lease portfolio by type. At the time of the Company's
analysis regarding the determination of the allowance for credit losses as of December 31, 2022,
concerns existed about the somewhat incomplete recovery evident in some sectors of the economy;
elevated levels of inflation; fears of a slowing economy and possible recession in 2023; the volatile
nature of global markets and international economic conditions that could impact the U.S. economy;
Federal Reserve positioning of monetary policy; downward pressures on commercial and residential
real estate values; ongoing supply chain issues and wage pressures impacting commercial borrowers;
the extent to which borrowers, in particular commercial real estate borrowers, may be negatively
affected by pandemic-related and general economic conditions; and continued stagnant population and
economic growth in the upstate New York and Pennsylvania regions (approximately 38% of the
Company's loans and leases are to customers in New York State and Pennsylvania) that historically
lag other regions of the country. The Company utilizes a loan grading system to differentiate risk
amongst its commercial loans and commercial real estate loans. Loans with a lower expectation of
default are assigned one of ten possible “pass” loan grades while specific loans determined to have an
elevated level of credit risk are classified as “criticized.” A criticized loan may be classified as
“nonaccrual” if the Company no longer expects to collect all amounts according to the contractual
terms of the loan agreement or the loan is delinquent 90 days or more. In response to changed
the Company re-graded
conditions stemming from the pandemic and other economic factors,
significant portions of its commercial loans and commercial real estate loans based on financial results
and projections of specific borrowers. Criticized commercial loans and commercial real estate loans
totaled $10.7 billion, including $2.5 billion of loans acquired from People's United, at December 31,
2022, compared with $9.0 billion at December 31, 2021 and $7.2 billion at December 31, 2020. Despite
improved economic conditions during much of 2022 as compared with 2021, as pandemic-related
restrictions continued to be lifted and consumer spending increased, the business climate continues to
be subjected to inflationary pressures and supply chain constraints. The level of criticized loans
remains reflective of the impact of current conditions on many borrowers, particularly those with
investor-owned commercial real estate loans in the hotel, office and healthcare sectors. Investor-owned
commercial real estate loans comprised $7.8 billion, or 74% of total criticized loans of $10.7 billion at
December 31, 2022. The weighted-average loan-to-value (“LTV”) ratios for investor-owned
commercial real estate properties was approximately 57%. Criticized loans secured by investor-owned
commercial real estate had a weighted-average LTV ratio of approximately 65%.

Line of business personnel in different geographic locations with the support of the Company’s
credit risk personnel review and reassign loan grades based on their detailed knowledge of individual
borrowers and their judgment of the impact on such borrowers resulting from changing conditions in
their respective regions. The Company’s policy is that, at least annually, updated financial information
is obtained from commercial borrowers associated with pass grade loans and additional analysis
performed. On a quarterly basis, the Company’s centralized credit risk department 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 contemplated.

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, 2022, approximately 54% of the Company’s home equity
portfolio consisted of first lien loans and lines of credit and 46% were junior liens. With respect to
junior lien loans, 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. In monitoring
the credit quality of its home equity portfolio for purposes of determining the allowance for credit
losses, the Company reviews delinquency and nonaccrual information and considers recent charge-off
experience. When evaluating individual home equity loans and lines of credit for charge off and for
purposes of determining the allowance for credit losses, the Company considers the required repayment
of any first lien positions related to collateral property. 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, 2022, approximately 86% 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 14% were making contractually
allowed payments that do not include any repayment of principal.

The Company generally estimates current expected credit losses on loans with similar risk
characteristics on a collective basis. To estimate expected losses, the Company utilizes statistically
developed models to project principal balances over the remaining contractual lives of the loan

portfolios and determine estimated credit losses through a reasonable and supportable forecast period.
The Company’s approach for estimating current expected credit losses for loans and leases at
December 31, 2022, 2021 and 2020 included utilizing macroeconomic assumptions to project losses
over a two-year reasonable and supportable forecast period. Subsequent to the forecast period, the
Company reverted to longer-term historical loss experience, over a period of one year, to estimate
expected credit losses over the remaining contractual life. Forward-looking estimates of certain
macroeconomic variables are determined by the M&T Scenario Development Group, which is
comprised of senior management business leaders and economists. The assumptions utilized as of
December 31, 2022 included an average national unemployment rate of 4.0% through the reasonable
and supportable forecast period. The forecast also assumed gross domestic product grows at a 1.0%
average rate during the first year of the reasonable and supportable forecast period followed by a 2.5%
average rate in the second year. Commercial real estate prices were assumed to cumulatively grow
1.9% and residential real estate prices were assumed to contract 6.2% over the two-year reasonable
and supportable forecast period. Among the assumptions utilized as of December 31, 2021 was that
the national unemployment rate would average 4.6% through the first year of the reasonable and
supportable forecast period before gradually improving to 3.7% in the latter half of 2023. The forecast
also assumed gross domestic product grew during 2022 at a 3.1% annual rate and during 2023 at a
2.7% average rate. Commercial real estate and residential real estate prices were assumed to
cumulatively grow 11.1% and 5.9%, respectively, over the two-year reasonable and supportable
forecast period. The assumptions utilized in estimating the allowance for credit losses as of December
31, 2020 included an estimated unemployment rate averaging 6.9% through 2021 followed by a
gradual return to long-term historical averages by the end of 2022. Gross domestic product was
assumed to grow at a 4.1% annual rate during 2021 resulting in a return to pre-pandemic levels by the
end of 2022. Commercial real estate prices were assumed to decline by approximately 6.8% in 2021,
followed by improvement. Residential real estate prices were not assumed to fluctuate significantly. In
most
instances the actual macroeconomic conditions experienced in 2021 were favorable in
comparison to the forecasts made at December 31, 2020. Such improvements contributed to the
recapture of provision for credit losses during 2021 of $75 million. The assumptions utilized as of
January 1, 2020 at the time of the adoption of the expected credit loss accounting standard anticipated
unemployment rates that averaged under 4% and steady growth in gross domestic product of 3.3%
over the eight-quarter forecast period. Forecasted changes in real estate prices as of that date were not
significant. The assumptions utilized were based on information available to the Company at or near
December 31, 2022, 2021, 2020 and January 1, 2020 (at the time the Company was preparing its
estimate of expected credit losses as of those dates).

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

A potential downside economic scenario assumed the unemployment rate averages 7.1% in the
reasonable and supportable forecast period. The scenario also assumed gross domestic product
contracts 2.3% in the first year of the reasonable and supportable forecast period before recovering to
1.7% growth in the second year and commercial real estate and residential real estate prices

cumulatively decline 20.1% and 14.3%, respectively, by the end of the reasonable and supportable
forecast period.

A potential upside economic scenario assumed the unemployment rate declines to approximately
3.5% for the duration of the reasonable and supportable forecast period. The scenario also assumes
gross domestic product grows 3.4% in the initial year of the reasonable and supportable forecast period
and 2.5% in the second year while commercial real estate prices cumulatively rise 6.6% and residential
real estate prices cumulatively contract 0.2% over the two-year reasonable and supportable forecast
period.

The scenario analyses resulted in an additional $404 million of modeled credit losses under the
assumptions of the downside economic scenario, whereas under the assumptions of the upside
economic scenario a $176 million reduction in modeled credit losses could occur. These examples are
only a few of the numerous possible economic scenarios that could be utilized in assessing the
sensitivity of expected credit losses. The estimated impacts on credit losses in such scenarios pertain
only to modeled credit losses and do not include consideration of other factors the Company may
evaluate when determining its allowance for credit losses.

As a result, it is possible that the Company may, at another point in time, reach different
conclusions regarding credit loss estimates. The Company’s process for determining the allowance for
credit losses undergoes quarterly and periodic evaluations by independent risk management personnel,
which among many other considerations, evaluate the reasonableness of management’s methodology
and significant assumptions. Further information about the Company’s methodology to estimate
expected credit losses is included in note 5 of Notes to Financial Statements.

Prior to 2020, the allowance for credit losses represented the amount that in management’s
judgment reflected incurred credit losses inherent in the loan and lease portfolio as of the balance sheet
date. The allowance was 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 current 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 estimation of the allowance for credit losses prior to 2020 did not
consider reasonable and supportable forecasts that could have affected the collectability of the reported
amounts.

A comparative allocation of the allowance for credit losses for each of the past five year-ends is
presented in table 14. Amounts were allocated to specific loan categories based on information
available to management at the time of each year-end assessment and using the methodologies
described herein. Variations in the allocation of the allowance by loan category as a percentage of those
loans reflect the impact of the new accounting rules effective January 1, 2020 as well as changes in
management’s estimate of credit
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.

losses in light of economic developments. Furthermore,

Table 14
ALLOCATION OF THE ALLOWANCE FOR CREDIT LOSSES TO LOAN CATEGORIES

December 31

2022

2021

2020
(Dollars in thousands)

2019

2018

Commercial, financial, leasing, etc............... $ 502,153
676,684
Commercial real estate..................................
115,092
Residential real estate....................................
631,402
Consumer ......................................................
—
Unallocated ...................................................
Total .......................................................... $1,925,331

$ 283,899
557,239
71,726
556,362
—
$1,469,226

$ 405,846
670,719
103,590
556,232
—
$1,736,387

$ 366,094
322,201
56,033
229,118
77,625
$1,051,071

330,055
341,655
69,125
200,564
78,045
$ 1,019,444

As a Percentage of Loans and Leases
Outstanding, Net of Unearned Discount

Commercial, financial, leasing, etc...............
Commercial real estate..................................
Residential real estate....................................
Consumer ......................................................
Total ..............................................................

1.20%
1.49
.48
3.07
1.46

1.21%
1.57
.45
3.10
1.58

1.47%
1.78
.62
3.36
1.76

1.54%
.91
.35
1.49
1.16

1.44%
.99
.40
1.44
1.15

Management believes that the allowance for credit losses at December 31, 2022 appropriately
reflected expected credit losses inherent in the portfolio as of that date. The allowance for credit losses
totaled $1.93 billion at December 31, 2022, $1.47 billion at December 31, 2021 and $1.74 billion at
December 31, 2020. The allowance for credit losses was $1.18 billion at January 1, 2020 when the
current expected credit loss guidance became effective. As a percentage of loans outstanding, the
allowance was 1.46% at December 31, 2022, 1.58% at December 31, 2021 and 1.76% at December
31, 2020. Using the same methodology as described herein, the Company added $341 million to the
allowance for credit losses related to the $35.8 billion of loans and leases obtained in the acquisition
of People's United on April 1, 2022. The combined Company allowance for credit losses at April 1,
2022 as a percentage of loans and leases outstanding was 1.42%. The level of the allowance reflects
management’s evaluation of the loan and lease portfolio using the methodology and considering the
factors as described herein. Should the various economic forecasts and credit factors considered by
losses change and should management’s
management
assessment of losses in the loan portfolio also change, the level of the allowance as a percentage of
loans could increase or decrease in future periods. The reported level of the allowance reflects
management’s evaluation of the loan and lease portfolio as of each respective date.

in establishing the allowance for credit

The ratio of the allowance for credit losses to total nonaccrual loans at the end of 2022, 2021 and
2020 was 79%, 71% and 92%, respectively. Given the Company’s general position as a secured lender
and its practice of charging off loan balances when collection is deemed doubtful, that ratio and
changes in the ratio are generally not an indicative measure of the adequacy of the Company’s
allowance for credit losses, nor does management rely upon that ratio in assessing the adequacy of the
Company’s allowance for credit losses.

The Company had no concentrations of credit extended to any specific industry that exceeded
loans at December 31, 2022, however residential real estate loans comprised
10% of total
approximately 18% of the loan portfolio. Outstanding loans to foreign borrowers aggregated $319
million at December 31, 2022, or .24% of total loans and leases.

Other Income
Other income totaled $2.36 billion in 2022, up from $2.17 billion and $2.09 billion in 2021 and 2020,
respectively. The growth in 2022 as compared with 2021 reflects revenues associated with the acquired
operations of People's United (predominantly increases reflected in trust income, service charges on
deposit accounts and other revenues from operations, including credit-related fees), the $136 million
gain on sale of MTIA and higher trust income from legacy operations. Those increases were partially
offset by lower mortgage banking revenues and a planned reduction in insufficient funds fees reflected
in service charges on deposit accounts. The acquisition of People's United contributed approximately
$200 million to other income in the last three quarters of 2022. The rise in other income from 2020 to
2021 was largely attributable to higher trust income, service charges on deposit accounts, brokerage
services income, merchant discount and credit card fees and letter of credit and other credit-related
fees, partially offset by lower trading account and non-hedging derivative gains, higher valuation losses
on investment securities and a decline in the level of distributions from BLG.

Mortgage banking revenues aggregated $357 million in 2022, $571 million in 2021 and $567
million in 2020. 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 $235 million in 2022, $406 million in 2021 and $424 million
in 2020. The decline in residential mortgage banking revenues in 2022 as compared with 2021 and
2020 reflects the Company's decision late in the third quarter of 2021 to originate the majority of its
residential real estate loans for retention in its loan portfolio rather than for sale.

New commitments to originate residential real estate loans to be sold were approximately $314
million in 2022, compared with $3.9 billion in 2021 and $4.5 billion in 2020. 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 loss of $2 million in 2022, compared with gains of $164
million in 2021 and $191 million in 2020. The Company expects to return to originating for sale the
majority of its newly committed residential mortgage loans in the first quarter of 2023.

Loans held for sale that were secured by residential real estate totaled $32 million and $474
million at December 31, 2022 and 2021, respectively. Commitments to sell residential real estate loans
and commitments to originate residential real estate loans for sale at pre-determined rates totaled $53
million and $31 million, respectively, at December 31, 2022, $617 million and $233 million,
respectively, at December 31, 2021 and $1.47 billion and $1.03 billion, respectively, at December 31,
2020. Net recognized unrealized losses on residential real estate loans held for sale, commitments to
sell loans and commitments to originate loans for sale were $1 million at December 31, 2022, compared
with net recognized unrealized gains of $10 million at December 31, 2021 and $52 million at December
31, 2020. Changes in such net unrealized gains are recorded in mortgage banking revenues and resulted
in net decreases of $11 million and $16 million in 2022 and 2021, respectively, and a net increase of
$40 million in 2020.

Revenues from servicing residential real estate loans for others totaled $237 million in 2022
compared with $242 million in 2021 and $233 million in 2020. Residential real estate loans serviced
for others aggregated $118.4 billion at December 31, 2022, $97.9 billion at December 31, 2021 and
$94.4 billion at December 31, 2020. Reflected in residential real estate loans serviced for others were
loans sub-serviced for others of $96.0 billion, $74.7 billion and $68.1 billion at December 31, 2022,
2021 and 2020, respectively. Revenues earned for sub-servicing loans totaled $154 million in 2022,

compared with $153 million in 2021 and $129 million in 2020. The contractual servicing rights
associated with loans sub-serviced by the Company were predominantly held by affiliates of BLG.
Information about the Company’s relationship with BLG and its affiliates is included in note 25 of
Notes to Financial Statements.

Capitalized residential mortgage servicing assets totaled $194 million at December 31, 2022,
compared with $217 million and $201 million at December 31, 2021 and 2020, respectively.
Additional
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.

information about

Commercial mortgage banking revenues totaled $122 million in 2022, compared with $165
million in 2021 and $143 million in 2020. Included in such amounts were revenues from loan
origination and sales activities of $54 million in 2022, $89 million in 2021 and $84 million in 2020.
The level of loan origination and sales activities revenues in 2022 as compared with 2021 and 2020
reflects lower volumes of commercial real estate loans originated for sale. Commercial real estate loans
originated for sale to other investors totaled approximately $3.1 billion in 2022, compared with $4.0
billion in 2021 and $3.4 billion in 2020. Loan servicing revenues totaled $68 million in 2022, $76
million in 2021 and $59 million in 2020. The higher servicing revenues in 2021 were reflective of fees
received from customers who repaid loans prior to maturity. Capitalized commercial mortgage
servicing assets were $126 million at December 31, 2022 and $133 million at each of December 31,
2021 and 2020. Commercial real estate loans serviced for other investors totaled $26.0 billion at
December 31, 2022, $23.7 billion at December 31, 2021 and $22.2 billion at December 31, 2020, and
included $3.9 billion at December 31, 2022 and $4.0 billion at each of December 31, 2021 and 2020
of loan balances for which investors had recourse to the Company if such balances are ultimately
uncollectable. Included in commercial real estate loans serviced for others were loans sub-serviced for
others of $3.8 billion at December 31, 2022, $3.5 billion at December 31, 2021 and $3.3 billion at
December 31, 2020. Commitments to sell commercial real estate loans and commitments to originate
commercial real estate loans for sale aggregated $480 million and $349 million, respectively, at
December 31, 2022, $751 million and $325 million, respectively, at December 31, 2021 and $641
million and $364 million, respectively, at December 31, 2020. Commercial real estate loans held for
sale were $131 million, $425 million and $278 million at December 31, 2022, 2021 and 2020,
respectively. The fluctuation in balances of commercial real estate loans held for sale at December 31,
2022, 2021 and 2020 reflects the timing of loans originated later in each year that had not been
delivered to investors by year end.

Service charges on deposit accounts totaled $447 million in 2022, compared with $402 million
in 2021 and $371 million in 2020. The increase in 2022 from 2021 reflects fees associated with the
acquisition of People's United of $70 million and increased consumer activity, reduced by lower
overdraft-related fees of approximately $40 million that reflect the Company's planned elimination,
announced in February 2022, of certain non-sufficient funds fees and overdraft protection transfer
charges from linked deposit accounts beginning in the second quarter of 2022. The Company also
waived certain fees in the third and fourth quarters of 2022 following the conversion to the Company's
deposit servicing system of People's United acquired customer deposit accounts in early September
2022. The impact of such temporary waivers was not material. The higher service charges in 2021 as
compared with 2020 reflect increased consumer service charges, predominantly resulting from a
reduction in COVID-19 related fee waivers and higher customer transaction activity.

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

trust,
management services. The Wealth Advisory Services (“WAS”) business offers personal
planning, fiduciary, asset management, family office and other services designed to help high net worth
individuals and families grow, preserve and transfer wealth. Trust income aggregated $741 million in
2022, compared with $645 million in 2021 and $602 million in 2020. Trust income contributed from
the acquisition of People's United totaled approximately $35 million in 2022. Revenues associated with
the ICS business were $442 million in 2022 inclusive of $4 million of People's United-related revenue,
compared with $375 million in 2021 and $342 million in 2020. The higher revenues in 2022 compared
with 2021 were largely attributable to reduced fee waivers of $31 million resulting from higher rates
on money market fund accounts and incremental fees from sales. As compared with 2020, ICS
revenues in 2021 reflect sales activities and increased retirement services income resulting from growth
in collective fund balances. Revenues generated by the Company's WAS business, inclusive of $27
million associated with People's United, totaled $290 million in 2022, up from $255 million in 2021
and $233 million in 2020. As compared with 2021, in addition to the impact of the People's United
acquisition, WAS revenues in 2022 reflect reduced money market fee waivers of $6 million and sales
activity partially offset by adverse market conditions in the equity markets. As compared with 2020,
WAS revenue in 2021 reflected an increase related to equity market performance partially offset by
fee waivers resulting from a low interest rate environment in 2021. Trust assets under management
were $165.2 billion and $165.6 billion at December 31, 2022 and 2021, respectively. Trust assets under
management include the Company’s proprietary mutual funds’ assets of $13.0 billion at December 31,
2022 and $13.2 billion at December 31, 2021. Additional trust income from investment management
activities was $9 million in 2022, compared with $15 million and $27 million in 2021 and 2020,
respectively, and includes fees earned from retail customer investment accounts. Lower trust income
from investment management activities in 2022 reflects the full-year impact of a change in June 2021
of product delivery to retail brokerage and certain trust customers related to the LPL Financial
relationship described herein resulting in revenues previously recognized in trust income to be recorded
as brokerage services income, partially offset by People's United-related revenue.

