☒ QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934

☐ TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934

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 (or for such shorter period that the registrant was required to file such reports), and (2) has been subject to such filing requirements for the past 90 days. ☒Yes☐ No

Indicate by check mark whether the registrant has submitted electronically ~~and posted on its corporate Web site, if any,~~ every Interactive Data File required to be submitted ~~and posted~~ pursuant to Rule 405 of Regulation S-T (§232.405 of this chapter) during the preceding 12 months (or for such shorter period that the registrant was required to submit ~~and post~~ such files). ☒Yes☐ No

Indicate by check mark whether the registrant is a large accelerated filer, an accelerated filer, a non-accelerated filer, or a smaller reporting company, or an emerging growth company. See definitions of “large accelerated filer,” “accelerated filer,” “smaller reporting company,” and “emerging growth company” in Rule 12b-2 of the Exchange Act. ~~(Check one):~~

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 is a shell company (as defined in Rule 12b-2 of the Exchange Act). ☐ Yes ☒ No

Number of shares of the registrant's Common Stock, $0.50 par value, outstanding as of the close of business on ~~October 31, 2017: 150,515,367~~November 1, 2022: 172,613,343 shares.

4. Loans and leases and the allowance for credit losses

A summary of current, past due and nonaccrual loans as of September 30, ~~2017~~2022 and December 31, ~~2016~~2021 follows:


	Current		30-89 Days Past Due		Accruing Loans Past Due 90 Days or More		Nonaccrual		Total
	(In thousands)
September 30, 2022
Commercial, financial, leasing, etc.	$	37,938,053		481,091		20,639		368,166	$	38,807,949
Real estate:
Commercial		35,880,425		227,399		38,470		1,406,200		37,552,494
Residential builder and developer		1,377,505		62		—		1,930		1,379,497
Other commercial construction		6,981,412		157,175		1,900		66,187		7,206,674
Residential		20,709,362		580,357		411,731		285,395		21,986,845
Residential — limited documentation		974,779		17,274		—		95,382		1,087,435
Consumer:
Home equity lines and loans		4,959,845		25,370		—		78,208		5,063,423
Recreational finance		8,738,849		41,758		—		38,718		8,819,325
Automobile		4,282,895		35,550		—		40,318		4,358,763
Other		1,897,867		12,730		3,763		48,822		1,963,182
Total	$	123,740,992		1,578,766		476,503		2,429,326	$	128,225,587


December 31, 2021
Commercial, financial, leasing, etc.	$	23,101,810	142,208	8,284	221,022	$	23,473,324
Real estate:
Commercial		24,712,643	319,099	31,733	1,069,280		26,132,755
Residential builder and developer		1,400,437	2,904	—	3,005		1,406,346
Other commercial construction		7,722,049	17,175	—	111,405		7,850,629
Residential		13,294,872	239,561	920,080	355,858		14,810,371
Residential — limited documentation		1,124,520	16,666	—	122,888		1,264,074
Consumer:
Home equity lines and loans		3,476,617	15,486	—	70,488		3,562,591
Recreational finance		7,985,173	40,544	—	27,811		8,053,528
Automobile		4,604,772	40,064	—	34,037		4,678,873
Other		1,620,147	12,223	3,302	44,289		1,679,961
Total	$	89,043,040	845,930	963,399	2,060,083	$	92,912,452

Current

30-89 Days
Past Due

Accruing
Loans Past
Due 90
Days or
More (a)

Accruing
Loans
Acquired at
a Discount
Past Due
90 days
or More (b)

Purchased
Impaired (c)

Nonaccrual

Total

(In thousands)

September 30, 2017

Commercial, financial, leasing, etc.

$
21,486,942

48,159

3,710

369

75

203,996

$
21,743,251

Real estate:

Commercial

24,724,768

273,539

1,710

7,523

20,509

200,193

25,228,242

Residential builder and developer

1,604,095

26,182

—

4,413

10,717

2,416

1,647,823

Other commercial construction

5,952,636

51,132

1,220

—

13,972

19,263

6,038,223

Residential

15,868,656

458,066

249,983

10,025

307,529

236,363

17,130,622

Residential — limited documentation

2,829,667

88,814

—

—

114,141

101,918

3,134,540

Consumer:

Home equity lines and loans

5,275,572

34,878

772

9,856

—

75,584

5,396,662

Automobile

3,327,148

67,280

—

1

—

21,267

3,415,696

Other

4,120,712

33,070

3,893

24,038

—

8,362

4,190,075

Total

$
85,190,196

1,081,120

261,288

56,225

466,943

869,362

$
87,925,134

December 31, 2016

Commercial, financial, leasing, etc.

$
22,287,857

53,503

6,195

417

641

261,434

$
22,610,047

Real estate:

Commercial

25,076,684

183,531

7,054

12,870

31,404

176,201

25,487,744

Residential builder and developer

1,884,989

4,667

5

1,952

14,006

16,707

1,922,326

Other commercial construction

5,985,118

77,701

922

198

14,274

18,111

6,096,324

Residential

17,631,377

485,468

281,298

11,537

378,549

229,242

19,017,471

Residential — limited documentation

3,239,344

88,366

—

—

139,158

106,573

3,573,441

Consumer:

Home equity lines and loans

5,502,091

44,565

—

12,678

—

81,815

5,641,149

Automobile

2,869,232

56,158

—

1

—

18,674

2,944,065

Other

3,491,629

31,286

5,185

21,491

—

11,258

3,560,849

Total

$
87,968,321

1,025,245

300,659

61,144

578,032

920,015

$
90,853,416

~~(a)~~

~~Excludes loans acquired at a discount.~~

~~(b)~~

~~Loans acquired at a discount that were recorded at fair value at acquisition date. This category does not include purchased impaired loans that are presented separately.~~

~~(c)~~

~~Accruing loans acquired at a discount that were impaired at acquisition date and recorded at fair value.~~

At September 30, 2022 and December 31, 2021, the Company had $39 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 met the criteria described in note 1 of Notes to Financial Statements in the 2021 Annual Report and, accordingly, are not considered past due or otherwise in default of loan terms as of the date presented. Included in those loan balances were $20 million and $974 million of government-guaranteed loans at September 30, 2022 and December 31, 2021, respectively. Payment deferrals are generally scheduled to expire in 2022 and/or are in the process of formal modification of repayment terms for previously deferred payments.

One-to-four family residential mortgage loans held for sale were $43 million and $474 million at September 30, 2022 and December 31, 2021, respectively. Commercial real estate loans held for sale were $300 million at September 30, 2022 and $425 million at December 31, 2021.

- 1215 -

NOTES TO FINANCIAL STATEMENTS, CONTINUED

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

One-to-four family residential mortgage loans held for sale were $347 million and $414 million at September 30, 2017 and December 31, 2016, respectively. Commercial real estate loans held for sale were $224 million at September 30, 2017 and $643 million at December 31, 2016.Credit quality indicators

The outstanding principal balance and the carrying amount of loans acquired at a discount that were recorded at fair value at the acquisition date and included in the consolidated balance sheet were as follows:

September 30,

December 31,

2017

2016

(In thousands)

Outstanding principal balance

$
1,584,126

2,311,699

Carrying amount:

Commercial, financial, leasing, etc.

42,878

59,928

Commercial real estate

308,426

456,820

Residential real estate

665,278

799,802

Consumer

127,919

487,721

$
1,144,501

1,804,271

Purchased impaired loans included in the table above totaled $467 million at September 30, 2017 and $578 million at December 31, 2016, representing less than 1% of the Company’s assets as of each date. A summary of changes in the accretable yield for loans acquired at a discount for the three months and nine months ended September 30, 2017 and 2016 follows:

Three Months Ended September 30

2017

2016

Purchased

Other

Purchased

Other

Impaired

Acquired

Impaired

Acquired

(In thousands)

Balance at beginning of period

$
133,532

163,099

$
162,023

245,195

Interest income

(10,815
)

(20,064
)

(12,784
)

(26,540
)
Reclassifications from nonaccretable balance

30,799

6,041

2,256

12,050

Other (a)

—

1,545

—

(818
)
Balance at end of period

$
153,516

150,621

$
151,495

229,887

Nine Months Ended September 30

2017

2016

Purchased

Other

Purchased

Other

Impaired

Acquired

Impaired

Acquired

(In thousands)

Balance at beginning of period

$
154,233

201,153

$
184,618

296,434

Interest income

(32,546
)

(66,505
)

(40,906
)

(97,300
)
Reclassifications from nonaccretable balance

31,829

11,076

7,783

20,647

Other (a)

—

4,897

—

10,106

Balance at end of period

$
153,516

150,621

$
151,495

229,887

~~(a)~~

~~Other changes in expected cash flows including changes in interest rates and prepayment assumptions.~~

~~- 13 -~~

~~NOTES TO FINANCIAL STATEMENTS, CONTINUED~~

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

~~Changes in the allowance for credit losses for the three months ended September 30, 2017 were as follows:~~

Commercial,
Financial,

Real Estate

Leasing, etc.

Commercial

Residential

Consumer

Unallocated

Total

(In thousands)

Beginning balance

$
339,314

366,229

66,006

158,559

78,117

$
1,008,225

Provision for credit losses

2,451

(7,699
)

1,267

33,886

95

30,000

Net charge-offs

Charge-offs

(9,714
)

(258
)

(4,206
)

(32,874
)

—

(47,052
)
Recoveries

4,423

5,895

2,028

9,807

—

22,153

Net (charge-offs) recoveries

(5,291
)

5,637

(2,178
)

(23,067
)

—

(24,899
)
Ending balance

$
336,474

364,167

65,095

169,378

78,212

$
1,013,326

~~Changes in the allowance for credit losses for the three months ended September 30, 2016 were as follows:~~

Commercial,
Financial,

Real Estate

Leasing, etc.

Commercial

Residential

Consumer

Unallocated

Total

(In thousands)

Beginning balance

$
316,079

349,674

69,660

157,361

77,722

$
970,496

Provision for credit losses

26,222

9,963

(6,232
)

16,539

508

47,000

Net charge-offs

Charge-offs

(21,075
)

(1,564
)

(6,754
)

(29,882
)

—

(59,275
)
Recoveries

6,958

1,704

1,919

7,319

—

17,900

Net (charge-offs) recoveries

(14,117
)

140

(4,835
)

(22,563
)

—

(41,375
)
Ending balance

$
328,184

359,777

58,593

151,337

78,230

$
976,121

~~Changes in the allowance for credit losses for the nine months ended September 30, 2017 were as follows:~~

Commercial, Financial,

Real Estate

Leasing, etc.

Commercial

Residential

Consumer

Unallocated

Total

(In thousands)

Beginning balance

$
330,833

362,719

61,127

156,288

78,030

$
988,997

Provision for credit losses

44,642

1,201

14,067

76,908

182

137,000

Net charge-offs

Charge-offs

(51,318
)

(7,556
)

(16,364
)

(96,060
)

—

(171,298
)
Recoveries

12,317

7,803

6,265

32,242

—

58,627

Net (charge-offs) recoveries

(39,001
)

247

(10,099
)

(63,818
)

—

(112,671
)
Ending balance

$
336,474

364,167

65,095

169,378

78,212

$
1,013,326

~~- 14 -~~

~~NOTES TO FINANCIAL STATEMENTS, CONTINUED~~

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

~~Changes in the allowance for credit losses for the nine months ended September 30, 2016 were as follows:~~

Commercial, Financial,

Real Estate

Leasing, etc.

Commercial

Residential

Consumer

Unallocated

Total

(In thousands)

Beginning balance

$
300,404

326,831

72,238

178,320

78,199

$
955,992

Provision for credit losses

39,667

29,799

(610
)

59,113

31

128,000

Net charge-offs

Charge-offs

(34,711
)

(3,569
)

(18,816
)

(107,761
)

—

(164,857
)
Recoveries

22,824

6,716

5,781

21,665

—

56,986

Net (charge-offs) recoveries

(11,887
)

3,147

(13,035
)

(86,096
)

—

(107,871
)
Ending balance

$
328,184

359,777

58,593

151,337

78,230

$
976,121

~~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 establishing the allowance for credit losses, the Company estimates losses attributable to specific troubled credits identified through both normal and detailed or intensified credit review processes and also estimates losses inherent in other loans and leases on a collective basis. For purposes of determining the level of the allowance for credit losses, the Company evaluates its loan and lease portfolio by loan type. The amounts of loss components in the Company’s loan and lease portfolios are determined through a loan-by-loan analysis of larger balance commercial loans and commercial real estate loans that are in nonaccrual status and by applying loss factors to groups of loan balances based on loan type and management’s classification of such loans under the Company’s loan grading system. Measurement of the specific loss components is typically based on expected future cash flows, collateral values and other factors that may impact the borrower’s ability to pay. In determining the allowance for credit losses, the Company utilizes a loan grading system ~~which is applied~~ to commercial and commercial real estate credits on an individual loan basis. Loan officers are responsible for continually assigning grades to these loans based on standards outlined in the Company’s Credit Policy. Internal loan grades are also monitored by the Company’s credit review department to ensure consistency and strict adherence to the prescribed standards. Loan grades are assigned loss component factors that reflect the Company’s loss estimate for each group of loans and leases. Factors considered in assigning loan grades and loss component factors include borrower-specific information related to expected future cash flows and operating results, collateral values, geographic location, financial condition and performance, payment status, and other information; levels of and trends in portfolio charge-offs and recoveries; levels of and trends in portfolio delinquencies and impaired loans; changes in thedifferentiate risk profile of specific portfolios; trends in volume and terms of loans; effects of changes in credit concentrations; and observed trends and practices in the banking industry. As updated appraisals are obtained on individual loans or other events in the market place indicate that collateral values have significantly changed, individual loan grades are adjusted as appropriate. Changes in other factors cited may also lead to loan grade changes at any time. Except for consumer loans and residential real estate loans that are considered smaller balance homogenous loans and acquired loans that are evaluated on an aggregated basis, the Company considers a loan to be impaired for purposes of applying GAAP when, based on current information and events, it is probable that the Company will be unable to collect all amounts according to the contractual terms of the loan agreement or the loan is delinquent 90 days. Regardless of loan type, the Company considers a loan to be impaired if it qualifies as a troubled debt restructuring. Modified loans, including smaller balance homogenous loans, that are considered to be troubled debt restructurings are evaluated for impairment giving consideration to the impact of the modified loan terms on the present value of the loan’s expected cash flows.

~~- 15 -~~

~~NOTES TO FINANCIAL STATEMENTS, CONTINUED~~

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

The following tables provide information with respect to loans and leases that were considered impaired as of September 30, 2017 and December 31, 2016 and for the three-month and nine-month periods ended September 30, 2017 and 2016.

September 30, 2017

December 31, 2016

Recorded
Investment

Unpaid
Principal
Balance

Related
Allowance

Recorded
Investment

Unpaid
Principal
Balance

Related
Allowance

(In thousands)

With an allowance recorded:

Commercial, financial, leasing, etc.

$
148,747

179,120

49,447

168,072

184,432

48,480

Real estate:

Commercial

73,144

81,244

10,200

71,862

86,666

11,620

Residential builder and developer

6,537

6,842

288

7,396

8,361

506

Other commercial construction

1,626

1,785

292

2,475

2,731

448

Residential

97,483

118,030

3,475

86,680

105,944

3,457

Residential — limited documentation

79,030

94,194

4,600

82,547

97,718

6,000

Consumer:

Home equity lines and loans

48,231

52,975

8,711

44,693

48,965

8,027

Automobile

14,225

16,743

3,011

16,982

18,272

3,740

Other

3,176

5,633

650

3,791

5,296

776

472,199

556,566

80,674

484,498

558,385

83,054

With no related allowance recorded:

Commercial, financial, leasing, etc.

80,952

97,073

—

100,805

124,786

—

Real estate:

Commercial

148,733

158,815

—

113,276

121,846

—

Residential builder and developer

1,174

1,174

—

14,368

21,124

—

Other commercial construction

17,850

37,237

—

15,933

35,281

—

Residential

17,312

23,291

—

16,823

24,161

—

Residential — limited documentation

11,091

18,480

—

15,429

24,590

—

277,112

336,070

—

276,634

351,788

—

Total:

Commercial, financial, leasing, etc.

229,699

276,193

49,447

268,877

309,218

48,480

Real estate:

Commercial

221,877

240,059

10,200

185,138

208,512

11,620

Residential builder and developer

7,711

8,016

288

21,764

29,485

506

Other commercial construction

19,476

39,022

292

18,408

38,012

448

Residential

114,795

141,321

3,475

103,503

130,105

3,457

Residential — limited documentation

90,121

112,674

4,600

97,976

122,308

6,000

Consumer:

Home equity lines and loans

48,231

52,975

8,711

44,693

48,965

8,027

Automobile

14,225

16,743

3,011

16,982

18,272

3,740

Other

3,176

5,633

650

3,791

5,296

776

Total

$
749,311

892,636

80,674

761,132

910,173

83,054

~~- 16 -~~

~~NOTES TO FINANCIAL STATEMENTS, CONTINUED~~

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

Three Months Ended September 30, 2017

Three Months Ended September 30, 2016

Interest Income
Recognized

Interest Income
Recognized

Average
Recorded
Investment

Total

Cash
Basis

Average
Recorded
Investment

Total

Cash
Basis

(In thousands)

Commercial, financial, leasing, etc.

$
224,526

391

391

262,796

744

744

Real estate:

Commercial

233,572

1,425

1,425

175,256

1,806

1,806

Residential builder and developer

8,550

895

895

26,996

405

405

Other commercial construction

16,578

25

25

21,500

190

190

Residential

113,892

1,903

905

96,961

1,572

570

Residential — limited documentation

91,974

1,624

569

101,877

1,501

378

Consumer:

Home equity lines and loans

47,831

419

99

41,740

368

112

Automobile

14,588

251

22

18,571

303

19

Other

3,269

80

2

4,077

72

11

Total

$
754,780

7,013

4,333

749,774

6,961

4,235

Nine Months Ended September 30, 2017

Nine Months Ended September 30, 2016

Interest Income
Recognized

Interest Income
Recognized

Average
Recorded
Investment

Total

Cash
Basis

Average
Recorded
Investment

Total

Cash
Basis

(In thousands)

Commercial, financial, leasing, etc.

$
242,410

1,674

1,674

283,783

7,055

7,055

Real estate:

Commercial

205,814

3,213

3,213

177,579

3,891

3,891

Residential builder and developer

14,551

1,791

1,791

30,832

488

488

Other commercial construction

15,474

958

958

19,774

563

563

Residential

108,741

5,004

2,285

97,229

4,778

2,591

Residential — limited documentation

94,680

4,573

1,292

104,382

4,580

1,648

Consumer:

Home equity lines and loans

46,829

1,240

290

33,998

937

295

Automobile

15,483

788

62

20,358

964

83

Other

3,430

227

8

10,987

371

74

Total

$
747,412

19,468

11,573

778,922

23,627

16,688

~~- 17 -~~

~~NOTES TO FINANCIAL STATEMENTS, CONTINUED~~

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

~~In accordance with the previously described policies, the Company utilizes a loan grading system that is applied to all~~amongst its commercial loans and commercial real estate loans. ~~Loan grades are utilized to differentiate risk within the portfolio and consider the expectations of default for each loan. Commercial loans and commercial real estate loans~~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. ~~All larger- balance~~

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 ~~are individually reviewed by centralized credit personnel each quarter~~greater than $1 million to determine the appropriateness of the assigned loan grade, including whether the loan should be reported as accruing or nonaccruing. Smaller-balance criticized loans are analyzed by business line risk management areas to ensure proper loan grade classification. Furthermore, criticized nonaccrual commercial loans and commercial real estate loans are considered impaired and, as a result, specific loss allowances on such loans are established within the allowance for credit losses to the extent appropriate in each individual instance.

The following table summarizes the loan grades applied at September 30, 2022 to the various classes of the Company’s commercial loans and commercial real estate ~~loans.~~loans by origination year.


	Term Loans by Origination Year												Revolving		Revolving Loans Converted to Term
	2022		2021		2020		2019		2018		Prior		Loans		Loans		Total
	(In thousands)
Commercial, financial, leasing, etc.:
Loan grades:
Pass	$	5,781,789		5,344,496		2,395,097		2,002,268		984,260		2,170,726		17,905,476		33,403	$	36,617,515
Criticized accrual		183,126		255,935		159,898		119,906		67,885		302,787		715,190		17,541		1,822,268
Criticized nonaccrual		15,954		47,840		42,491		43,953		37,789		64,076		110,414		5,649		368,166
Total commercial, financial, leasing, etc.	$	5,980,869		5,648,271		2,597,486		2,166,127		1,089,934		2,537,589		18,731,080		56,593	$	38,807,949

Real estate:
Commercial:
Loan grades:
Pass	$	3,169,811		3,566,811		3,480,606		4,628,815		3,534,628		11,778,026		852,233		45,264	$	31,056,194
Criticized accrual		116,303		325,114		532,354		1,028,855		1,040,898		1,987,906		58,670		—		5,090,100
Criticized nonaccrual		9,313		9,119		199,654		185,468		187,115		791,882		23,649		—		1,406,200
Total commercial real estate	$	3,295,427		3,901,044		4,212,614		5,843,138		4,762,641		14,557,814		934,552		45,264	$	37,552,494

Residential builder and developer:
Loan grades:
Pass	$	561,314		367,867		33,935		31,596		18,574		9,878		169,941		—	$	1,193,105
Criticized accrual		—		23,263		11,294		107,408		14,514		62		27,921		—		184,462
Criticized nonaccrual		—		654		—		518		—		758		—		—		1,930
Total residential builder and developer	$	561,314		391,784		45,229		139,522		33,088		10,698		197,862		—	$	1,379,497

Other commercial construction:
Loan grades:
Pass	$	526,338		1,079,329		1,388,737		1,431,834		401,870		327,992		23,584		618	$	5,180,302
Criticized accrual		46,282		163,004		249,622		971,447		386,480		136,358		6,992		—		1,960,185
Criticized nonaccrual		—		—		—		25,352		10,588		27,814		2,433		—		66,187
Total other commercial construction	$	572,620		1,242,333		1,638,359		2,428,633		798,938		492,164		33,009		618	$	7,206,674

Real Estate

Commercial,

Residential

Other

Financial,

Builder and

Commercial

Leasing, etc.