In December 2022 Wilmington Trust, N.A. (a subsidiary of M&T) announced the sale of its
Collective Investment Trust business to a private equity firm. That sale is expected to close in the first
half of 2023. Revenues associated with that business and included in ICS trust income revenues
described herein totaled approximately $165 million, $151 million and $105 million during 2022,
2021, and 2020, respectively. After considering expenses, the results of operations of that business
were not material to M&T's net income in those years.

Brokerage services income, which includes revenues from the sale of mutual funds and annuities
and securities brokerage fees and, since June 2021, sales of select investment products of LPL Financial
(as described below), totaled $88 million in 2022, compared with $63 million in 2021 and $47 million
in 2020. The increase in brokerage services income in 2022 reflects the acquisition of People's United
and the full-year impact of a change in June 2021 in product delivery to retail brokerage and certain
trust customers related to the LPL Financial relationship. Revenues associated with the sale of
investment products of LPL Financial, an independent financial services broker, are included in
“brokerage services income.” Prior to the transition to LPL Financial’s product platform, revenues
earned by the Company from providing those customers with proprietary trust products managed by
the Company were reported as trust income. Trading account and non-hedging derivative activity
resulted in gains of $27 million in 2022, $24 million in 2021 and $41 million in 2020. The modest
increase in 2022 as compared with 2021 reflects higher revenues from interest rate swap agreements
and foreign exchange transactions with commercial customers, offset by declines in the value of assets
held in connection with deferred compensation and other non-qualified benefit plans. The lower gains
in 2021 as compared with 2020 resulted predominantly from decreased activity related to interest rate
swap agreements with commercial customers. The Company enters into interest rate swap agreements
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 non-
hedging contracts entered into by the Company is included in note 19 of Notes to Financial Statements
and herein under the heading “Liquidity, Market Risk, and Interest Rate Sensitivity.”

The Company recognized net losses on investment securities of $6 million, $21 million and $9
million in 2022, 2021 and 2020, respectively. Those losses reflect unrealized losses on investments in
Fannie Mae and Freddie Mac preferred stock and other equity securities.

Other revenues from operations totaled $704 million (including $88 million associated with the
acquisition of People's United) in 2022, compared with $483 million in 2021 and $471 million in 2020.
In addition to the revenues associated with the People's United acquisition, the higher revenues in 2022
compared with 2021 resulted from the $136 million gain on the sale of MTIA and an increase in
merchant discount and credit card fees driven by increased commercial and consumer spending,
partially offset by decreases in insurance income reflecting the sale of MTIA and tax-exempt income
from bank owned life insurance. Comparing 2021 with 2020, higher merchant discount, credit card
interchange and letter of credit and credit-related fees, largely loan syndication fees, were partially
offset by lower income received from BLG during 2021.

Included in other revenues from operations were the following significant components. A $136
million gain on the sale of MTIA was recorded in the fourth quarter of 2022. Letter of credit and other
credit-related fees totaled $165 million, $128 million and $109 million in 2022, 2021 and 2020,
respectively. The rising level of such fees since 2020 resulted largely from higher loan syndication fees
and, in 2022, the impact of acquired operations from the People's United transaction. Revenues from
merchant discount and credit card fees were $169 million in 2022, $140 million in 2021 and $111
million in 2020. In addition to the impact of the People's United acquisition in 2022, the higher level
of such revenues in 2022 and 2021 resulted from increased customer transaction activity reflecting
lessened pandemic-related restrictions on business and customer activity. 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 $44 million in 2022, $47 million in 2021 and $48 million in
2020. The Company owns both general account and separate account policies. To the extent market
conditions change such that the market value of assets in a separate account bank owned life insurance
policy becomes less than the previously recorded cash surrender value, an adjustment is recorded as a
reduction to "other revenues from operations." The increase in interest rates during 2022 led to
reductions of the market values of assets in some separate account bank owned life insurance policies
below previously recorded cash surrender value. Those reductions in recognized cash surrender value
were not material, but are, nevertheless, recognized as a reduction of revenues. Insurance-related sales
commissions and other revenues totaled $48 million in each of 2022 and 2020, compared with $47
million in 2021. Automated teller machine usage fees aggregated $11 million in each of 2022 and
2021, up from $9 million in 2020.

M&T’s investment in BLG resulted in cash distributions declared and paid by BLG that are
included in “other revenues from operations” of $30 million in each of 2022 and 2021, compared with
$53 million in 2020. During 2017, the operating losses of BLG resulted in M&T reducing the carrying
value of its investment in BLG to zero. Subsequently, M&T has received cash distributions when
declared by BLG that result in the recognition of income by M&T. M&T expects cash distributions
from BLG in the future, but the timing and amount of those distributions cannot be estimated. BLG is
entitled to receive distributions from its affiliates that provide asset management and other services
that are available for distribution to BLG’s owners, including M&T. Information about the Company’s
relationship with BLG and its affiliates is included in note 25 of Notes to Financial Statements.

Other Expense
Other expense totaled $5.05 billion in 2022, compared with $3.61 billion in 2021 and $3.39 billion in
2020. Included in those amounts are expenses considered to be “nonoperating” in nature consisting of
amortization of core deposit and other intangible assets of $56 million, $10 million and $15 million in
2022, 2021 and 2020, respectively, and merger-related expenses of $338 million and $44 million in
2022 and 2021, respectively. No merger-related expenses were incurred in 2020. Exclusive of those
nonoperating expenses, noninterest operating expenses aggregated $4.66 billion in 2022, $3.56 billion
in 2021 and $3.37 billion in 2020. Approximately three-fourths of the increase in 2022 from 2021 is
attributable to operating expenses associated with the acquisition of People's United. A $135 million
contribution to The M&T Charitable Foundation in the fourth quarter of 2022 and higher salaries and
benefits expense were other factors contributing to the rise in noninterest operating expenses in 2022
as compared with 2021. The higher level of noninterest operating expenses in 2021 as compared with
2020 reflected increased costs for salaries and employee benefits (predominantly incentive
compensation), outside data processing and software, FDIC assessments, and professional services
expenses.

Salaries and employee benefits expense aggregated $2.79 billion in 2022, compared with $2.05
billion and $1.95 billion in 2021 and 2020, respectively. Excluding nonoperating expenses,
predominantly severance and related costs, salaries and employee benefits expense aggregated $2.69
billion in 2022. The higher level of operating expenses in 2022 as compared with 2021 reflect higher
staffing levels, including the addition of People's United employees at the beginning of the second
quarter, higher salaries resulting from merit increases and a rise in incentive compensation. Stock-
based compensation totaled $111 million in 2022, compared with $85 million in 2021 and $80 million
in 2020. The number of full-time equivalent employees were 22,509 at December 31, 2022, compared
with 17,421 and 17,076 at December 31, 2021 and 2020, respectively. The increase in staffing levels
since December 31, 2021 was predominantly the result of the acquisition of People's United.

The Company provides pension and other postretirement benefits for its employees, including
pension, retirement savings and post-retirement benefit plans. Expenses related to such benefits totaled
$62 million in 2022, $128 million in 2021 and $118 million in 2020. The amounts recorded in salaries
and employee benefits expense and other costs of operations, respectively, from the preceding sentence
were as follows: $149 million and ($87 million) in 2022; $125 million and $3 million in 2021; $118
million and less than $1 million in 2020. The Company sponsors both defined benefit and defined
contribution pension plans. Pension expense for those plans was a net benefit of $23 million in 2022,
compared with expense of $68 million in 2021 and $60 million in 2020. Components of pension
expense included in other costs of operations reflect the amortization of net unrecognized gains and
losses included in accumulated other comprehensive income. Prior to 2022, such net unrecognized
gains and losses were amortized over the average remaining service periods of active participants in
the plan. If all or substantially all of the plan’s participants are inactive, GAAP provides for the average
remaining life expectancy of the participants to be used instead of average remaining service periods.
Substantially all of the participants in the Company’s qualified defined benefit pension plan were
inactive and, beginning in 2022, the average remaining life expectancy was utilized to amortize the net
unrecognized gains and losses of the Plan. The change increased the amortization period by
approximately sixteen years beginning in 2022 and, accordingly, reduced the amount of amortization
of unrecognized losses recorded in the 2022 net periodic pension expense that otherwise would have
been recorded by approximately $36 million. Information about the Company’s pension plans,
including significant assumptions utilized in completing actuarial calculations for the plans, is included
in note 13 of Notes to Financial Statements.

The Company’s retirement savings plan (“RSP”) 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. Including the impact of employees associated with the People's United acquisition, RSP expense

reflecting the Company’s employer matching contribution increased to $84 million in 2022, compared
with $63 million in 2021 and $62 million in 2020.

Excluding the nonoperating expense items already noted, nonpersonnel operating expenses were
$1.97 billion in 2022, $1.51 billion in 2021 and $1.42 billion in 2020. Approximately 70% of the
increase in 2022 as compared with 2021 can be attributed to People's United-related nonpersonnel
operating expenses. Other factors contributing to the year-over-year increase were higher charitable
contributions and outside data processing and software expenses, partially offset by lower defined
benefit pension-related expenses included in other costs of operations. The increase in nonpersonnel
operating expenses in 2021 as compared with 2020 reflects a rise in expenditures for outside data
processing and software, FDIC assessments and professional services, partially offset by a reduction
in the valuation allowance for capitalized mortgage servicing rights as compared with an increase in
2020. On October 18, 2022, the FDIC finalized a rule that increases initial base deposit insurance
assessment rates by 2 basis points, beginning with the first quarterly assessment period of 2023. The
Company expects that regulatory change could increase FDIC assessments by approximately $35
million in 2023.

Income Taxes
The provision for income taxes was $619 million in 2022, $596 million in 2021 and $416 million in
2020. The effective tax rates were 23.7% in 2022, 24.3% in 2021 and 23.5% in 2020. 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
discrete or infrequently occurring items. The Company’s effective tax rate in future periods will also
be affected by any change in income tax laws or regulations and interpretations of income tax
regulations that differ from the Company’s interpretations by any of the 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 14 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 $319 million and $197 million of loans
to foreign borrowers at December 31, 2022 and 2021, respectively. Loans at M&T Bank’s commercial
banking office in Ontario, Canada included in international assets as of December 31, 2022 and 2021
totaled $284 million and $153 million, respectively. Deposits at that office were $34 million and $32
million at December 31, 2022 and 2021, respectively. The Company also offers trust-related services
in Europe. Revenues from providing such services were approximately $36 million in each of 2022
and 2020, compared with $38 million in 2021.

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 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 85% of the Company’s earning assets at December 31, 2022,
compared with 90% at December 31, 2021 and 88% at December 31, 2020.

The Company supplements funding provided through core deposits with various short-term and
long-term wholesale borrowings, including overnight federal funds purchased, short-term advances
from the FHLB of New York, brokered deposits and longer-term borrowings. At December 31, 2022,
M&T Bank had short-term and long-term credit facilities with the FHLBs aggregating $23.1 billion.
Outstanding borrowings under FHLB credit facilities totaled $3.2 billion at December 31, 2022 and $2
million at December 31, 2021. Such borrowings were secured by loans and investment securities. M&T
Bank had an available line of credit with the FRB of New York that totaled approximately $14.3 billion
at December 31, 2022. 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,
2022 and 2021. Senior notes issued and outstanding totaled $2.5 billion at December 31, 2022 and $2.4
billion at December 31, 2021. In November 2022 M&T Bank issued $500 million of fixed rate senior
notes that pay a rate of 5.4% semi-annually and mature in November 2025. In August 2022 M&T
issued $500 million of senior notes that mature in August 2028 and pay a fixed rate of 4.553% semi-
annually until August 2027 after which the SOFR plus 1.78% will be paid quarterly until maturity. In
April 2022, M&T Bank redeemed $650 million of fixed rate senior notes that were due to mature on
May 18, 2022. During May 2022, $250 million of variable rate senior notes of M&T Bank matured.
As of April 1, 2022, long-term borrowings assumed in the People's United acquisition totaled $494
million and included $483 million of fixed-rate subordinated notes and $11 million of FHLB advances.
In January 2023 M&T issued $1.0 billion of fixed rate to floating rate senior notes that mature in
January 2034 and M&T Bank issued $1.3 billion and $1.2 billion of fixed rate senior notes that mature
in January 2026 and January 2028, respectively.

The Company has, from time to time, issued subordinated capital notes and junior subordinated
debentures associated with trust preferred securities to provide liquidity and enhance regulatory capital
ratios. Those borrowings are generally considered Tier 2 capital and are includable in total regulatory
capital. Information about the Company’s borrowings is included in note 9 of Notes to Financial
Statements.

The Company has also benefited from the placement of brokered deposits. The Company has
brokered savings and interest-bearing checking deposit accounts that aggregated $3.8 billion and $3.2
billion at December 31, 2022 and 2021, respectively. Brokered time deposits totaled $4.1 billion at
December 31, 2022. There were no brokered time deposits outstanding at December 31, 2021.

The Company’s ability to obtain funding from these sources could be negatively impacted should
the Company experience a substantial deterioration in its financial condition or its debt ratings, or
should the availability of 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 15. 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.

Table 15

DEBT RATINGS

M&T Bank Corporation

Senior debt...................................................................................................
Subordinated debt........................................................................................

M&T Bank

Short-term deposits .....................................................................................
Long-term deposits......................................................................................
Senior debt...................................................................................................
Subordinated debt........................................................................................

Moody’s

Standard
and Poor’s

Fitch

A3
A3

Prime-1
Aa3
A3
A3

BBB+
BBB

A-2
A-
A-
BBB+

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 was not material at December 31, 2022 or December 31, 2021. The total
amount of VRDBs outstanding backed by M&T Bank letters of credit was $604 million and $662
million at December 31, 2022 and 2021, respectively. M&T Bank also serves as remarketing agent for
most of those bonds.

Table 16

MATURITY DISTRIBUTION OF LOANS AND LEASES (a)

December 31, 2022

Demand

2023

2024 - 2027
(In thousands)

2028 - 2037

After 2037

Commercial, financial, leasing, etc. ........
Commercial real estate ............................
Residential real estate..............................
Consumer ................................................
Total ....................................................

Floating or adjustable interest rates:
Commercial, financial, leasing, etc. ......
Commercial real estate ..........................
Residential real estate............................
Consumer ..............................................
Fixed or predetermined interest rates:
Commercial, financial, leasing, etc. ......
Commercial real estate ..........................
Residential real estate............................
Consumer ..............................................
Total ....................................................

$ 7,759,439 $ 9,159,466 $22,594,918 $ 2,228,022 $

184,784
119,095
23,423,257
9,903,512
3,720,803
4,430,311
6,612,916
$ 8,457,395 $27,637,298 $56,351,894 $22,527,344 $14,637,702

15,541,094
1,119,155
1,817,583

4,731,726
8,653,364
6,914,232

106,008
6,510
585,438

$15,522,770 $
18,239,874
1,038,390
921,124

888,419 $

3,052,566
2,710,252
381,460

12,126
76,222
3,677,101
3,287,264

7,072,148
5,183,383
2,682,413
5,691,792

172,658
1,339,603
42,873
1,679,160
6,226,411
5,943,112
1,143,047
6,532,772
$56,351,894 $22,527,344 $14,637,702

(a)

The data reflects contractual paydowns, but excludes nonaccrual loans.

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, 2022
are summarized in table 17. Off-balance sheet commitments to customers may impact liquidity,
including commitments to extend credit, standby letters of credit, commercial letters of credit, financial
guarantees and indemnification contracts, and commitments to sell real estate loans. Because many of
these commitments or contracts expire without being funded in whole or in part, the contract amounts
are not necessarily indicative of future cash flows. Further discussion of these commitments is provided
in note 22 of Notes to Financial Statements. Table 17 summarizes the Company’s other commitments
as of December 31, 2022 and the timing of the expiration of such commitments.

Table 17

CONTRACTUAL OBLIGATIONS AND OTHER COMMITMENTS

December 31, 2022

Less Than One
Year

One to Three
Years

Three to Five
Years

Over Five
Years

Total

(In thousands)

Payments due for contractual

obligations
Time deposits ............................. $
Short-term borrowings ...............
Long-term borrowings................
Operating leases .........................
Other...........................................
Total............................................ $

Other commitments

Commitments to extend

credit (a) .................................. $

Standby letters of credit..............
Commercial letters of

credit........................................

Financial guarantees and

6,017,181 $
3,554,951
744,127
133,439
491,047
10,940,745 $

3,962,262 $

—
1,741,010
230,899
126,435
6,060,606 $

122,102 $

—
764,874
155,048
21,758
1,063,782 $

— $ 10,101,545
3,554,951
—
3,964,537
714,526
709,201
189,815
653,364
14,124
918,465 $ 18,983,598

21,956,366 $
1,407,362

9,760,976 $ 10,768,871 $ 5,062,333 $ 47,548,546
2,376,644

589,707

276,893

102,682

14,458

4,377

45,243

988

65,066

indemnification contracts ........

99,800

363,658

710,825

2,848,149

4,022,432

Commitments to sell real

estate loans ..............................
Total............................................ $

271,090

533,458
23,749,076 $ 10,965,782 $ 11,817,136 $ 8,014,152 $ 54,546,146

247,064

15,304

—

(a)

Amounts exclude discretionary funding commitments to commercial customers of $11.7 billion that the
Company has the unconditional right to cancel prior to funding.

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 bank subsidiary to M&T are limited
by the amount of earnings of the subsidiary in the current year and the two preceding years. For
purposes of that test, at December 31, 2022 approximately $1.07 billion was available for payment of
dividends to M&T from banking subsidiaries. M&T also may obtain funding through long-term
borrowings. Outstanding senior notes of M&T at December 31, 2022 and December 31, 2021 were
$1.22 billion and $766 million, respectively. Junior subordinated debentures of M&T associated with
trust preferred securities outstanding at December 31, 2022 and December 31, 2021 totaled $536
million and $532 million, respectively. In January 2023 M&T issued $1.0 billion of fixed rate to
floating rate senior notes that mature in January 2034.

Table 18

MATURITY AND TAXABLE-EQUIVALENT YIELD OF INVESTMENT SECURITIES

December 31, 2022

Investment securities available for sale (a)
U.S. Treasury and federal agencies

Carrying value .................................................
Yield .............................................................

Mortgage-backed securities (b)

Government issued or guaranteed

Carrying value .............................................
Yield .........................................................

Other debt securities

Carrying value .................................................
Yield .............................................................

Total investment securities available for sale

Carrying value .................................................
Yield .............................................................

Investment securities held to maturity
U.S. Treasury and federal agencies

Carrying value .................................................
Yield .............................................................

Obligations of states and political subdivisions

Carrying value .................................................
Yield .............................................................

Mortgage-backed securities (b)

Government issued or guaranteed

Carrying value .............................................
Yield .........................................................

Privately issued

Carrying value .............................................
Yield .........................................................

Other debt securities

Carrying value .................................................
Yield .............................................................

Total investment securities held to maturity

Carrying value .................................................
Yield .............................................................

Equity and other securities
Equity securities

Carrying Value.................................................
Yield .............................................................

Other investment securities

Carrying Value.................................................
Yield .............................................................

Total investment securities

Carrying value .................................................
Yield .............................................................

One Year
or Less

One to Five
Years

Five to Ten
Years

Over Ten
Years

Total

(Dollars in thousands)

124,399

7,546,561

.94%

2.57%

— $
—

— $ 7,670,960
—

2.55%

401,619

2.53%

1,558,051

2.53%

522,244

2.51%

422,503

2,904,417

2.50%

2.53%

2,212
1.87%

82,018

3.79%

61,938

1.99%

27,416

6.02%

173,584

3.49%

528,230

2.16%

9,186,630

2.58%

584,182

2.46%

449,919

10,748,961

2.72%

2.56%

109,941

1.83%

27,913

2.14%

944,094

2.47%

—
—

1,054,035

2.40%

113,217

1,092,875

1,343,073

2,577,078

2.59%

3.17%

3.88%

3.50%

427,570

2.81%

1,779,496

2,947,757

4,692,526

9,847,349

2.81%

2.79%

2.80%

3,289
7.97%

—
—

13,164

7.97%

16,462

7.97%

—
—

16,827

7.78%

1,765
4.73%

49,742

7.91%

1,765
4.73%

568,713

2.62%

2,849,971

4,057,094

6,054,191

13,529,969

2.71%

2.92%

3.05%

2.92%

151,458

3.20%

780,483

2.15%

$ 1,096,943

12,036,601

$ 4,641,276

$ 6,504,110

$ 25,210,871

2.39%

2.61%

2.86%

3.02%

2.74%

(a)
(b)

Investment securities available for sale are presented at estimated fair value. Yields on such securities are based on amortized cost.
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.

Table 19

MATURITY OF TIME DEPOSITS WITH BALANCES OVER $250,000

December 31,
2022
(In thousands)

3 months or less .................................................................................................................................. $ 224,399
Over 3 through 6 months ..................................................................................................................
143,968
Over 6 through 12 months................................................................................................................
328,142
Over 12 months...................................................................................................................................
346,223
Total ................................................................................................................................................. $ 1,042,732

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.

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, 2022, the aggregate notional amount of interest rate swap
agreements entered into for interest rate risk management purposes that were currently in effect was
$12.75 billion. In addition, the Company has entered into $4.65 billion of forward-starting interest rate
swap agreements. 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 19 of Notes to Financial Statements.

The Company’s Asset-Liability Committee, which includes members of executive 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
modeling changing interest rates, the Company considers different yield curve shapes that consider
both parallel (that is, simultaneous changes in interest rates at each point on the yield curve) and non-
parallel (that is, allowing interest rates at points on the yield curve to vary by different amounts) shifts
in the yield curve. In utilizing the model, market-implied forward interest rates over the subsequent
twelve months are generally used to determine a base interest rate scenario for the net interest income
simulation. That calculated base net interest income is then compared with the income calculated under

the varying interest rate scenarios. The model considers the impact of ongoing lending and deposit-
gathering activities, as well as interrelationships in the magnitude and timing of the repricing of
financial instruments, including the effect of changing interest rates on expected prepayments and
maturities. When deemed prudent, management has taken actions to mitigate exposure to interest rate
risk through the use of on- or off-balance sheet financial instruments and intends to do so in the future.
Possible actions include, but are not limited to, changes in the pricing of loan and deposit products,
modifying the composition of earning assets and interest-bearing liabilities, and adding to, modifying
or terminating existing interest rate swap agreements or other financial instruments used for interest
rate risk management purposes.

Table 20 displays as of December 31, 2022 and 2021 the estimated impact on net interest income
in the base scenario described above resulting from parallel changes in interest rates across repricing
categories during the first modeling year.

Table 20

SENSITIVITY OF NET INTEREST INCOME TO CHANGES IN INTEREST RATES

Changes in interest rates

Calculated Increase (Decrease)
in Projected Net Interest Income

December 31, 2022

December 31, 2021

(In thousands)

+200 basis points.......................................................................................
+100 basis points.......................................................................................
-100 basis points........................................................................................
-200 basis points........................................................................................

224,555
158,020
(216,202)
(439,512)

533,317
297,573
(204,760)

— (a)

(a)

The Company did not analyze this scenario as of December 31, 2021.

The Company utilized many assumptions to calculate the impact that changes in interest rates
may have on net interest income. The more significant of those assumptions included the rate of
prepayments of mortgage-related assets, cash flows from derivative and other financial instruments,
loan and deposit volumes and pricing, and deposit maturities. In the scenarios presented, the Company
also assumed gradual changes in interest rates during a twelve-month period as compared with the base
scenario. In the declining rate scenario, the rate changes may be limited to lesser amounts such that
interest rates remain at or above zero on all points of the yield curve. Changes in the amounts presented
since December 31, 2021 reflect higher balances of earnings assets obtained in the People's United
acquisition, changes in portfolio composition, the level of market-implied forward interest rates and
hedging actions taken by the Company. 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 21 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
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 21

CONTRACTUAL REPRICING DATA

December 31, 2022

Three Months
or Less

Four to Twelve
Months

One to
Five Years

After
Five Years

Total

(Dollars in thousands)

Loans and leases, net ......................... $
Investment securities .........................
Other earning assets...........................
Total earning assets.....................

74,203,489
298,876
25,078,633
99,580,998

Savings and interest-

checking deposits ...........................
Time deposits ...................................

87,911,463
2,335,630

Total interest-

bearing deposits........................
Short-term borrowings.......................
Long-term borrowings .......................

90,247,093
3,554,951
171

Total interest-

6,927,190
383,060
933
7,311,183

—
3,681,551

3,681,551
—
743,956

27,037,309
9,206,305
—
36,243,614

23,396,175
15,322,630
—
38,718,805

$131,564,163
25,210,871
25,079,566
181,854,600

—
4,084,364

4,084,364
—
2,505,884

—
—

87,911,463
10,101,545

—
—
714,526

98,013,008
3,554,951
3,964,537

bearing liabilities......................

93,802,215

4,425,507

6,590,248

714,526

105,532,496

Interest rate swap

agreements.....................................
Periodic gap...................................... $
Cumulative gap.................................
Cumulative gap as a %

of total earning assets......................

(8,900,000)
(3,121,217)
(3,121,217)

(1,150,000)
1,735,676
(1,385,541)

10,050,000
39,703,366
38,317,825

—
38,004,279
76,322,104

—

(1.7)%

(0.8)%

21.1%

42.0%

A significant amount of the Company’s earning assets, interest-bearing liabilities, preferred
equity instruments and interest rate swap agreements have contractual repricing terms that reference
the London Interbank Offered Rate (“LIBOR”). Publication of certain tenors of LIBOR has already
ceased and complete cessation of LIBOR publication is expected by June 30, 2023. Effective
December 31, 2021, the Company essentially discontinued entering into new LIBOR-based contracts.
The Company's enterprise-wide LIBOR transition program is monitored by executive
management as well as the Risk Committee of the Board of Directors. At December 31, 2022 the
Company had LIBOR-based commercial loans and leases and commercial real estate loans of $32.1
billion and residential mortgage and consumer loans of $4.1 billion outstanding. Approximately 85%
of the loans either mature before June 30, 2023 or have been amended to include appropriate alternative
language to be effective upon cessation of LIBOR publication. Approximately $732 million of
borrowings and $1.1 billion of M&T's preferred stock reference LIBOR as of December 31, 2022.
Upon cessation of LIBOR after June 30, 2023 dividends on M&T’s preferred stock and interest
payments on variable rate preferred capital securities will be paid based on SOFR plus a pre-determined
static spread (dependent on the tenor of LIBOR for each series of preferred stock and each preferred
capital security) as proposed by the Board of Governors of the FRB. The Company’s interest rate swap
agreements primarily reference LIBOR. In October 2020, the International Swaps and Derivatives
Association, Inc. published the IBOR Fallbacks Supplement (“Supplement”) and the IBOR Fallback
Protocol (“Protocol”). The Protocol enables market participants to incorporate certain revisions into
their legacy non-cleared derivative trades with other counterparties that also choose to adhere to the
Protocol. M&T adhered to the Protocol in November 2020 and is continuing the process of remediating
its interest rate swap transactions with its end-user customers. With respect to the Company’s cleared
interest rate swap agreements that reference LIBOR, clearinghouses have adopted the same relevant
SOFR benchmark alternatives of the Supplement and Protocol.

As loans mature and new originations occur a larger percentage of the Company’s variable-rate
loans are expected to reference SOFR or other indexes, including the Bloomberg Short Term Bank
Yield Index (“BSBY”). At December 31, 2022, the Company had approximately $28.7 billion and

$212 million of outstanding loan balances that reference SOFR and BSBY, respectively. Additionally,
as of December 31, 2022 the Company had $12.1 billion of notional amount of interest rate swap
agreements designated as cash flow hedges of commercial real estate loans, including $4.7 billion of
forward-starting interest rate swap agreements that become effective in 2023, and notional amounts of
$6.0 billion of non-hedging derivative interest rate contracts that are referenced to SOFR. The
Company continues to work with its customers and other counterparties to remediate LIBOR-based
agreements which expire after June 30, 2023 by incorporating alternative language, negotiating new
agreements, or other means. The discontinuation of LIBOR and uncertainty relating to the emergence
of one or more alternative benchmark indexes to replace LIBOR could materially impact the
Company’s interest rate risk profile and its management thereof.

In addition to the effect of interest rates, changes in fair value of the Company’s financial
instruments can also result from a lack of trading activity for similar instruments in the financial
markets. 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 in notes 3 and 21
of Notes to Financial Statements.

The Company enters into interest rate and foreign exchange contracts to meet the financial needs
of customers that it includes in its financial statements as non-hedging derivatives within other assets
and other liabilities. Financial instruments utilized for such activities consist predominantly of interest
rate swap agreements and forward and futures contracts related to foreign currencies. The Company
generally mitigates the foreign currency and interest rate risk associated with customer activities by
entering into offsetting positions with third parties that are also included in other assets and other
liabilities. The fair values of non-hedging derivative positions associated with interest rate contracts
and foreign currency and other option and futures contracts are presented in note 19 of Notes to
Financial Statements. As with any non-government guaranteed financial instrument, the Company is
exposed to credit risk associated with counterparties to the Company’s non-hedging derivative
activities. Although the notional amounts of these contracts are not recorded in the consolidated
balance sheet, the unsettled fair values of those financial instruments are recorded in the consolidated
balance sheet. The fair values of such non-hedging derivative assets and liabilities recognized on the
balance sheet were $380 million and $1.3 billion, respectively, at December 31, 2022 and $418 million
and $83 million, respectively, at December 31, 2021. The fair value of asset and liability amounts at
December 31, 2022 have been reduced by contractual settlements of $1.1 billion and $29 million,
respectively, and at December 31, 2021 by contractual settlements of $54 million and $305 million,
respectively. The values associated with the Company's non-hedging derivative activities at December
31, 2022 as compared with December 31, 2021 reflect changes in values associated with the interest
rate swap agreements entered into with commercial customers that are not subject to periodic variation
margin settlement payments.

Trading account assets at December 31, 2022 and 2021, respectively, were $118 million and $50
million and included assets related to deferred compensation plans aggregating $23 million and $21
million. Changes in the fair values of such assets are recorded as “trading account and non-hedging
derivative gains” in the consolidated statement of income. Included in “other liabilities” in the
consolidated balance sheet at December 31, 2022 and 2021 were $29 million and $24 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 $95 million at
December 31, 2022, and $29 million at December 31, 2021. The increase at December 31, 2022 as
compared with December 31, 2021 reflects assets obtained in the acquisition of the People's United
non-qualified supplemental retirement and other benefit plans.

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 and non-hedging
derivative 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 actions to mitigate foreign
currency and interest rate risk associated with customer activities. Additional information about the
Company’s use of derivative financial instruments is included in note 19 of Notes to Financial
Statements.

Capital
Shareholders’ equity was $25.3 billion at December 31, 2022 and represented 12.61% of total assets,
compared with $17.9 billion or 11.54% at December 31, 2021 and $16.2 billion or 11.35% at December
31, 2020. The increase in shareholders' equity from December 31, 2021 reflects the issuance of
50,325,004 M&T common shares and other common equity consideration totaling $8.4 billion for the
acquisition of People's United and the conversion of People's United preferred stock into 10,000,000
shares of Series H Perpetual Fixed-to-Floating Rate Non-cumulative Preferred Stock of M&T ("Series
H Preferred Stock") amounting to $261 million.

Included in shareholders’ equity was preferred stock with financial statement carrying values of
$2.01 billion at December 31, 2022, compared with $1.75 billion at December 31, 2021, and $1.25
billion at December 31, 2020. On April 1, 2022, the Company closed the acquisition of People's United
resulting in the issuance of 10,000,000 shares of Series H Preferred Stock, par value $1.00 per share
and liquidation preference of $25.00 per share, valued at $261 million. Through December 14, 2026,
holders of the Series H 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 5.625%, payable quarterly in
arrears. Subsequent to December 14, 2026, holders will be entitled to receive, only when, as and if
declared by M&T's Board of Directors, non-cumulative cash dividends at a variable rate as described
in note 10 of Notes to Financial Statements. The Series H preferred stock may be redeemed at M&T's
option, in whole or in part, from time to time, on or after April 1, 2027 or, in whole but not in part, at
any time within 90 days following a regulatory treatment event whereby the full liquidation value of
the shares no longer qualifies as "additional Tier 1 capital". The Series H Preferred Stock is listed on
the NYSE under the symbol MTBPrH. On August 17, 2021, M&T issued 50,000 shares of Series I
Perpetual Fixed-Rate Reset Non-cumulative Preferred Stock, par value $1.00 and liquidation
preference of $10,000 per share. Through August 31, 2026 holders of the Series I 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 3.5%, payable semiannually in arrears. Subsequent to August 31, 2026
holders will be 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 the five-year U.S. Treasury Rate plus 2.679%, payable
semiannually in arrears. The Series I preferred stock may be redeemed at M&T’s option, in whole or
in part, on any dividend payment date on or after September 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 “additional Tier 1 capital."

Common shareholders’ equity totaled $23.3 billion, or $137.68 per share, at December 31, 2022,
compared with $16.2 billion, or $125.51 per share, at December 31, 2021 and $14.9 billion, or $116.39
per share, at December 31, 2020. Tangible equity per common share, which excludes goodwill and
core deposit and other intangible assets and applicable deferred tax balances, was $86.59 at December
31, 2022, compared with $89.80 and $80.52 at December 31, 2021 and 2020, respectively. The
Company’s ratio of tangible common equity to tangible assets was 7.63% at December 31, 2022,
compared with 7.68% and 7.49% at December 31, 2021 and 2020, respectively. Reconciliations of
total common shareholders’ equity and tangible common equity and total assets and tangible assets as
of December 31, 2022, 2021 and 2020 are presented in table 2. During 2022, 2021 and 2020, the ratio

of average total shareholders’ equity to average total assets was 12.51%, 11.08% and 11.80%,
respectively. The ratio of average common shareholders’ equity to average total assets was 11.49%,
10.13% and 10.88% in 2022, 2021 and 2020, 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, remaining unrealized losses on held-to-maturity securities transferred from available for sale that
have not yet been amortized, 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 $329 million, or $1.94
per common share, at December 31, 2022, compared with net unrealized gains of $78 million, or $.60
per common share, at December 31, 2021, and $145 million, or $1.13 per common share, at December
31, 2020. 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, 2022 and 2021 is included in note 3 of Notes to Financial
Statements.

Reflected in the carrying amount of available-for-sale investment securities at December 31, 2022
were pre-tax effect unrealized gains of $515,000 on securities with an amortized cost of $135 million
and pre-tax effect unrealized losses of $445 million on securities with an amortized cost of $11.1
billion. Information concerning the Company’s fair valuations of investment securities is provided in
notes 3 and 21 of Notes to Financial Statements.

Each reporting period the Company reviews its available-for-sale investment securities for
declines in value that might be indicative of credit-related losses through an analysis of the
creditworthiness of the issuer or the credit performance of the underlying collateral supporting the
bond. If the Company does not expect to recover the entire amortized cost basis of a debt security a
credit loss is recognized in the consolidated statement of income. A loss is also recognized if the
Company intends to sell a bond or it more likely than not will be required to sell a bond before recovery
of the amortized cost basis. As of December 31, 2022, based on a review of each of the securities in
the available-for-sale investment securities portfolio, the Company concluded that it expected to realize
the amortized cost basis of each security. As of December 31, 2022, the Company did not intend to
sell nor is it anticipated that it would be required to sell any securities for which fair value was less
than the amortized 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 amortized cost basis of those securities to become uncollectable.

Accounting guidance requires investment securities held to maturity to be presented at their net
carrying value that is expected to be collected over their contractual term. The Company estimated no
material allowance for credit losses for its investment securities classified as held-to-maturity at
December 31, 2022 and December 31, 2021. The amortized cost basis and fair value of obligations of
states and political subdivisions in the held-to-maturity portfolio totaled $2.6 billion and $2.5 billion,
respectively, at December 31, 2022. Those municipal securities were predominantly obtained in the
acquisition of People's United. At December 31, 2022 and December 31, 2021, the Company had in
its held-to-maturity portfolio privately issued mortgage-backed securities with an amortized cost basis
of $50 million and $62 million, respectively, and a fair value of $51 million and $57 million,
respectively. At December 31, 2022, 83% of the mortgage-backed securities were in the most senior
tranche of the securitization structure. The mortgage-backed securities are generally collateralized by
residential and small-balance commercial real estate loans originated between 2004 and 2008. After
considering the repayment structure and estimated future collateral cash flows of each individual bond,
the Company has concluded that as of December 31, 2022, it expected to recover the amortized cost
basis of those privately issued mortgage-backed securities. Nevertheless, it is possible that adverse

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changes in the estimated 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 $202 million, or
$1.19 per common share, at December 31, 2022, $267 million, or $2.08 per common share, at
December 31, 2021 and $481 million, or $3.75 per common share, at December 31, 2020. Information
about the funded status of the Company’s pension and other postretirement benefit plans is included
in note 13 of Notes to Financial Statements.

On January 20, 2021, M&T’s Board of Directors authorized a stock repurchase plan to repurchase
up to $800 million of shares of M&T’s common stock subject to all applicable regulatory limitations.
There were no repurchases pursuant to that authorization during 2021 and in February 2022 the Board
reaffirmed that plan. In the second quarter of 2022, M&T repurchased 3,505,946 shares of its common
stock for $600 million under that plan. On July 19, 2022, M&T's Board of Directors authorized a new
stock purchase program to repurchase up to $3.0 billion of common shares subject to all applicable
regulatory reporting limitations. The plan authorized in July 2022 replaced the previous plan. In the
last two quarters of 2022, M&T repurchased 6,947,336 shares of its common stock for $1.2 billion
under the new program resulting in a total of 10,453,082 common shares repurchased for $1.8 billion
in 2022. Pursuant to previously approved capital plans and authorizations by M&T’s Board of
Directors, M&T repurchased 2,577,000 common shares for $374 million in 2020.

During the fourth quarter of 2021, M&T’s Board of Directors authorized an increase in the
quarterly common stock dividend to $1.20 per common share from the previous rate of $1.10 per
common share. Cash dividends declared on M&T’s common stock totaled $788 million in 2022,
compared with $584 million and $569 million in 2021 and 2020, respectively. Dividends per common
share totaled $4.80 in 2022, compared with $4.50 and $4.40 in 2021 and 2020, respectively. Dividends
of $97 million in 2022, $73 million in 2021 and $68 million in 2020 were declared on preferred stock
in accordance with the terms of each series.

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.

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

The federal bank regulatory agencies have issued rules that allow banks and bank holding
companies to phase-in the impact of adopting the expected credit loss accounting model on regulatory
capital. Those rules allow banks and bank holding companies to delay for two years the day one impact

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on retained earnings of adopting the expected loss accounting standard and 25% of the cumulative
change in the reported allowance for credit losses subsequent to the initial adoption through the end of
2021, followed by a three-year transition period. The regulatory capital amounts and ratios of M&T
and its bank subsidiaries as of December 31, 2022 are presented in note 24 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 subject to the comprehensive regulatory framework applicable to bank and
financial holding companies and their subsidiaries, which includes examinations by a number of
regulators. Regulation of financial institutions such as M&T and its subsidiaries is intended primarily
for the protection of depositors, the 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
information concerning this
Company and in M&T’s ability to pay dividends. For additional
comprehensive regulatory framework, refer to Part I, Item 1 of this Form 10-K.

Fourth Quarter Results
Net income in the fourth quarter of 2022 was $765 million, compared with $458 million in the year-
earlier quarter. Diluted and basic earnings per common share were $4.29 and $4.32, respectively, in
the final 2022 quarter, compared with diluted and basic earnings per common share of $3.37 in the
corresponding quarter of 2021. The annualized rates of return on average assets and average common
shareholders’ equity for the final quarter of 2022 were 1.53% and 12.59%, respectively, compared with
1.15% and 10.91%, respectively, in the corresponding quarter of 2021.