Commercial

Developer

Construction

(In thousands)

September 30, 2017

Pass

$
20,561,077

24,309,923

1,580,763

5,830,122

Criticized accrual

978,178

718,126

64,644

188,838

Criticized nonaccrual

203,996

200,193

2,416

19,263

Total

$
21,743,251

25,228,242

1,647,823

6,038,223

December 31, 2016

Pass

$
21,398,581

24,570,269

1,789,071

5,912,351

Criticized accrual

950,032

741,274

116,548

165,862

Criticized nonaccrual

261,434

176,201

16,707

18,111

Total

$
22,610,047

25,487,744

1,922,326

6,096,324

- 1816 -

NOTES TO FINANCIAL STATEMENTS, CONTINUED

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

~~In determining~~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 September 30, 2022 for the ~~allowance for credit losses,~~various classes of the Company’s residential real estate loans and consumer loans ~~are generally evaluated collectively after considering such factors as payment performance and recent loss experience and trends, which are mainly driven~~ by current collateral values in the market place as well as the amount of loan defaults. Loss rates on such loans are determined by reference to recent charge-off history and are evaluated (and adjusted if deemed appropriate) through consideration of other factors including near-term forecasted loss estimates developed by the Company’s credit department. In arriving at such forecasts, the Company considers the current estimated fair value of its collateral based on geographical adjustments for home price depreciation/appreciation and overall borrower repayment performance. With regard to collateral values, the realizability of such values by the Company contemplates repayment of any first lien position prior to recovering amounts on a second lien position. However, residential real estate loans and outstanding balances of home equity loans and lines of credit that are more than 150 days past due are generally evaluated for collectability on a loan-by-loan basis giving consideration to estimated collateral values. The carrying value of residential real estate loans and home equity loans and lines of credit for which a partial charge-off has been recognized totaled $39 million and $27 million, respectively, at September 30, 2017 and $44 million and $32 million, respectively, at December 31, 2016. Residential real estate loans and home equity loans and lines of credit that were more than 150 days past due but did not require a partial charge-off because the net realizable value of the collateral exceeded the outstanding customer balance were $19 million and $33 million, respectively, at September 30, 2017 and $16 million and $39 million, respectively, at December 31, 2016.origination year follows.

The Company also measures additional losses for purchased impaired loans when it is probable that the Company will be unable to collect all cash flows expected at acquisition plus additional cash flows expected to be collected arising from changes in estimates after acquisition. The determination of the allocated portion of the allowance for credit losses is very subjective. Given that inherent subjectivity and potential imprecision involved in determining the allocated portion of the allowance for credit losses, the Company also provides an inherent unallocated portion of the allowance. The unallocated portion of the allowance is intended to recognize probable losses that are not otherwise identifiable and includes management’s subjective determination of amounts necessary to provide for the possible use of imprecise estimates in determining the allocated portion of the allowance. Therefore, the level of the unallocated portion of the allowance is primarily reflective of the inherent imprecision in the various calculations used in determining the allocated portion of the allowance for credit losses. Other factors that could also lead to changes in the unallocated portion include the effects of expansion into new markets for which the Company does not have the same degree of familiarity and experience regarding portfolio performance in changing market conditions, the introduction of new loan and lease product types, and other risks associated with the Company’s loan portfolio that may not be specifically identifiable.


	Term Loans by Origination Year												Revolving		Revolving Loans Converted to Term
	2022		2021		2020		2019		2018		Prior		Loans		Loans		Total
	(In thousands)
Residential:
Current	$	4,057,196		4,049,835		2,734,863		1,345,076		760,442		7,731,831		30,119		—	$	20,709,362
30-89 days past due		35,387		53,249		28,996		76,049		15,744		363,807		7,125		—		580,357
Accruing loans past due 90 days or more		6,137		39,753		27,044		12,697		17,304		308,796		—		—		411,731
Nonaccrual		2,741		7,978		2,831		7,899		2,954		260,243		749		—		285,395
Total residential	$	4,101,461		4,150,815		2,793,734		1,441,721		796,444		8,664,677		37,993		—	$	21,986,845

Residential - limited documentation:
Current	$	—		—		—		—		—		974,779		—		—	$	974,779
30-89 days past due		—		—		—		—		—		17,274		—		—		17,274
Accruing loans past due 90 days or more		—		—		—		—		—		—		—		—		—
Nonaccrual		—		—		—		—		—		95,382		—		—		95,382
Total residential - limited documentation	$	—		—		—		—		—		1,087,435		—		—	$	1,087,435

Consumer:
Home equity lines and loans:
Current	$	179		2,205		2,506		16,700		25,043		104,764		3,323,628		1,484,820	$	4,959,845
30-89 days past due		—		—		—		27		—		993		1,376		22,974		25,370
Accruing loans past due 90 days or more		—		—		—		—		—		—		—		—		—
Nonaccrual		3		15		—		—		—		6,311		8,748		63,131		78,208
Total home equity lines and loans	$	182		2,220		2,506		16,727		25,043		112,068		3,333,752		1,570,925	$	5,063,423

Recreational finance:
Current	$	2,270,380		2,397,260		1,673,217		1,016,693		517,571		863,728		—		—	$	8,738,849
30-89 days past due		3,636		7,922		9,136		6,797		4,199		10,068		—		—		41,758
Accruing loans past due 90 days or more		—		—		—		—		—		—		—		—		—
Nonaccrual		862		5,310		7,946		6,905		5,821		11,874		—		—		38,718
Total recreational finance	$	2,274,878		2,410,492		1,690,299		1,030,395		527,591		885,670		—		—	$	8,819,325

Automobile:
Current	$	1,040,034		1,698,621		780,755		433,718		202,662		127,105		—		—	$	4,282,895
30-89 days past due		3,753		9,992		6,091		6,354		4,641		4,719		—		—		35,550
Accruing loans past due 90 days or more		—		—		—		—		—		—		—		—		—
Nonaccrual		557		8,573		7,837		8,418		6,710		8,223		—		—		40,318
Total automobile	$	1,044,344		1,717,186		794,683		448,490		214,013		140,047		—		—	$	4,358,763

Other:
Current	$	210,244		192,316		66,148		42,643		11,594		25,864		1,338,436		10,622	$	1,897,867
30-89 days past due		2,558		1,083		338		441		161		114		7,598		437		12,730
Accruing loans past due 90 days or more		—		—		—		—		—		8		3,755		—		3,763
Nonaccrual		1,405		742		304		277		79		245		45,668		102		48,822
Total other	$	214,207		194,141		66,790		43,361		11,834		26,231		1,395,457		11,161	$	1,963,182

Total loans and leases at June 30, 2022	$	18,045,302		19,658,286		13,841,700		13,558,114		8,259,526		28,514,393		24,663,705		1,684,561	$	128,225,587

- 1917 -

NOTES TO FINANCIAL STATEMENTS, CONTINUED

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

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

~~The allocation~~


	Term Loans by Origination Year												Revolving		Revolving Loans Converted to Term
	2021		2020		2019		2018		2017		Prior		Loans		Loans		Total
	(In thousands)
Commercial, financial, leasing, etc.:
Loan grades:
Pass	$	4,798,052		1,916,072		1,476,786		951,881		500,615		1,398,775		10,993,461		18,699	$	22,054,341
Criticized accrual		196,680		98,595		107,010		73,126		36,232		185,935		484,755		15,628		1,197,961
Criticized nonaccrual		19,462		23,229		17,114		39,908		20,927		33,698		60,175		6,509		221,022
Total commercial, financial, leasing, etc.	$	5,014,194		2,037,896		1,600,910		1,064,915		557,774		1,618,408		11,538,391		40,836	$	23,473,324

Real estate:
Commercial:
Loan grades:
Pass	$	3,413,587		2,662,999		3,682,178		2,648,388		2,076,155		5,232,790		728,948		—	$	20,445,045
Criticized accrual		133,133		480,146		685,701		1,068,552		468,530		1,743,798		38,570		—		4,618,430
Criticized nonaccrual		21,587		133,560		195,084		83,857		76,628		520,473		38,091		—		1,069,280
Total commercial real estate	$	3,568,307		3,276,705		4,562,963		3,800,797		2,621,313		7,497,061		805,609		—	$	26,132,755

Residential builder and developer:
Loan grades:
Pass	$	786,983		106,510		75,287		47,587		4,680		12,450		230,017		—	$	1,263,514
Criticized accrual		2,055		5,356		117,258		13,637		630		—		891		—		139,827
Criticized nonaccrual		—		—		2,910		—		—		95		—		—		3,005
Total residential builder and developer	$	789,038		111,866		195,455		61,224		5,310		12,545		230,908		—	$	1,406,346

Other commercial construction:
Loan grades:
Pass	$	957,947		1,781,603		2,022,276		832,547		152,669		273,556		38,781		—	$	6,059,379
Criticized accrual		24,103		54,191		675,226		583,428		228,739		114,158		—		—		1,679,845
Criticized nonaccrual		—		—		71,613		3,303		12,263		19,970		4,256		—		111,405
Total other commercial construction	$	982,050		1,835,794		2,769,115		1,419,278		393,671		407,684		43,037		—	$	7,850,629

- 18 -

NOTES TO FINANCIAL STATEMENTS, CONTINUED

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

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


	Term Loans by Origination Year												Revolving			Revolving Loans Converted to Term
	2021		2020		2019		2018		2017		Prior		Loans			Loans		Total
	(In thousands)
Residential:
Current	$	3,057,118		1,672,090		1,075,896		466,040		1,037,958		5,913,461		72,309			—	$	13,294,872
30-89 days past due		15,245		12,535		9,886		6,132		33,097		162,666		—			—		239,561
Accruing loans past due 90 days or more		10,924		100,581		28,512		31,996		205,318		542,749		—			—		920,080
Nonaccrual		3,359		19,858		7,119		4,577		5,890		314,792		263			—		355,858
Total residential	$	3,086,646		1,805,064		1,121,413		508,745		1,282,263		6,933,668		72,572			—	$	14,810,371

Residential - limited documentation:
Current	$	—		—		—		—		—		1,124,520		—			—	$	1,124,520
30-89 days past due		—		—		—		—		—		16,666		—			—		16,666
Accruing loans past due 90 days or more		—		—		—		—		—		—		—			—		—
Nonaccrual		—		—		—		—		—		122,888		—			—		122,888
Total residential - limited documentation	$	—		—		—		—		—		1,264,074		—			—	$	1,264,074

Consumer:
Home equity lines and loans:
Current	$	304		777		2,793		1,730		1,944		38,015		2,348,279			1,082,775	$	3,476,617
30-89 days past due		—		—		—		21		—		698		346			14,421		15,486
Accruing loans past due 90 days or more		—		—		—		—		—		—		—			—		—
Nonaccrual		—		—		—		—		—		5,750		4,951			59,787		70,488
Total home equity lines and loans	$	304		777		2,793		1,751		1,944		44,463		2,353,576			1,156,983	$	3,562,591

Recreational finance:
Current	$	2,890,111		2,088,342		1,267,929		646,883		445,868		646,040		—			—	$	7,985,173
30-89 days past due		5,929		8,912		8,317		5,074		5,189		7,123		—			—		40,544
Accruing loans past due 90 days or more		—		—		—		—		—		—		—			—		—
Nonaccrual		1,341		4,646		4,871		4,918		4,039		7,996		—			—		27,811
Total recreational finance	$	2,897,381		2,101,900		1,281,117		656,875		455,096		661,159		—			—	$	8,053,528

Automobile:
Current	$	2,220,061		1,097,684		662,000		341,655		211,774		71,598		—			—	$	4,604,772
30-89 days past due		8,508		6,615		8,936		7,161		5,715		3,129		—			—		40,064
Accruing loans past due 90 days or more		—		—		—		—		—		—		—			—		—
Nonaccrual		1,588		4,390		7,847		7,867		6,882		5,463		—			—		34,037
Total automobile	$	2,230,157		1,108,689		678,783		356,683		224,371		80,190		—	��		—	$	4,678,873

Other:
Current	$	244,346		96,945		73,586		24,424		16,924		14,321		1,148,096			1,505	$	1,620,147
30-89 days past due		2,937		404		472		255		101		5,712		1,908			434		12,223
Accruing loans past due 90 days or more		—		—		—		—		—		3,302		—			—		3,302
Nonaccrual		2,051		326		326		193		104		353		40,807			129		44,289
Total other	$	249,334		97,675		74,384		24,872		17,129		23,688		1,190,811			2,068	$	1,679,961

Total loans and leases at December 31, 2021	$	18,817,411		12,376,366		12,286,933		7,895,140		5,558,871		18,542,940		16,234,904			1,199,887	$	92,912,452

- 19 -

NOTES TO FINANCIAL STATEMENTS, CONTINUED

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

Allowance for credit losses

For purposes of determining the level of the allowance for credit losses, ~~summarized~~the Company evaluates its loan and lease portfolio by type. Changes in the allowance for credit losses for the three months ended September 30, 2022 and 2021 were as follows:


	Commercial, Financial,			Real Estate
	Leasing, etc.			Commercial			Residential			Consumer			Total
	(In thousands)
Three Months Ended September 30, 2022
Beginning balance	$	414,473			708,393			124,326			576,598		$	1,823,790
Provision for credit losses		43,343			26,949			(11,169	)		55,877			115,000
Net charge-offs
Charge-offs		(37,396	)		(35,213	)		(2,572	)		(26,086	)		(101,267	)
Recoveries		22,022			401			2,234			13,411			38,068
Net charge-offs		(15,374	)		(34,812	)		(338	)		(12,675	)		(63,199	)
Ending balance	$	442,442			700,530			112,819			619,800		$	1,875,591


	Commercial, Financial,			Real Estate
	Leasing, etc.			Commercial			Residential			Consumer			Total
	(In thousands)
Three Months Ended September 30, 2021
Beginning balance	$	314,852			679,963			77,869			502,444		$	1,575,128
Provision for credit losses		(292	)		(42,016	)		(3,522	)		25,830			(20,000	)
Net charge-offs
Charge-offs		(26,598	)		(14,242	)		(1,925	)		(21,508	)		(64,273	)
Recoveries		3,785			2,362			1,903			16,119			24,169
Net charge-offs		(22,813	)		(11,880	)		(22	)		(5,389	)		(40,104	)
Ending balance	$	291,747			626,067			74,325			522,885		$	1,515,024

Changes in the allowance for credit losses for the nine months ended September 30, 2022 and 2021 were as follows:


	Commercial, Financial,			Real Estate
	Leasing, etc.			Commercial			Residential			Consumer			Total
	(In thousands)
Nine Months Ended September 30, 2022
Beginning balance	$	283,899			557,239			71,726			556,362		$	1,469,226
Allowance on acquired PCD loans		41,003			55,812			1,833			352			99,000
Provision for credit losses (a)		167,985			116,288			40,719			102,008			427,000
Net charge-offs
Charge-offs (b)		(94,555	)		(45,809	)		(9,407	)		(78,148	)		(227,919	)
Recoveries		44,110			17,000			7,948			39,226			108,284
Net charge-offs		(50,445	)		(28,809	)		(1,459	)		(38,922	)		(119,635	)
Ending balance	$	442,442			700,530			112,819			619,800		$	1,875,591

- 20 -

NOTES TO FINANCIAL STATEMENTS, CONTINUED

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


	Commercial, Financial,			Real Estate
	Leasing, etc.			Commercial			Residential			Consumer			Total
	(In thousands)
Nine Months Ended September 30, 2021
Beginning balance	$	405,846			670,719			103,590			556,232		$	1,736,387
Provision for credit losses		(57,610	)		32,650			(29,026	)		(6,014	)		(60,000	)
Net charge-offs
Charge-offs		(93,638	)		(87,417	)		(6,586	)		(79,926	)		(267,567	)
Recoveries		37,149			10,115			6,347			52,593			106,204
Net charge-offs		(56,489	)		(77,302	)		(239	)		(27,333	)		(161,363	)
Ending balance	$	291,747			626,067			74,325			522,885		$	1,515,024

(a)

Includes $242 million related to non-PCD acquired loans for the nine months ended September 30, 2022.

(b)

For the nine months ended September 30, 2022, net charge-offs do not reflect $33 million of charge-offs related to PCD acquired loans.

Despite the allocation in the preceding tables, the allowance for credit losses is general in nature and is available to absorb losses from any loan or lease type. In determining the allowance for credit losses, accruing loans with similar risk characteristics are generally evaluated collectively. The Company utilizes statistically developed models to project principal balances over the remaining contractual lives of the loan portfolios and to determine estimated credit losses through a reasonable and supportable forecast period. Individual loan credit quality indicators including loan grade and borrower repayment performance can inform the models, which have been statistically developed based on historical correlations of credit losses with prevailing economic metrics, including unemployment, gross domestic product and real estate prices. Model forecasts may be adjusted for inherent limitations or biases that have been identified through independent validation and back-testing of model performance to actual realized results. At each of September 30, 2022 and December 31, 2021, the Company utilized a reasonable and supportable forecast period of two years. Subsequent to this forecast period the Company reverted, ratably over a one-year period, to historical loss experience to inform its estimate of losses for the remaining contractual life of each portfolio. The Company also estimates losses attributable to specific troubled credits identified through both normal and targeted credit review processes. The amounts of specific loss components in the Company’s loan and lease portfolios are determined through a loan-by-loan analysis of larger balance commercial 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 ~~basis~~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.

- 21 -

NOTES TO FINANCIAL STATEMENTS, CONTINUED

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

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 ~~methodology~~giving consideration to the impact of the modified loan terms on the present value of the loan’s expected cash flows.

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

The Company’s reserve for off-balance sheet credit exposures was ~~as follows:~~

not material at September 30, 2022 and December 31, 2021.

Commercial,
Financial,

Real Estate

Leasing, etc.

Commercial

Residential

Consumer

Total

(In thousands)

September 30, 2017

Individually evaluated for impairment

$
49,447

10,780

8,075

12,372

$
80,674

Collectively evaluated for impairment

287,027

353,387

47,674

157,006

845,094

Purchased impaired

—

—

9,346

—

9,346

Allocated

$
336,474

364,167

65,095

169,378

935,114

Unallocated

78,212

Total

$
1,013,326

December 31, 2016

Individually evaluated for impairment

$
48,480

12,500

9,457

12,543

$
82,980

Collectively evaluated for impairment

282,353

348,301

47,993

143,745

822,392

Purchased impaired

—

1,918

3,677

—

5,595

Allocated

$
330,833

362,719

61,127

156,288

910,967

Unallocated

78,030

Total

$
988,997

~~The recorded investment in~~Information with respect to loans and leases ~~summarized on~~that were considered nonaccrual at the ~~basis~~beginning and end of the ~~Company’s impairment methodology was as follows:~~reporting period and the interest income recognized on such loans for the three months and nine months ended September 30, 2022 and 2021 follows.


	September 30, 2022						June 30, 2022		January 1, 2022		Three Months Ended September 30, 2022		Nine Months Ended September 30, 2022
	Amortized Cost with Allowance		Amortized Cost without Allowance		Total		Amortized Cost		Amortized Cost		Interest Income Recognized		Interest Income Recognized
	(In thousands)

Commercial, financial, leasing, etc.	$	207,841	$	160,325	$	368,166	$	442,496	$	221,022	$	4,708	$	20,423
Real estate:
Commercial		394,502		1,011,698		1,406,200		1,476,658		1,069,280		7,059		14,944
Residential builder and developer		1,930		—		1,930		518		3,005		—		1,687
Other commercial construction		25,235		40,952		66,187		73,046		111,405		22		3,398
Residential		160,704		124,691		285,395		331,376		355,858		8,059		21,397
Residential — limited documentation		61,297		34,085		95,382		112,608		122,888		229		456
Consumer:
Home equity lines and loans		38,324		39,884		78,208		79,445		70,488		669		3,291
Recreational finance		31,295		7,423		38,718		33,414		27,811		166		488
Automobile		36,075		4,243		40,318		36,266		34,037		35		110
Other		48,741		81		48,822		47,178		44,289		84		268
Total	$	1,005,944	$	1,423,382	$	2,429,326	$	2,633,005	$	2,060,083	$	21,031	$	66,462

- 22 -

Commercial,
Financial,

Real Estate

Leasing, etc.

Commercial

Residential

Consumer

Total

(In thousands)

September 30, 2017

Individually evaluated for impairment

$
229,699

249,064

204,916

65,632

$
749,311

Collectively evaluated for impairment

21,513,477

32,620,026

19,638,576

12,936,801

86,708,880

Purchased impaired

75

45,198

421,670

—

466,943

Total

$
21,743,251

32,914,288

20,265,162

13,002,433

$
87,925,134

December 31, 2016

Individually evaluated for impairment

$
268,877

224,630

201,479

65,466

$
760,452

Collectively evaluated for impairment

22,340,529

33,222,080

21,871,726

12,080,597

89,514,932

Purchased impaired

641

59,684

517,707

—

578,032

Total

$
22,610,047

33,506,394

22,590,912

12,146,063

$
90,853,416

NOTES TO FINANCIAL STATEMENTS, CONTINUED

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


	September 30, 2021						June 30, 2021		January 1, 2021		Three Months Ended September 30, 2021		Nine Months Ended September 30, 2021
	Amortized Cost with Allowance		Amortized Cost without Allowance		Total		Amortized Cost		Amortized Cost		Interest Income Recognized		Interest Income Recognized
	(In thousands)

Commercial, financial, leasing, etc.	$	171,040	$	109,149	$	280,189	$	330,040	$	306,827	$	4,646	$	10,661
Real estate:
Commercial		332,014		820,856		1,152,870		1,081,546		775,894		2,256		4,518
Residential builder and developer		594		—		594		14,552		1,094		206		239
Other commercial construction		36,750		121,949		158,699		133,758		114,039		255		570
Residential		196,918		156,508		353,426		372,144		365,729		6,809		17,603
Residential — limited documentation		81,538		44,991		126,529		136,683		147,170		100		336
Consumer:
Home equity lines and loans		38,582		32,892		71,474		76,711		79,392		979		2,924
Recreational finance		18,428		5,479		23,907		23,276		25,519		164		478
Automobile		27,258		3,744		31,002		31,090		39,404		46		143
Other		43,330		243		43,573		42,257		38,231		110		433
Total	$	946,452	$	1,295,811	$	2,242,263	$	2,242,057	$	1,893,299	$	15,571	$	37,905

- 23 -

NOTES TO FINANCIAL STATEMENTS, CONTINUED

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

Loan modifications

During the normal course of business, the Company modifies loans to maximize recovery efforts. If the borrower is experiencing financial difficulty and a concession is granted, the Company considers such modifications as troubled debt restructurings and classifies those loans as either nonaccrual loans or renegotiated loans. The types of concessions that the Company grants typically include principal deferrals and interest rate concessions, but may also include other types of concessions.