Net operating income during 2022’s fourth quarter was $812 million, compared with $475 million
in the year-earlier quarter. Diluted net operating earnings per common share were $4.57 and $3.50 in
the fourth quarters of 2022 and 2021, respectively. The annualized net operating returns on average
tangible assets and average tangible common equity in the final three months of 2022 were 1.70% and
21.29%, respectively, compared with 1.23% and 15.98%, respectively, in the similar 2021 period.
Reconciliations of GAAP results with non-GAAP results for the quarterly periods of 2022 and 2021
are provided in table 23.

Taxable-equivalent net interest income aggregated $1.84 billion in the final quarter of 2022,
compared with $937 million in the year-earlier period. That increase reflects a 148 basis point
expansion of the net interest margin to 4.06% from 2.58% in the year-earlier quarter and the impact of
earning assets associated with the acquisition of People's United. Average earning assets increased to
$179.9 billion in 2022’s fourth quarter as compared with $144.4 billion in the final quarter of 2021.
The $35.5 billion increase in average earning assets was driven by a $36.2 billion increase in average
outstanding loans and an $18.5 billion increase in average investment securities, partially offset by a
$19.2 billion decline in deposit balances at the FRB of New York and other banks. Loans acquired
from People's United totaled $35.8 billion on the April 1, 2022 acquisition date and consisted of
approximately $13.6 billion of commercial loans and leases, $13.5 billion of commercial real estate
loans, $7.1 billion of residential real estate loans and $1.6 billion of consumer loans. Average balances
of commercial loans and leases were $40.0 billion in the recent quarter, up $17.7 billion or 79% from
$22.3 billion in the fourth quarter of 2021. That increase was largely attributable to acquired balances
from the People's United acquisition and loan growth, partially offset by decreased average balances
of PPP loans, due to loan repayments by the Small Business Administration. PPP loans averaged $141
million in 2022’s final quarter, compared with $1.6 billion in the year-earlier quarter. Average
commercial real estate loan balances aggregated $45.7 billion in the final quarter of 2022, up $9.0

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billion or 24% from $36.7 billion in the year-earlier quarter. Partially offsetting the increase in
commercial real estate loans from the acquisition of People's United was a reduction in balances of
construction and permanent mortgage loans, reflecting repayments by customers. Included in those
totals were average balances of loans held for sale of $299 million in the final quarter of 2022,
compared with $535 million in the corresponding period of 2021. Average residential real estate loan
balances increased $7.0 billion to $23.3 billion in the fourth quarter of 2022 from $16.3 billion in the
year-earlier quarter, reflecting loans obtained in the acquisition of People's United and the Company's
decision in the third quarter of 2021 to retain rather than sell most originated residential mortgage
loans. Consumer loans averaged $20.3 billion in the last three months of 2022, $2.4 billion or 14%
higher than in the year-earlier quarter reflecting the impact of loans obtained in the acquisition of
People's United (that consisted predominantly of outstanding balances of home equity lines of credit)
and growth in average recreational finance loans (consisting predominantly of loans secured by
recreational vehicles and boats). The net interest spread expanded in the fourth quarter of 2022 to
3.62%, up 110 basis points from 2.52% in the corresponding quarter of 2021. The yield on earning
assets in the last three months of 2022 was 4.60%, up 196 basis points from 2.64% in the year-earlier
quarter. The rate paid on interest-bearing liabilities in the 2022’s final quarter was .98%, up 86 basis
points from .12% in the similar quarter of 2021. The contribution of net interest-free funds to the
Company’s net interest margin was .44% and .06% in the fourth quarters of 2022 and 2021,
respectively.

The provision for credit losses was $90 million in the fourth quarter of 2022, compared with a
recapture of provision of $15 million in the year-earlier period. Net loan charge-offs were $40 million
in the last three months of 2022, representing an annualized .12% of average loans and leases
outstanding, compared with $31 million or .13% during the similar 2021 period. Net charge-offs in the
fourth quarters of 2022 and 2021 included: net charge-offs of commercial loans of $8 million in 2022
and $25 million in 2021; net charge-offs of commercial real estate loans of $8 million in 2022
compared with net recoveries of $7 million in 2021; net charge-offs of residential real estate loans of
less than $1 million in 2022 and $2 million in 2021; and net charge-offs of consumer loans of $24
million in 2022 and $11 million in 2021.

Other income rose to $682 million in the fourth quarter of 2022 from $579 million in the similar
2021 period. The increase reflects the impact of the acquired operations of People's United
(predominantly increases in trust income, services charges on deposit accounts and credit-related fees)
and higher trust income from legacy operations, as well as the $136 million gain on the sale of MTIA.
Those increases were partially offset by a decline in mortgage banking revenues resulting from lower
volumes of residential and commercial real estate loans originated for sale, lower income recorded
from the Company's investment in Bayview Lending Group, and a planned reduction of insufficient
funds fees reflected in service charges on deposit accounts.

Other expense totaled $1.41 billion during the recent quarter, compared with $928 million in the
final quarter of 2021. Included in such amounts are expenses considered to be “nonoperating” in nature
consisting of amortization of core deposit and other intangible assets of $18 million and $2 million
during the quarters ended December 31, 2022 and 2021, respectively, and merger-related expenses of
$45 million in fourth quarter of 2022 and $21 million in the similar 2021 period. Exclusive of those
nonoperating expenses, noninterest operating expenses were $1.35 billion in the fourth quarter of 2022
and $904 million in the corresponding 2021 quarter. The higher level of expenses in the recent quarter
as compared with the fourth quarter of 2021 was predominantly due to the impact of operations
obtained in the People's United acquisition and the $135 million contribution to The M&T Charitable
Foundation. Higher salaries and employee benefits expenses were offset by lower defined benefit
pension-related expenses included in other costs of operations. The Company’s efficiency ratio during
the final quarters of 2022 and 2021 was 53.3% and 59.7%, respectively. Table 23 includes a

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reconciliation of other expense to noninterest operating expense and the calculation of the efficiency
ratio for each of the quarters of 2022 and 2021.

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 23 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. The Company continues to evaluate its indirect fixed and variable expenses included
within the “All Other” category to determine if the expenses may be allocated to the Company’s
various segments to support strategic business decisions by the Company’s executive leadership. As a
result, in the fourth quarter of 2022 the Company implemented the following: an additional allocation
of incentive compensation; a refinement of consumption-driven services allocations including
cybersecurity and modeling functions; an expanded allocation of franchise-type services such as risk
management, data services and legal services; and a refinement in allocation of technology application
costs in support of business activities. Additionally, certain lending relationships within the hospitality
sector that had previously received oversight within the Commercial Banking segment were realigned
to the Commercial Real Estate segment. Accordingly, prior period financial information for 2021 and
information on a comparable basis. Financial
2020 has been reclassified to provide segment
information about the Company’s segments is presented in note 23 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 SBA, 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 $313 million in 2022, compared with
$207 million in 2021. That 51% rise in net income reflected a nine-month impact of the People’s United
acquisition and was predominantly attributable to increases of $193 million in net interest income, $17
million in service charges on deposit accounts and $10 million in merchant discount and credit card
fees, partially offset by a rise in centrally-allocated costs associated with data processing, risk
management and other support services provided to the Business Banking segment of $53 million and
higher personnel-related costs of $13 million. The growth in net interest income reflected an increase
in average outstanding deposit balances of $5.4 billion and a widening of the net interest margin on
deposits of 99 basis points, partially offset by a narrowing of the net interest margin on loans of 101
basis points that reflected a lower level of PPP fee income resulting from repayment of loans by the
SBA. The Business Banking segment contributed net income of $154 million in 2020. The 34%
increase in 2021 as compared with 2020 resulted from higher net interest income of $56 million, a $15
million decline in the provision for credit losses and higher merchant discount and credit card fees of
$12 million, partially offset by higher personnel-related costs of $11 million. The higher net interest

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income reflected a 127 basis point widening of the net interest margin on loans and higher average
deposit balances of $3.3 billion, partially offset by a 57 basis point narrowing of the net interest margin
on deposits. The widening margin on loans resulted from a higher level of PPP fee income resulting
from the repayment of loans by the SBA. The increase in average deposits resulted from a continued
desire by the customers of the Business Banking segment to maintain liquidity during the pandemic
and amid the low interest rate environment.

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. Net income for the Commercial Banking segment was $730
million in 2022, compared with $499 million in 2021. The 46% rise in net income was predominantly
due to an increase in net interest income of $506 million, reflecting a widening of the net interest
margin on deposits of 97 basis points and higher average outstanding balances in loans and deposits of
$13.4 billion and $1.2 billion, respectively (including the nine-month impact of the People’s United
acquisition), an increase of $56 million in credit-related fees, higher service charges on deposit
accounts of $13 million and a rise in merchant discount and credit card fees of $9 million. Those
favorable factors were offset, in part, by increases in centrally-allocated costs associated with data
processing, risk management and other support services provided to the Commercial Banking segment
of $125 million, personnel-related costs of $105 million and other costs of operations of $31 million
(all largely reflecting the nine-month impact of the People’s United acquisition). Net income for the
Commercial Banking segment totaled $476 million in 2020. The most significant factors contributing
to the rise in net income from 2020 to 2021 included higher letter of credit and other credit-related fees
of $22 million, an increase in merchant discount and credit card fees of $13 million and a lower
provision for credit losses of $10 million, partially offset by an increase of $13 million in centrally-
allocated costs associated with data processing, risk management and other support services provided
to the Commercial Banking segment.

The Commercial Real Estate segment provides credit and deposit services to its customers.
Commercial real estate loans may be secured by apartment/multifamily buildings, hotels, 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. The Commercial
Real Estate segment recorded net income of $446 million in 2022, up 26% from $354 million in 2021.
That rise reflects a $116 million decrease in the provision for credit losses due to lower net charge-offs
and higher net interest income of $72 million. Also contributing to higher net income were increases
in credit-related fees of $8 million and non-hedging derivative gains of $7 million resulting mainly
from increased activity related to interest rate swap transactions executed on behalf of commercial
customers. Partially offsetting those positive factors was a decline in commercial mortgage banking
revenues reflecting lower commercial real estate loan origination and sales activity, and higher
centrally-allocated costs associated with data processing, risk management and other support services
provided to the Commercial Real Estate segment of $57 million. The increase in net interest income
reflected a widening of the net interest margin on deposits of 89 basis points and higher average
balances of loans and deposits of $3.4 billion and $1.7 billion, respectively, partially offset by a
tightening of the net interest margin on loans of 31 basis points. Net income for this segment was $400
million in 2020. The decline from 2020 to 2021 was primarily attributable to a $45 million decrease in
net interest income, reflecting a 58 basis point narrowing of the net interest margin on deposits and
lower average loan balances of $266 million. Additionally, lower non-hedging derivitive gains of $12
million resulting from decreased activity related to interest rate swap agreements executed on behalf
of commercial customers, increased amortization of capitalized commercial mortgage servicing rights
of $7 million, higher FDIC assessments and personnel related costs of $6 million each and a $5 million

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increase in centrally-allocated costs associated with data processing, risk management and other
support services provided to the Commercial Real Estate segment were partially offset by a $17 million
increase in commercial mortgage servicing income.

The Discretionary Portfolio segment includes investment securities, residential real estate loans
and other assets, short-term and long-term borrowed funds, brokered deposits, and, through June 2021,
Cayman Islands office deposits. This segment also provides foreign exchange services to customers.
Net income of the Discretionary Portfolio segment amounted to $17 million in 2022 and $287 million
in 2021. The decline in net income can be attributed to lower net interest income reflecting reduced
income from interest rate swap agreements entered into for interest rate risk management purposes.
Intersegment fees paid to the Residential Mortgage Banking segment during 2022 increased $41
million and centrally-allocated costs associated with data processing, risk management and other
support services provided to the Discretionary Portfolio segment increased $8 million. Partially
offsetting those unfavorable factors was a $16 million reduction in unrealized valuation losses on
equity investment securities as compared with 2021. The Discretionary Portfolio segment recorded net
income of $321 million in 2020. The 11% decline in the 2021’s net income as compared with 2020
reflects a $21 million increase in intersegment fees related to the transfer of residential mortgage loans
to the Discretionary Portfolio segment from the Residential Mortgage Banking segment and a $12
million decrease in the value of equity securities.

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. 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 generated $21 million of net income in
2022, compared with $169 million in 2021. The decline compared with 2021 was largely due to a
decrease in revenues (including intersegment revenues) resulting from lower mortgage origination and
sales activities of $135 million, lower net interest income of $52 million and a $14 million rise in
centrally-allocated costs associated with data processing, risk management and other support services
provided to the Residential Mortgage Banking segment, partially offset by an increase of $15 million
in revenues associated with servicing residential real estate loans (including intersegment revenues).
The decrease in net interest income was driven by a decline in average outstanding balances of loans
and deposits of $1.7 billion and $1.4 billion, respectively. Net income for the Residential Mortgage
Banking segment increased 31% to $169 million in 2021 from $129 million in 2020. That year-over-
year increase was attributable to higher net interest income of $40 million, reflecting higher average
loan balances of $1.3 billion, and increased revenues associated with servicing and sub-servicing
residential real estate loans (including intersegment revenues) of $9 million.

The Retail Banking segment offers a variety of services to consumers through several delivery
channels which include branch offices, automated teller machines, telephone banking and Internet
banking. The Company has branch offices in New York State, Maryland, New Jersey, Pennsylvania,
Delaware, Connecticut, Massachusetts, Maine, Vermont, New Hampshire, Virginia, West Virginia and
the District of Columbia. Credit services offered by this segment include consumer installment loans,
automobile and recreational finance 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 $631 million in 2022,
up from $324 million in 2021. The improvement from 2021 reflected higher net interest income of
$873 million and higher consumer service charges on deposit accounts of $12 million. Those favorable
factors were partially offset by higher personnel-related costs of $181 million, a rise in centrally-
allocated expenses associated with support services provided to the Retail Banking segment of $128
million, an increase in equipment and net occupancy costs of $85 million, higher professional services

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expense of $25 million, and an increase in the provision for credit losses of $24 million (all reflecting
the nine-month impact of the People’s United acquisition). The increase in net interest income reflected
a 94 basis point widening of the net interest margin on deposits and higher average outstanding deposit
and loan balances of $19.3 billion and $2.1 billion, respectively. Retail Banking segment net income
aggregated $324 million in 2021 compared with $332 million in 2020. Factors contributing to the
decline in net income in 2021 included a decrease of $78 million in net interest income and increased
centrally-allocated costs, largely associated with data processing, risk management and other support
services provided to the Retail Banking segment. The net interest income decline reflected a narrowing
of the net interest margin on deposits of 49 basis points, partially offset by higher average outstanding
balances of deposits and loans of $5.1 billion and $1.5 billion, respectively. The unfavorable factors
were partially offset by a $53 million decrease in the provision for credit losses, a $22 million decrease
in personnel-related costs (reflecting lower staffing levels), a $20 million rise in service charges on
deposit accounts and an $8 million increase in merchant discount and credit card fees.

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 from the acquisitions of financial institutions, distributions from BLG, merger-related
expenses related to acquisitions (when incurred) 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 a net loss of
$165 million in 2022 compared with net income of $20 million in 2021. The net loss in 2022 as
compared with 2021’s net income resulted from an increase in the provision for credit losses, increases
in expenses resulting from the acquisition of People’s United (inclusive of merger-related expenses)
and higher contributions to The M&T Charitable Foundation. Those unfavorable factors were partially
offset by higher net interest income reflecting 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, the $136 million gain on sale of
MTIA (recorded in the fourth quarter of 2022) and an increase in trust income of $96 million (inclusive
of People’s United-related revenues of $35 million). The various components of the “All Other”
category resulted in a net loss of $459 million in 2020. The improvement in 2021 resulted from a $795
million decrease in the provision for credit losses, 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 increased trust income. Those
favorable factors were partially offset by higher professional services expenses and increased
personnel-related costs.

Recent Accounting Developments
A discussion of recent accounting developments is included in note 27 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 regarding the Company within the
meaning of the Private Securities Litigation Reform Act of 1995. Any statement that does not describe
historical or current facts is a forward-looking statement, including statements based on current
expectations, estimates and projections about the Company’s business, management’s beliefs and
assumptions made by management.

107

Statements regarding the potential effects of events or factors specific to the Company and/or the
financial industry as a whole, as well as national and global events generally, including economic
conditions, on the Company’s business, financial condition, liquidity and results of operations may
constitute forward-looking statements. Such statements are subject to the risk that the actual effects
may differ, possibly materially, from what is reflected in those forward-looking statements due to
factors and future developments that are uncertain, unpredictable and in many cases beyond the
Company’s control. Statements regarding expectations or predictions relating to the Company's
acquisition of People's United are also forward-looking statements, including statements regarding
expected financial results, prospects, targets, goals and outlook.

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.

Future Factors include risks, predictions and uncertainties relating to: the impact of the People's
United transaction; economic conditions, including inflation and market volatility; the impact of
international conflicts and other events; the impact of the COVID-19 pandemic; 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 on loans, collateral securing loans, and other
assets; sources of liquidity; common shares outstanding; common stock price volatility; fair value of
and number of stock-based compensation awards to be issued in future periods; the impact of changes
in market values on trust-related revenues; legislation and/or regulations affecting the financial services
industry, or M&T and its subsidiaries individually or collectively, including tax policy; regulatory
supervision and oversight, including monetary policy and capital requirements; governmental and
public policy changes; the outcome of pending and future litigation and governmental proceedings,
including tax-related examinations and other matters; changes in accounting policies or procedures as
may be required by the Financial Accounting Standards Board, regulatory agencies or legislation;
increasing price, product and 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 and services; containing costs and
expenses; protection and validity of intellectual property rights; reliance on large customers;
technological,
implementation and cost/financial risks in large, multi-year contracts; continued
availability of financing; financial resources in the amounts, at the times and on the terms required to
support M&T and its subsidiaries' future businesses; and material differences in the actual financial
results of merger, acquisition and investment activities compared with M&T's initial expectations,
including the full realization of anticipated cost savings and revenue enhancements.

Further details regarding these Future Factors and risks and uncertainties related to the Company
are described in the "Risk Factors" section of this annual report. 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.

Forward-looking statements speak only as of the date they are made and the Company assumes

no duty to update forward-looking statements.

108

Table 22

QUARTERLY TRENDS

Earnings and dividends
Amounts in thousands, except per share
Interest income (taxable-equivalent basis) ...........
Interest expense ....................................
Net interest income.................................
Less: provision for credit losses .....................
Other income ......................................
Less: other expense.................................
Income before income taxes ........................
Applicable income taxes............................
Taxable-equivalent adjustment......................
Net income ........................................
Net income available to common

shareholders-diluted .............................
Basic earnings .................................
Diluted earnings................................
Cash dividends.................................
Basic ..........................................
Diluted ........................................

Average common shares outstanding

Per common share data

Performance ratios, annualized
Return on

Average assets .................................
Average common shareholders’ equity ..........
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) ................
Diluted net operating income per common share .....
Annualized return on
Average tangible assets.........................
Average tangible common shareholders’ equity
Efficiency ratio (b) .................................
Balance sheet data
In millions, except per share
Average balances

Total assets (c) .................................
Total tangible assets (c).........................
Earning assets..................................
Investment securities ...........................
Loans and leases, net of unearned discount ......
Deposits .......................................
Common shareholders’ equity (c) ...............
Tangible common shareholders’ equity (c).......
Total assets (c) .................................
Total tangible assets (c).........................
Earning assets..................................
Investment securities ...........................
Loans and leases, net of unearned discount ......
Deposits .......................................
Common shareholders’ equity (c) ...............
Tangible common shareholders’ equity (c).......
Equity per common share.......................
Tangible equity per common share ..............