~~- 20 -~~

~~NOTES TO FINANCIAL STATEMENTS, CONTINUED~~

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

The tables that follow summarize the Company’s loan modification activities that were considered troubled debt restructurings for the three-month and nine-month periods ended September 30, ~~2017~~2022 and ~~2016:~~2021:


					Post-modification (a)
	Number		Pre- modification Recorded Investment		Principal Deferral		Interest Rate Reduction		Other		Combination of Concession Types		Total
Three Months Ended September 30, 2022	(Dollars in thousands)

Commercial, financial, leasing, etc.		70	$	32,451	$	11,237	$	446	$	229	$	21,519	$	33,431
Real estate:
Commercial		14		22,951		7,222		—		122		15,543		22,887
Residential		57		14,380		11,094		—		—		3,470		14,564
Residential — limited documentation		2		155		155		—		—		—		155
Consumer:
Home equity lines and loans		25		1,700		1,504		—		—		196		1,700
Recreational finance		167		6,937		6,937		—		—		—		6,937
Automobile		474		9,755		9,755		—		—		—		9,755
Other		30		371		371		—		—		—		371
Total		839	$	88,700	$	48,275	$	446	$	351	$	40,728	$	89,800


Three Months Ended September 30, 2021

Commercial, financial, leasing, etc.		62	$	49,884	$	6,051	$	—	$	40,242	$	3,479	$	49,772
Real estate:
Commercial		15		53,198		30,311		—		262		22,599		53,172
Residential		64		14,443		12,281		—		—		1,984		14,265
Residential — limited documentation		4		828		828		—		—		—		828
Consumer:
Home equity lines and loans		22		1,349		1,246		—		—		103		1,349
Recreational finance		67		2,565		2,565		—		—		—		2,565
Automobile		146		2,711		2,711		—		—		—		2,711
Other		15		123		123		—		—		—		123
Total		395	$	125,101	$	56,116	$	—	$	40,504	$	28,165	$	124,785

Post-modification (a)

Number

Pre-
modification recorded investment

Principal Deferral

Other

Combination of
Concession Types

Total

Three Months Ended September 30, 2017

(Dollars in thousands)

Commercial, financial, leasing, etc.

49

$
15,812

$
5,888

$
97

$
9,251

$
15,236

Real estate:

Commercial

17

5,861

1,420

868

3,450

5,738

Residential

34

5,123

3,033

—

2,716

5,749

Residential — limited documentation

4

515

383

—

167

550

Consumer:

Home equity lines and loans

25

2,154

461

—

1,776

2,237

Automobile

17

342

326

—

16

342

Other

1

5

5

—

—

5

Total

147

$
29,812

$
11,516

$
965

$
17,376

$
29,857

Three Months Ended September 30, 2016

Commercial, financial, leasing, etc.

43

$
69,486

$
40,183

$
—

$
19,802

$
59,985

Real estate:

Commercial

18

14,925

11,644

—

2,614

14,258

Residential

30

5,638

4,714

—

1,214

5,928

Residential — limited documentation

6

827

470

—

493

963

Consumer:

Home equity lines and loans

26

2,552

251

—

2,301

2,552

Automobile

10

186

186

—

—

186

Other

1

26

26

—

—

26

Total

134

$
93,640

$
57,474

$
—

$
26,424

$
83,898

(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.

- 2124 -

NOTES TO FINANCIAL STATEMENTS, CONTINUED

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


					Post-modification (a)
	Number		Pre- modification Recorded Investment		Principal Deferral		Interest Rate Reduction		Other		Combination of Concession Types		Total
Nine Months Ended September 30, 2022	(Dollars in thousands)

Commercial, financial, leasing, etc.		147	$	79,437	$	49,671	$	455	$	983	$	30,262	$	81,371
Real estate:
Commercial		44		33,349		13,052		—		2,223		17,728		33,003
Residential		221		56,912		40,821		—		—		18,469		59,290
Residential — limited documentation		7		1,231		1,049		—		—		193		1,242
Consumer:
Home equity lines and loans		93		6,483		6,089		—		—		461		6,550
Recreational finance		514		19,138		19,131		—		—		—		19,131
Automobile		1,537		29,789		29,759		—		—		—		29,759
Other		128		1,170		1,170		—		—		—		1,170
Total		2,691	$	227,509	$	160,742	$	455	$	3,206	$	67,113	$	231,516

Nine Months Ended September 30, 2021

Commercial, financial, leasing, etc.		244	$	174,366	$	42,143	$	—	$	40,464	$	90,770	$	173,377
Real estate:
Commercial		83		223,209		48,841		—		30,832		141,456		221,129
Other commercial construction		3		542		532		—		—		—		532
Residential		304		88,067		80,411		—		—		7,391		87,802
Residential — limited documentation		17		2,349		2,292		—		—		—		2,292
Consumer:
Home equity lines and loans		64		5,034		4,702		—		—		277		4,979
Recreational finance		173		5,896		5,896		—		—		—		5,896
Automobile		516		9,182		9,168		—		—		14		9,182
Other		338		2,393		2,393		—		—		—		2,393
Total		1,742	$	511,038	$	196,378	$	—	$	71,296	$	239,908	$	507,582

Post-modification (a)

Number

Pre-
modification recorded investment

Principal Deferral

Other

Combination of
Concession Types

Total

Nine Months Ended September 30, 2017

(Dollars in thousands)

Commercial, financial, leasing, etc.

162

$
93,346

$
18,449

$
6,459

$
47,211

$
72,119

Real estate:

Commercial

67

38,608

16,193

868

21,332

38,393

Residential builder and developer

3

12,291

—

—

10,879

10,879

Other commercial construction

2

168

168

—

—

168

Residential

105

22,459

11,608

—

12,557

24,165

Residential — limited documentation

17

3,724

618

—

3,352

3,970

Consumer:

Home equity lines and loans

85

7,885

1,040

491

6,442

7,973

Automobile

59

1,160

1,089

—

71

1,160

Other

6

85

85

—

—

85

Total

506

$
179,726

$
49,250

$
7,818

$
101,844

$
158,912

Nine Months Ended September 30, 2016

Commercial, financial, leasing, etc.

112

$
148,204

$
98,561

$
—

$
39,971

$
138,532

Real estate:

Commercial

55

36,984

17,802

4,576

13,546

35,924

Residential builder and developer

3

23,905

22,958

—

—

22,958

Other commercial construction

2

374

250

—

124

374

Residential

73

11,946

7,945

—

4,705

12,650

Residential — limited documentation

14

2,415

803

—

1,872

2,675

Consumer:

Home equity lines and loans

84

9,189

655

—

8,534

9,189

Automobile

148

1,005

865

55

85

1,005

Other

78

1,192

951

45

196

1,192

Total

569

$
235,214

$
150,790

$
4,676

$
69,033

$
224,499

(a)

~~(a)~~

Troubled debt restructurings ~~are considered to be impaired loans and for purposes of establishing the allowance for credit losses~~ are evaluated for impairment giving consideration to the impact of the modified loan terms on the present value of the loan’s expected cash flows. Impairment of troubled debt restructurings that have subsequently defaulted may also be measured based on the loan’s observable market price or the fair value of collateral if the loan is collateral-dependent. Charge-offs may also be recognized on troubled debt restructurings that have subsequently defaulted. Loans that were modified as troubled debt restructurings during the twelve months ended September 30, ~~2017~~2022 and ~~2016~~2021 and for which there was a subsequent payment default during the nine-month periods ended September 30, ~~2017~~2022 and ~~2016,~~2021, respectively, were not material.

~~- 22 -~~

~~NOTES TO FINANCIAL STATEMENTS, CONTINUED~~

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

The amount of foreclosed residential real estate property held by the Company ~~totaled $106~~was $36 million and ~~$129~~$24 million at September 30, ~~2017~~2022 and December 31, ~~2016,~~2021, respectively. There were ~~$545~~$187 million and ~~$506~~$151 million at September 30, ~~2017~~2022 and December 31, ~~2016,~~2021, respectively, inof loans secured by residential real estate that were in the process of foreclosure. Of all loans in the process of foreclosure at September 30, ~~2017,~~2022, approximately ~~48% were classified as purchased impaired and 20%~~46% were government guaranteed.

The Company pledged certain loans to secure outstanding borrowings and available lines of credit. At September 30, 2022, the Company pledged approximately $9.9 billion of commercial loans and leases, $13.9 billion of commercial real estate loans, $18.7 billion of one-to-four family residential real estate loans, $3.1 billion of home equity loans and lines of credit and $10.4 billion of other consumer loans. At December 31, 2021, the Company pledged approximately $9.5 billion of commercial loans and leases, $11.9 billion of commercial real estate loans, $11.5 billion of one-to-four family residential real estate loans, $1.9 billion of homes equity loans and lines of credit and $10.2 billion of other consumer loans.

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

Stock-based compensation awards ~~and warrants~~ to purchase common stock of M&T representing ~~408,657~~252,793 common shares and ~~2,015,870~~314,155 common shares during the three-month ~~periods ended September 30, 2017~~ and ~~2016, respectively, and 404,487 and 2,513,288 common shares during the~~ nine-month periods ended September 30, ~~2017~~2022, respectively, and ~~2016,~~460,710 common shares and 461,792 common shares during the three-month and nine-month periods ended September 30, 2021, respectively, were not included in the computations of diluted earnings per common share because the effect on those periods would have been antidilutive.

As part of managing interest rate risk, the Company enters into interest rate swap agreements to modify the repricing characteristics of certain portions of the Company’s portfolios of earning assets and interest-bearing liabilities. The Company designates interest rate swap agreements utilized in the management of interest rate risk as either fair value hedges or cash flow hedges. Interest rate swap agreements are generally entered into with counterparties that meet established credit standards and most contain master netting, collateral and/or settlement provisions protecting the at-risk party. Based on adherence to the Company’s credit standards and the presence of the netting, collateral or settlement provisions, the Company believes that the credit risk inherent in these contracts was not ~~significant~~material as of September 30, ~~2017.~~2022.

The net effect of interest rate swap agreements was to decrease net interest income by $22 million and to increase net interest income by $7$50 million ~~and $9 million for~~during the three-month ~~periods ended September 30, 2017~~ and ~~2016, respectively, and $18 million and $30 million for the~~ nine-month periods ended September 30, ~~2017~~2022, respectively, and ~~2016,~~to increase net interest income by $67 million and $233 million during the three-month and nine-month periods ended September 30, 2021, respectively.

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

Derivative financial instruments ~~used for trading account purposes~~not designated as hedging instruments included interest rate contracts, foreign exchange and other option ~~contracts, foreign exchange forward~~ and ~~spot contracts, and financial futures.~~futures contracts. Interest rate contracts ~~entered into for trading account purposes~~not designated as hedging instruments had notional values of ~~$15.5~~$45.6 billion and ~~$21.6~~$32.6 billion at September 30, ~~2017~~2022 and December 31, ~~2016,~~2021, respectively. The notional amounts of foreign ~~currency~~exchange and other option and futures contracts ~~entered into for trading account purposes~~not designated as hedging instruments aggregated ~~$545 million~~$1.9 billion and ~~$471 million~~$1.1 billion at September 30, ~~2017~~2022 and December 31, ~~2016,~~2021, respectively.

The amount of ~~gain (loss)~~interest income recognized in the consolidated statement of income associated with derivatives designated as cash flow hedges was ~~not material~~a decrease of $22 million and an increase of $58 million for the three months ended September 30, 2022 and 2021, respectively, and an increase of $36 million and $207 million for the nine months ended September 30, ~~2017.~~2022 and 2021, respectively. As of September 30, 2022 the unrealized net loss recognized in other comprehensive income related to cash flow hedges was $377 million, of which losses of $16 million, $75 million and $286 million related to interest rate swap agreements maturing in 2022, 2023, and 2025, respectively.

The Company also has commitments to sell and commitments to originate residential and commercial real estate loans that are considered derivatives. The Company designates certain of the commitments to sell real estate loans as fair value hedges of real estate loans held for sale. The Company also utilizes commitments to sell real estate loans to offset the exposure to changes in the fair value of certain commitments to originate real estate loans for sale. As a result of these activities, net unrealized pre-tax gains related to hedged loans held for sale, commitments to originate loans for sale and commitments to sell loans were approximately ~~$27~~$12 million and ~~$28~~$24 million at September 30, ~~2017~~2022 and December 31, ~~2016,~~2021, respectively. Changes in unrealized gains and losses are included in mortgage banking revenues and, in general, are realized in subsequent periods as the related loans are sold and commitments satisfied.

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

The aggregate fair value of derivative financial instruments in a liability position ~~which are subject to enforceable master netting arrangements was $17 million~~ and ~~$34 million at September 30, 2017 and December 31, 2016, respectively. After consideration of such netting arrangements for purposes of posting collateral,~~ the net liability positions with counterparties ~~aggregated $17~~which are subject to master netting arrangements was $1 million and ~~$30~~$35 million at September 30, ~~2017~~2022 and December 31, ~~2016,~~2021, respectively. The Company was required to post collateral ~~relating to~~for those positions of ~~$18~~$33 million ~~and $27 million~~at December 31, 2021. No collateral was posted for those positions at September 30, ~~2017 and December 31, 2016, respectively.~~2022. Certain of the Company’s derivative financial instruments contain provisions that require the Company to maintain specific credit ratings from credit rating agencies to avoid higher collateral posting requirements. If the Company’s debt rating were to fall below specified ratings, the counterparties of the derivative financial instruments could demand immediate incremental collateralization on those instruments in a net liability position. The aggregate fair value of all derivative financial instruments with such credit risk-related contingent features in a net liability position on September 30, ~~2017 was less than $1 million, for which the Company~~2022 was not required to post collateral in the normal course of business. If the credit risk-related contingent features had been triggered on September 30, 2017, the Company would not have been required to post any collateral to counterparties.material.

The aggregate fair value of derivative financial instruments in an asset position and the net asset positions with counterparties which are subject to enforceable master netting arrangements was ~~$7 million and $15~~$316 million at September 30, ~~2017~~2022 and $7 million at December 31, 2016, respectively. After consideration of such netting arrangements for purposes of posting collateral, the net asset positions with counterparties aggregated $7 million and $11 million at September 30, 2017 and December 31, 2016, respectively.2021. Counterparties posted collateral relating to those positions of ~~$5 million and $9~~$308 million at September 30, ~~2017~~2022 and $6 million at December 31, ~~2016, respectively. Trading account interest~~2021. Interest rate swap agreements entered into with customers are subject to the Company’s credit risk standards and often contain collateral provisions.

In addition to the derivative contracts noted above, the Company clears certain derivative transactions through a clearinghouse, rather than directly with counterparties. Those transactions cleared through a clearinghouse require initial margin collateral and variation margin payments depending on the contracts being in a net asset or liability position. The amount of initial margin collateral posted by the Company was ~~$49~~$215 million and ~~$111~~$132 million at September 30, ~~2017~~2022 and December 31, ~~2016,~~2021, respectively. The fair value asset and liability amounts of derivative contracts ~~at September 30, 2017~~ have been reduced by variation margin payments treated as settlements ~~of $89 million and $45 million, respectively.~~as described herein. Variation margin on derivative contracts not treated as settlements continues to represent collateral posted or received by the Company. For those contracts, the net fair values of derivative financial instruments cleared through clearinghouses for which variation margin is required was a net asset position of $1 million and $63 million at September 30, 2017 and December 31, 2016, respectively. Collateral posted by the clearinghouses associated with that net asset position was $1 million and $81 million at September 30, 2017 and December 31, 2016, respectively.

~~12.~~13. Fair value measurements

GAAP permits an entity to choose to measure eligible financial instruments and other items at fair value. The Company has not made any fair value elections at September 30, ~~2017.~~2022.

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

•

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

•

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

•

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

When available, the Company attempts to use quoted market prices in active markets to determine fair value and classifies such items as Level 1 or Level 2. If quoted market prices in active markets are not available, fair value

~~- 32 -~~

~~NOTES TO FINANCIAL STATEMENTS, CONTINUED~~

~~12. Fair value measurements, continued~~

is often determined using model-based techniques incorporating various assumptions including interest rates, prepayment speeds and credit losses. Assets and liabilities valued using model-based techniques are classified as either Level 2 or Level 3, depending on the lowest level classification of an input that is considered significant to the overall valuation. The following is a description of the valuation methodologies used for the Company's assets and liabilities that are measured on a recurring basis at estimated fair value.

Trading account ~~assets and liabilities~~

Trading account assets and liabilities consist primarily of interest rate swap agreements and foreign exchange contracts with customers who require such services with offsetting positions with third parties to minimize the Company's risk with respect to such transactions. The Company generally determines the fair value of its derivative trading account assets and liabilities using externally developed pricing models based on market observable inputs and, therefore, classifies such valuations as Level 2. Mutual funds held in connection with deferred compensation and other arrangements have been classified as Level 1 valuations. Valuations of investments in ~~municipal and other bonds~~debt securities can generally be obtained through reference to quoted prices in less active markets for the same or similar securities or through model-based techniques in which all significant inputs are observable and, therefore, such valuations have been classified as Level 2.

Investment securities available for sale and equity securities

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

Real estate loans held for sale

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

- 37 -

NOTES TO FINANCIAL STATEMENTS, CONTINUED

13. Fair value measurements, continued

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

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

Interest rate swap agreements used for interest rate risk management

The Company utilizes interest rate swap agreements as part of the management of interest rate risk to modify the repricing characteristics of certain portions of its portfolios of earning assets and interest-bearing liabilities. The Company generally determines the fair value of its interest rate swap agreements using externally developed pricing

~~- 33 -~~

~~NOTES TO FINANCIAL STATEMENTS, CONTINUED~~

~~12. Fair value measurements, continued~~

models based on market observable inputs and, therefore, classifies such valuations as Level 2. The Company has considered counterparty credit risk in the valuation of its interest rate swap agreement assets and has considered its own credit risk in the valuation of its interest rate swap agreement liabilities.

Non-hedging derivatives

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

- 38 -

NOTES TO FINANCIAL STATEMENTS, CONTINUED

13. Fair value measurements, continued

The following tables present assets and liabilities at September 30, ~~2017~~2022 and December 31, ~~2016~~2021 measured at estimated fair value on a recurring basis:


	Fair Value Measurements		Level 1		Level 2		Level 3
	(In thousands)
September 30, 2022
Trading account	$	129,672	$	129,672	$	—	$	—
Investment securities available for sale:
U.S. Treasury and federal agencies		7,658,728		—		7,658,728		—
Mortgage-backed securities:
Government issued or guaranteed
Commercial		606,571		—		606,571		—
Residential		2,430,946		—		2,430,946		—
Other debt securities		174,101		—		174,101		—
		10,870,346		—		10,870,346		—
Equity securities		194,537		184,811		9,726		—
Real estate loans held for sale		342,720		—		342,720		—
Other assets (a)		491,867		—		491,024		843
Total assets	$	12,029,142	$	314,483	$	11,713,816	$	843
Other liabilities (a)		1,481,364		—		1,432,215		49,149
Total liabilities	$	1,481,364	$	—	$	1,432,215	$	49,149

December 31, 2021
Trading account	$	49,745	$	49,545	$	200	$	—
Investment securities available for sale:
U.S. Treasury and federal agencies		678,690		—		678,690		—
Mortgage-backed securities:
Government issued or guaranteed
Residential		3,155,312		—		3,155,312		—
Other debt securities		121,802		—		121,802		—
		3,955,804		—		3,955,804		—
Equity securities		77,640		68,850		8,790		—
Real estate loans held for sale		899,282		—		899,282		—
Other assets (a)		442,453		—		430,725		11,728
Total assets	$	5,424,924	$	118,395	$	5,294,801	$	11,728
Other liabilities (a)		93,843		—		88,555		5,288
Total liabilities	$	93,843	$	—	$	88,555	$	5,288

Fair Value Measurements

Level 1 (a)

Level 2 (a)

Level 3

(In thousands)

September 30, 2017

Trading account assets

$
170,516

47,927

122,589

—

Investment securities available for sale:

U.S. Treasury and federal agencies

2,007,117

—

2,007,117

—

Obligations of states and political subdivisions

2,678

—

2,678

—

Mortgage-backed securities:

Government issued or guaranteed

9,184,483

—

9,184,483

—

Privately issued

30

—

—

30

Other debt securities

128,530

—

128,530

—

Equity securities

93,986

50,917

43,069

—

11,416,824

50,917

11,365,877

30

Real estate loans held for sale

571,199

—

571,199

—

Other assets (b)

20,830

—

6,868

13,962

Total assets

$
12,179,369

98,844

12,066,533

13,992

Trading account liabilities

$
109,730

—

109,730

—

Other liabilities (b)

4,078

—

3,838

240

Total liabilities

$
113,808

—

113,568

240

December 31, 2016

Trading account assets

$
323,867

46,135

277,732

—

Investment securities available for sale:

U.S. Treasury and federal agencies

1,902,544

—

1,902,544

—

Obligations of states and political subdivisions

3,641

—

3,641

—

Mortgage-backed securities:

Government issued or guaranteed

10,954,861

—

10,954,861

—

Privately issued

44

—

—

44

Other debt securities

118,516

—

118,516

—

Equity securities

352,466

301,711

50,755

—

13,332,072

301,711

13,030,317

44

Real estate loans held for sale

1,056,180

—

1,056,180

—

Other assets (b)

58,351

—

50,291

8,060

Total assets

$
14,770,470

347,846

14,414,520

8,104

Trading account liabilities

$
174,376

—

174,376

—

Other liabilities (b)

2,481

—

1,746

735

Total liabilities

$
176,857

—

176,122

735

(a)

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

~~(a)~~

~~There were no significant transfers between Level 1 and Level 2 of the fair value hierarchy during the nine months ended September 30, 2017 and the year ended December 31, 2016.~~

~~(b)~~

Comprised predominantly of interest rate swap agreements used for interest rate risk management (Level 2), commitments to sell real estate loans (Level 2) and commitments to originate real estate loans to be held for sale (Level 3).

- 3439 -

NOTES TO FINANCIAL STATEMENTS, CONTINUED

~~12.~~13. Fair value measurements, continued

The changes in Level 3 assets and liabilities measured at estimated fair value on a recurring basis during the three months ended September 30, ~~2017~~2022 and 2021 were as follows:


	Other Assets and Other Liabilities
2022	(In thousands)

Balance — June 30, 2022	$	(24,181	)
Total gains (losses) realized/unrealized:
Included in earnings		(9,321	)	(a)
Transfers out of Level 3		(14,804	)	(b)
Balance — September 30, 2022	$	(48,306	)
Changes in unrealized gains included in earnings related to assets still held at September 30, 2022	$	(17,160	)	(a)

2021

Balance — June 30, 2021	$	35,666
Total gains realized/unrealized:
Included in earnings		44,152		(a)
Transfers out of Level 3		(59,673	)	(b)
Balance — September 30, 2021	$	20,145
Changes in unrealized gains included in earnings related to assets still held at September 30, 2021	$	18,196		(a)

Investment Securities
Available for Sale

Privately Issued
Mortgage-Backed
Securities

Other Assets and Other Liabilities

(In thousands)

Balance — June 30, 2017

$
35

12,425

Total gains (losses) realized/unrealized:

Included in earnings

—

22,313

(b)
Settlements

(5
)

—

Transfers in and/or out of Level 3 (a)

—

(21,016
)
(d)
Balance — September 30, 2017

$
30

13,722

Changes in unrealized gains included in earnings
related to assets still held at September 30, 2017

$
—

12,659

(b)
(a)

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

~~The changes in~~

(b)

Transfers out of Level 3 ~~assets and liabilities measured at estimated fair value on a recurring basis during the three months ended September 30, 2016 were as follows:~~

Investment Securities Available for Sale

Privately Issued Mortgage-Backed Securities

Collateralized
Debt Obligations

Other Assets and Other Liabilities

(In thousands)

Balance — June 30, 2016

$
57

43,305

21,383

Total gains (losses) realized/unrealized:

Included in earnings

—

28,475

45,534

(b)
Included in other comprehensive income

—

(15,050
)
(c)

—

Sales

—

(56,730
)

—

Settlements

(6
)

—

—

Transfers in and/or out of Level 3 (a)

—

—

(37,117
)
(d)
Balance — September 30, 2016

$
51

—

29,800

Changes in unrealized gains included in earnings
related to assets still held at September 30, 2016

$
—

—

27,663

(b)
consist of interest rate locks transferred to closed loans.

- 3540 -

NOTES TO FINANCIAL STATEMENTS, CONTINUED

~~12.~~13. Fair value measurements, continued

The changes in Level 3 assets and liabilities measured at estimated fair value on a recurring basis during the nine months ended September 30, ~~2017~~2022 and 2021 were as follows:

Investment Securities
Available for Sale

Privately Issued
Mortgage-Backed
Securities

Other Assets and Other Liabilities

(In thousands)

Balance — January 1, 2017

$
44

7,325

Total gains (losses) realized/unrealized:

Included in earnings

—

65,824

(b)
Settlements

(14
)

—

Transfers in and/or out of Level 3 (a)

—

(59,427
)
(d)
Balance — September 30, 2017

$
30

$
13,722

Changes in unrealized gains included in earnings
related to assets still held at September 30, 2017

$
—

$
13,684

(b)


	Investment Securities Available for Sale
	Privately Issued Mortgage-Backed Securities		Other Assets and Other Liabilities
2022	(In thousands)

Balance — January 1, 2022	$	—	$	6,440
Total gains (losses) realized/unrealized:
Included in earnings		—		(34,630	)	(a)
Transfers out of Level 3		—		(20,116	)	(b)
Balance — September 30, 2022	$	—	$	(48,306	)
Changes in unrealized gains included in earnings related to assets still held at September 30, 2022	$	—	$	(48,108	)	(a)

~~The changes~~


2021

Balance — January 1, 2021	$	16		$	43,234
Total gains realized/unrealized:
Included in earnings		—			102,489		(a)
Settlements		(16	)		—
Transfers out of Level 3		—			(125,578	)	(b)
Balance — September 30, 2021	$	—		$	20,145
Changes in unrealized gains included in earnings related to assets still held at September 30, 2021	$	—		$	21,722		(a)

(a)

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

(b)

Transfers out of Level 3 ~~assets and liabilities measured at estimated fair value on a recurring basis during the nine months ended September 30, 2016 were as follows:~~consist of interest rate locks transferred to closed loans.

Investment Securities Available for Sale

Privately Issued Mortgage-Backed Securities

Collateralized Debt Obligations

Other Assets and Other Liabilities

(In thousands)

Balance — January 1, 2016

$
74

47,393

9,879

Total gains (losses) realized/unrealized:

Included in earnings

—

28,475

104,862

(b)
Included in other comprehensive income

—

(18,268
)
(c)

—

Sales

—

(56,730
)

—

Settlements

(23
)

(870
)

—

Transfers in and/or out of Level 3 (a)

—

—

(84,941
)
(d)
Balance — September 30, 2016

$
51

—

29,800

Changes in unrealized gains included in earnings
related to assets still held at
September 30, 2016

$
—

—

29,288

(b)

~~(a)~~

~~The Company’s policy for transfers between fair value levels is to recognize the transfer as of the actual date of the event or change in circumstances that caused the transfer.~~

~~(b)~~

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

~~(c)~~

Reported as net unrealized losses on investment securities in the consolidated statement of comprehensive income. The Company sold its collateralized debt obligations during the third and fourth quarters of 2016.

~~(d)~~

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

- 3641 -

NOTES TO FINANCIAL STATEMENTS, CONTINUED

~~12.~~13. Fair value measurements, continued

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

Loans

Loans are generally not recorded at fair value on a recurring basis. Periodically, the Company records nonrecurring adjustments to the carrying value of loans based on fair value measurements for partial charge-offs of the ~~uncollectible~~uncollectable portions of those loans. Nonrecurring adjustments also include certain impairment amounts for collateral-dependent loans when establishing the allowance for credit losses. Such amounts are generally based on the fair value of the underlying collateral supporting the loan and, as a result, the carrying value of the loan less the calculated valuation amount does not necessarily represent the fair value of the loan. Real estate collateral is typically valued using appraisals or other indications of value based on recent comparable sales of similar properties or assumptions generally observable in the marketplace and the related nonrecurring fair value measurement adjustments have ~~generally~~ been classified as Level 2, unless significant adjustments have been made to the valuation that are not readily observable by market participants. Non-real estate collateral supporting commercial loans generally consists of business assets such as receivables, inventory and equipment. Fair value estimations are typically determined by discounting recorded values of those assets to reflect estimated net realizable value considering specific borrower facts and circumstances and the experience of credit personnel in their dealings with similar borrower collateral liquidations. Such discounts were ~~generally~~ in the range of ~~15%~~15% to ~~90%~~90% with a weighted-average of 37% at September 30, ~~2017.~~2022. As these discounts are not readily observable and are considered significant, the valuations have been classified as Level 3. Automobile collateral is typically valued by reference to independent pricing sources based on recent sales transactions of similar vehicles and, accordingly, the related nonrecurring fair value measurement adjustments have been classified as Level 2. Collateral values for other consumer installment loans are generally estimated based on historical recovery rates for similar types of ~~loans.~~loans which at September 30, 2022 was 66%. As these recovery rates are not readily observable by market participants, such valuation adjustments have been classified as Level 3. Loans subject to nonrecurring fair value measurement were ~~$184~~$706 million at September 30, ~~2017~~2022 ($~~105~~439 million and ~~$79~~$267 million of which were classified as Level 2 and Level 3, respectively), ~~$293~~$574 million at December 31, ~~2016~~2021 ($~~153~~340 million and ~~$140~~$234 million of which were classified as Level 2 and Level 3, respectively) and ~~$249~~$591 million at September 30, ~~2016~~2021 ($~~144~~330 million and ~~$105~~$261 million of which were classified as Level 2 and Level 3, respectively). Changes in fair value recognized for partial charge-offs of loans and loan impairment reserves on loans held by the Company on September 30, ~~2017~~2022 were decreases of ~~$16~~$38 million and ~~$55~~$128 million for the three-month and nine-month periods ended September 30, ~~2017,~~2022, respectively. Changes in fair value recognized for partial charge-offs of loans and loan impairment reserves on loans held by the Company on September 30, ~~2016~~2021 were decreases of ~~$20~~$35 million and ~~$42~~$125 million for the three-month and nine-month periods ended September 30, ~~2016,~~2021, respectively.

- 42 -

NOTES TO FINANCIAL STATEMENTS, CONTINUED

13. Fair value measurements, continued

Assets taken in foreclosure of defaulted loans

Assets taken in foreclosure of defaulted loans are primarily comprised of commercial and residential real property and are generally measured at the lower of cost or fair value less costs to sell. The fair value of the real property is generally determined using appraisals or other indications of value based on recent comparable sales of similar properties or assumptions generally observable in the marketplace and the related nonrecurring fair value measurement adjustments have generally been classified as Level 2. Assets taken ininto foreclosure of defaulted loans subject to nonrecurring fair value measurement were ~~$36 million and $53 million~~not material at September 30, ~~2017~~2022 and ~~2016, respectively.~~2021. Changes in fair value recognized for ~~those~~ foreclosed assets held by the Company were not material during the three-month and nine-month periods ended September 30, ~~2017~~2022 and ~~2016.~~2021.

Capitalized servicing rights

Capitalized servicing rights are initially measured at fair value in the Company’s consolidated balance sheet. The Company utilizes the amortization method to subsequently measure its capitalized servicing assets. In accordance with GAAP, the Company must record impairment charges, on a nonrecurring basis, when the carrying value of certain strata exceed their estimated fair value. To estimate the fair value of servicing rights, the Company considers market prices for similar assets, if available, and the present value of expected future cash flows associated with the servicing rights calculated using assumptions that market participants would use in estimating future servicing income and expense. Such assumptions include estimates of the cost of servicing loans, loan default rates, an appropriate discount rate, and prepayment speeds. For purposes of evaluating and measuring impairment of capitalized servicing rights, the Company stratifies such assets based on the predominant risk characteristics of the underlying financial instruments that are expected to have the most impact on projected prepayments, cost of servicing and other factors affecting future cash flows associated with the servicing rights. Such factors may include financial asset or loan type, note rate and term. The amount of impairment recognized is the amount by which the carrying value of the capitalized servicing rights for a stratum exceed estimated fair value. Impairment is recognized through a valuation allowance. The determination of fair value of capitalized servicing rights is considered a Level 3 valuation. Capitalized servicing rights related to residential mortgage loans of $138 million at December 31, 2021 required a valuation allowance of $24 million. Significant unobservable inputs used in this Level 3 valuation included a weighted-average prepayment speed of 14.64% and a weighted-average option-adjusted spread of 900 basis points at December 31, 2021. Changes in fair value recognized for impairment of capitalized servicing rights were decreases in the valuation allowance of $10 million and $24 million, respectively, for the three-month and nine-month periods ended September 30, 2022 and $1 million during the nine-month period ended September 30, 2021.

~~- 37 -~~

~~NOTES TO FINANCIAL STATEMENTS, CONTINUED~~

~~12. Fair value measurements, continued~~

Significant unobservable inputs to Level 3 measurements

The following ~~tables present~~table presents quantitative information about significant unobservable inputs used in the fair value measurements for certain Level 3 assets and liabilities at September 30, ~~2017~~2022 and December 31, ~~2016:~~2021:


	Fair Value			Valuation Technique	Unobservable Inputs/Assumptions	Range (Weighted- Average)
	(In thousands)
September 30, 2022
Recurring fair value measurements
Net other assets (liabilities) (a)	$	(48,306	)	Discounted cash flow	Commitment expirations	0% - 90% (4%)

December 31, 2021
Recurring fair value measurements
Net other assets (liabilities) (a)	$	6,440		Discounted cash flow	Commitment expirations	0% - 80% (10%)

Fair Value

Valuation
Technique

Unobservable
Inputs/Assumptions

Range
(Weighted-
Average)

(In thousands)

September 30, 2017

Recurring fair value measurements

Privately issued mortgage-backed
securities

$
30

Two independent pricing quotes

—

��
—

Net other assets (liabilities) (a)

13,722

Discounted cash flow

Commitment expirations

0%-80% (28%)

December 31, 2016

Recurring fair value measurements

Privately issued mortgage-backed
securities

$
44

Two independent pricing quotes

—

—

Net other assets (liabilities) (a)

7,325

Discounted cash flow

Commitment expirations

0%-77% (30%)

(a)

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

- 43 -

NOTES TO FINANCIAL STATEMENTS, CONTINUED

~~(a)~~

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

13. Fair value measurements, continued

Sensitivity of fair value measurements to changes in unobservable inputs

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

~~- 38 -~~

~~NOTES TO FINANCIAL STATEMENTS, CONTINUED~~

~~12. Fair value measurements, continued~~

Disclosures of fair value of financial instruments

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


	September 30, 2017														September 30, 2022
	Carrying Amount			Estimated Fair Value			Level 1		Level 2			Level 3			Carrying Amount			Estimated Fair Value			Level 1		Level 2			Level 3
	(In thousands)														(In thousands)
Financial assets:
Cash and cash equivalents	$	1,368,252			1,368,252			1,290,532		77,720			—		$	2,255,810			2,255,810			2,115,730		140,080			—
Interest-bearing deposits at banks		6,306,484			6,306,484			—		6,306,484			—			25,391,528			25,391,528			—		25,391,528			—
Trading account assets		170,516			170,516			47,927		122,589			—
Trading account																129,672			129,672			129,672		—			—
Investment securities		15,073,926			15,079,756			50,917		14,916,360			112,479			24,603,765			23,259,558			184,811		23,021,349			53,398
Loans and leases:
Commercial loans and leases		21,743,251			21,409,984			—		—			21,409,984			38,807,949			38,230,478			—		—			38,230,478
Commercial real estate loans		32,914,288			32,507,319			—		223,659			32,283,660			46,138,665			44,324,720			—		300,373			44,024,347
Residential real estate loans		20,265,162			20,369,392			—		4,557,929			15,811,463			23,074,280			21,173,522			—		7,262,522			13,911,000
Consumer loans		13,002,433			12,935,924			—		—			12,935,924			20,204,693			19,844,173			—		—			19,844,173
Allowance for credit losses		(1,013,326	)		—			—		—			—			(1,875,591	)		—			—		—			—
Loans and leases, net		86,911,808			87,222,619			—		4,781,588			82,441,031			126,349,996			123,572,893			—		7,562,895			116,009,998
Accrued interest receivable		325,982			325,982			—		325,982			—			539,270			539,270			—		539,270			—
Financial liabilities:
Noninterest-bearing deposits	$	(33,111,246	)		(33,111,246	)		—		(33,111,246	)		—		$	(73,023,271	)		(73,023,271	)		—		(73,023,271	)		—
Savings and interest-checking deposits		(52,936,615	)		(52,936,615	)		—		(52,936,615	)		—			(86,015,700	)		(86,015,700	)		—		(86,015,700	)		—
Time deposits		(7,233,518	)		(7,294,182	)		—		(7,294,182	)		—			(4,806,417	)		(4,797,112	)		—		(4,797,112	)		—
Deposits at Cayman Islands office		(232,014	)		(232,014	)		—		(232,014	)		—
Short-term borrowings		(200,768	)		(200,768	)		—		(200,768	)		—			(917,806	)		(917,806	)		—		(917,806	)		—
Long-term borrowings		(8,577,645	)		(8,630,195	)		—		(8,630,195	)		—			(3,459,336	)		(3,431,790	)		—		(3,431,790	)		—
Accrued interest payable		(69,290	)		(69,290	)		—		(69,290	)		—			(38,502	)		(38,502	)		—		(38,502	)		—
Trading account liabilities		(109,730	)		(109,730	)		—		(109,730	)		—
Other financial instruments:
Commitments to originate real estate loans for sale	$	13,722			13,722			—		—			13,722		$	(48,306	)		(48,306	)		—		—			(48,306	)
Commitments to sell real estate loans		2,333			2,333			—		2,333			—			74,527			74,527			—		74,527			—
Other credit-related commitments		(119,938	)		(119,938	)		—		—			(119,938	)		(135,000	)		(135,000	)		—		—			(135,000	)
Interest rate swap agreements used for interest rate risk management		697			697			—		697			—			(11,495	)		(11,495	)		—		(11,495	)		—
Interest rate and foreign exchange contracts not designated as hedging instruments																(1,004,223	)		(1,004,223	)		—		(1,004,223	)		—

- 3944 -

NOTES TO FINANCIAL STATEMENTS, CONTINUED

~~12.~~13. Fair value measurements, continued


	December 31, 2016														December 31, 2021
	Carrying Amount			Estimated Fair Value			Level 1		Level 2			Level 3			Carrying Amount			Estimated Fair Value			Level 1		Level 2			Level 3
				(In thousands)														(In thousands)
Financial assets:
Cash and cash equivalents	$	1,320,549			1,320,549			1,249,654		70,895		—			$	1,337,577			1,337,577			1,205,269		132,308			—
Interest-bearing deposits at banks		5,000,638			5,000,638			—		5,000,638		—				41,872,304			41,872,304			—		41,872,304			—
Trading account assets		323,867			323,867			46,135		277,732		—
Trading account																49,745			49,745			49,545		200			—
Investment securities		16,250,468			16,244,412			301,711		15,821,176			121,525			7,155,860			7,192,476			68,850		7,066,293			57,333
Loans and leases:
Commercial loans and leases		22,610,047			22,239,428		—		—				22,239,428			23,473,324			23,285,224			—		—			23,285,224
Commercial real estate loans		33,506,394			33,129,428		—			642,590			32,486,838			35,389,730			34,730,191			—		425,010			34,305,181
Residential real estate loans		22,590,912			22,638,167		—			4,912,488			17,725,679			16,074,445			16,160,799			—		4,524,018			11,636,781
Consumer loans		12,146,063			12,061,590		—			—			12,061,590			17,974,953			18,121,363			—		—			18,121,363
Allowance for credit losses		(988,997	)		—		—			—			—			(1,469,226	)		—			—		—			—
Loans and leases, net		89,864,419			90,068,613		—			5,555,078			84,513,535			91,443,226			92,297,577			—		4,949,028			87,348,549
Accrued interest receivable		308,805			308,805		—			308,805		—				335,162			335,162			—		335,162			—
Financial liabilities:
Noninterest-bearing deposits	$	(32,813,896	)		(32,813,896	)	—			(32,813,896	)	—			$	(60,131,480	)		(60,131,480	)		—		(60,131,480	)		—
Savings and interest-checking deposits		(52,346,207	)		(52,346,207	)	—			(52,346,207	)	—				(68,603,966	)		(68,603,966	)		—		(68,603,966	)		—
Time deposits		(10,131,846	)		(10,222,585	)	—			(10,222,585	)	—				(2,807,963	)		(2,810,143	)		—		(2,810,143	)		—
Deposits at Cayman Islands office		(201,927	)		(201,927	)	—			(201,927	)	—
Short-term borrowings		(163,442	)		(163,442	)	—			(163,442	)	—				(47,046	)		(47,046	)		—		(47,046	)		—
Long-term borrowings		(9,493,835	)		(9,473,844	)	—			(9,473,844	)	—				(3,485,369	)		(3,562,223	)		—		(3,562,223	)		—
Accrued interest payable		(75,172	)		(75,172	)	—			(75,172	)	—				(40,866	)		(40,866	)		—		(40,866	)		—
Trading account liabilities		(174,376	)		(174,376	)	—			(174,376	)	—
Other financial instruments:
Commitments to originate real estate loans for sale	$	7,325			7,325		—			—			7,325		$	6,440			6,440			—		—			6,440
Commitments to sell real estate loans		36,653			36,653		—			36,653		—				7,525			7,525			—		7,525			—
Other credit-related commitments		(136,295	)		(136,295	)	—			—			(136,295	)		(123,032	)		(123,032	)		—		—			(123,032	)
Interest rate swap agreements used for interest rate risk management		11,892			11,892		—			11,892		—				(207	)		(207	)		—		(207	)		—
Interest rate and foreign exchange contracts not designated as hedging instruments																334,852			334,852			—		334,852			—

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

~~Cash and cash equivalents, interest-bearing deposits at banks, deposits at Cayman Islands office, short-term borrowings, accrued interest receivable and accrued interest payable~~

Due to the nature of cash and cash equivalents and the near maturity of interest-bearing deposits at banks, deposits at Cayman Islands office, short-term borrowings, accrued interest receivable and accrued interest payable, the Company estimated that the carrying amount of such instruments approximated estimated fair value.

~~- 40 -~~

~~NOTES TO FINANCIAL STATEMENTS, CONTINUED~~

~~12. Fair value measurements, continued~~

~~Investment securities~~

Estimated fair values of investments in readily marketable securities were generally based on quoted market prices. Investment securities that were not readily marketable were assigned amounts based on estimates provided by outside parties or modeling techniques that relied upon discounted calculations of projected cash flows or, in the case of other investment securities, which include capital stock of the Federal Reserve Bank of New York and the Federal Home Loan Bank of New York, at an amount equal to the carrying amount.

~~Loans and leases~~

In general, discount rates used to calculate values for loan products were based on the Company’s pricing at the respective period end. A higher discount rate was assumed with respect to estimated cash flows associated with nonaccrual loans. Projected loan cash flows were adjusted for estimated credit losses. However, such estimates made by the Company may not be indicative of assumptions and adjustments that a purchaser of the Company’s loans and leases would seek.

~~Deposits~~

Pursuant to GAAP, the estimated fair value ascribed to noninterest-bearing deposits, savings deposits and interest-checking deposits must be established at carrying value because of the customers’ ability to withdraw funds immediately. Time deposit accounts are required to be revalued based upon prevailing market interest rates for similar maturity instruments. As a result, amounts assigned to time deposits were based on discounted cash flow calculations using prevailing market interest rates based on the Company’s pricing at the respective date for deposits with comparable remaining terms to maturity.

The Company believes that deposit accounts have a value greater than that prescribed by GAAP. The Company feels, however, that the value associated with these deposits is greatly influenced by characteristics of the buyer, such as the ability to reduce the costs of servicing the deposits and deposit attrition which often occurs following an acquisition.

~~Long-term borrowings~~

The amounts assigned to long-term borrowings were based on quoted market prices, when available, or were based on discounted cash flow calculations using prevailing market interest rates for borrowings of similar terms and credit risk.

~~Other commitments and contingencies~~

As described in note 13, in the normal course of business, various commitments and contingent liabilities are outstanding, such as loan commitments, credit guarantees and letters of credit. The Company’s pricing of such financial instruments is based largely on credit quality and relationship, probability of funding and other requirements. Loan commitments often have fixed expiration dates and contain termination and other clauses which provide for relief from funding in the event of significant deterioration in the credit quality of the customer. The rates and terms of the Company’s loan commitments, credit guarantees and letters of credit are competitive with other financial institutions operating in markets served by the Company. The Company believes that the carrying amounts, which are included in other liabilities, are reasonable estimates of the fair value of these financial instruments.