At end of quarter

Fourth

Third

Second

First

Fourth

Third

Second

First

2022 Quarters

2021 Quarters

$ 2,085,594
244,835
1,840,759
90,000
681,537
1,408,288
1,024,008
245,252
13,385
765,371

1,793,340
102,822
1,690,518
115,000
563,079
1,279,253
859,344
200,921
11,827
646,596

1,475,868
53,425
1,422,443
302,000
571,100
1,403,154
288,389
60,141
10,726
217,522

931,490
24,082
907,408
10,000
540,887
959,741
478,554
113,146
3,234
362,174

962,081
24,725
937,356
(15,000)
578,637
927,500
603,493
141,962
3,563
457,968

996,649
25,696
970,953
(20,000)
569,126
899,334
660,745
161,582
3,703
495,460

974,090
28,018
946,072
(15,000)
513,633
865,345
609,360
147,559
3,732
458,069

1,020,695
35,567
985,128
(25,000)
505,598
919,444
596,282
145,300
3,733
447,249

739,126

620,554

192,236

339,590

434,171

475,961

438,759

428,093

4.32
4.29
1.20

3.55
3.53
1.20

1.08
1.08
1.20

2.63
2.62
1.20

3.37
3.37
1.20

3.70
3.69
1.10

3.41
3.41
1.10

171,187
172,149

174,609
175,682

177,367
178,277

128,945
129,416

128,698
128,888

128,689
128,844

128,671
128,842

3.33
3.33
1.10

128,537
128,669

1.53 %
12.59 %

1.28 %
10.43 %

.42 %
3.21 %

.97 %
8.55 %

1.15 %
10.91 %

1.28 %
12.16 %

1.22 %
11.55 %

1.22 %
11.57 %

4.06 %

3.68 %

3.01 %

2.65 %

2.58 %

2.74 %

2.77 %

2.97 %

1.85 %

1.89 %

2.05 %

2.32 %

2.22 %

2.40 %

2.31 %

1.97 %

$
$

812,359
4.57

700,030
3.83

577,622
3.10

375,999
2.73

475,477
3.50

504,030
3.76

462,959
3.45

457,372
3.41

1.70 %
21.29 %
53.3 %

1.44 %
17.89 %
53.6 %

1.16 %
14.41 %
58.3 %

1.04 %
12.44 %
64.9 %

1.23 %
15.98 %
59.7 %

1.34 %
17.54 %
57.7 %

1.27 %
16.68 %
58.4 %

1.29 %
17.05 %
60.3 %

198,592
189,934
179,914
25,297
129,406
163,468
23,335
14,677

200,730
192,082
181,855
25,211
131,564
163,515
23,307
14,659
137.68
86.59

201,131
192,450
182,382
23,945
127,525
167,271
23,654
14,973

197,955
189,281
178,351
24,604
128,226
163,845
23,245
14,571
134.45
84.28

208,865
200,170
189,755
22,384
127,599
174,683
24,079
15,384

204,033
195,344
185,109
22,802
128,486
170,358
23,784
15,095
135.16
85.78

151,648
147,053
138,624
7,724
92,159
128,055
16,144
11,549

149,864
145,269
137,237
9,357
91,808
126,319
16,126
11,531
124.93
89.33

157,722
153,125
144,420
6,804
93,250
134,444
15,863
11,266

155,107
150,511
141,990
7,156
92,912
131,543
16,153
11,557
125.51
89.80

154,037
149,439
140,420
6,019
95,314
131,255
15,614
11,016

151,901
147,304
138,527
6,448
93,583
128,701
15,779
11,182
122.60
86.88

150,641
146,041
136,951
6,211
98,610
128,413
15,321
10,721

150,623
146,023
137,171
6,143
97,113
128,269
15,470
10,870
120.22
84.47

148,157
143,554
134,355
6,605
99,356
125,733
15,077
10,474

150,481
145,879
137,367
6,611
99,299
128,476
15,197
10,595
118.12
82.35

(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 23.
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 23.

109

Table 23

RECONCILIATION OF QUARTERLY GAAP TO NON-GAAP MEASURES

Fourth

Third

2022 Quarters
Second

First

Fourth

Third

Second

First

2021 Quarters

765,371

646,596

217,522

362,174

457,968

495,460

458,069

447,249

13,559
33,429
812,359

14,141
39,293
700,030

14,138
345,962
577,622

933
12,892
375,999

1,447
16,062
475,477

2,028
6,542
504,030

2,023
2,867
462,959

2,034
8,089
457,372

4.29

.08
.20

4.57

3.53

.08
.22

3.83

1.08

.08
1.94

3.10

2.62

.01
.10

2.73

3.37

.01
.12

3.50

3.69

.02
.05

3.76

3.41

.02
.02

3.45

3.33

.02
.06

3.41

$ 1,408,288

1,279,253

1,403,154

959,741

927,500

899,334

865,345

919,444

(17,600)
(45,113)
$ 1,345,575

(18,384)
(53,027)
1,207,842

(18,384)
(222,809)
1,161,961

(1,256)
(17,372)
941,113

(1,954)
(21,190)
904,356

(2,738)
(8,826)
887,770

(2,737)
(3,893)
858,715

(2,738)
(9,951)
906,755

3,670
2,294
2,193
5,258
2,953
28,745
45,113
—
45,113

13,094
2,106
2,277
2,177
651
32,722
53,027
—
53,027

85,299
502
716
1,199
2,460
132,633
222,809
242,000
464,809

$ 1,345,575

$ 1,840,759
681,537

1,207,842

1,690,518
563,079

1,161,961

1,422,443
571,100

87
1,807
252
628
722
13,876
17,372
—
17,372

941,113

907,408
540,887

112
340
250
337
186
19,965
21,190
—
21,190

904,356

937,356
578,637

60
1
625
505
730
6,905
8,826
—
8,826

4
—
244
24
2,049
1,572
3,893
—
3,893

—
—
—
—
—
9,951
9,951
—
9,951

887,770

970,953
569,126

858,715

946,072
513,633

906,755

985,128
505,598

(3,773)
$ 2,526,069

(1,108)
2,254,705

(62)
1,993,605

(743)
1,449,038

1,426
1,514,567

291
1,539,788

(10,655)
1,470,360

(12,282)
1,503,008

53.3%

53.6%

58.3%

64.9%

59.7%

57.7%

58.4%

60.3%

198,592
(8,494)
(218)
54
189,934

25,346
(2,011)
23,335
(8,494)
(218)
54
14,677

200,730
(8,490)
(209)
51
192,082

25,318
(2,011)
23,307
(8,490)
(209)
51
14,659

201,131
(8,501)
(236)
56
192,450

25,665
(2,011)
23,654
(8,501)
(236)
56
14,973

197,955
(8,501)
(227)
54
189,281

25,256
(2,011)
23,245
(8,501)
(227)
54
14,571

208,865
(8,501)
(254)
60
200,170

26,090
(2,011)
24,079
(8,501)
(254)
60
15,384

204,033
(8,501)
(245)
57
195,344

25,795
(2,011)
23,784
(8,501)
(245)
57
15,095

151,648
(4,593)
(3)
1
147,053

17,894
(1,750)
16,144
(4,593)
(3)
1
11,549

149,864
(4,593)
(3)
1
145,269

17,876
(1,750)
16,126
(4,593)
(3)
1
11,531

157,722
(4,593)
(5)
1
153,125

17,613
(1,750)
15,863
(4,593)
(5)
1
11,266

155,107
(4,593)
(4)
1
150,511

17,903
(1,750)
16,153
(4,593)
(4)
1
11,557

154,037
(4,593)
(7)
2
149,439

17,109
(1,495)
15,614
(4,593)
(7)
2
11,016

151,901
(4,593)
(6)
2
147,304

17,529
(1,750)
15,779
(4,593)
(6)
2
11,182

150,641
(4,593)
(10)
3
146,041

16,571
(1,250)
15,321
(4,593)
(10)
3
10,721

150,623
(4,593)
(9)
2
146,023

16,720
(1,250)
15,470
(4,593)
(9)
2
10,870

148,157
(4,593)
(13)
3
143,554

16,327
(1,250)
15,077
(4,593)
(13)
3
10,474

150,481
(4,593)
(12)
3
145,879

16,447
(1,250)
15,197
(4,593)
(12)
3
10,595

Income statement data (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 ............................

Other expense
Other expense.................................
Amortization of core deposit and other
intangible assets .............................
Merger-related expenses .......................
Noninterest operating expense ..............

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 ......................................

Efficiency ratio
Noninterest operating expense (numerator) .....
Taxable-equivalent net interest income .........
Other income .................................
Less: Gain (loss) on bank investment
securities ....................................
Denominator...............................
Efficiency ratio................................
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 quarter
Total assets
Total assets ...................................
Goodwill .....................................
Core deposit and other intangible assets ........
Deferred taxes.................................
Total tangible assets........................

Total common equity
Total equity...................................
Preferred stock ................................
Common equity............................
Goodwill .....................................
Core deposit and other intangible assets ........
Deferred taxes.................................
Total tangible common equity ..............

(a)

After any related tax effect.

110

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 20) 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 22 “Quarterly Trends” presented in Part II, Item 7, “Management’s
Discussion and Analysis of Financial Condition and Results of Operations.”

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

2022, 2021 and 2020 ..................................................................................................................................
Notes to Financial Statements.......................................................................................................................

112
113
117
118

119
120

121
122

111

Report on Internal Control Over Financial Reporting

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

The

financial

consolidated

by
PricewaterhouseCoopers LLP, an independent registered public accounting firm, that was engaged to
express
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.

fairness of presentation of

an opinion as

such financial

the Company

statements

to the

audited

been

have

M&T BANK CORPORATION

René F. Jones
Chairman of the Board and Chief Executive Officer

Darren J. King
Senior Executive Vice President and Chief Financial
Officer

112

Report of Independent Registered Public Accounting Firm

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

Opinions on the Financial Statements and Internal Control over Financial Reporting

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

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

Change in Accounting Principle

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

Basis for Opinions

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

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

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

113

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

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

Definition and Limitations of Internal Control over Financial Reporting

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

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

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

114

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

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

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

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

interest rates, expected credit

Allowance for Credit Losses – Adjustments to model forecasts

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

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

115

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

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

Buffalo, New York
February 22, 2023

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

116

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.......................................................................................
Federal funds sold ...........................................................................................................
Trading account ..............................................................................................................
Investment securities

Available for sale (cost: $11,193,152 at December 31, 2022;

$3,849,347 at December 31, 2021) ..............................................................................

Held to maturity (fair value: $12,375,420 at December 31, 2022;

$2,771,290 at December 31, 2021) ..............................................................................

Equity and other securities (cost: $933,766 at December 31, 2022;

$461,516 at December 31, 2021) .................................................................................
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........................................................................................
Total assets ............................................................................................................

Liabilities
Noninterest-bearing deposits .............................................................................................
Savings and interest-checking deposits................................................................................
Time deposits .................................................................................................................
Total deposits .........................................................................................................
Short-term borrowings .....................................................................................................
Accrued interest and other liabilities...................................................................................
Long-term borrowings .....................................................................................................
Total liabilities........................................................................................................

Shareholders' equity
Preferred stock, $1.00 par, 20,000,000 shares authorized;

Issued and outstanding: Liquidation preference of $1,000 per share: 350,000
shares at December 31, 2022 and December 31, 2021; Liquidation preference of
$10,000 per share: 140,000 shares at December 31, 2022 and 2021; Liquidation
preference of $25 per share: 10,000,000 shares at December 31, 2022 ...................................

Common stock, $.50 par, 250,000,000 shares authorized,
179,436,779 shares issued at December 31, 2022 and
159,741,898 shares issued at December 31, 2021 ...............................................................

Common stock issuable, 14,031 shares at December 31, 2022;

15,769 shares at December 31, 2021 ................................................................................
Additional paid-in capital .................................................................................................
Retained earnings............................................................................................................
Accumulated other comprehensive income (loss), net............................................................
Treasury stock — common, at cost — 10,165,419 shares at December 31, 2022;

31,052,845 shares at December 31, 2021 ..........................................................................
Total shareholders’ equity.........................................................................................
Total liabilities and shareholders’ equity .....................................................................

December 31,

2022

2021

1,517,244
24,958,719
3,000
117,847

1,337,577
41,872,304
—
49,745

10,748,961

3,955,804

13,529,969

2,734,674

931,941
25,210,871
132,074,156
(509,993)
131,564,163
(1,925,331)
129,638,832
1,653,628
8,490,089
209,374
8,930,237
$ 200,729,841

65,501,860
87,911,463
10,101,545
163,514,868
3,554,951
4,377,495
3,964,537
175,411,851

465,382
7,155,860
93,136,678
(224,226)
92,912,452
(1,469,226)
91,443,226
1,144,765
4,593,112
3,998
7,506,573
$ 155,107,160

60,131,480
68,603,966
2,807,963
131,543,409
47,046
2,127,931
3,485,369
137,203,755

2,010,600

1,750,000

89,718

79,871

1,112
10,002,891
15,753,978
(790,030)

1,212
6,635,000
14,646,448
(127,578)

(1,750,279)
25,317,990
$ 200,729,841

(5,081,548)
17,903,405
$ 155,107,160

See accompanying notes to financial statements.

117

M&T BANK CORPORATION AND SUBSIDIARIES

Consolidated Statement of Income

(In thousands, except per share)
Interest income
Loans and leases, including fees ............................................................... $ 5,237,405
Investment securities

2022

Year Ended December 31,
2021

2020

3,748,988 $

3,975,053

Fully taxable.........................................................................................
Exempt from federal taxes ....................................................................
Deposits at banks......................................................................................
Other........................................................................................................
Total interest income ........................................................................

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 non-hedging derivative gains ....................................
Gain (loss) on bank investment securities..................................................
Other revenues from operations ................................................................
Total other income............................................................................

447,646
51,113
509,030
1,926
6,247,120

270,765
23,867
—
19,426
111,106
425,164
5,821,956
517,000
5,304,956

356,636
446,604
740,717
87,877
26,786
(5,686)
703,669
2,356,603

Other expense
Salaries and employee benefits .................................................................
2,787,351
Equipment and net occupancy...................................................................
474,316
Outside data processing and software........................................................
376,493
FDIC assessments.....................................................................................
90,274
Advertising and marketing........................................................................
90,748
Printing, postage and supplies ...................................................................
55,570
Amortization of core deposit and other intangible assets............................
55,624
Other costs of operations ..........................................................................
1,120,060
Total other expense...........................................................................
5,050,436
Income before taxes..................................................................................
2,611,123
Income taxes ............................................................................................
619,460
Net income ............................................................................................... $ 1,991,663
Net income available to common shareholders

Basic ................................................................................................ $ 1,891,469
Diluted .............................................................................................
1,891,480

Net income per common share

Basic ................................................................................................ $
Diluted .............................................................................................

11.59
11.53

See accompanying notes to financial statements.

141,046
116
47,491
1,143
3,938,784

32,998
18,635
201
7
62,165
114,006
3,824,778
(75,000)
3,899,778

571,329
402,113
644,716
62,791
24,376
(21,220)
482,889
2,166,994

2,045,677
326,698
291,839
69,704
64,428
36,507
10,167
766,603
3,611,623
2,455,149
596,403
1,858,746 $

176,469
183
32,956
8,051
4,192,712

146,701
66,280
4,054
28
109,332
326,395
3,866,317
800,000
3,066,317

566,641
370,788
601,884
47,428
40,536
(9,421)
470,588
2,088,444

1,950,692
322,037
258,480
53,803
61,904
39,869
14,869
683,586
3,385,240
1,769,521
416,369
1,353,152

1,776,977 $
1,776,987

1,279,066
1,279,068

13.81
13.80

9.94
9.94

118

M&T BANK CORPORATION AND SUBSIDIARIES

Consolidated Statement of Comprehensive Income

(In thousands)

Year Ended December 31
2021

2022

2020

Net income ................................................................................................. $ 1,991,663
Other comprehensive income (loss), net of tax and

reclassification adjustments:
(406,793)
Net unrealized gains (losses) on investment securities..........................
(314,831)
Cash flow hedges adjustments ...............................................................
(5,787)
Foreign currency translation adjustments ..............................................
64,959
Defined benefit plans liability adjustments............................................
Total other comprehensive income (loss) ..........................................
(662,452)
Total comprehensive income ............................................................. $ 1,329,211

$ 1,858,746

$1,353,152

(66,977)
(210,626)
(862)
213,919
(64,546)
$ 1,794,200

107,222
172,787
2,284
(138,645)
143,648
$1,496,800

See accompanying notes to financial statements.

119

M&T BANK CORPORATION AND SUBSIDIARIES

Consolidated Statement of Cash Flows

(In thousands)
Cash flows from operating activities
Net income....................................................................................................... $
Adjustments to reconcile net income to net cash provided by operating activities

Provision for credit losses .................................................................................
Depreciation and amortization of premises and equipment ...........................................
Amortization of capitalized servicing rights ............................................................
Amortization of core deposit and other intangible assets..............................................
Provision for deferred income taxes......................................................................
Asset write-downs ..........................................................................................
Net gain on sales of assets .................................................................................
Net change in accrued interest receivable, payable ....................................................
Net change in other accrued income and expense ......................................................
Net change in loans originated for sale ..................................................................
Net change in trading account and non-hedging derivative assets and liabilities ..................
Net cash provided by operating activities ...............................................................

Cash flows from investing activities
Proceeds from sales of investment securities

Equity and other securities.................................................................................

Proceeds from maturities of investment securities

Purchases of investment securities

Available for sale ...........................................................................................
Held to maturity.............................................................................................
Equity and other securities.................................................................................
Net (increase) decrease in loans and leases..................................................................
Net (increase) decrease in interest-bearing deposits at banks.............................................
Capital expenditures, net.......................................................................................
Net (increase) decrease in loan servicing advances ........................................................
Acquisition, net of cash consideration

Bank and bank holding company .........................................................................
Other, net.........................................................................................................
Net cash provided (used) by investing activities........................................................

Cash flows from financing activities
Net increase (decrease) in deposits ...........................................................................
Net increase (decrease) in short-term borrowings ..........................................................
Proceeds from long-term borrowings ........................................................................
Payments on long-term borrowings ..........................................................................
Purchases of treasury stock ....................................................................................
Dividends paid — common ...................................................................................
Dividends paid — preferred ...................................................................................
Proceeds from issuance of Series I preferred stock ........................................................
Other, net.........................................................................................................
Net cash provided (used) by financing activities .......................................................
Net increase (decrease) in cash, cash equivalents and restricted cash ...................................
Cash, cash equivalents and restricted cash at beginning of period .......................................
Cash, cash equivalents and restricted cash at end of period............................................... $
Supplemental disclosure of cash flow information
Interest received during the period ........................................................................... $
Interest paid during the period ................................................................................
Income taxes paid during the period .........................................................................
Supplemental schedule of noncash investing and financing activities
Real estate acquired in settlement of loans .................................................................. $
Additions to right-of-use assets under operating leases....................................................
Loans held for sale transferred to loans held for investment..............................................
Acquisition of bank and bank holding company

Common stock issued ......................................................................................
Common stock awards converted.........................................................................
Fair value of

Assets acquired (noncash) .............................................................................
Liabilities assumed .....................................................................................
Preferred stock converted..............................................................................