~~- 41 -~~

~~NOTES TO FINANCIAL STATEMENTS, CONTINUED~~

~~12. Fair value measurements, continued~~

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

- 45 -

NOTES TO FINANCIAL STATEMENTS, CONTINUED

~~13.~~14. Commitments and contingencies

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


	September 30,		December 31,
	2022		2021
	(In thousands)
Commitments to extend credit
Home equity lines of credit	$	8,317,141	$	5,693,045
Commercial real estate loans to be sold		401,369		324,943
Other commercial real estate		5,063,155		4,998,631
Residential real estate loans to be sold		57,155		233,257
Other residential real estate		889,013		924,211
Commercial and other		32,089,753		22,145,057
Standby letters of credit		2,393,048		2,151,595
Commercial letters of credit		28,926		31,981
Financial guarantees and indemnification contracts		3,893,455		4,211,797
Commitments to sell real estate loans		783,405		1,367,523

September 30,

December 31,

2017

2016

(In thousands)

Commitments to extend credit

Home equity lines of credit

$
5,492,892

5,499,609

Commercial real estate loans to be sold

170,786

70,100

Other commercial real estate

5,749,428

6,451,709

Residential real estate loans to be sold

482,650

478,950

Other residential real estate

202,702

232,721

Commercial and other

12,677,838

12,298,473

Standby letters of credit

2,657,352

2,987,091

Commercial letters of credit

42,684

44,723

Financial guarantees and indemnification contracts

3,385,498

3,043,580

Commitments to sell real estate loans

1,052,472

1,489,237

Commitments to extend credit are agreements to lend to customers, generally having fixed expiration dates or other termination clauses that may require payment of a fee. In addition to the amounts in the preceding table, the Company had discretionary funding commitments to commercial customers of $15.2 billion and $10.8 billion at September 30, 2022 and December 31, 2021, respectively, that the Company had the unconditional right to cancel prior to funding. Standby and commercial letters of credit are conditional commitments issued to guarantee the performance of a customer to a third party. Standby letters of credit generally are contingent upon the failure of the customer to perform according to the terms of the underlying contract with the third party, whereas commercial letters of credit are issued to facilitate commerce and typically result in the commitment being funded when the underlying transaction is consummated between the customer and a third party. The credit risk associated with commitments to extend credit and standby and commercial letters of credit is essentially the same as that involved with extending loans to customers and is subject to normal credit policies. Collateral may be obtained based on management's assessment of the customer's creditworthiness.

Financial guarantees and indemnification contracts are ~~oftentimes similar to standby letters~~predominantly comprised of ~~credit and include mandatory purchase agreements issued to ensure that customer obligations are fulfilled,~~ recourse obligations associated with sold loans and other guarantees ~~of customer performance or compliance with designated rules~~ and ~~regulations.~~commitments. Included in financial guarantees and indemnification contracts are loan principal amounts sold with recourse in conjunction with the Company's involvement in the Fannie Mae Delegated Underwriting and Servicing program. The Company's maximum credit risk for recourse associated with loans sold under this program totaled approximately ~~$3.2 billion and $2.8~~$3.7 billion at September 30, ~~2017~~2022 and $4.0 billion at December 31, ~~2016, respectively.~~2021. There have been no material losses incurred as a result of those credit recourse arrangements.

~~- 42 -~~

~~NOTES TO FINANCIAL STATEMENTS, CONTINUED~~

~~13. Commitments and contingencies, continued~~

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

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

~~The Company also has commitments under long-term operating leases.~~- 46 -

NOTES TO FINANCIAL STATEMENTS, CONTINUED

14. Commitments and contingencies, continued

The Company is contractually obligated to repurchase previously sold residential real estate loans that do not ultimately meet investor sale criteria related to underwriting procedures or loan documentation. When required to do so, the Company may reimburse loan purchasers for losses incurred or may repurchase certain loans. The Company reduces residential mortgage banking revenues by an estimate for losses related to its obligations to loan purchasers. The amount of those charges is based on the volume of loans sold, the level of reimbursement requests received from loan purchasers and estimates of losses that may be associated with previously sold loans. At September 30, ~~2017~~2022, the Company believes that its obligation to loan purchasers was not material to the Company’s consolidated financial position.

M&T and its subsidiaries are subject in the normal course of business to various pending and threatened legal proceedings and ~~other~~ matters in which claims for monetary damages are asserted. On an on-going basis management, after consultation with legal counsel, assesses the Company’s liabilities and contingencies in connection with such proceedings. For those matters where it is probable that the Company will incur losses and the amounts of the losses can be reasonably estimated, the Company records an expense and corresponding liability in its consolidated financial statements. To the extent ~~the~~ pending or threatened litigation could result in exposure in excess of that liability, the amount of such excess is not currently estimable. Although not considered probable, the range of reasonably possible losses for such matters in the aggregate, beyond the existing recorded liability, was between $0$0 and ~~$50 million.~~$25 million as of September 30, 2022. Although the Company does not believe that the outcome of pending ~~litigations~~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.

~~14.~~15. Segment information

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

The financial information of the Company's segments was compiled utilizing the accounting policies described in note 2223 of Notes to Financial Statements in the ~~2016~~2021 Annual Report. The management accounting policies and processes utilized in compiling segment financial information are highly subjective and, unlike financial accounting, are not based on authoritative guidance similar to GAAP. As a result, the financial information of the reported segments is not necessarily comparable with similar information reported by other financial institutions. Furthermore, changes in management structure or allocation methodologies and procedures may result in changes in reported segment financial data. ~~As disclosed in the 2016 Annual Report, during 2016 the Company revised its funds transfer pricing allocation related to borrowings. Additionally, during the second quarter of 2017, the~~ ~~Company revised its funds transfer pricing allocation related to certain deposit categories. As a result, prior period~~

~~- 43 -~~

~~NOTES TO FINANCIAL STATEMENTS, CONTINUED~~

~~14. Segment information, continued~~

~~financial information has been reclassified to provide segment information on a comparable basis, as noted in the following tables.~~

Three Months Ended September 30, 2016

Total Revenues as Previously Reported

Impact of Changes

Total Revenues as Reclassified

Net Income (Loss) as Previously Reported

Impact of Changes

Net Income (Loss) as Reclassified

(In thousands)

Business Banking

$
116,513

4,388

120,901

$
21,422

2,602

24,024

Commercial Banking

268,683

(155
)

268,528

102,796

(92
)

102,704

Commercial Real Estate

205,562

—

205,562

90,065

—

90,065

Discretionary Portfolio

114,391

(8,806
)

105,585

50,773

(5,222
)

45,551

Residential Mortgage Banking

108,576

(11,901
)

96,675

22,924

(7,059
)

15,865

Retail Banking

353,016

8,848

361,864

69,506

5,247

74,753

All Other

182,949

7,626

190,575

(7,502
)

4,524

(2,978
)
Total

$
1,349,690

—

1,349,690

$
349,984

—

349,984

Nine Months Ended September 30, 2016

Total Revenues as Previously Reported

Impact of Changes

Total Revenues as Reclassified

Net Income (Loss) as Previously Reported

Impact of Changes

Net Income (Loss) as Reclassified

(In thousands)

Business Banking

$
344,562

13,022

357,584

$
69,617

7,723

77,340

Commercial Banking

787,781

(423
)

787,358

309,515

(251
)

309,264

Commercial Real Estate

575,117

—

575,117

254,682

—

254,682

Discretionary Portfolio

324,195

(28,575
)

295,620

151,522

(16,947
)

134,575

Residential Mortgage Banking

309,393

(28,539
)

280,854

59,981

(16,926
)

43,055

Retail Banking

1,037,727

25,196

1,062,923

204,291

14,943

219,234

All Other

575,885

19,319

595,204

(65,065
)

11,458

(53,607
)
Total

$
3,954,660

—

3,954,660

$
984,543

—

984,543

As also described in note 22 in the 2016 Annual Report, neither goodwill nor core deposit and other intangible assets (and the amortization charges associated with such assets) resulting from acquisitions of financial institutions have been allocated to the Company's reportable segments, but are included in the “All Other” category. The Company does, however, assign such intangible assets to business units for purposes of testing for impairment.

~~- 44 -~~

~~NOTES TO FINANCIAL STATEMENTS, CONTINUED~~

~~14. Segment information, continued~~

Information about the Company's segments ~~is presented in the following table:~~follows.

Three Months Ended September 30

2017

2016

Total
Revenues(a)

Inter-
segment
Revenues

Net
Income
(Loss)

Total
Revenues(a)

Inter-
segment
Revenues

Net
Income
(Loss)

(In thousands)

Business Banking

$
130,501

919

31,408

$
120,901

1,086

24,024

Commercial Banking

267,822

840

109,797

268,528

950

102,704

Commercial Real Estate

212,014

401

97,295

205,562

463

90,065

Discretionary Portfolio

65,808

(12,346
)

31,515

105,585

(14,795
)

45,551

Residential Mortgage Banking

90,018

18,866

13,546

96,675

22,051

15,865

Retail Banking

392,542

2,668

96,329

361,864

3,052

74,753

All Other

257,858

(11,348
)

(23,967
)

190,575

(12,807
)

(2,978
)
Total

$
1,416,563

—

355,923

$
1,349,690

—

349,984

Nine Months Ended September 30

2017

2016

Total
Revenues(a)

Inter-
segment
Revenues

Net
Income
(Loss)

Total
Revenues(a)

Inter- segment Revenues

Net
Income
(Loss)

(In thousands)

Business Banking

$
375,816

2,836

85,146

$
357,584

3,274

77,340

Commercial Banking

818,846

2,603

328,211

787,358

2,917

309,264

Commercial Real Estate

604,437

1,165

269,113

575,117

1,299

254,682

Discretionary Portfolio

216,798

(37,670
)

95,200

295,620

(43,726
)

134,575

Residential Mortgage Banking

264,120

55,221

37,206

280,854

62,955

43,055

Retail Banking

1,144,964

8,760

282,614

1,062,923

9,198

219,234

All Other

751,703

(32,915
)

(11,587
)

595,204

(35,917
)

(53,607
)
Total

$
4,176,684

—

1,085,903

$
3,954,660

—

984,543

- 4547 -

NOTES TO FINANCIAL STATEMENTS, CONTINUED

~~14.~~15. Segment information, continued


	Three Months Ended September 30
	2022								2021
	Total Revenues(a)		Inter- segment Revenues			Net Income (Loss)			Total Revenues(a)		Inter- segment Revenues			Net Income (Loss)
	(In thousands)

Business Banking	$	241,629	$	663		$	94,094		$	181,873	$	694		$	72,017
Commercial Banking		510,549		802			214,063			295,209		1,009			144,367
Commercial Real Estate		234,479		249			94,937			228,317		227			84,663
Discretionary Portfolio		36,622		(23,044	)		11,813			112,529		(14,448	)		74,666
Residential Mortgage Banking		95,091		35,647			(3,283	)		159,213		25,150			46,077
Retail Banking		650,229		(5	)		181,639			357,335		(53	)		88,004
All Other		473,171		(14,312	)		53,333			201,900		(12,579	)		(14,334	)
Total	$	2,241,770	$	—		$	646,596		$	1,536,376	$	—		$	495,460


	Nine Months Ended September 30
	2022								2021
	Total Revenues(a)		Inter- segment Revenues			Net Income (Loss)			Total Revenues(a)		Inter- segment Revenues			Net Income (Loss)
	(In thousands)

Business Banking	$	586,605	$	2,060		$	205,741		$	482,874	$	2,157		$	159,895
Commercial Banking (b)		1,239,300		2,605			521,749			865,780		2,830			378,040
Commercial Real Estate		676,176		687			314,284			629,719		679			242,625
Discretionary Portfolio		190,761		(74,952	)		103,283			365,380		(34,554	)		243,744
Residential Mortgage Banking		346,409		110,986			35,028			459,655		70,208			125,791
Retail Banking (b)		1,523,992		(12	)		379,688			1,055,240		500			262,562
All Other (b)		1,106,405		(41,374	)		(333,481	)		620,694		(41,820	)		(11,879	)
Total	$	5,669,648	$	—		$	1,226,292		$	4,479,342	$	—		$	1,400,778

(a)

Total revenues are comprised of net interest income and other income. Net interest income is the difference between taxable-equivalent interest earned on assets and interest paid on liabilities owed by a segment and a funding charge (credit) based on the Company's internal funds transfer and allocation methodology. Segments are charged a cost to fund any assets (e.g. loans) and are paid a funding credit for any funds provided (e.g. deposits). The taxable-equivalent adjustment aggregated $11,827,000 and $3,703,000 for the three-month periods ended September 30, 2022 and 2021, respectively, and $25,787,000 and $11,168,000 for the nine-month periods ended September 30, 2022 and 2021, respectively, and is eliminated in "All Other" total revenues. Intersegment revenues are included in total revenues of the reportable segments. The elimination of intersegment revenues is included in the determination of "All Other" total revenues.

(b)

During the three months ended September 30, 2022, the Company transferred most financial records and processes associated with People's United to the Company's data systems and processes. Additionally during that period the Company transferred certain acquired operations to the Commercial Banking segment from other segments. Revenues and net income related to those operations were $96.0 million and $32.6 million in the three months ended June 30, 2022 and have been reclassified in the financial data presented herein for the nine months ended September 30, 2022.


	Average Total Assets
	Nine Months Ended September 30				Year Ended December 31
	2022		2021		2021
	(In millions)

Business Banking	$	7,515	$	8,386	$	8,007
Commercial Banking		40,464		29,109		28,559
Commercial Real Estate		28,811		25,913		25,628
Discretionary Portfolio		40,987		22,317		22,262
Residential Mortgage Banking		4,370		6,582		6,463
Retail Banking		20,063		17,701		17,897
All Other		45,185		40,959		43,853
Total	$	187,395	$	150,967	$	152,669

Average Total Assets

Nine Months Ended September 30

Year Ended
December 31

2017

2016

2016

(In millions)

Business Banking

$
5,596

5,442

5,456

Commercial Banking

26,699

25,363

25,592

Commercial Real Estate

22,800

20,571

21,131

Discretionary Portfolio

37,807

41,253

40,867

Residential Mortgage Banking

2,335

2,578

2,569

Retail Banking

12,519

11,739

11,840

All Other

13,317

16,951

16,885

Total

$
121,073

123,897

124,340

- 48 -

NOTES TO FINANCIAL STATEMENTS, CONTINUED

~~(a)~~

Total revenues are comprised of net interest income and other income. Net interest income is the difference between taxable-equivalent interest earned on assets and interest paid on liabilities owed by a segment and a funding charge (credit) based on the Company's internal funds transfer and allocation methodology. Segments are charged a cost to fund any assets (e.g. loans) and are paid a funding credit for any funds provided (e.g. deposits). The taxable-equivalent adjustment aggregated $8,828,000 and $6,725,000 for the three-month periods ended September 30, 2017 and 2016, respectively, and $25,563,000 and $19,579,000 for the nine-month periods ended September 30, 2017 and 2016, respectively, and is eliminated in "All Other" total revenues. Intersegment revenues are included in total revenues of the reportable segments. The elimination of intersegment revenues is included in the determination of "All Other" total revenues.

~~15.~~16. Relationship with Bayview Lending Group LLC and Bayview Financial Holdings, L.P.

M&T holds a ~~20%~~20% minority interest in Bayview Lending Group LLC ("BLG"), a privately-held commercial mortgage company. ~~M&T recognizes income or loss from BLG using the equity method of accounting.~~ That investment had no remaining carrying value at September 30, ~~2017~~2022 as a result of cumulative losses recognized and cash distributions ~~received.~~received in prior years. Cash distributions now received from BLG are recognized as income by M&T and included in other revenues from operations. That income totaled $30 million for the nine-month period ended September 30, 2022. There was no similar cash distribution during the nine-month period ended September 30, 2021 or in the three-month period ended September 30, 2022.

Bayview Financial Holdings, L.P. (together with its affiliates, "Bayview Financial"), a privately-held specialty ~~mortgage~~ finance company, is BLG's majority investor. In addition to their common investment in BLG, the Company and Bayview Financial conduct other business activities with each other. The Company has obtained loan servicing rights for mortgage loans from BLG and Bayview Financial having outstanding principal balances of ~~$3.2~~$1.4 billion and ~~$3.5~~$1.6 billion at September 30, ~~2017~~2022 and December 31, ~~2016,~~2021, respectively. Revenues from those servicing rights were $4$3 million and $5$2 million ~~for~~in the three-month periods ended September 30, ~~2017~~2022 and ~~2016,~~2021, respectively, and ~~$13~~$7 million ~~and $15 million~~ for each of the nine-month periods ended September 30, ~~2017~~2022 and ~~2016, respectively.~~2021. The Company sub-services residential mortgage loans for Bayview Financial having outstanding principal balances of ~~$59.3~~$81.2 billion and ~~$30.4~~$74.7 billion at September 30, ~~2017~~2022 and December 31, ~~2016,~~2021, respectively. Revenues earned for sub-servicing loans for Bayview Financial were ~~$26~~$33 million and ~~$25~~$39 million for the three-month periods ended September 30, ~~2017~~2022 and ~~2016,~~2021, respectively, and ~~$74~~$119 million and ~~$73~~$110 million ~~for~~in the nine-month periods ended September 30, ~~2017~~2022 and ~~2016,~~2021, respectively. In addition, the Company held ~~$141~~$52 million and ~~$158~~$62 million of mortgage-backed securities in its held-to-maturity portfolio at September 30, ~~2017~~2022 and December 31, ~~2016,~~2021, respectively, that were securitized by Bayview Financial. ~~In April 2017,~~At September 30, 2022, the Company ~~provided a~~held $298 million of Bayview Financial's $2.0 billion syndicated loan tofacility. The Company held $210 million of Bayview ~~Financial for $100 million at terms consistent with those offered to non-affiliated customers. That loan was subsequently paid in full in June 2017. Also in June 2017, a new~~Financial's $1.4 billion syndicated loan facility ~~was entered into by Bayview Financial for $750 million, of which the Company held $88 million~~ at ~~September 30, 2017.~~December 31, 2021.

- 4649 -

NOTES TO FINANCIAL STATEMENTS, CONTINUED

~~16.~~17. Recent accounting developments

~~Effective January 1, 2017,~~The following table provides a description of accounting standards that were adopted by the Company ~~adopted amended accounting guidance for share-based transactions. The most significant aspect of the amended guidance~~in 2022 as well as standards that ~~affects the Company requires~~are not effective that all excess tax benefits and tax deficiencies be recognized in income tax expense in the income statement and that such amounts be recognized in the period in which the tax deduction arises or in the period in whichcould have an expiration of an award occurs. The adoption of this guidance resulted in an $18 million reduction of income tax expense for the three-month period ended March 31, 2017, that under previous accounting guidance would have been recognized directly in shareholders’ equity. The amended accounting guidance did not have a significant impact ~~on income tax expense in the three-month periods ended September 30 and June 30, 2017.~~

~~Effective January 2017, the Company also adopted amended accounting guidance for the transition~~ to the equity method of accounting. The amended guidance eliminates the requirement that when an investment qualifies for use of the equity method as a result of an increase in the level of ownership interest or degree of influence, an investor must adjust the investment, results of operations, and retained earnings retroactively on a step-by-step basis as if the equity method has been in effect during all previous periods that the investment had been held. Instead, the amended guidance requires the investor to adopt the equity method of accounting as of the date the investment first qualifies for such accounting. The adoption of this guidance did not have a material effect on the Company’sM&T’s consolidated financial ~~position or results of operations.~~statements upon adoption.


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

In January 2017, the Company adopted two amendments to the accounting guidance for derivatives and hedging. The first amendment clarifies that a change in the counterparty to a derivative instrument that has been designated as the hedging instrument does not, in and of itself, require dedesignation of that hedging relationship provided that all other hedge accounting criteria continue to be met. The second amendment clarifies the requirements for assessing whether contingent call (put) options that can accelerate the payment of principal on debt instruments are clearly and closely related to their debt hosts. An entity performing the assessment is required to assess the embedded call (put) options solely in accordance with a four-step decision sequence and no longer has to assess whether the event that triggers the ability to exercise the option is related to interest rates or credit risks. The adoption of this guidance did not have a material effect on the Company’s consolidated financial position or results of operations.

In August 2017, the Financial Accounting Standards Board (“FASB”) issued amended guidance expanding and clarifying hedge accounting for nonfinancial and financial risk components, aligning the recognition and presentation of the effects of the hedging instrument and hedged item in the financial statements, and simplifying the requirements for assessing effectiveness in a hedging relationship. The guidance eliminates the concept of benchmark interest rates for cash flow hedges of interest rate risk and permits variability in cash flows attributable to the contractually specified interest rate to be designated as the hedged risk in a cash flows hedge of a variable-rate financial instrument. For a fair value hedge of interest rate risk, the amended guidance added the Securities Industry and Financial Markets Association Municipal Swap Rate as an eligible benchmark interest rate. The amendments also change the guidance for designating fair value hedges of interest rate risk and for measuring the change in fair value of the hedged item in fair value hedges of interest rate risk by (1) for a closed portfolio of prepayable financial assets or one or more beneficial interests secured by a portfolio of prepayable financial instruments, permitting an amount that is not expected to be affected by prepayments, defaults, and other events affecting the timing and amount of cash flow (“last of layer” method) to be designated as the hedged item, (2) permitting the change in fair value of the hedged item to be measured on the basis of the benchmark interest rate component of the contractual coupon cash flows rather than the full contractual coupon cash flows, (3) permitting the hedged item in a partial-term fair value hedge to be measured by assuming the hedged item has a term that reflects only the designated cash flows being hedged, and (4) for prepayable financial instruments, permitting the consideration of only how changes in the benchmark interest rate affect a decision to settle a debt instrument before its scheduled maturity in calculating the change in fair value of the hedged item attributable to interest rate risk. As it relates to aligning the recognition and

- 4750 -

NOTES TO FINANCIAL STATEMENTS, CONTINUED

~~16.~~17. Recent accounting developments, continued

presentation of the effects of the hedging instrument and hedged item in the financial statements, the amended guidance requires (1) the entire change in fair value of the hedging instrument that is included in the assessment of hedge effectiveness to be presented in the same income statement line item that is used to present the earnings effect of the hedged item in a fair value hedge and the hedged transaction in a cash flow hedge and (2) for cash flow hedges, the entire change in fair value of the hedging instrument to be included in other comprehensive income (hedge ineffectiveness no longer will be recognized in earnings for cash flow hedges) and reclassified to earnings when the hedged forecasted transaction effects earnings. From the perspective of simplifying the requirements for assessing effectiveness in a hedging relationship, the amendments permit (1) qualitative subsequent assessments of hedge effectiveness when the facts and circumstances related to the hedging relationship have not changed, (2) initial prospective quantitative assessments at any time after hedge designation up to the first quarterly effectiveness testing date, and (3) application of the long-haul method for assessing hedge effectiveness if the shortcut method was initially applied and is no longer appropriate. The guidance is effective for annual periods and interim periods within those annual periods beginning after December 15, 2018, with early adoption permitted. If adopted in an interim period, the effects of the adoption should be reflected as of the beginning of the fiscal year of adoption. For cash flow hedges existing at the date of adoption, a cumulative-effect adjustment should be applied related to eliminating the separate measurement of ineffectiveness to accumulated other comprehensive income with a corresponding adjustment to the opening balance of retained earnings as of the beginning of the fiscal year that an entity adopts the amendments. The amended presentation and disclosure guidance is required only prospectively. The Company is evaluating when it will adopt the amended guidance and does not expect such adoption will have a material impact on its consolidated financial statements.

In May 2017, the FASB issued amended guidance relating to which changes to the terms and conditions of a share-based payment award require an entity to apply modification accounting. The guidance requires an entity to account for the effects of a modification unless all the following criteria are met: (1) the fair value of the modified award is the same as the fair value of the original award immediately before the original award was modified. If the modification does not affect any of the inputs to the valuation technique that the entity uses to value the award, the entity is not required to estimate the value immediately before and after the modification; (2) the vesting conditions of the modified award are the same as the vesting conditions of the original award immediately before the original award was modified; and (3) the classification of the modified award as an equity instrument or a liability instrument is the same as the classification of the original award immediately before the original award was modified. The guidance is effective for annual periods; and interim periods within those annual periods beginning after December 15, 2017, and should be applied on a prospective basis to an award modified on or after the adoption date. The Company does not expect the guidance to have a material impact on its consolidated financial statements.

In March 2017, the FASB issued amended guidance requiring the premium on callable debt securities held at a premium to be amortized to the earliest call date. The amendments do not require an accounting change for securities held at a discount; the discount continues to be amortized to maturity. The guidance is effective for annual periods and interim periods within those annual periods beginning after December 15, 2018, with early adoption permitted. If adopted in an interim period, any adjustments should be reflected as of the beginning of the fiscal year that includes that interim period. The amendments should be applied on a modified retrospective basis through a cumulative-effect adjustment directly to retained earnings as of the beginning of the period of adoption. The Company does not expect the guidance to have a material impact on its consolidated financial statements.

In March 2017, the FASB issued amended guidance requiring the service cost component of the net periodic pension cost and net periodic postretirement benefit cost to be reported in the same line item in the income statement as other compensation costs arising from services rendered by the pertinent employees during the period. The amendments also require that the other components of net benefit costs be presented separately from the service cost

~~- 48 -~~

~~NOTES TO FINANCIAL STATEMENTS, CONTINUED~~

~~16. Recent accounting developments, continued~~

component. The guidance is effective for annual periods and interim periods within those annual periods beginning after December 15, 2017, using a retrospective transition method for the presentation of the service cost and other components of net periodic pension cost and net periodic postretirement benefit cost in the income statement. The amendments allow for a practical expedient that permits the use of the amounts disclosed in the Company’s pension and other postretirement benefit plan note for the prior comparative periods as the estimation basis for applying the retrospective presentation requirements. The Company does not expect the guidance to have a material impact on its consolidated financial statements.

In January 2017, the FASB issued amended guidance eliminating step 2 from the goodwill impairment test. Under the amendments to the guidance, an entity should perform its goodwill impairment test by comparing the fair value of a reporting unit with its carrying amount. An entity should recognize an impairment charge for the amount by which the carrying amount exceeds the reporting unit’s fair value. The loss recognized, however, should not exceed the total amount of goodwill allocated to that reporting unit. Additionally, an entity should consider income tax effects from any tax deductible goodwill on the carrying amount of the reporting unit when measuring the goodwill impairment loss, if applicable. The guidance is effective for annual periods or any interim goodwill impairment tests beginning after December 15, 2019 using a prospective transition method. Early adoption is permitted. The Company does not expect the guidance will have a material impact on its consolidated financial statements, unless at some point in the future one of its reporting units were to fail step 1 of the goodwill impairment test.

In January 2017, the FASB issued amended guidance clarifying the definition of a business for purposes of evaluating whether transactions would be accounted for as acquisitions (or disposals) of assets or businesses. The amendments provide a screen to determine when a set of assets and activities (collectively referred to as a “set”) is not a business. The screen requires that when substantially all of the fair value of the gross assets acquired (or disposed of) is concentrated in a single identifiable asset or group of similar assets, the set is not a business. If the screen is not met, the amendments (1) require that to be considered a business, a set must include, at a minimum, an input and a substantive process that together significantly contribute to the ability to create output, and (2) remove the evaluation of whether a market participant could replace missing elements. The guidance is effective for annual
periods and interim periods within those annual periods beginning after December 15, 2017 using a prospective transition method. The Company does not expect the guidance to have a material impact on its consolidated financial statements.

In November 2016, the FASB issued amended guidance for the presentation of restricted cash in the statement of cash flows. The guidance requires that restricted cash and restricted cash equivalents be included with cash and cash equivalents when reconciling the beginning-of-period and end-of-period total amounts shown on the statement of cash flows. In addition, when cash, cash equivalents, and restricted cash or restricted cash equivalents are presented in more than one line item within the statement of financial position, the line items and amounts must be presented on the face of the statement of cash flows or disclosed in the notes to the financial statements. Information about the nature of restrictions on an entity’s cash and cash equivalents must also be disclosed. The guidance, which applies only to the consolidated statement of cash flows, is effective for annual periods and interim periods within those annual periods beginning after December 15, 2017, using a retrospective transition method.

~~- 49 -~~

~~NOTES TO FINANCIAL STATEMENTS, CONTINUED~~

~~16. Recent accounting developments, continued~~

In August 2016, the FASB issued amended guidance for how certain cash receipts and cash payments are presented and classified in the statement of cash flows. The guidance addresses the following eight specific cash flow issues: (1) cash payments for debt extinguishment costs should be classified as cash outflows for financing activities; (2) for zero-coupon debt instruments, the portion of the cash payment attributable to the accreted interest should be classified as a cash outflow for operating activities; (3) contingent consideration payments made after a business combination should be classified based on the timing of the payment; (4) cash proceeds received from the settlement of insurance claims should be classified on the basis of the related insurance coverage; (5) cash proceeds received from the settlement of corporate-owned and bank-owned life insurance policies should be classified as cash inflows from investing activities; (6) when the equity method is applied, an accounting policy election should be made to classify distributions received using either the cumulative earnings approach or the nature of the distribution approach; (7) cash receipts from payments on a transferor’s beneficial interests obtained in a securitization of financial assets should be classified as cash inflows from investing activities; and (8) the classification of cash receipts and payments that have aspects of more than one class of cash flows should be determined by applying specific guidance in GAAP. The guidance, which only impacts the presentation of the consolidated statement of cash flows, is effective for annual periods and interim periods within those annual periods beginning after December 15, 2017.

In June 2016, the FASB issued amended guidance for the measurement of credit losses on certain financial assets. The amended guidance requires financial assets measured at amortized cost to be presented at the net amount expected to be collected. The allowance for credit losses will represent a valuation account that is deducted from the amortized cost basis of the financial assets to present their net carrying value at the amount expected to be collected. The income statement will reflect the measurement of credit losses for newly recognized financial assets as well as expected increases or decreases of expected credit losses that have taken place during the period. When determining the allowance, expected credit losses over the contractual term of the financial asset(s) (taking into account prepayments) will be estimated considering relevant information about past events, current conditions, and reasonable and supportable forecasts that affect the collectibility of the reported amount. The amended guidance also requires recording an allowance for credit losses for purchased financial assets with a more-than-insignificant amount of credit deterioration since origination. The initial allowance for these assets will be added to the purchase price at acquisition rather than being reported as an expense. Subsequent changes in the allowance will be recorded through the income statement as an expense adjustment. In addition, the amended guidance requires credit losses relating to available-for-sale debt securities to be recorded through an allowance for credit losses. The calculation of credit losses for available-for-sale securities will be similar to how it is determined under existing guidance. The guidance is effective for annual periods and interim periods within those annual periods beginning after

December 15, 2019. The Company is assessing the new guidance to determine what modifications to existing credit estimation processes may be required. The Company expects that the new guidance will result in an increase in its allowance for credit losses as a result of considering credit losses over the expected life of its loan portfolios. ~~Increases in the level of the allowance for credit losses will also reflect new requirements to include the~~ nonaccretable principal difference on purchased credit impaired loans and estimated credit losses on investment securities classified as held-to-maturity, if any. The Company is still evaluating the extent of the increase to the allowance for credit losses and the impact to its financial statements.

In February 2016, the FASB issued guidance related to the accounting for leases. The core principle of the guidance is that all leases create an asset and a liability for the lessee and, therefore, lease assets and lease liabilities should be recognized in the balance sheet. Lease assets will be recognized as a right-of-use asset and lease liabilities will be recognized as a liability to make lease payments. While the guidance requires all leases to be recognized in the balance sheet, there continues to be a differentiation between finance leases and operating leases for purposes of income statement recognition and cash flow statement presentation. For finance leases, interest on the lease liability

~~- 50 -~~

~~NOTES TO FINANCIAL STATEMENTS, CONTINUED~~

~~16. Recent accounting developments, continued~~

and amortization of the right-of-use asset will be recognized separately in the statement of income. Repayments of principal on those lease liabilities will be classified within financing activities and payments of interest on the lease liability will be classified within operating activities in the statement of cash flows. For operating leases, a single lease cost is recognized in the statement of income and allocated over the lease term, generally on a straight-line basis. All cash payments are presented within operating activities in the statement of cash flows. The accounting applied by lessors is largely unchanged from existing GAAP, however, the guidance eliminates the accounting model for leveraged leases for leases that commence after the effective date of the guidance. The guidance is effective for annual periods beginning after December 15, 2018, including interim periods within those fiscal years. The Company occupies certain banking offices and uses certain equipment under noncancelable operating lease agreements, which currently are not reflected in its consolidated balance sheet. Upon adoption of the guidance, the Company expects to report increased assets and increased liabilities as a result of recognizing right-of-use assets and lease liabilities on its consolidated balance sheet. The Company was committed to $467 million of minimum lease payments under noncancelable operating lease agreements at December 31, 2016. The Company does not expect the new guidance will have a material impact to its consolidated statement of income.

In January 2016, the FASB issued amended guidance related to recognition and measurement of financial assets and liabilities. The amended guidance requires that equity investments (excluding those accounted for under the equity method of accounting or those that result in consolidation of the investee) be measured at fair value with changes in fair value recognized in net income. An entity can elect to measure equity investments that do not have readily determinable fair values at cost less impairment, plus or minus changes resulting from observable price changes in orderly transactions for the identical or similar investment of the same issuer. The impairment assessment of equity investments without readily determinable fair values is simplified by requiring a qualitative assessment to identify impairment. When a qualitative assessment indicates impairment exists, an entity is required to measure the investment at fair value. The guidance eliminates the requirement for public business entities to disclose the method and significant assumptions used to estimate the fair value that is required to be disclosed for financial instruments measured at amortized cost on the balance sheet. Further, the guidance requires public entities to use the exit price when measuring the fair value of financial instruments for disclosure purposes. The guidance also requires an entity to present separately in other comprehensive income, a change in the instrument-specific credit risk when the entity has elected to measure a liability at fair value in accordance with the fair value option. Separate presentation of financial assets and liabilities by measurement category and type of instrument on the balance sheet or accompanying notes to the financial statements is required. The guidance also clarifies that an entity should evaluate the need for a valuation allowance on a deferred tax asset related to available-for-sale securities in combination with the entity’s other deferred tax assets. This guidance is effective for annual periods and interim periods within those annual periods beginning after December 15, 2017. The Company does hold certain equity securities in its available-for-sale portfolio. Upon adoption of this guidance, fair value changes in such equity securities will be recognized in the consolidated statement of income as opposed to accumulated other comprehensive income where they are recognized under current accounting guidance. Although those securities have historically fluctuated in value, how those securities could change in value in the future is not predictable.

In May 2014, the FASB issued amended accounting and disclosure guidance for revenue from contracts with customers. The core principle of the accounting guidance is that an entity should recognize revenue to depict the transfer of promised goods or services to customers in an amount that reflects the consideration to which the entity expects to be entitled in exchange for those goods or services. To achieve that core principle, an entity should apply the following steps: (1) identify the contract(s) with a customer; (2) identify the performance obligations in the contract; (3) determine the transaction price; (4) allocate the transaction price to the performance obligations in the contract; (5) recognize revenue when (or as) the entity satisfies a performance obligation. The guidance also specifies the accounting for some costs to obtain or fulfill a contract with a customer. The amended disclosure guidance requires sufficient information to enable users of financial statements to understand the nature, amount,

~~- 51 -~~

~~NOTES TO FINANCIAL STATEMENTS, CONTINUED~~

~~16. Recent accounting developments, continued~~

timing, and uncertainty of revenue and cash flows arising from contracts with customers. The amended guidance is effective for annual reporting periods beginning after December 15, 2017, including interim periods within that reporting period. The guidance should be applied either retrospectively to each prior reporting period presented or retrospectively with the cumulative effect of initially applying this guidance recognized at the date of initial application (the “modified retrospective approach”). The Company expects to adopt the revenue recognition guidance in the first quarter of 2018. A significant amount of the Company’s revenues are derived from net interest income on financial assets and liabilities, which are excluded from the scope of the amended guidance. With respect to noninterest income, the Company has identified revenue streams within the scope of the guidance and is in the final stages of its accounting analysis of the underlying contracts. The Company does not presently expect that changes in the timing of revenue recognition will be material to the amount of annual revenue recognized by the Company.

~~- 52 -~~


~~Item 2.~~	~~Management’s Discussion~~Standard	Description	Required date of adoption	Effect on consolidated financial statements
	Standards Not Yet Adopted as of September 30, 2022
	Accounting for Contract Assets and ~~Analysis~~Contract Liabilities from Contracts with Customers in a Business Combination	The amendments require that an entity (acquirer) recognize and measure contract assets and contract liabilities acquired in a business combination in accordance with specified revenue recognition guidance. At the acquisition date, an acquirer should account for the related revenue contracts as if it had originated the contracts and may assess how the acquiree applied the revenue guidance to determine what to record for such contracts. The guidance is generally expected to result in an acquirer recognizing and measuring the acquired contract assets and contract liabilities consistent with how they were recognized and measured in the acquiree’s financial statements.	January 1, 2023 Early adoption permitted	The amendments should be applied prospectively to business combinations occurring on or after the effective date of ~~Financial Condition~~the amendments. However, if early adoption is elected, the amendments should be applied (1) retrospectively to all business combinations for which the acquisition date occurs on or after the beginning of the fiscal year that includes the interim period of early application and ~~Results~~(2) prospectively to all business combinations that occur on or after the date of ~~Operations.~~initial application. The Company does not expect the guidance will have a material impact on its consolidated financial statements.
	Fair Value Hedging of Multiple Hedge Layers under Portfolio Layer Method	The amendments allow multiple hedged layers to be designated for a single closed portfolio of financial assets or one or more beneficial interests secured by a portfolio of financial instruments. If multiple hedged layers are designated, the amendments require an analysis to be performed to support the expectation that the aggregate amount of the hedged layers is anticipated to be outstanding for the designated hedge periods. Only closed portfolios may be hedged under the portfolio layer method (that is, no assets can be added to the closed portfolio once established), however designating new hedging relationships and dedesignating existing hedging relationships associated with the closed portfolio any time after the closed portfolio is established is permitted.	January 1, 2023 Early adoption permitted	The amendments should be applied on a modified retrospective basis by means of a cumulative-effect adjustment to the opening balance of retained earnings on the initial application date. The Company does not expect the guidance will have a material impact on its consolidated financial statements.
	Accounting for Troubled Debt Restructurings (TDRs) and Expansion of Vintage Disclosures Applicable to Credit Losses	The amendments (1) eliminate the accounting guidance for TDRs and require enhanced disclosure for certain loan refinancings by creditors when a borrower is experiencing financial difficulty and (2) require disclosure of current-period gross write-offs by year of origination for financing receivables and net investments in leases within credit loss disclosures.	January 1, 2023 Early adoption permitted	The amendments should be applied prospectively, except for the amendments related to the recognition and measurement of TDRs for which an option is permitted to apply a modified retrospective transition method. Under the amended guidance the Company will no longer be required to identify TDRs and apply specialized accounting to such loans. The Company does not expect the guidance will have a material impact on its consolidated financial statements outside of the modified disclosure requirements.
	Fair Value Measurement of Equity Securities Subject to Contractual Sale Restrictions	The amendments clarify that a contractual restriction on the sale of an equity security is not considered part of the unit of account of the equity security and, therefore, is not considered in measuring fair value. The amendments also clarify that an entity cannot, as a separate unit of account, recognize and measure a contractual sale restriction. In addition, the amendments require the following disclosures for equity securities subject to contractual sale restrictions: 1. The fair value of equity securities subject to contractual sale restrictions reflected in the balance sheet; 2. The nature and remaining duration of the restriction(s); and 3. The circumstances that could cause a lapse in the restriction(s).	January 1, 2024 Early adoption permitted	The amendments should be applied prospectively with any adjustments from the adoption of the amendments recognized in earnings and disclosed on the date of adoption. The Company does not expect the guidance will have a material impact on its consolidated financial statements.

~~Overview~~

- 51 -

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

Overview

M&T Bank Corporation (“M&T”) ~~recorded~~had net income of $647 million in the third quarter of ~~2017~~2022, compared with $495 million in the corresponding quarter of ~~$356~~2021 and $218 million ~~or $2.21~~in the second quarter of ~~diluted~~2022. Diluted and basic earnings per common share ~~compared with $350~~were $3.53 and $3.55, respectively, in the recent quarter, $3.69 and $3.70, respectively, in the third quarter of 2021 and were each $1.08 in the second quarter of 2022. M&T's second and third quarter results each reflect a full-quarter impact of its April 1, 2022 acquisition of People's United Financial, Inc. ("People's United"). The after-tax impact of merger-related expenses was $39 million ($53 million pre-tax) or ~~$2.10~~$.22 of basic and diluted earnings per common share in the ~~similar quarter of 2016. Net income in the second quarter of 2017 totaled $381 million or $2.35 of diluted earnings per common share. Basic earnings per common share were $2.22 in the~~ recent quarter, ~~compared with $2.10~~$7 million ($9 million pre-tax) or $.05 of basic and $2.36 in the third quarter of 2016 and the second quarter of 2017, respectively. For the first nine months of 2017, net income was $1.09 billion or $6.69 of diluted earnings per common share, compared with $985 million or $5.80 of diluted earnings per common share in the ~~corresponding 2016 period. Basic~~third quarter of 2021 and $346 million ($465 million pre-tax) or $1.94 of basic and diluted earnings per common share ~~were $6.71~~in the second quarter of 2022. Such expenses included professional services and other temporary help fees associated with conversions of systems and/or integration of operations, 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 April 1, 2022. Net income aggregated $1.23 billion or $7.14 of diluted and $7.18 of basic earnings per common share in the first nine months of ~~2017,~~2022, compared with ~~$5.82 for~~$1.40 billion or $10.43 of diluted and $10.44 of basic earnings per common share in the ~~initial~~corresponding 2021 period. Merger-related expenses were $398 million ($535 million pre-tax) or $2.46 of basic and diluted earnings per common share in the nine months ended September 30, 2022 and $17 million ($23 million pre-tax) or $.13 of ~~2016.~~basic and diluted earnings per common share in the nine months ended September 30, 2021.

The annualized rate of return on average total assets for M&T and its consolidated subsidiaries (“the Company”) in each of the third ~~quarter~~quarters of ~~2017~~2022 and 2021 was ~~1.18%,~~1.28% compared with ~~1.12% in the year-earlier quarter and 1.27%~~.42% in the second quarter of ~~2017.~~2022. The annualized rate of return on average common shareholders’ equity was ~~8.89%~~10.43% in the ~~recently completed~~recent quarter, ~~compared with 8.68% and 9.67%~~12.16% in the third quarter of ~~2016~~2021 and 3.21% in the second ~~2017~~ quarter ~~respectively.~~of 2022. During the nine-month period ended September 30, ~~2017,~~2022, the annualized rates of return on average assets and average common shareholders’ equity were ~~1.20%~~.87% and ~~9.15%~~7.24%, respectively, compared with ~~1.06%~~1.24% and ~~8.17%~~11.76%, respectively, in the ~~similar~~corresponding period of ~~2016.~~2021.

On ~~October 9, 2017, Wilmington Trust Corporation, a wholly owned subsidiary of M&T, reached an agreement with~~April 1, 2022, the ~~U.S. Attorney’s Office for the District of Delaware related to alleged conduct that took place between 2009 and 2010 prior to~~Company closed the acquisition of ~~Wilmington Trust Corporation by M&T. Under~~People's United resulting in the issuance of 50,325,004 common shares. Pursuant to the terms of the merger agreement, Wilmington Trust Corporation was required to pay $60 million and settled the government’s claims. The settlement amount included $16 million previously paid to the U.S. Securities and Exchange Commission in a related action. The result was a paymentPeople’s United shareholders received consideration valued at .118 of ~~$44 million that is not deductible for income tax purposes. Wilmington Trust Corporation did not admit any liability.~~

As of September 30, 2017, the Company increased the reserve for legal matters by $50 million. That increase, coupled with the non-deductible nature of the $44 million payment, reduced net income by $48 million, or $.31 of diluted earnings peran M&T common share in exchange for each common share of People’s United. The purchase price totaled approximately $8.4 billion (with the ~~third quarter~~price based on M&T’s closing price of ~~2017.~~ $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.