Year Ended December 31

2022

2021

2020

1,991,663

1,858,746

1,353,152

517,000
282,056
96,463
55,624
(29,987)
8,471
(153,491)
(122,755)
(69,993)
771,458
1,227,231
4,573,740

(75,000)
224,274
89,767
10,167
87,159
8,431
(10,308)
65,724
52,540
(163,623)
567,082
2,714,959

800,000
220,598
84,821
14,869
(31,291)
21,014
(19,441)
(132,252)
(418,752)
(542,078)
(561,453)
789,187

242,596

17,654

67,036

795,157
1,515,623

1,433,793
615,201

1,614,557
911,555

(7,221,885)
(1,889,954)
(456,024)
(3,639,040)
26,106,931
(214,388)
1,578,825

393,923
(619,028)
16,592,736

(20,993,952)
2,613,036
998,540
(907,240)
(1,800,000)
(784,089)
(96,927)
—
(13,177)
(20,983,809)
182,667
1,337,577
1,520,244

6,134,684
428,772
487,618

31,376
137,998
—

8,286,515
104,810

63,757,316
55,499,314
260,600

(677,916)
(1,601,698)
(30,153)
5,676,670
(18,208,494)
(149,213)
(197,141)

—
(510,302)
(13,631,599)

11,737,671
(12,436)
9,500
(853,091)
—
(580,260)
(68,200)
495,000
(26,710)
10,701,474
(215,166)
1,552,743
1,337,577

3,976,804
139,164
314,295

8,851
57,760
330,188

—
—

—
—
—

(7,581)
(11,993)
(29,004)
(7,231,694)
(16,473,656)
(172,289)
(754,823)

—
67,411
(22,020,481)

25,037,167
(2,881)
—
(2,665,023)
(373,750)
(568,112)
(68,256)
—
(11,413)
21,347,732
116,438
1,436,305
1,552,743

4,135,990
372,291
275,558

20,646
70,754
—

—
—

—
—
—

See accompanying notes to financial statements.

120

M&T BANK CORPORATION AND SUBSIDIARIES

Consolidated Statement of Changes in Shareholders’ Equity

Dollars in thousands, except

per share

Preferred
Stock

Common
Stock

Common
Stock
Issuable

Additional
Paid-in
Capital

Retained
Earnings

Accumulated
Other
Comprehensive
Income (Loss),
Net

Treasury
Stock

Total

2020
Balance — January 1, 2020 ......... $1,250,000
Cumulative effect of change in

79,871

1,566

6,593,539

12,820,916

(206,680)

(4,822,563) $15,716,649

accounting principle —
credit losses .........................
Total comprehensive income........
Preferred stock cash dividends......
Purchases of treasury stock..........
Stock-based compensation

transactions, net.....................

—
—
—
—

—

—
—
—
—

—

—
—
—
—

(91,925)
1,353,152
(68,228)
—

—
143,648
—
—

—
—
—
(373,750)

(91,925)
1,496,800
(68,228)
(373,750)

(222)

23,865

(411)

—

53,581

76,813

Common stock cash dividends

— $4.40 per share ..................

—
Balance — December 31, 2020..... $1,250,000
2021
Total comprehensive income........
Preferred stock cash dividends......
Issuance of Series I preferred

—
—

stock..................................

Stock-based compensation

transactions, net.....................

500,000

—

Common stock cash dividends

— $4.50 per share ..................

—
Balance — December 31, 2021..... $1,750,000
2022
Total comprehensive income........
Acquisition of People's United

—

Financial, Inc.:
Common stock issued ............
Common stock awards

converted ........................

Conversion of Series H

preferred stock ..................
Preferred stock cash dividends......
Purchases of treasury stock..........
Stock-based compensation

transactions, net.....................

—

260,600
—
—

—

—
79,871

—
1,344

—
6,617,404

(569,076)
13,444,428

—
(63,032)

—

(569,076)
(5,142,732) $16,187,283

—
—

—

—
79,871

—

9,824

—

—
—
—

—
—

—

—
—

1,858,746
(72,915)

(64,546)
—

(5,000)

(132)

22,596

—

(844)

—

—
—

—

1,794,200
(72,915)

495,000

61,184

82,804

—
1,212

—
6,635,000

(582,967)
14,646,448

—
(127,578)

—

(582,967)
(5,081,548) $17,903,405

—

—
—
—

—

1,991,663

(662,452)

—

1,329,211

3,256,821

104,810

—

—
—
—

—
(96,587)
—

— 5,019,870

8,286,515

—

104,810

—
—
—
—
— (1,800,000)

260,600
(96,587)
(1,800,000)

(100)

6,260

(1,301)

—

111,399

116,281

Common stock cash dividends

— $4.80 per share ..................

—
Balance — December 31, 2022..... $2,010,600

—
89,718

—
1,112

—
10,002,891

(786,245)
15,753,978

—
(790,030)

—

(786,245)
(1,750,279) $25,317,990

See accompanying notes to financial statements.

121

M&T BANK CORPORATION AND SUBSIDIARIES

Notes to Financial Statements

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

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

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

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

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

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

122

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

Other securities are stated at cost and include stock of the Federal Reserve Bank of New York

and the Federal Home Loan Bank (“FHLB”) of New York.

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

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

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

123

not secured by residential real estate are returned to accrual status when all past due principal and
interest payments have been paid by the borrower. Loan balances are charged off when it becomes
evident that such balances are not fully collectable. For commercial loans and commercial real estate
loans, charge-offs are recognized after an assessment by credit personnel of the capacity and
willingness of the borrower to repay, the estimated value of any collateral, and any other potential
sources of repayment. A charge-off is recognized when, after such assessment, it becomes evident that
the loan balance is not fully collectable. For loans secured by residential real estate, the excess of the
loan balances over the net realizable value of the property collateralizing the loan is charged-off when
the loan becomes 150 days delinquent. Consumer loans are generally charged-off when the loans are
91 to 180 days past due, depending on whether the loan is collateralized and the status of repossession
activities with respect to such collateral.

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

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

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

124

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

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

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

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

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

125

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

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

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

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

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

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

126

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

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

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

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

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

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

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

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

127

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

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

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

2. Acquisition and divestitures

Acquisition

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

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

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

128

Consideration:

Common stock issued (50,325,004 shares)............................................................................... $
Common stock awards converted .............................................................................................
Cash...........................................................................................................................................
Total consideration..............................................................................................................

8,286,515
104,810
1,824
8,393,149

(In thousands)

Net assets acquired:
Identifiable assets

Cash and due from banks ..........................................................................................................
Interest-bearing deposits at banks .............................................................................................
Investment securities.................................................................................................................
Loans and leases........................................................................................................................
Core deposit and other intangible assets ...................................................................................
Other assets ...............................................................................................................................
Total identifiable assets acquired ..................................................................................................
Liabilities and preferred stock

Deposits.....................................................................................................................................
Borrowings................................................................................................................................
Other liabilities..........................................................................................................................
Total liabilities assumed......................................................................................................
Preferred stock ..........................................................................................................................
Total liabilities and preferred stock...............................................................................................
Net assets acquired........................................................................................................................
Goodwill........................................................................................................................................ $

395,747
9,193,346
11,574,689
35,840,648
261,000
2,979,388
60,244,818

52,967,915
1,389,012
1,142,387
55,499,314
260,600
55,759,914
4,484,904
3,908,245

The following is a description of the methodologies used to estimate the fair values of the

significant assets acquired, liabilities assumed and preferred stock converted at the acquisition date:

Cash and due from banks and interest-bearing deposits in banks: Given the short-term nature of

these assets, the carrying amount was determined to be a reasonable estimate of fair value.

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

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

rates, expected credit

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

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

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

129

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

prices.

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

PCD

Non-PCD

(in thousands)

Unpaid principal balance ................................................................................. $
Allowance for credit losses at acquisition .......................................................
Other discount..................................................................................................

Fair value ..................................................................................................... $

3,410,506 (a) $ 32,896,454
—
(260,498) (b)

(99,000) (a)
(106,814)
3,204,692

$ 32,635,956

(a)
(b)

The unpaid principal balance and allowance for credit losses at acquisition is net of charge-offs of $33 million recognized on the PCD loans.
Includes approximately $242 million of principal balances not expected to be collected.

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

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

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

Total revenues (a) ......................................................................................................
Net income ................................................................................................................

8,631,283 $
2,158,047

8,075,955
2,391,034

(a)

Represents the total of net interest income and other income.

Pro forma
(Unaudited)

2022

2021

(In thousands)

130

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

2022

2021

(In thousands)

Salaries and employee benefits................................................................................ $
Equipment and net occupancy .................................................................................
Outside data processing software.............................................................................
Advertising and marketing.......................................................................................
Printing, postage and supplies..................................................................................
Other cost of operations ...........................................................................................

Other expense..................................................................................................... $

102,150 $
6,709
5,438
9,262
6,786
207,976
338,321 $

176
341
1,119
866
2,965
38,393
43,860

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

Divestitures

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

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

131

Investment securities

3.
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

7,913,932 $

200 $

243,172 $

7,670,960

594,779
2,501,334
183,107
11,193,152

1,054,035
2,577,078

912,431
8,934,918
49,742
1,765
13,529,969
$ 24,723,121 $

153,283 $
780,483
933,766 $

—
65
250
515

—
4

20,480
171,281
9,773
444,706

45,747
116,512

574,299
2,330,118
173,584
10,748,961

1,008,288
2,460,570

—
1,451
8,833
—
10,288
10,803 $

2,120 $
—
2,120 $

808,903
103,528
8,045,306
891,063
50,588
7,987
1,765
—
1,164,837
12,375,420
1,609,543 $ 23,124,381

3,945 $
—
3,945 $

151,458
780,483
931,941

682,267 $

229 $

3,806 $

678,690

3,042,771
124,309
3,849,347

3,052
177

2,667,328
61,555
2,562
2,734,674
6,584,021 $

73,774 $

387,742
461,516 $

113,102
1,974
115,305

—
2

49,221
10,520
—
59,743
175,048 $

4,460 $
—
4,460 $

561
4,481
8,848

9
—

3,155,312
121,802
3,955,804

3,043
179

8,376
14,742
—
23,127
31,975 $

2,708,173
57,333
2,562
2,771,290
6,727,094

594 $
—
594 $

77,640
387,742
465,382

December 31, 2022
Investment securities available for sale:
U.S. Treasury and federal agencies.................
Mortgage-backed securities:

Government issued or guaranteed:

Commercial.............................................
Residential...............................................
Other debt securities........................................

Investment securities held to maturity:
U.S. Treasury and federal agencies.................
Obligations of states and political subdivisions
Mortgage-backed securities:

Government issued or guaranteed:

Commercial.............................................
Residential...............................................
Privately issued ...........................................
Other debt securities........................................

Total debt securities ........................................
Equity and other securities:

Readily marketable equity — at fair value
Other — at cost ...........................................
Total equity and other securities .....................

December 31, 2021
Investment securities available for sale:
U.S. Treasury and federal agencies.................
Mortgage-backed securities:

Government issued or guaranteed:

Residential...............................................
Other debt securities........................................

Investment securities held to maturity:
U.S. Treasury and federal agencies.................
Obligations of states and political subdivisions
Mortgage-backed securities:

Government issued or guaranteed:

Residential...............................................
Privately issued ...........................................
Other debt securities........................................

Total debt securities ........................................
Equity and other securities:

Readily marketable equity — at fair value
Other — at cost ...........................................
Total equity and other securities .....................

132

No investment in securities of a single non-U.S. Government, government agency or government

guaranteed issuer exceeded ten percent of shareholders’ equity at December 31, 2022.

As of December 31, 2022, the latest available investment ratings of all obligations of states and

political subdivisions, privately issued mortgage-backed securities and other debt securities were:

Amortized
Cost

Estimated
Fair Value

A or
Better

BBB
(In thousands)

B or
Less

Not
Rated

Average Credit Rating of Fair Value Amount

Obligations of states and

political subdivisions ............ $

2,577,078

$ 2,460,570

$ 2,450,795

— $

9,775

Privately issued mortgage-

backed securities ..................
Other debt securities.................

49,742
184,872

50,588
175,349

—
15,044

—
63,361

—
35,741

379
—

50,209
61,203

The amortized cost and estimated fair value of collateralized mortgage obligations included in

mortgage-backed securities were as follows:

December 31

2022

2021

(In thousands)

Collateralized mortgage obligations:

Amortized cost ...................................................................................................... $ 372,373 $
Estimated fair value..............................................................................................

327,981

61,980
57,763

There were no significant gross realized gains or losses from sales of investment securities in

2022, 2021 or 2020.

At December 31, 2022, the amortized cost and estimated fair value of debt securities by

contractual maturity were as follows:

Debt securities available for sale:
Due in one year or less.............................................................................................. $
Due after one year through five years.......................................................................
Due after five years through ten years ......................................................................
Due after ten years ....................................................................................................

Mortgage-backed securities available for sale ..........................................................

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 ....................................................................................................

Mortgage-backed securities held to maturity............................................................

Amortized
Cost

Estimated
Fair Value

(In thousands)

131,291 $

126,611
7,628,579
7,870,319
61,938
65,429
27,416
30,000
7,844,544
8,097,039
3,096,113
2,904,417
11,193,152 $ 10,748,961

137,854 $

136,564
1,011,114
1,057,311
1,068,369
1,092,875
1,254,576
1,344,838
3,470,623
3,632,878
9,897,091
8,904,797
13,529,969 $ 12,375,420

133

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

Less Than 12 Months
Fair
Value

Unrealized
Losses

12 Months or More

Fair
Value

Unrealized
Losses

(In thousands)

December 31, 2022
Investment securities available for sale:
U.S. Treasury and federal agencies.............................. $ 6,706,413 $
Mortgage-backed securities:

183,760 $

841,945 $

59,412

Government issued or guaranteed:

Commercial..........................................................
Residential............................................................
Other debt securities.....................................................

Investment securities held to maturity:
U.S. Treasury and federal agencies..............................
Obligations of states and political subdivisions...........
Mortgage-backed securities:

Government issued or guaranteed:

Commercial..........................................................
Residential............................................................
Privately issued ........................................................

574,299
2,295,873
93,458
9,670,043

1,008,288
2,449,420

808,903
6,292,462
—
10,559,073

20,480
169,489
3,604
377,333

45,747
116,512

103,528
619,403
—
885,190

—
28,305
73,280
943,530

—
—

—
1,319,300
35,661
1,354,961

Total ............................................................................. $ 20,229,116 $ 1,262,523 $ 2,298,491 $

—
1,792
6,169
67,373

—
—

—
271,660
7,987
279,647
347,020

December 31, 2021
Investment securities available for sale:
U.S. Treasury and federal agencies.............................. $
Mortgage-backed securities:

Government issued or guaranteed:

Residential............................................................
Other debt securities.....................................................

Investment securities held to maturity:
U.S. Treasury and federal agencies..............................
Mortgage-backed securities:

Government issued or guaranteed:

Residential............................................................

Privately issued ........................................................

598,566 $

3,806 $

— $

—

10,111
3,760
612,437

54
74
3,934

20,824
66,419
87,243

3,043

—

507
4,407
4,914

—

1,372,236
—
1,375,279

8,356
—
8,365
12,299 $

1,251
43,692
44,943
132,186 $

20
14,742
14,762
19,676

Total ............................................................................. $ 1,987,716 $

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

134

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

The Company estimated no material allowance for credit losses for its investment securities

classified as held-to-maturity at December 31, 2022 or December 31, 2021.

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

4. Loans and leases
Total loans and leases outstanding were comprised of the following:

December 31

2022

2021

(In thousands)

Loans

Commercial, financial, etc. .............................................................................. $
Commercial real estate.....................................................................................
Residential real estate.......................................................................................
Consumer .........................................................................................................
Total loans .....................................................................................................

39,695,189 $
45,444,010
23,773,842
20,579,263
129,492,304

22,524,542
35,473,884
16,077,275
17,964,331
92,040,032

Leases

Commercial ....................................................................................................
Total loans and leases ..........................................................................................
Less: unearned discount .......................................................................................
Total loans and leases, net of unearned discount ................................................. $

2,581,852
132,074,156
(509,993)
131,564,163 $

1,096,646
93,136,678
(224,226)
92,912,452

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

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

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

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

135

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

Current

30-89 Days
Past Due

Accruing
Loans Past
Due 90
Days or
More
(In thousands)

Nonaccrual

Total

December 31, 2022
Commercial, financial,

leasing, etc. ............................ $

40,982,398 $

448,462 $

72,502 $

347,204 $ 41,850,566

Real estate:

Commercial ..........................
Residential builder and

developer ...........................

Other commercial

construction .......................
Residential ............................
Residential — limited

documentation ...................

Consumer:

34,972,627

311,188

67,696

1,396,662

36,748,173

1,304,798

8,703

—

1,229

1,314,730

6,936,661
21,491,506

239,521
595,897

549
345,402

124,937
272,090

7,301,668
22,704,895

950,782

22,456

—

77,814

1,051,052

Home equity lines and loans
Recreational finance .............
Automobile ...........................
Other .....................................

4,891,311
8,974,171
4,393,206
1,958,196

Total.......................................... $ 126,855,656 $

30,787
54,593
44,486
22,961
1,779,054 $

—
—
—
4,869
491,018 $

84,788
44,630
39,584
49,497

5,006,886
9,073,394
4,477,276
2,035,523
2,438,435 $ 131,564,163

December 31, 2021
Commercial, financial,

leasing, etc. ............................ $

23,101,810 $

142,208 $

8,284 $

221,022 $ 23,473,324

Real estate:

Commercial ..........................
Residential builder and

developer ...........................

Other commercial

construction .......................
Residential ............................
Residential — limited

documentation ...................

Consumer:

24,712,643

319,099

31,733

1,069,280

26,132,755

1,400,437

2,904

—

3,005

1,406,346

7,722,049
13,294,872

17,175
239,561

—
920,080

111,405
355,858

7,850,629
14,810,371

1,124,520

16,666

—

122,888

1,264,074

Home equity lines and loans
Recreational finance .............
Automobile ...........................
Other .....................................
Total.......................................... $

3,476,617
7,985,173
4,604,772
1,620,147
89,043,040 $

15,486
40,544
40,064
12,223
845,930 $

—
—
—
3,302
963,399 $

70,488
27,811
34,037
44,289

3,562,591
8,053,528
4,678,873
1,679,961
2,060,083 $ 92,912,452

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

During the normal course of business, the Company modifies loans to maximize recovery efforts.
If the borrower is experiencing financial difficulty and a concession is granted, the Company considers
such modifications as troubled debt restructurings and classifies those loans as either nonaccrual loans

136

or renegotiated loans. The types of concessions that the Company grants typically include principal
deferrals and interest rate concessions, but may also include other types of concessions.

The tables that follow summarize the Company’s loan modification activities that were

considered troubled debt restructurings for the years ended December 31, 2022, 2021 and 2020:

Year Ended December 31, 2022

Number

Post-modification (a)

Pre-
modification
Recorded
Investment

Principal
Deferral

Interest
Rate
Reduction
(Dollars in thousands)

Other

Combination
of Concession
Types

Total

Commercial, financial, leasing, etc.
Real estate:

Commercial ...........................
Residential builder and developer
Other commercial construction ...
Residential .............................
Residential — limited

documentation......................

Consumer:

Home equity lines and loans.......
Recreational finance .................
Automobile ............................
Other ....................................
Total.........................................

Year Ended December 31, 2021

Commercial, financial, leasing, etc.
Real estate:

Commercial ...........................
Residential builder and developer
Other commercial construction ...
Residential .............................
Residential — limited

documentation......................

Consumer:

Year Ended December 31, 2020

Commercial, financial, leasing, etc.
Real estate:

Commercial ...........................
Residential builder and developer
Other commercial construction ...
Residential .............................
Residential — limited

documentation......................

Consumer:

193

87,873

53,219

455

983

34,791

89,448

50
1
1
274

144
729
2,092
149
3,641

34,972
60
100
71,165

1,398

10,146
27,517
41,540
1,426
276,197

14,037
57
—
54,519

1,216

9,372
27,510
41,510
1,426
202,866

—
—
—
—

—

—
—
—
—
455

2,223
—
—
—

—

—
—
—
—
3,206

18,358
—
100
19,022

34,618
57
100
73,541

193

1,409

841
—
—
—
73,305

10,213
27,510
41,510
1,426
$ 279,832

284

185,458

46,806

— $

40,558

95,516

$ 182,880

99
1
3
373

89
281
807
362
2,320

202,878
3
542
108,325

2,920

6,430
9,931
14,668
2,597
533,752

67,387
3
532
95,769

2,865

6,054
9,931
14,654
2,597
246,598

—
—
—
—

—

—
—
—
—
— $

31,202
—
—
—

—

—
—
—
—
71,760

102,248
—
—
12,866

200,837
3
532
108,635

—

2,865

321
—
14
—
210,965

6,375
9,931
14,668
2,597
$ 529,323

394

246,479

70,671

298

31,605

97,344

$ 199,918

161
1
2
631

259
428
2,249
1,095
5,250

310,578
91
13,602
202,985

204,591
—
13,573
183,878

7,413

7,100

17,228
16,392
39,951
7,788
862,507

5,882
16,388
39,949
3,383
545,415

505
—
—
—

—

—
—
—
—
803

4,874
—
—
—

—

—
—
—
—
36,479

85,261
90
—
23,639

295,231
90
13,573
207,517

1,232

8,332

11,372
4
2
4,405
223,349

17,254
16,392
39,951
7,788
$ 806,046

(a)

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

137

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

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

Commercial leases:

Direct financings:

Lease payments receivable ................................................................................... $ 2,174,730 $
Estimated residual value of leased assets .............................................................
Unearned income ..................................................................................................
Investment in direct financings .......................................................................

262,354
(144,916)
2,292,168

873,089
75,140
(68,456)
879,773

Leveraged leases:

December 31,

2022

2021

(In thousands)

Lease payments receivable ...................................................................................
Estimated residual value of leased assets .............................................................
Unearned income ..................................................................................................
Investment in leveraged leases........................................................................

75,003
73,414
(25,374)
123,043
Total investment in leases................................................................................................ $ 2,415,247 $ 1,002,816
56,759
Deferred taxes payable arising from leveraged leases..................................................... $

71,371
73,397
(21,689)
123,079

51,974 $

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

At December 31, 2022, the minimum future lease payments to be received from lease financings

were as follows:

Year ending December 31:

(In thousands)

2023................................................................................................................................................. $
2024.................................................................................................................................................
2025.................................................................................................................................................
2026.................................................................................................................................................
2027.................................................................................................................................................
Later years .....................................................................................................................................

756,544
621,629
410,540
255,292
129,624
72,472
$ 2,246,101

138

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

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

were as follows:

Commercial,
Financial,
Leasing, etc.

Real Estate

Commercial

Residential

Consumer

Unallocated

Total

(In thousands)

2022
Beginning balance ..........................$
Allowance on acquired PCD loans......
Provision for credit losses (a) ............
Net charge-offs

Charge-offs (b) ..........................
Recoveries................................
Net charge-offs ..............................
Ending balance ..............................$

2021
Beginning balance ..........................$
Provision for credit losses.................
Net charge-offs

Charge-offs...............................
Recoveries................................
Net charge-offs ..............................
Ending balance ..............................$

2020
Beginning balance ..........................$
Adoption of new accounting standard
Provision for credit losses.................
Net charge-offs

Charge-offs...............................
Recoveries................................
Net charge-offs ..............................
Ending balance ..............................$

283,899
41,003
235,702

(117,223)
58,772
(58,451)
502,153

405,846
(40,378)

(122,651)
41,082
(81,569)
283,899

366,094
(61,474)
220,544

(135,083)
15,765
(119,318)
405,846

557,239
55,812
100,445

(61,641)
24,829
(36,812)
676,684

670,719
(42,825)

(101,306)
30,651
(70,655)
557,239

322,201
23,656
356,203

(35,891)
4,550
(31,341)
670,719

71,726
1,833
43,574

(11,783)
9,742
(2,041)
115,092

103,590
(29,817)

(10,904)
8,857
(2,047)
71,726

56,033
53,896
(3,172)

(10,283)
7,116
(3,167)
103,590

556,362
352
137,279

(112,310)
49,719
(62,591)
631,402

556,232
38,020

(103,293)
65,403
(37,890)
556,362

229,118
194,004
226,425

(152,250)
58,935
(93,315)
556,232

—
—
—

—
—
—
— $

1,469,226
99,000
517,000

(302,957)
143,062
(159,895)
1,925,331

— $
—

1,736,387
(75,000)

—
—
—
— $

(338,154)
145,993
(192,161)
1,469,226

77,625
(77,625)
—

1,051,071
132,457
800,000

—
—
—
— $

(333,507)
86,366
(247,141)
1,736,387

________________________________________________
(a)
(b)

Includes $242 million related to non-PCD acquired loans recorded on April 1, 2022.
For the year ended December 31, 2022, net charge-offs do not reflect $33 million of charge-offs related to
PCD loans acquired on April 1, 2022.

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

losses with prevailing economic metrics,

139

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

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

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

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

140

Commercial, financial, leasing, etc. ...........................
Real estate:

Commercial ........................................................
Residential builder and developer..........................
Other commercial construction .............................
Residential ..........................................................
Residential — limited documentation ....................

Consumer:

Amortized
Cost with
Allowance

Amortized
Cost without
Allowance

Total

December 31, 2022

$ 173,350

$ 173,854

(In thousands)
347,204
$

Amortized
Cost

January 1,
2022

Interest
Income
Recognized
Year Ended
December 31,
2022

$ 221,022

22,336

404,661
1,229
58,834
147,461
47,711

992,001
—
66,103
124,629
30,103

1,396,662
1,229
124,937
272,090
77,814

1,069,280
3,005
111,405
355,858
122,888

Home equity lines and loans .................................
Recreational finance.............................................
Automobile .........................................................
Other ..................................................................
Total.......................................................................

42,699
36,256
35,139
49,389
$ 996,729

42,089
8,374
4,445
108
$1,441,706

84,788
44,630
39,584
49,497
$ 2,438,435

70,488
27,811
34,037
44,289
$2,060,083

January 1,
2021
$ 306,827

Year Ended
December 31,
2021
11,865

Commercial, financial, leasing, etc. ...........................
Real estate:

Consumer:

$ 110,790

December 31, 2021
$
$ 110,232

242,078
613
30,229
198,560
79,777

827,202
2,392
81,176
157,298
43,111

221,022

1,069,280
3,005
111,405
355,858
122,888

775,894
1,094
114,039
365,729
147,170

32,269
21,476
29,314
44,122
$ 789,228

38,219
6,335
4,723
167
$1,270,855

70,488
27,811
34,037
44,289
$ 2,060,083

79,392
25,519
39,404
38,231
$1,893,299

January 1,
2020
$ 346,743

Year Ended
December 31,
2020
11,269

Commercial, financial, leasing, etc. ...........................
Real estate:

Consumer:

$ 226,897

December 31, 2020
$
79,930
$

364,110
1,094
20,992
159,006
84,568

411,784
—
93,047
206,723
62,602

306,827

775,894
1,094
114,039
365,729
147,170

173,796
4,708
35,881
322,504
114,667

61,031
19,434
34,044
3,606
$ 974,782

18,361
6,085
5,360
34,625
$ 918,517

79,392
25,519
39,404
38,231
$ 1,893,299

65,039
14,308
21,293
35,394
$1,134,333

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

141

18,117
2,195
3,411
25,146
557

4,333
657
144
354
77,250

15,872
973
596
23,772
528

3,780
637
186
531
58,740

7,821
1,694
8,457
18,069
634

4,092
626
186
1,369
54,217

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

The following table summarizes the loan grades applied at December 31, 2022 to the various

classes of the Company’s commercial loans and commercial real estate loans by origination year.

2022

2021

2020

2019

2018

Prior

Term Loans by Origination Year

(In thousands)

Revolving
Loans
Converted
to Term
Loans

Revolving
Loans

Total

Commercial, financial, leasing, etc.:
Loan grades:
Pass ......................
Criticized accrual .........
Criticized nonaccrual......
Total commercial,
financial, leasing, etc........

$ 8,575,130
247,626
18,379

$ 8,841,135

4,952,758
222,861
52,067

2,024,603
190,368
37,608

1,796,047
116,881
36,241

817,569
71,485
35,689

1,970,947
246,846
59,146

19,444,247
768,497
100,972

40,471
17,026
7,102

$ 39,621,772
1,881,590
347,204

5,227,686

2,252,579

1,949,169

924,743

2,276,939

20,313,716

64,599

$ 41,850,566

Real estate:
Commercial:

Loan grades:
Pass ......................
Criticized accrual .........
Criticized nonaccrual......
Total commercial real
estate ......................

Residential builder and
developer:

Loan grades:
Pass ......................
Criticized accrual .........
Criticized nonaccrual......
Total residential builder
and developer ..............

Other commercial construction:
Loan grades:
Pass ......................
Criticized accrual .........
Criticized nonaccrual......
Total other commercial
construction................

$ 4,136,890
324,652
11,541

3,379,900
463,484
22,459

3,388,590
467,557
183,986

4,557,065
688,239
297,106

3,293,380
937,421
170,382

10,905,956
1,890,297
688,079

869,981
48,099
23,109

— $ 30,531,762
4,819,749
—
1,396,662
—

$ 4,473,083

3,865,843

4,040,133

5,542,410

4,401,183

13,484,332

941,189

— $ 36,748,173

680,705
2,969
57

230,079
28,472
654

683,731

259,205

11,280
9,952
—

21,232

22,111
108,968
518

131,597

12,812
15,069
—

27,881

$ 1,032,774
37,893
—

1,080,141
145,199
9,992

1,225,845
320,463
44,037

1,185,685
1,025,371
35,841

366,686
299,350
10,542

$ 1,070,667

1,235,332

1,590,345

2,246,897

676,578

9,865
—
—

9,865

297,355
144,394
22,099

463,848

150,404
30,815
—

181,219

15,575
—
2,426

18,001

— $
—
—

1,117,256
196,245
1,229

— $

1,314,730

— $
—
—

5,204,061
1,972,670
124,937

— $

7,301,668

Increases to criticized commercial and commercial real estate loans since December 31, 2021

were predominantly attributable to the acquisition of People's United.

142

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

2022

2021

2020

2019

2018

Prior

Term Loans by Origination Year

(In thousands)

Revolving
Loans
Converted
to Term
Loans

Revolving
Loans

Total

Residential:

Current .................. $ 5,071,379
30-89 days past due......
59,477
Accruing loans past due
90 days or more .......
Nonaccrual ..............

12,012
5,686
Total residential............. $ 5,148,554

Residential - limited documentation:
Current .................. $
30-89 days past due......
Accruing loans past due
90 days or more .......
Nonaccrual ..............

Total residential - limited
documentation ............ $

Consumer:
Home equity lines and

loans:
Current .................. $
30-89 days past due......
Accruing loans past due
90 days or more .......
Nonaccrual ..............
Total home equity lines and
loans ...................... $

—
—

—

930
—

—
—

930

Recreational finance:

Current .................. $ 2,842,091
30-89 days past due......
8,648
Accruing loans past due
90 days or more .......
Nonaccrual ..............

—
3,533
$ 2,854,272

Total recreational finance

Automobile:

Current .................. $ 1,491,076
30-89 days past due......
6,926
Accruing loans past due
90 days or more .......
Nonaccrual ..............

—
2,493
Total automobile............ $ 1,500,495

Other:
Current......................

30-89 days past due...... $
Accruing loans past due
90 days or more .......
Nonaccrual ..............
Total other .................. $

274,530
3,783

—
2,745
281,058

Total loans and leases at
December 31, 2022 ....... $ 24,853,925

—
—

—

2,109
—

—
15

4,001,652
51,308

39,934
10,865
4,103,759

2,717,371
40,337

20,067
2,583
2,780,358

1,392,866
21,849

14,050
9,860
1,438,625

753,908
23,126

14,007
4,650
795,691

—
—

—

—
—

—

—
—

—

7,523,890
399,301

245,332
231,093
8,399,616

950,782
22,456

—
77,814

1,051,052

30,440
499

—
7,353
38,292

—
—

—

— $ 21,491,506
595,897
—

345,402
—
—
272,090
— $ 22,704,895

— $
—

950,782
22,456

—
—

—
77,814

— $

1,051,052

2,441
—

—
—

15,361
171

—
536

23,321
126

—
334

97,282
2,030

—
6,458

3,262,533
—

1,487,334
28,460

4,891,311
30,787

—
2,799

—
74,646

—
84,788

2,124

2,441

16,068

23,781

105,770

3,265,332

1,590,440

5,006,886

2,280,627
9,525

—
7,440
2,297,592

1,557,676
13,324

—
10,698
1,581,698

172,238
1,450

—
830
174,518

1,587,629
12,412

—
9,427
1,609,468

702,711
7,284

—
7,372
717,367

58,339
326

—
332
58,997

963,907
8,387

—
7,625
979,919

378,962
7,239

—
7,520
393,721

38,439
386

—
371
39,196

486,964
5,202

—
5,344
497,510

167,438
5,464

—
5,620
178,522

8,217
141

—
120
8,478

812,953
10,419

—
11,261
834,633

95,343
4,249

—
5,881
105,473

23,163
569

226
465
24,423

—
—

—
—
—

—
—

—
—
—

— $
—

8,974,171
54,593

—
—
— $

—
44,630
9,073,394

— $
—

4,393,206
44,486

—
—
— $

—
39,584
4,477,276

1,375,049
15,655

4,643
44,449
1,439,796

8,221
651

—
185
9,057

1,958,196
22,961

4,869
49,497
2,035,523

18,747,757

13,072,920

12,737,602

7,534,367

26,755,951

26,197,545

1,664,096

$ 131,564,163

143

The following table summarizes the loan grades applied at December 31, 2021 to the various

classes of the Company’s commercial loans and commercial real estate loans by origination year.

2021

2020

2019

2018

2017

Prior

Term Loans by Origination Year

(In thousands)

Revolving
Loans
Converted
to Term
Loans

Revolving
Loans

Total

Commercial, financial, leasing, etc.:
Loan grades:
Pass....................
Criticized accrual .......
Criticized nonaccrual ...
Total commercial,
financial, leasing, etc........

$ 4,798,052
196,680
19,462

$ 5,014,194

1,916,072
98,595
23,229

1,476,786
107,010
17,114

951,881
73,126
39,908

500,615
36,232
20,927

1,398,775
185,935
33,698

10,993,461
484,755
60,175

18,699
15,628
6,509

$ 22,054,341
1,197,961
221,022

2,037,896

1,600,910

1,064,915

557,774

1,618,408

11,538,391

40,836

$ 23,473,324

Real estate:
Commercial:

Loan grades:
Pass....................
Criticized accrual .......
Criticized nonaccrual ...
Total commercial real
estate ......................

Residential builder and
developer:

Loan grades:
Pass....................
Criticized accrual .......
Criticized nonaccrual ...
Total residential builder
and developer ..............

Other commercial construction:
Loan grades:
Pass....................
Criticized accrual .......
Criticized nonaccrual ...
Total other commercial
construction................

$ 3,413,587
133,133
21,587

2,662,999
480,146
133,560

3,682,178
685,701
195,084

2,648,388
1,068,552
83,857

2,076,155
468,530
76,628

5,232,790
1,743,798
520,473

728,948
38,570
38,091

— $ 20,445,045
4,618,430
—
1,069,280
—

$ 3,568,307

3,276,705

4,562,963

3,800,797

2,621,313

7,497,061

805,609

— $ 26,132,755

786,983
2,055
—

106,510
5,356
—

75,287
117,258
2,910

789,038

111,866

195,455

47,587
13,637
—

61,224

4,680
630
—

5,310

957,947
24,103
—

1,781,603
54,191
—

2,022,276
675,226
71,613

832,547
583,428
3,303

152,669
228,739
12,263

982,050

1,835,794

2,769,115

1,419,278

393,671

12,450
—
95

12,545

273,556
114,158
19,970

407,684

230,017
891
—

230,908

38,781
—
4,256

43,037

— $
—
—

1,263,514
139,827
3,005

— $

1,406,346

— $
—
—

6,059,379
1,679,845
111,405

— $

7,850,629

144

A summary of loans in accrual and nonaccrual status at December 31, 2021 for the various classes

of the Company’s residential real estate loans and consumer loans by origination year follows.

2021

2020

2019

2018

2017

Prior

Term Loans by Origination Year

(In thousands)

Revolving
Loans
Converted
to Term
Loans

Revolving
Loans

Total

Residential:

Current .................. $ 3,057,118
30-89 days past due......
15,245
Accruing loans past due
90 days or more .......
Nonaccrual ..............

10,924
3,359
Total residential............. $ 3,086,646

Residential - limited documentation:
Current .................. $
30-89 days past due......
Accruing loans past due
90 days or more .......
Nonaccrual ..............

Total residential - limited
documentation ............ $

Consumer:
Home equity lines and

loans:
Current .................. $
30-89 days past due......
Accruing loans past due
90 days or more .......
Nonaccrual ..............
Total home equity lines and
loans ...................... $

—
—

—

304
—

—
—

304

Recreational finance:

Current .................. $ 2,890,111
30-89 days past due......
5,929
Accruing loans past due
90 days or more .......
Nonaccrual ..............

—
1,341
$ 2,897,381

Total recreational finance

Automobile:

Current .................. $ 2,220,061
30-89 days past due......
8,508
Accruing loans past due
90 days or more .......
Nonaccrual ..............

—
1,588
Total automobile............ $ 2,230,157

Other:

Current .................. $
30-89 days past due......
Accruing loans past due
90 days or more .......
Nonaccrual ..............
Total other .................. $

244,346
2,937

—
2,051
249,334

Total loans and leases at
December 31, 2021 ....... $ 18,817,411

—
—

—

777
—

—
—

777

2,088,342
8,912

—
4,646
2,101,900

1,097,684
6,615

—
4,390
1,108,689

96,945
404

—
326
97,675

1,672,090
12,535

100,581
19,858
1,805,064

1,075,896
9,886

28,512
7,119
1,121,413

466,040
6,132

31,996
4,577
508,745

1,037,958
33,097

205,318
5,890
1,282,263

—
—

—

2,793
—

—
—

—

1,730
21

—
—

—

1,944
—

—
—

5,913,461
162,666

542,749
314,792
6,933,668

1,124,520
16,666

—
122,888

1,264,074

72,309
—

—
263
72,572

—
—

—

— $ 13,294,872
239,561
—

920,080
—
—
355,858
— $ 14,810,371

— $ 1,124,520
16,666
—

—
—

—
122,888

— $ 1,264,074

38,015
698

—
5,750

2,348,279
346

1,082,775
14,421

$ 3,476,617
15,486

—
4,951

—
59,787

—
70,488

2,793

1,751

1,944

44,463

2,353,576

1,156,983

$ 3,562,591

1,267,929
8,317

—
4,871
1,281,117

662,000
8,936

—
7,847
678,783

73,586
472

—
326
74,384

646,883
5,074

—
4,918
656,875

341,655
7,161

—
7,867
356,683

24,424
255

—
193
24,872

445,868
5,189

—
4,039
455,096

211,774
5,715

—
6,882
224,371

16,924
101

—
104
17,129

646,040
7,123

—
7,996
661,159

71,598
3,129

—
5,463
80,190

14,321
5,712

3,302
353
23,688

—
—

—
—
—

—
—

—
—
—

— $ 7,985,173
40,544
—

—
—
—
27,811
— $ 8,053,528

— $ 4,604,772
40,064
—

—
—
—
34,037
— $ 4,678,873

1,148,096
1,908

—
40,807
1,190,811

1,505
434

—
129
2,068

$ 1,620,147
12,223

3,302
44,289
$ 1,679,961

12,376,366

12,286,933

7,895,140

5,558,871

18,542,940

16,234,904

1,199,887

$ 92,912,452

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

2022 and December 31, 2021.

145

6. Premises and equipment
The detail of premises and equipment was as follows:

Land............................................................................................................................ $
Buildings ....................................................................................................................
Leasehold improvements ..........................................................................................
Furniture and equipment — owned .........................................................................
Furniture and equipment — capital leases ..............................................................

Less: accumulated depreciation and amortization

Owned assets........................................................................................................
Capital leases .......................................................................................................