~~During~~The People's United transaction has been accounted for using the ~~first quarter~~acquisition method of ~~2017,~~accounting and, accordingly, assets acquired, liabilities assumed, and consideration exchanged were recorded at estimated fair value on the acquisition date. M&T ~~adopted new accounting guidance for share-based transactions. That guidance requires that all excess tax benefits~~preliminarily recorded assets acquired of $64.2 billion, including $35.8 billion of loans and ~~tax deficiencies associated~~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 ~~share-based compensation be recognized~~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 ~~income tax expense~~assets serving communities in the ~~income statement. Previously, tax effects resulting~~Northeast and Mid-Atlantic from ~~changes in M&T’s share price subsequent~~Maine to the grant date were recorded through shareholders’ equity at the time of vesting or exercise. The adoption of the amended accounting guidance resulted in an $18 million reduction of income tax expense or $.12 of diluted earnings per common share in the initial 2017 quarter. The impact of that change in accounting on income tax expense was not significant in the second and third quarters of 2017.

During the third quarter of 2016, the Company sold substantially all of its collateralized debt obligations with an amortized cost of $28 million held in the available-for-sale investment securities portfolio, resulting in an after-tax gain of $17 million ($28 million pre-tax), or $.11 per diluted common share. Those securities, which had been obtained in previous acquisitions, were sold in response to the provisions of the Dodd-Frank Wall Street Reform and Consumer Protection Act (“Dodd-Frank Act”) commonly referred to as the “Volcker Rule.” There were no significant gains or losses on investment securities during the second or third quarters of 2017.

~~On June 28, 2017,~~Virginia, including Washington, D.C. M&T ~~announced that~~completed the ~~Federal Reserve did not object~~transfer of most financial records of People’s United to M&T’s ~~proposed 2017 Capital Plan. That capital plan includes~~core operating systems in the recent quarter.

On July 19, 2022 the Company's Board of Directors authorized a program to repurchase of up to ~~$900 million~~$3.0 billion of M&T's common ~~shares during~~stock. The action replaced the ~~four-quarter period starting on July 1, 2017, an increase in~~previous program under which the ~~quarterly common stock dividend~~repurchases in the second quarter of 2018 of up to $.05 per share to $.80 per share, and the issuance of subordinated capital notes in the third quarter of 2017 of $500 million. M&T may continue to pay dividends and interest on equity and debt instruments included in regulatory capital, including preferred stock, trust preferred securities and subordinated debt that2022 were ~~outstanding at December 31, 2016, consistent with the contractual terms of those instruments. Dividends are subject to declaration~~

~~- 53 -~~

by M&T’s Board of Directors. In July 2017, M&T’s Board of Directors authorized a new stock repurchase program to repurchase up to $900 million of shares of M&T’s common stock subject to all applicable regulatory limitations, including those set forth in M&T’s 2017 Capital Plan.conducted. In accordance with the program and its capital plan, M~~&T’s 2017 Capital Plan,~~&T repurchased 3,282,449 shares of its common stock during the ~~third~~recent quarter at an average cost per share of ~~2017,~~$182.79 resulting in a total cost of $600 million. During the first nine months of 2022, M&T repurchased ~~1,382,746~~6,788,395 shares of its common stock at aan average cost per share of $225 million and issued $500 million of subordinated capital notes. In accordance with M&T’s revised 2016 Capital Plan, during the second quarter of 2017, M&T repurchased 1,409,807 shares of its common stock at$176.77 resulting in a total cost of $225 million and in the first quarter of 2017, M&T repurchased 3,233,196 shares of its common stock at a cost of $532 million and increased the quarterly common stock dividend from $.70 to $.75 per share. In the aggregate, M&T repurchased 6,025,749 shares of its common stock at a cost of $982 million during the first three quarters of 2017 and 5,307,595 shares for $604 million during the first three quarters of 2016.$1.2 billion.

On July 25, 2017, the Federal Reserve Bank of New York terminated its written agreement with M&T and its principal bank subsidiary, M&T Bank, that had been entered into in June 2013. Under the terms of that agreement, M&T and M&T Bank implemented an enhanced compliance risk management program designed to ensure compliance with the Bank Secrecy Act and anti-money-laundering laws and regulations (“BSA/AML”) and took other steps to enhance their compliance practices.- 52 -

Supplemental Reporting of Non-GAAP Results of Operations

M&T consistently provides supplemental reporting of its results on a “net operating” or “tangible” basis, from which M&T excludes the after-tax effect of amortization of core deposit and other intangible assets (and the related goodwill, core deposit intangible and other intangible asset balances, net of applicable deferred tax amounts) and gains (when realized) and expenses (when incurred) associated with merging acquired operations into the Company, since such items are considered by management to be “nonoperating” in nature. Those merger-related expenses generally consist of professional services and other temporary help fees associated with the actual or planned conversion of systems and/or integration of operations; costs related to branch and office consolidations; costs related to termination of existing contractual arrangements to purchase various services; initial marketing and promotion expenses designed to introduce the Company to its new customers; severance; incentive compensation costs; travel costs; and printing, supplies and other costs of completing the transactions and commencing operations in new markets and offices. Merger-related expenses associated with the 2015 acquisition of Hudson City Bancorp, Inc. (“Hudson City”) were $36 million ($22 million after-tax effect) in the first nine months of 2016 ($.14 per diluted common share). There were no merger-related expenses during the third quarter of 2016 or in the first nine months of 2017. 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 $361~~totaled $700 million in the third quarter of ~~2017,~~2022, compared with ~~$356~~$504 million in the year-earlier quarter and $578 million in the second 2022 quarter. Diluted net operating earnings per common share ~~for the recent quarter were $2.24, compared with $2.13~~ in the third ~~quarter~~quarters of ~~2016. Net operating income~~2022 and ~~diluted net operating earnings per common share~~2021 were ~~$386 million~~$3.83 and ~~$2.38,~~$3.76, respectively, compared with $3.10 in the second quarter of ~~2017.~~2022. For the first nine months of ~~2017,~~2022, net operating income and diluted net operating earnings per common share were ~~$1.10~~$1.65 billion and ~~$6.78,~~$9.78, respectively, compared with ~~$1.03~~$1.42 billion and ~~$6.07,~~$10.61, respectively, in the ~~corresponding 2016 period.~~first nine months of 2021.

Net operating income in the recent quarter expressed as an annualized rate of return on average tangible assets was ~~1.25%~~1.44%, compared with ~~1.18%~~1.34% in the ~~year-earlier quarter and 1.33% in the second~~third quarter of ~~2017.~~ 2021 and 1.16% in 2022’s second quarter.Net operating income represented an annualized return on average tangible common equity of ~~13.03%~~17.89% in ~~2017’s~~the third quarter ~~compared with 12.77%~~of 2022, 17.54% in the ~~similar~~year-earlier quarter and 14.41% in the second quarter of ~~2016 and 14.18% in 2017’s second quarter.~~2022. For the first nine months of ~~2017,~~2022, net operating income represented an annualized return on average tangible assets and average tangible common shareholders’ equity of ~~1.26%~~1.23% and ~~13.42%~~15.13%, respectively, compared with ~~1.15%~~1.30% and ~~12.36%~~17.10%, respectively, in the ~~first nine months of 2016.~~corresponding 2021 period.

Reconciliations of GAAP amounts with corresponding non-GAAP amounts are provided in table 2.

~~- 54 -~~

Taxable-equivalent Net Interest Income

Taxable-equivalent net interest income was ~~$966 million~~$1.69 billion in the third quarter of ~~2017, 12%~~2022, 74% higher than ~~$865~~$971 million recorded in the year-earlier quarter. That ~~growth resulted primarily~~increase reflects the impact of $42.0 billion in additional average earning assets predominantly resulting from the People's United transaction, and a ~~widening~~94 basis point (hundredths of one percent) expansion of the net interest margin, or taxable-equivalent net interest income expressed as an annualized percentage of average earning assets, to ~~3.53%~~3.68% in the recent quarter from ~~3.05%~~2.74% in the ~~corresponding 2016 period. The improvement in the net interest margin was largely the result~~third quarter of ~~the~~2021. That increase resulted from higher ~~interest rate environment due to actions initiated by~~yields on loans, deposits at the Federal Reserve Bank ("FRB") of New York, and investment securities, partially offset by a 27 basis point increase in ~~mid-December 2016, mid-March 2017 and mid-June 2017 to raise its target Federal funds rate by .25% at each of those dates.~~the rates paid on interest-bearing liabilities. Taxable-equivalent net interest income in the recent quarter increased ~~from $947~~$268 million infrom the second ~~2017~~ quarter ~~predominantly due to~~of 2022 reflecting an ~~8 basis point (hundredths of one percent) widening of~~increase in the net interest margin ~~from 3.45% in the second quarter of 2017. That widening reflected the impact~~ in the recent quarter offrom 3.01% in the ~~June interest rate increase initiated by the Federal Reserve.~~

prior quarter. For the first ~~three quarters~~nine months of ~~2017,~~2022, taxable-equivalent net interest income was ~~$2.84~~$4.02 billion, ~~8% higher than $2.61~~up 39% from $2.90 billion in the ~~similar period of 2016. That~~corresponding 2021 period. The increase was ~~primarily due~~largely attributable to the higher level of earning assets, including the impact of the People's United transaction, and a 32 basis point widening of the net interest margin to ~~3.44%~~3.15% in ~~2017~~the 2022 period from ~~3.12%~~2.83% in ~~2016. Also contributing to~~ the year-earlier period. The higher ~~taxable-equivalent~~ net interest ~~income~~margin in the ~~2017 period was growth~~recent periods is generally reflective of a rising interest rate environment resulting from actions taken by the Federal Reserve to raise interest rates in ~~average loan balances, which increased $986 million from~~an attempt to temper inflationary pressures on the ~~first nine months of 2016.~~U.S. economy.

Average loans and leases totaled ~~$88.4 billion in the recent quarter, compared with $88.7~~$127.5 billion in the third quarter of ~~2016. Commercial~~2022, up $32.2 billion or 34% from $95.3 billion in the similar quarter of 2021. Included in average loans and leases in the recent quarter 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 impact of the acquired loan balances, commercial loans and leases averaged ~~$21.7~~$38.3 billion in the recent quarter, $14.6 billion or 61% higher than in the year-earlier quarter. 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 $241 million in the third quarter of 2022, compared with $3.3 billion in the third quarter of ~~2017, $254 million or 1% above $21.5 billion in the year-earlier quarter.~~2021. Average commercial real estate loans were ~~$33.3~~$46.3 billion in the recent quarter, up ~~$2.0~~

- 53 -

$8.7 billion or ~~6%,~~23% from ~~$31.3~~$37.5 billion in the ~~third~~corresponding quarter of ~~2016. Reflecting ongoing repayments~~2021. That increase was predominantly due to the impact of loans obtained in the acquisition of ~~Hudson City, average~~People's United partially offset by a reduction in balances of construction and permanent mortgage loans, reflecting repayments by customers. Average residential real estate loans ~~declined $3.5~~increased $6.6 billion or ~~14%,~~40% to ~~$20.6~~$23.0 billion in the third quarter of ~~2017~~2022 from ~~$24.1~~$16.4 billion in the year-earlier quarter. ~~Included~~The growth in ~~average~~ residential real estate loans ~~were~~was largely attributable to the acquisition of loans ~~held for sale, which averaged $346 million~~from People's United and the Company's decision in the ~~recent~~third quarter ~~and $374 million in the corresponding 2016 quarter.~~of 2021 to retain rather than sell most originated residential mortgage loans. Consumer loans averaged ~~$12.8~~$20.0 billion in the third quarter of ~~2017, an increase of $844 million,~~2022, up $2.3 billion or ~~7%,~~13% from ~~$11.9~~$17.7 billion in the year-earlier quarter, reflecting the impact of loans obtained in the acquisition of People's United (that consisted predominantly ~~due to growth in average automobile and recreational vehicle loans, partially offset by lower~~of outstanding balances of home equity lines of ~~credit.~~credit) and growth in average recreational finance loans (consisting predominantly of loans secured by recreational vehicles and boats).

Average loan and lease balances in the third quarter of ~~2017 declined $882 million~~2022 were $127.5 billion, little changed from ~~$89.3~~$127.6 billion in the second quarter of ~~2017. As compared with 2017’s second quarter, average commercial~~2022. Commercial loan and lease average balances ~~decreased $616 million, or 3%,~~ in the recent quarter ~~and average residential~~increased $504 million from $37.8 billion in the second quarter of 2022. Average commercial real estate loans in the third quarter of ~~2017~~2022 declined ~~$710~~$946 million ~~or 3%, reflecting the continued pay down of loans obtained~~from $47.2 billion in the ~~acquisition~~second quarter of ~~Hudson City, while commercial~~2022. Average balances of residential real estate ~~loan average balances~~loans in the recently completed quarter increased ~~$43~~$201 million ~~or less than 1%, and average~~from $22.8 billion in 2022’s second quarter. Average consumer loans in the recent quarter increased ~~$400~~$167 million ~~or 3%.~~from $19.8 billion in 2022’s second quarter. The accompanying table summarizes quarterly changes in the major components of the loan and lease portfolio.

~~- 55 -~~

AVERAGE LOANS AND LEASES

(net of unearned discount)


			Percent Increase
			(Decrease) from
	Third Quarter		Third Quarter				Second Quarter
	2022		2021				2022
	(In millions)

Commercial, financial, etc.	$	38,321		61		%		1		%
Real estate — commercial		46,282		23				(2	)
Real estate — consumer		22,962		40				1
Consumer
Recreational finance		8,626		9				4
Automobile		4,379		(4	)			(5	)
Home equity lines and loans		5,056		38				—
Other		1,899		25				5
Total consumer		19,960		13				1
Total	$	127,525		34		%		—		%

Percent Increase

(Decrease) from

3rd Qtr.

3rd Qtr.

2nd Qtr.

2017

2016

2017

(In millions)

Commercial, financial, etc.

$
21,734

1

%

(3
)
%
Real estate — commercial

33,257

6

—

Real estate — consumer

20,609

(14
)

(3
)

Consumer

Automobile

3,328

19

5

Home equity lines and loans

5,413

(6
)

(1
)

Other

4,045

19

9

Total consumer

12,786

7

3

Total

$
88,386

—

%

(1
)
%

For the first nine months of ~~2017,~~2022, average loans and leases totaled ~~$89.1~~$115.9 billion, up ~~$986 million, or 1%,~~19% from ~~$88.2~~$97.7 billion in the corresponding ~~period~~2021 period. The impact of ~~2016. Growth~~loans obtained in ~~commercial real estate~~the People's United acquisition was the most significant factor for that increase offset, in part, by lower average balances of PPP loans ~~commercial loans~~of $549 million and ~~leases~~$4.9 billion in the first nine months of 2022 and ~~consumer loans were partially offset by a decline in residential real estate loans.~~2021, respectively.

The investment securities portfolio averaged ~~$15.4~~$23.9 billion in the ~~recent~~third quarter of 2022, up ~~$1.1~~$17.9 billion ~~or 8%,~~ from ~~$14.4~~$6.0 billion in the year-earlier quarter ~~but $470 million lower~~and $1.6 billion higher than the ~~$15.9~~$22.4 billion averaged in the second quarter of ~~2017.~~2022. For the first nine months of ~~2017~~2022 and ~~2016,~~2021, investment securities averaged ~~$15.8~~$18.1 billion and ~~$14.9~~$6.3 billion, respectively. ~~Those changes~~The higher average balance in the recent periods reflect the ~~net effect~~acquisition of People’s United, which added approximately $11.6 billion to the investment securities portfolio on April 1, 2022, and purchases ~~offset by maturities~~of approximately $2.7 billion of investment securities during each of the quarters ended September 30, 2022, June 30, 2022 and ~~pay downs~~March 31, 2022. The purchases in the first nine months of ~~mortgage-backed securities. During the second quarter of 2017, the Company purchased $658 million of mortgage-backed securities,~~2022 consisted predominantly ~~Ginnie Mae securities, and $214 million~~ of U.S. Treasury ~~notes. The Company sold $512 million of available-for-sale Fannie Mae~~notes and ~~Freddie Mac~~fixed rate residential mortgage-backed securities during 2017’s second quarter largely due to the limitations on the amount of Fannie Mae and Freddie Mac mortgage-backed securities that are permitted to be included in the highest tier of “high quality liquid assets” for the Liquidity Coverage Ratio (“LCR”) calculation. During the third quarter of 2016, the Company sold substantially all of its collateralized debt obligations that were held in the available-for-sale investment securities portfolio for a gain of approximately $28 million. Those securities were sold in large part in response to the provisions of the Volcker Rule. During the third quarter of 2017, theresecurities. There were no significant ~~purchases or~~ sales of investment ~~securities.~~ securities during the first nine months of 2022 or 2021. 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 amounts of outstanding borrowings and available lines of credit with those entities.

- 54 -

The investment securities portfolio is largely comprised of residential mortgage-backed securities ~~debt securities issued by municipalities, trust preferred securities issued by certain financial institutions,~~ and shorter-term U.S. Treasury notes and, ~~federal agency notes.~~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 manages its investment securities portfolio, in part, to satisfy the requirements of the LCR that became effective in January 2016. The LCR is intended to ensure that banks hold a sufficient amount of “high quality liquid assets” to cover the anticipated net cash outflows during a hypothetical acute 30-day stress scenario. For additional information concerning the LCR rules, refer to Part I, Item 1 of M&T’s Form 10-K for the year ended December 31, 2016 under the heading “Liquidity.”

~~In addition to the sales noted above, 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 ~~(including the LCR)~~ and balance sheet size and resulting capital ratios.

~~- 56 -~~

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 not significant in the third quarter of 2022, the second quarter of 2022 or the third quarter of 2021. Net unrealized losses for the first nine months of 2022 and 2021 were $2 million and $23 million, respectively. Those losses include changes in the 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 ~~characterized as “other than temporary.” There~~indicative of credit-related losses. In light of such reviews, there were no ~~other-than-temporary impairment charges~~credit-related losses on debt investment securities recognized in either of the nine-month periods ended September 30, ~~2017~~2022 or ~~2016.~~2021. Based on management’s assessment of future cash flows associated with individual investment securities as of September 30, 2022, the Company did not expect to incur any material credit-related losses in its portfolios of debt investment securities. Additional information about the investment securities portfolio is included in notes 3 and 1213 of Notes to Financial Statements.

Other earning assets include interest-bearing deposits at the ~~Federal Reserve Bank~~FRB of New York and other banks, trading account assets, ~~and~~ federal funds ~~sold.~~sold and agreements to resell securities. Those other earning assets in the aggregate averaged ~~$4.8~~$30.9 billion in the ~~two most recent quarters,~~recently completed quarter, compared with ~~$9.8~~$39.1 billion in the ~~third~~year-earlier quarter and $39.8 billion in the second quarter of ~~2016.~~2022. Interest-bearing deposits at banks averaged ~~$4.7~~$30.8 billion, $39.0 billion and $39.4 billion during ~~each of~~ the ~~quarters~~three months ended September 30, ~~2017~~2022, September 30, 2021 and June 30, 2017 and $9.7 billion in the quarter ended September 30, 2016. For the nine-month periods ended September 30, 2017 and 2016, average balances of interest-bearing deposits at banks were $5.2 billion and $8.9 billion,2022, respectively. The amounts of investment securities and other earning assets held by the Company are influenced by such factors as demand for loans, which generally yield more than investment securities and other earning assets, ongoing repayments, the levels of deposits, and management of liquidity (including the LCR) and balance sheet size and resulting capital ratios. The amounts of interest-bearing deposits at banks at the respective dates were predominantly comprised of deposits held at the ~~Federal Reserve Bank~~FRB of New York. The ~~levels~~decline in the recent quarter reflects actions taken by the Company including the purchases of ~~those~~investment securities and treasury stock and the management of select deposit relationships designed to reduce the balances of higher-cost deposit accounts. In general, the level of deposits ~~often fluctuate~~held at the FRB of New York also fluctuates due to changes in ~~trust-related~~ deposits of commercial entities, ~~purchases~~trust-related deposits and additions to or maturities of investment securities or ~~borrowings to manage the Company’s liquidity.~~borrowings.

As a result of the changes described herein, average earning assets totaled ~~$108.6~~$182.4 billion in the most recent quarter, compared with ~~$112.9~~$140.4 billion in the ~~year-earlier~~third quarter of 2021 and ~~$110.0~~$189.8 billion in the second quarter of ~~2017.~~2022. Average earning assets ~~aggregated $110.2~~totaled $170.4 billion and ~~$112.0~~$137.3 billion during the ~~nine-month periods ended September 30, 2017~~first nine months of 2022 and ~~2016,~~2021, respectively.

The most significant source of funding for the Company is core deposits. The Company considers noninterest-bearing deposits, interest-bearing transaction accounts, savings deposits and time deposits of $250,000 or less as core deposits. The Company’s branch network is its principal source of core deposits, which generally carry lower interest rates than wholesale funds of comparable maturities. Average core deposits totaled ~~$91.0~~$162.8 billion in the third quarter of ~~2017, compared with $93.2~~2022, up 28% from $127.1 billion in the ~~year-earlier~~similar 2021 quarter, ~~and $92.0~~but down 4% from $169.6 billion in the second quarter of ~~2017.~~2022. 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 decline in average core deposits in the ~~third~~recent quarter ~~of 2017~~ as compared with the year-earlier quarter reflected a $4.1 billion, or 37%, decrease in time deposits, predominantly related to maturities of relatively high-rate deposits obtained in the acquisition of Hudson City, partially offset by growth in noninterest-bearing deposits, in part reflecting balances associated with trust customers. As compared with 2017’s second quarter of 2022 is largely reflective of the ~~most significant factor for~~Company's initiative to reduce certain historically higher-cost deposits as well as customer reactions to the ~~decrease in average core deposits in the recent quarter was the continued decline of average time deposits, largely associated with deposits obtained in the Hudson City acquisition.~~generally rising rate environment. The following table provides an analysis of quarterly changes in the components of average core deposits.

- 55 -

AVERAGE CORE DEPOSITS


			Percent Increase
			(Decrease) from
	Third Quarter		Third Quarter			Second Quarter
	2022		2021			2022
	(In millions)

Savings and interest-checking deposits	$	85,585		27	%		(6	)	%
Time deposits		4,313		60			(8	)
Noninterest-bearing deposits		72,861		27			(2	)
Total	$	162,759		28	%		(4	)	%

Percent Increase

(Decrease) from

3rd Qtr.

3rd Qtr.

2nd Qtr.