Right of use assets — operating leases....................................................................
Premises and equipment, net .................................................................................... $

December 31

2022

2021

(In thousands)

148,905 $
653,983
386,303
1,004,127
115
2,193,433

1,155,811
76
1,155,887
616,082
1,653,628 $

93,862
512,988
304,825
880,153
115
1,791,943

1,026,842
38
1,026,880
379,702
1,144,765

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

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

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

146

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

Year Ended December 31,
2021

2020

2022

Lease cost
Operating lease cost ........................................................... $
Short-term lease cost ..........................................................
Variable lease cost..............................................................

Total lease cost............................................................... $

Other information
Right-of-use assets:

Obtained in exchange for

new operating lease liabilities ...................................... $

Acquired in business combination ..................................
Cash paid toward lease liabilities.......................................
Weighted-average remaining lease term............................
Weighted-average discount rate.........................................

138,836
8,269
3,743
150,848

137,998
226,037
143,029
7 years

101,353
111
4,103
105,567

57,760
—
106,586
6 years

104,158
198
1,565
105,921

70,754
—
104,396
7 years

2.97%

2.51%

2.74%

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

table.

Year ending December 31:

(In thousands)

2023 ..................................................................................................................................................$
2024 ..................................................................................................................................................
2025 ..................................................................................................................................................
2026 ..................................................................................................................................................
2027 ..................................................................................................................................................
Later years ........................................................................................................................................
Total lease payments ............................................................................................................................
Less: imputed interest ...........................................................................................................................
Total......................................................................................................................................................$

149,061
139,820
118,110
97,979
75,220
212,036
792,226
83,025
709,201

All other operating leasing activities were not material to the Company’s consolidated results of

operations. Minimum lease payments required under capital leases are not material.

7. Capitalized servicing assets
Changes in capitalized servicing assets were as follows:

For the Year Ended December 31,

Residential Mortgage Loans
2021

2020

2022

Commercial Mortgage Loans
2021

2020

2022

(In thousands)

Beginning balance............. $ 241,053 $ 231,204 $ 244,411 $ 132,604 $ 133,429 $ 130,636
Originations ........................
29,306
Acquired in business

24,401

33,068

45,101

65,723

6,998

combination.....................
Amortization.......................

—
(26,513)
133,429
Valuation allowance .........
—
Ending balance, net........... $ 194,335 $ 217,053 $ 201,204 $ 126,391 $ 132,604 $ 133,429

—
(55,874)
241,053
— (24,000)

—
(58,308)
231,204
(30,000)

—
(30,614)
126,391
—

—
(33,893)
132,604
—

12,133
(65,849)
194,335

147

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

rates of 12.29% and 9.8% at December 31, 2022 and 2021,

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

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

Residential

Commercial

(Dollars in thousands)

Weighted-average prepayment speeds......................................................

Impact on fair value of 10% adverse change ..................................... $
Impact on fair value of 20% adverse change .....................................
Weighted-average discount rate .................................................................
Impact on fair value of 10% adverse change .....................................
Impact on fair value of 20% adverse change .....................................

7.27%

(8,471)
(16,417)

8.81%

(10,226)
(19,830)

18.00%
(6,467)
(12,498)

148

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

Gross Carrying
Amount

Accumulated
Amortization
(In thousands)

Net Carrying
Amount

December 31, 2022

Core deposit ................................................................ $
Other .............................................................................
Total .............................................................................. $

December 31, 2021

218,000 $
43,000
261,000 $

131,664 $
6,757
138,421 $

40,875 $
10,751
51,626 $

177,125
32,249
209,374

127,746 $
6,677
134,423 $

3,918
80
3,998

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

Year ending December 31:

62,044
52,992
37,939
26,887
17,835
11,677
$ 209,374

(In thousands)

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

149

A summary of goodwill assigned to each of the Company’s reportable segments as of December

31, 2022 and 2021 for purposes of testing for impairment is as follows:

December 31,
2021

2022
Transactions (a)
(In thousands)

December 31,
2022

Business Banking...................................................................... $
Commercial Banking ................................................................
Commercial Real Estate............................................................
Discretionary Portfolio..............................................................
Residential Mortgage Banking..................................................
Retail Banking...........................................................................
All Other ...................................................................................
Total .......................................................................................... $

864,366 $

1,401,873
654,389
—
—
1,309,191
363,293
4,593,112 $

693,905 $

2,686,253
291,217
—
—
221,196
4,406
3,896,977 $

1,558,271
4,088,126
945,606
—
—
1,530,387
367,699
8,490,089

(a)

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

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

Federal
Funds
Purchased
and
Repurchase
Agreements

Other
Short-term
Borrowings
(Dollars in thousands)

Total

At December 31, 2022

Amount outstanding ................................................................... $
Weighted-average interest rate..................................................

354,670

$ 3,200,281 $ 3,554,951

1.01%

4.59%

4.24%

For the year ended December 31, 2022

Highest amount at a month-end ................................................ $
Daily-average amount outstanding ...........................................
Weighted-average interest rate..................................................

633,684
368,326

0.20%

$ 3,200,283

567,654 $
3.29%

935,980

2.08%

At December 31, 2021

Amount outstanding ................................................................... $
Weighted-average interest rate..................................................

47,046

0.01%

For the year ended December 31, 2021

103,548
68,073

0.01%

At December 31, 2020

Amount outstanding ................................................................... $
Weighted-average interest rate..................................................

59,482

0.01%

For the year ended December 31, 2020

82,893
61,551

0.05%

— $
—

—
— $
—

— $
—

—
— $
—

47,046

0.01%

68,073

0.01%

59,482

0.01%

61,551

0.05%

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

150

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

(In thousands)

Outstanding borrowings ................................................................................................................ $
Unused............................................................................................................................................

3,205,807
34,250,872

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

Long-term borrowings were as follows:

December 31,

2022

2021

(In thousands)

Senior notes of M&T:

Variable rate due 2023 ................................................................................... $
3.55% due 2023..............................................................................................
4.55% fixed/variable due 2028......................................................................

249,961 $
493,960
477,044

Senior notes of M&T Bank:

Variable rate due 2022 ...................................................................................
2.50% due 2022..............................................................................................
5.40% due 2025..............................................................................................
2.90% due 2025..............................................................................................

—
—
499,317
749,824

Advances from FHLB:

Fixed rates.......................................................................................................

5,183

Subordinated notes of M&T:

5.75% due 2024..............................................................................................

77,337

Subordinated notes of M&T Bank:

4.00% due 2024..............................................................................................
3.40% due 2027..............................................................................................

403,569
462,727

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 ..................

15,798
31,267
6,999

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 .....................................................................................................................

149,479
151,932
97,365
15,464
59,132
8,644
9,535
3,964,537 $

249,893
516,173
—

249,961
653,903
—
749,740

1,578

—

—
522,867

15,775
30,103
6,912

148,945
151,270
97,220
15,464
57,547
8,448
9,570
3,485,369

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

151

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

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

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

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

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

152

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

Year ending December 31:

2023 ................................................................................................................................................. $
2024 .................................................................................................................................................
2025 .................................................................................................................................................
2026 .................................................................................................................................................
2027 .................................................................................................................................................
Later years.......................................................................................................................................

(In
thousands)

744,127
490,411
1,250,599
628
764,246
714,526
3,964,537

10. Shareholders’ equity
M&T is authorized to issue 20,000,000 shares of preferred stock. Preferred shares outstanding rank senior
to common shares both as to dividends and liquidation preference, but have no general voting rights.

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

December 31, 2022
Shares
Issued and
Outstanding

Carrying
Value

December 31, 2021
Shares
Issued and
Outstanding

Carrying
Value

(Dollars in thousands)

Series E (a)
Fixed-to-Floating Rate Non-cumulative Perpetual Preferred

Stock $1,000 liquidation preference per share.............................

350,000

$ 350,000

350,000

$ 350,000

Series F (b)
Fixed-to-Floating Rate Non-cumulative Perpetual Preferred

Stock $10,000 liquidation preference per share...........................

50,000

$ 500,000

50,000

$ 500,000

Series G (c)
Fixed-Rate Reset Non-cumulative Perpetual Preferred

Stock $10,000 liquidation preference per share...........................

40,000

$ 400,000

40,000

$ 400,000

Series H (d)
Fixed-to-Floating Rate Non-cumulative Perpetual Preferred

Stock $25 liquidation preference per share .................................

10,000,000

$ 260,600

—

Series I (e)
Fixed-Rate Reset Non-cumulative Perpetual Preferred

Stock $10,000 liquidation preference per share...........................

50,000

$ 500,000

50,000

$ 500,000

(a)

(b)

(c)

(d)

(e)

Dividends, if declared, are paid semi-annually at a rate of 6.45% through February 14, 2024 and thereafter will be paid quarterly at a rate of the
three-month LIBOR plus 361 basis points. Upon the expected cessation of LIBOR after June 30, 2023 dividends are estimated to be paid quarterly
at a rate of three-month SOFR plus 387 basis points. The shares are redeemable in whole or in part on or after February 15, 2024.
Notwithstanding M&T’s option to redeem the shares, if an event occurs such that the shares no longer qualify as Tier 1 capital, M&T may redeem
all of the shares within 90 days following that occurrence. Declared dividends per share were $64.50 in each of 2022, 2021 and 2020.
Dividends, if declared, are paid semi-annually at a rate of 5.125% through October 31, 2026 and thereafter will be paid quarterly at a rate of the
three-month LIBOR plus 352 basis points. Upon the expected cessation of LIBOR after June 30, 2023 dividends are estimated to be paid quarterly
at a rate of three-month SOFR plus 378 basis points. The shares are redeemable in whole or in part on or after November 1, 2026. Notwithstanding
M&T’s option to redeem the shares, if an event occurs such that the shares no longer qualify as Tier 1 capital, M&T may redeem all of the shares
within 90 days following that occurrence. Declared dividends per share were $512.50 in each of 2022, 2021 and 2020.
Dividends, if declared, are paid semi-annually at a rate of 5.0% through July 31, 2024 and thereafter will be paid semi-annually at a rate of the
five-year U.S. Treasury rate plus 3.174%. The shares are redeemable in whole or in part on or after August 1, 2024. Notwithstanding M&T’s
option to redeem the shares, if an event occurs such that the shares no longer qualify as Tier 1 capital, M&T may redeem all of the shares within 90
days following that occurrence. Declared dividends per share were $500.00 in each of 2022 and 2021, and $500.694 in 2020.
Dividends, if declared, are paid quarterly at a rate of 5.625% through December 14, 2026 and thereafter will be paid quarterly at a rate of the
three-month LIBOR plus 402 basis points. Upon the expected cessation of LIBOR after June 30, 2023 dividends are estimated to be paid quarterly
at a rate of three-month SOFR plus 428 basis points. The shares are redeemable in whole or in part on or after April 1, 2027. Notwithstanding
M&T's option to redeem the shares, if an event occurs such that the shares no longer qualify as Tier 1 capital, M&T may redeem all of the shares
within 90 days following that occurrence. Dividends declared per share were $1.0547 in 2022.
Dividends, if declared, are paid semi-annually at a rate of 3.5% through August 31, 2026 and thereafter will be paid semi-annually at a rate of the
five-year U.S. Treasury rate plus 2.679%. The shares are redeemable in whole or in part on or after September 1, 2026. Notwithstanding M&T’s
option to redeem the shares, if an event occurs such that the shares no longer qualify as Tier 1 capital, M&T may redeem all of the shares within 90
days following that occurrence. Dividends declared per share were $356.806 in 2022 and $94.306 in 2021.

153

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

Year Ended December 31, 2022

(In thousands)

Business
Banking

Commercial
Banking

Commercial
Real Estate

Discretionary
Portfolio

Residential
Mortgage
Banking

Retail
Banking

All Other

Total

Classification in consolidated

statement of income

Service charges on deposit accounts
Trust income...............................
Brokerage services income ..............
Other revenues from operations:

71,057
6
—

Merchant discount and

credit card fees ......................
Other....................................

62,040
—
$ 133,103

Year Ended December 31, 2021

Classification in consolidated

statement of income

Service charges on deposit accounts
Trust income...............................
Brokerage services income ..............
Other revenues from operations:

53,816
—
—

Merchant discount and

credit card fees ......................
Other....................................

Year Ended December 31, 2020

Classification in consolidated

statement of income

Service charges on deposit accounts
Trust income...............................
Brokerage services income ..............
Other revenues from operations:

Merchant discount and

credit card fees ......................
Other....................................

52,343
—
$ 106,159

50,119
18
—

40,475
—
90,612

111,238
—
—

67,433
14,358
193,029

98,880
—
—

55,164
5,968
160,012

92,720
442
—

45,528
9,408
148,098

14,569
—
—

3,924
10,183
28,676

11,853
—
—

2,661
7,304
21,818

10,252
—
—

2,221
6,218
18,691

—
—
—

—
91
91

—
—
—

—
1,359
1,359

—
—
—

—
1,625
1,625

—
—
—

243,871
—
—

5,869
740,711
87,877

$ 446,604
740,717
87,877

—
3,401
3,401

24,454
23,796
292,121

1,405
38,118
873,980

159,256
89,947
$1,524,401

—
—
—

232,279
—
—

5,285
644,716
62,791

$ 402,113
644,716
62,791

—
6,166
6,166

20,850
22,878
276,007

387
39,973
753,152

131,405
83,648
$1,324,673

—
—
—

211,858
—
—

5,839
601,424
47,428

$ 370,788
601,884
47,428

—
4,732
4,732

13,481
20,813
246,152

767
41,815
697,273

102,472
84,611
$1,207,183

Service charges on deposit accounts include fees deducted directly from customer account balances,
such as account maintenance, insufficient funds and other transactional service charges, and also
include debit card interchange revenue resulting from customer initiated transactions. Account
maintenance charges are generally recognized as revenue on a monthly basis, whereas other fees are
recognized after the respective service is provided.

Trust income includes fees related to the Institutional Client Services (“ICS”) business and the Wealth
Advisory Services (“WAS”) business. Revenues from the ICS business are largely derived from a
variety of trustee, agency, investment, cash management and administrative services, whereas revenues

154

from the WAS business are mainly derived from asset management, fiduciary services, and family
office services. Trust fees may be billed in arrears or in advance and are recognized as revenues as the
Company’s performance obligations are satisfied. Certain fees are based on a percentage of assets
invested or under management and are recognized as the service is performed and constraints regarding
the uncertainty of the amount of fees are resolved.

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

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

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

The Company’s equity incentive compensation plan allows for the issuance of various forms of
stock-based compensation,
including stock options, restricted stock and restricted stock units,
including performance-based awards. At December 31, 2022 and 2021, respectively, there were
1,650,696 and 2,299,502 shares available for future grant under the Company’s equity incentive
compensation plan.
Stock awards
Stock awards granted to employees are comprised of restricted stock and restricted stock units. Stock
awards generally vest over three years. The Company may issue shares from treasury stock to the
extent available or issue new shares. There were no restricted shares issued in 2022, 2021 or 2020. The
number of restricted stock units issued was 548,926 in 2022, 636,956 in 2021 and 480,949 in 2020,
with a weighted-average grant date fair value of $93 million, $84 million and $81 million, respectively.
Unrecognized compensation expense associated with restricted stock and restricted stock units,
inclusive of those awards assumed in the acquisition of People's United, was $38 million as of
December 31, 2022 and is expected to be recognized over a weighted-average period of approximately
one year.

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

Restricted
Stock Units
Outstanding

Weighted-
Average
Grant Price

Restricted
Stock
Outstanding

Weighted-
Average
Grant Price

Unvested at January 1, 2022 ..................................
Granted .......................................................................
Assumed in business combination .......................
Vested .........................................................................
Cancelled....................................................................
Unvested at December 31, 2022 ...........................

1,038,692 $ 147.32
169.13
164.66
156.21
155.72
156.23

548,926
252,820
(628,130)
(44,726)
1,167,582

4,076 $
—
173,204
(100,017)
(2,257)
75,006 $

162.35
—
164.66
164.57
164.66
164.65

155

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

A summary of stock option activity follows:

Stock
Options
Outstanding

Weighted-Average

Exercise
Price

Life
(In Years)

Aggregate
Intrinsic Value
(In thousands)

Outstanding at January 1, 2022 ..................................
Granted .............................................................................
Assumed in business combination .............................
Exercised..........................................................................
Expired .............................................................................
Outstanding at December 31, 2022............................
Exercisable at December 31, 2022.............................

635,864 $
138,825
1,857,739
(278,336)
(14,030)
2,340,062 $
1,840,243 $

162.73
169.38
141.58
142.36
157.47
148.78
147.61

5.9 $
5.2 $

18,797
15,797

For 2022, 2021 and 2020 M&T received $37 million, $305,000 and $3 million, respectively, in
cash from the exercise of stock options. The intrinsic value of stock options exercised and the related
tax benefit realized by the Company were not material in any of those three years. As of December 31,
2022, the amount of unrecognized compensation cost related to non-vested stock options was not
material. The total grant date fair value of stock options vested during 2022, 2021 and 2020 was not
material. Upon the exercise of stock options, the Company may issue shares from treasury stock to the
extent available or issue new shares.
Stock purchase plan
The stock purchase plan provides eligible employees of the Company with the right to purchase shares
of M&T common stock at a discount through accumulated payroll deductions. In connection with the
employee stock purchase plan, shares of M&T common stock issued were 75,232 in 2022, 95,147 in
2021 and 77,170 in 2020. As of December 31, 2022, there were 2,063,202 shares available for issuance
under the plan. M&T received cash for shares purchased through the employee stock purchase plan of
$11 million in each of 2022 and 2021, and $12 million in 2020. Compensation expense recognized for
the stock purchase plan was not material in 2022, 2021 or 2020.
Deferred bonus plan
The Company provided a deferred bonus plan pursuant to which eligible employees could elect to
defer all or a portion of their annual incentive compensation awards and allocate such awards to several
investment options, including M&T common stock. Participants could elect the timing of distributions
from the plan. Such distributions are payable in cash with the exception of balances allocated to M&T
common stock which are distributable in the form of M&T common stock. Shares of M&T common
stock distributable pursuant to the terms of the deferred bonus plan were 11,725 and 13,319 at
December 31, 2022 and 2021, respectively. The obligation to issue shares is included in “common
stock issuable” in the consolidated balance sheet.

156

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

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

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

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

2022

Year Ended December 31
2021
(In thousands)

2020

Service cost ......................................................................................... $
Interest cost on benefit obligation .......................................................
Expected return on plan assets ............................................................
Amortization of prior service cost.......................................................
Recognized net actuarial loss ..............................................................
Net periodic pension cost (benefit) ..................................................... $

17,660 $
82,467
(187,609)
516
19,895
(67,071) $

20,513 $
61,873
(143,448)
553
89,017
28,508 $

19,944
71,421
(125,512)
557
58,096
24,506

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

2022

Year Ended December 31
2021
(In thousands)

2020

Service cost ......................................................................................... $
Interest cost on benefit obligation .......................................................
Amortization of prior service credit ....................................................
Recognized net actuarial gain .............................................................
Net other postretirement benefits ........................................................ $

2,604 $
2,188
(2,772)
(1,481)

539 $

1,014 $
1,311
(4,738)
(1,295)
(3,708) $

970
1,741
(4,738)
(1,236)
(3,263)

Service cost is reflected in salaries and employee benefits expense. The other components of net

periodic benefit expense are reflected in other costs of operations.

Prior to 2022, net actuarial losses were generally amortized over the average remaining service
periods of active participants in the Company’s defined benefit pension plan. If all or substantially all
of the plan’s participants are inactive, GAAP provides for the average remaining life expectancy of the
participants to be used instead of average remaining service period in determining such amortization.
Substantially all of the participants in the Company’s defined benefit pension plan were inactive and
beginning in 2022 the average remaining life expectancy is now utilized prospectively to amortize the
net unrecognized losses. The change increased the amortization period by approximately sixteen years
and reduced the amount of amortization of unrecognized losses recorded for the year ended
December 31, 2022 from what would have been recorded without such change in amortization period
by $36 million.

157

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

Pension Benefits

2022

2021

(In thousands)