2017

2016

2017

(In millions)

Savings and interest-checking deposits

$
52,056

1

%

(1
)
%
Time deposits

6,897

(37
)

(10
)

Noninterest-bearing deposits

32,005

4

—

Total

$
90,958

(2
)
%

(1
)
%

~~- 57 -~~

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, and brokered deposits.~~office. Time deposits over $250,000 ~~excluding brokered deposits,~~ averaged ~~$717~~$681 million in the recent quarter, compared with ~~$1.3 billion~~$357 million in the third quarter of ~~2016~~2021 and $808 million in the second ~~2017 quarter.~~quarter of 2022. In the second quarter of 2021, the Company introduced a new interest-bearing sweep product (included in savings and interest-bearing deposits) that replaced the Eurodollar sweep product previously recorded as Cayman Islands office deposits. As a result, there are no longer deposits ~~averaged $169 million, $220 million~~maintained at the Cayman Islands office and ~~$163 million for~~ the quarters ended September 30, 2017, September 30, 2016 and June 30, 2017, respectively. Brokered time deposits averaged $59 million in each of the quarters ended September 30, 2017, September 30, 2016 and June 30, 2017.office is closed. The Company ~~also~~ had brokered savings and interest-bearing transaction accounts, which in the aggregate averaged ~~$1.2~~$3.8 billion ~~$1.0 billion~~during each of the recent quarter and ~~$1.1 billion during~~ the third quarter of ~~2017, the corresponding 2016 quarter~~2021 and $4.2 billion during the second quarter of ~~2017, respectively.~~ 2022. Total uninsured deposits, including deposits associated with the People's United acquisition, were estimated to be $74.7 billion at September 30, 2022 and $69.1 billion at December 31, 2021.

The ~~levels of brokered deposit accounts reflect~~accompanying table summarizes average total deposits for the demand for such deposits, largely resulting from the desire of brokerage firms to earn reasonable yields while ensuring that customer deposits are fully insured. The level of Cayman Islands office deposits is also reflective of customer demand. Additional amounts of Cayman Islands office deposits or brokered deposits may be added in the future depending on market conditions, including demand by customersquarters ended September 30, 2022, June 30, 2022 and ~~other investors for those deposits, and the cost of funds available from alternative sources at the time.~~September 30, 2021.

AVERAGE DEPOSITS


	Retail		Trust		Commercial and Other		Total
	(In millions)
Three Months Ended September 30, 2022
Savings and interest-checking deposits	$	51,196	$	7,008	$	31,156	$	89,360
Time deposits		4,607		12		431		5,050
Noninterest-bearing deposits		14,414		10,927		47,520		72,861
Total	$	70,217	$	17,947	$	79,107	$	167,271

Three Months Ended June 30, 2022
Savings and interest-checking deposits	$	52,750	$	6,852	$	35,547	$	95,149
Time deposits		5,001		17		462		5,480
Noninterest-bearing deposits		14,483		11,691		47,880		74,054
Total	$	72,234	$	18,560	$	83,889	$	174,683

Three Months Ended September 30, 2021
Savings and interest-checking deposits	$	34,344	$	5,934	$	30,698	$	70,976
Time deposits		2,892		12		157		3,061
Noninterest-bearing deposits		8,557		12,022		36,639		57,218
Total	$	45,793	$	17,968	$	67,494	$	131,255

The Company also uses borrowings from banks, securities dealers, various Federal Home Loan Banks, the ~~Federal Reserve Bank~~FRB of New York and others as sources of funding. Short-term borrowings represent borrowing arrangements that at the time they were entered into or were assumed in an acquisition had a contractual maturity of ~~less than~~ one ~~year.~~year or less. Average short-term borrowings totaled ~~$244 million in the recent quarter, compared with $231~~$913 million in the third quarter of 2016 and $212 million in the second quarter of 2017. Included in short-term borrowings were unsecured federal funds borrowings, which generally mature on the next business day, that averaged $139 million and $160 million in the third quarters of 2017 and 2016, respectively, and $141 million in the second quarter of 2017.

~~Long-term borrowings averaged $8.0 billion in the recent quarter,~~2022, compared with ~~$10.3 billion~~$91 million in the year-earlier quarter and ~~$8.3~~$1.1 billion in the second quarter of ~~2017.~~2022. Short-term borrowings assumed in connection with the People's United acquisition totaled $895 million. 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.

- 56 -

Long-term borrowings averaged $3.3 billion in each of the two most recent quarters, compared with $3.4 billion in the third quarter of 2021. Average balances of the Company’s outstanding senior notes were $1.7 billion during each of the three months ended September 30, 2022 and June 30, 2022, compared with $2.4 billion in the third quarter of 2021. 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 has a Bank Note Program whereby M&T Bank may offer unsecured senior and subordinated notes. Average balances of senior notes outstanding under that program were $4.7 billion, $5.2 billion and $4.8 billion during the three-month periods ended September 30, 2017, September 30, 2016 and June 30, 2017, respectively. During August 2017, M&T Bank issued $750redeemed $650 million of ~~2.05%~~ fixed rate senior notes that were due to mature ~~in 2020.~~on May 18, 2022. During May ~~2017, M&T Bank issued $650 million of fixed rate and~~2022, $250 million of variable rate senior notes ~~that mature in 2022. During June 2017,~~of M&T Bank ~~redeemed $750~~matured. In January 2021, $350 million of ~~1.40% fixed~~variable rate senior ~~notes. The~~ notes had a maturity date of July 25, 2017 and were redeemable on or after the 30th day prior to the maturity date. Outstanding balances of the senior unsecured notes were $5.0 billion at September 30, 2017 and $5.2 billion at December 31, 2016. Also included in average long-term borrowings were amounts borrowed from the Federal Home Loan Banks of New York, Atlanta and Pittsburgh of $580 million in the recent quarter, compared with $1.2 billion and $1.0 billion in the third quarter of 2016 and the second quarter of 2017, respectively.matured. Subordinated capital notes included in long-term borrowings averaged ~~$1.8 billion~~$982 million in the ~~recent~~third quarter ~~and $1.5 billion during each~~ of 2022, $500 million in the ~~quarters~~three-month period ended September 30, ~~2016~~2021 and ~~June 30, 2017. During August 2017,~~$983 million in the second quarter of 2022. In March 2021, M&T Bank ~~issued~~redeemed $500 million of ~~3.40% fixed rate~~ subordinated capital ~~notes that mature in 2027 in accordance with M&T’s 2017 Capital Plan.~~notes. Junior subordinated debentures associated with trust preferred securities that were included in average long-term borrowings ~~totaled $518~~were $534 million, ~~in each of the two most recent quarters, compared with $516~~$530 million inand $533 million during the third quarters of 2022 and 2021 and the second quarter of ~~2016.~~2022, respectively. Additional information regarding junior subordinated debentures is provided in note 5 of Notes to Financial Statements. ~~Also included in~~As of April 1, 2022, long-term borrowings ~~were agreements to repurchase securities, which averaged $427 million~~assumed in the recently completed quarter, compared with $1.9 billion in the year-earlier quarter and $430 million in the second quarter of 2017. The lower average balances of repurchase agreements in the 2017 periods as compared with the third quarter of 2016 reflect maturities. The repurchase agreements held at September 30, 2017People's United acquisition totaled ~~$425~~$494 million and ~~have various repurchase dates through 2020, however, the contractual maturities~~included $483 million of ~~the underlying securities extend beyond such repurchase dates.~~ fixed-rate subordinated notes and $11 million of FHLB advances.

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 September 30, ~~2017,~~2022, interest rate swap agreements were used ~~to hedge~~as fair value hedges of approximately ~~$5.0~~$1.5 billion of outstanding fixed rate long-term borrowings. ~~During the third quarter of 2017, the Company entered into $1.3 billion of~~Additionally, interest rate swap agreements ~~to hedge the senior notes and subordinated capital notes issued in~~

~~- 58 -~~

~~August 2017. In the second quarter~~with a notional amount of ~~2017, the Company entered into $2.8~~$15.25 billion were used as cash flow hedges of interest payments associated with variable rate ~~swap agreements to hedge the aforementioned senior notes issued during that quarter and certain existing fixed rate borrowings.~~commercial real estate loans. Further information on interest rate swap agreements is provided herein and in note 1011 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 ~~3.32%~~3.49% in the recent quarter, ~~compared with 2.85%~~up 81 basis points from 2.68% in the third quarter of ~~2016.~~2021. The yield on earning assets during the third quarter of ~~2017~~2022 was ~~3.89%~~3.90%, up 45108 basis points from ~~3.44%~~2.82% in the ~~year-earlier~~similar 2021 period, while the rate paid on interest-bearing liabilities ~~decreased two~~increased 27 basis points to ~~.57%~~.41% in the recent quarter from ~~.59%~~.14% in the ~~similar 2016~~year-earlier period. In the second quarter of ~~2017,~~2022, the net interest spread was ~~3.27%~~2.92%, the yield on earning assets was ~~3.79%~~3.12% and the rate paid on interest-bearing liabilities was ~~.52%~~.20%. The increases in the net interest spread since the third quarter of 2021 reflect 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. For the first nine months of ~~2017,~~2022, the net interest spread was ~~3.25%~~3.03%, up 3127 basis points from 2.76% in the year-earlier period. The yield on earning assets and the rate paid on interest-bearing liabilities for the ~~nine-month period ended September 30, 2017~~first nine months of 2022 were ~~3.79%~~3.30% and ~~.54%~~.27%, respectively, compared with ~~3.50%~~2.91% and ~~.56%~~.15%, respectively, in the ~~corresponding 2016 period.~~initial nine months of 2021. The ~~widening~~Federal Reserve raised its target Federal funds rate 3.00% since September 30, 2021, including hikes of ~~the net interest spread~~1.50% and 1.25% in ~~the recent quarter as compared with~~ the third quarter of ~~2016~~2022 and second quarter of 2017 and in the first nine months of 2017 as compared with the corresponding nine months of 2016 was largely due to the effect of increases in short-term interest rates initiated by the Federal Reserve in mid-December 2016, mid-March 2017 and mid-June 2017 that contributed to higher yields on loans and leases.2022, respectively.

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 ~~$39.2 billion in the recent quarter, compared with $37.3~~$83.8 billion in the third quarter of ~~2016~~2022, compared with $62.9 billion in the year-earlier quarter and ~~$39.1~~$84.7 billion in the second quarter of ~~2017.~~2022. During the first nine months of 2022 and 2021, average net interest-free funds aggregated $78.0 billion and $59.0 billion, respectively. The increases in average net interest-free funds in the recent quarter and the second quarter of 2022 as compared with third quarter of 2021 reflect higher average balances of noninterest-bearing deposits and shareholders’ equity that include the impact of the acquisition of People's United. Shareholders’ equity averaged $25.7 billion during the three-month period ended September 30, 2022, compared with $17.1 billion during the year-earlier period and $26.1 billion during the three-month period ended June 30, 2022. The higher amounts of shareholders' equity in the two most recent quarters as compared with 2021's third quarter 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

- 57 -

repurchased $600 million of its common stock in each of the third ~~quarter~~and second quarters of 2016 reflect higher average balances of noninterest-bearing deposits. Those deposits averaged $32.0 billion, $30.8 billion and $31.9 billion in the quarters ended September 30, 2017, September 30, 2016 and June 30, 2017, respectively. During the first nine months of 2017 and 2016, average net interest-free funds aggregated $39.6 billion and $36.0 billion, respectively. The growth in average noninterest-bearing deposits since the third quarter of 2016 reflects, in part, higher deposits of trust customers. Shareholders’ equity averaged $16.3 billion and goodwill2022. Goodwill and core deposit and other intangible assets averaged ~~$4.7~~$8.7 billion and $8.8 billion in ~~each~~the third quarter of 2022 and second quarter of 2022, respectively, up from $4.6 billion in the third quarter of 2021. 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 ~~three-month periods ended September 30, 2017, September 30, 2016~~transaction, intangible assets were identified and ~~June 30, 2017. Cash~~recorded at fair value, 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 ~~$1.8~~$2.6 billion in each of the third and second quarters of 2022, compared with $1.9 billion in the ~~recent~~third quarter ~~compared with $1.7 billion during each~~ of ~~the quarters ended September 30, 2016 and June 30, 2017. Increases~~2021. Changes in the cash surrender value of bank owned life insurance and benefits received 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 ~~.21%~~.19% in the third quarter of ~~2017,~~2022, compared with ~~.20%~~.06% and ~~.18%~~.09% in the third quarter of ~~2016~~2021 and the second quarter of ~~2017,~~2022, respectively. ~~That~~The increased contribution ~~for~~of net interest-free funds to net interest margin in the most recent quarter as compared with the third quarter of 2021 and second quarter of 2022 reflects the higher rates on interest-bearing liabilities used to value net interest-free funds. The contribution of net interest-free funds to net interest margin in the first nine months of ~~2017~~2022 and ~~2016~~2021 was ~~.19%~~.12% and ~~.18%~~.07%, respectively.

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 ~~3.53%~~3.68% in the third quarter of ~~2017,~~2022, compared with ~~3.05%~~2.74% in the ~~corresponding 2016~~year-earlier period and ~~3.45%~~3.01% in the second quarter of ~~2017.~~2022. During the first nine months of ~~2017~~2022 and ~~2016,~~2021, the net interest margin was ~~3.44%~~3.15% and ~~3.12%~~2.83%, respectively. 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~~changes to spreads, could ~~adversely~~ 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 during the first nine months of 2022. These actions have led to generally higher interest rates overall and, accordingly, have contributed to the Company's higher net interest margin in the recent quarter as compared with the year-earlier quarter and immediately preceding quarter.

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 ~~earned~~ 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 ~~$7.0~~$16.75 billion (excluding $4.65 billion of forward-starting swap agreements) at September 30, ~~2017,~~

~~- 59 -~~

~~compared with $1.4~~2022, $19.0 billion ~~and $900 million~~(excluding $8.35 billion of forward-starting swap agreements) at September 30, ~~2016~~2021 and $15.0 billion (excluding $8.35 billion of forward-starting swap agreements) at December 31, ~~2016, respectively.~~2021. 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. ~~The $6.1 billion increase in notional amount from December 31, 2016 reflects additions of $2.0 billion of~~At September 30, 2022 interest rate ~~swaps designated~~swap agreements with notional amounts of $15.25 billion were serving as cash flow hedges of interest payments associated with variable rate commercial real estate loans, compared with $17.35 billion at September 30, 2021 and ~~$4.1~~$13.35 billion at December 31, 2021. Interest rate swap agreements with notional amounts of ~~interest rate swaps designated~~$1.5 billion at September 30, 2022 and $1.65 billion at each of September 30, 2021 and December 31, 2021 were serving as fair value hedges of fixed rate long-term borrowings. ~~There were no~~The Company enters into forward-starting interest rate swap agreements ~~designated~~predominantly to extend the term of its interest rate swap agreements serving as cash flow hedges ~~at September 30, 2016 or December 31, 2016.~~and provide a hedge against changing interest rates on certain of its variable rate loans.

- 58 -

In a fair value hedge, the fair value of the derivative (the interest rate swap agreement) and changes in the fair value of the hedged item are recorded in the Company’s consolidated balance sheet with the corresponding gain or loss recognized in current earnings. The difference between changes in the fair value of the interest rate swap agreements and the hedged items represents hedge ineffectiveness and is recorded ~~in “other revenues from operations” in~~as an adjustment to the ~~Company’s consolidated statement~~interest income or interest expense of ~~income.~~the respective hedged item. In a cash flow hedge, ~~unlike in a fair value hedge, the effective portion of~~ 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. The ~~ineffective portion of the gain or loss is reported in “other revenues from operations” immediately. The~~ amounts of hedge ineffectiveness recognized during each of the quarters ended September 30, ~~2017,~~2022, September 30, ~~2016~~2021 and June 30, ~~2017~~2022 were not material to the Company’s consolidated results of operations. ~~The estimated aggregate net~~Information regarding the fair value of interest rate swap agreements ~~designated as fair value hedges represented losses (without consideration~~and hedge ineffectiveness is presented in note 11 of ~~any settlement payments)~~Notes to Financial Statements. Information regarding the valuation of approximately $12 million at September 30, 2017, compared with gains (without consideration of any settlement payments) of $21 million at September 30, 2016, $12 million at December 31, 2016 and $2 million at June 30, 2017. The fair values of such interest rate swap agreements were substantially offset by changes in the fair values of the hedged items. The estimated fair values of the interest rate swap agreements designated as cash flow hedges were net losses (without consideration of any settlement payments) of approximately $3.4 million at September 30, 2017 and $1.5 million at June 30, 2017. Net of applicable income taxes, the amount of such losses reflectedincluded in ~~“accumulated~~ other comprehensive income ~~net”~~is presented in ~~the Company’s consolidated balance sheet were approximately $2 million and $1 million at September 30 and June 30, 2017, respectively.~~note 10 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 Company’s credit exposure as of September 30, 2017 with respect to the estimated fair value of interest rate swap agreements used for managing interest rate risk has been substantially mitigated through master netting arrangements with trading account interest rate contracts with the same counterparty, periodic settlements and counterparty postings of $5 million of collateral with the Company.

~~The weighted-average rates to be received and paid under interest rate swap agreements currently in effect were 2.29% and 1.81% respectively, at September 30, 2017.~~ 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 the accompanying table. Additional information about the Company’s use of interest rate swap agreements and other derivatives is included in note 1011 of Notes to Financial Statements.

~~- 60 -~~

INTEREST RATE SWAP AGREEMENTS


	Three Months Ended September 30
.	2022							2021
				Rate(a)				Amount			Rate(a)
	(Dollars in thousands)
Increase (decrease) in:
Interest income	$	(22,466	)		.(05	)	%	$	58,058			.16		%
Interest expense		(651	)		—				(8,731	)		.(04	)
Net interest income/margin	$	(21,815	)		.(05	)	%	$	66,789			.19		%
Average notional amount (c)	$	16,472,826						$	18,923,913
Rate received (b)					2.06		%					1.53		%
Rate paid (b)					2.57		%					.15		%

	Nine Months Ended September 30,
.	2022							2021
	Amount			Rate(a)				Amount			Rate(a)
	(Dollars in thousands)
Increase (decrease) in:
Interest income	$	35,500			.03		%	$	206,713			.20		%
Interest expense		(14,436	)		.(02	)			(26,084	)		.(04	)
Net interest income/margin	$	49,936			.04		%	$	232,797			.23		%
Average notional amount (c)	$	15,452,015						$	18,915,751
Rate received (b)					1.67		%					1.79		%
Rate paid (b)					1.25		%					.17		%

Three Months Ended September 30

.

2017

2016

Amount

Rate(a)

Amount

Rate(a)

(Dollars in thousands)

Increase (decrease) in:

Interest income

$
1,181

—

%
$
—

—

%
Interest expense

(6,059
)

(.03
)

(9,462
)

(.05
)

Net interest income/margin

$
7,240

.03

%
$
9,462

.03

%
Average notional amount

$
6,352,174

$
1,400,000

Rate received (b)

2.26

%

4.42

%
Rate paid (b)

1.76

%

1.68

%
(a)

Computed as an annualized 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 period.

(c)

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

Nine Months Ended September 30

2017

2016

Amount

Rate(a)

Amount

Rate(a)

(Dollars in thousands)

Increase (decrease) in:

Interest income

$
2,275

—

%
$
—

—

%
Interest expense

(15,611
)

(.03
)

(29,593
)

(.05
)

Net interest income/margin

$
17,886

.02

%
$
29,593

.04

%
Average notional amount

$
3,807,326

$
1,400,000

Rate received (b)

2.38

%

4.42

%
Rate paid (b)

1.74

%

1.58

%

~~(a)~~

~~Computed as an annualized 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 period.~~

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,

- 59 -

thrifts, mutual funds, securities dealers and others. The Company supplements funding provided through 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. M~~&T’s bank subsidiaries have~~&T Bank has access to additional funding sources through borrowings from the FHLB of New York, lines of credit with the ~~Federal Reserve Bank~~FRB of New York, ~~the previously noted~~M&T Bank’s Bank Note Program, and other available borrowing facilities. The Bank Note Program enables M&T Bank to offer unsecured senior and subordinated notes. The Company has, from time to time, also issued subordinated capital notes and junior subordinated debentures associated with trust preferred securities to provide liquidity and enhance regulatory capital ratios. ~~Such notes generally qualify under the Federal Reserve Board’s risk-based capital guidelines for inclusion in the Company’s regulatory capital. However, pursuant to the Dodd-Frank Act, the~~The Company’s junior subordinated debentures associated with trust preferred securities ~~have been phased-out of the definition of Tier 1 capital. Beginning January 1, 2016 those instruments~~and other subordinated capital notes are considered Tier 2 capital and are ~~only~~ includable in total regulatory capital.

~~The Company has informal and sometimes reciprocal sources~~ At each of funding available through various arrangements for unsecured short-term borrowings from a wide group of banks and other financial institutions. Short-term federal funds borrowings were $134 million, $159 million and $112 million at September 30, ~~2017, September 30, 2016~~2022 and December 31, ~~2016, respectively. In general, those~~2021, long-term borrowings ~~were unsecured and matured on the next business day. In addition to satisfying customer demand,~~ aggregated $3.5 billion.

Cayman Islands office deposits ~~may be~~had been used by some customers of the Company as an alternative to ~~short-term borrowings.~~other deposit and investment products. 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, the Cayman Islands office has been closed and there were no Cayman Islands office deposits ~~totaled $232 million at~~outstanding as of September 30, ~~2017, $223 million at September 30, 2016~~2022 and ~~$202 million at~~ December 31, ~~2016.~~2021. The Company has ~~also~~ benefited from the placement of brokered deposits. The Company had brokered savings and ~~interest-bearing checking~~interest-checking deposit accounts which ~~totaled~~aggregated approximately ~~$1.3~~$3.3 billion at September 30, ~~2017, $1.1~~2022, $3.2 billion at December 31, 2021 and $3.4 billion at September 30, ~~2016 and $1.2 billion at December 31, 2016.~~2021. Brokered time deposits were not a significant source of funding as of those dates.

~~- 61 -~~

The Company’s ability to obtain funding from these ~~other~~ sources could be negatively impacted should the Company experience a substantial deterioration in its financial condition or its debt ratings, or should the availability of ~~short-term~~ funding become restricted due to a disruption in the financial markets. The Company attempts to quantify such credit-event risk by modeling scenarios that estimate the liquidity impact resulting from a short-term ratings downgrade over various grading levels. Such impact is estimated by attempting to measure the effect on available unsecured lines of credit, available capacity from secured borrowing sources and securitizable assets. 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.

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. ~~There were $2 million~~The value of VRDBs in the Company’s trading account was not material at September 30, ~~2017, compared with $73 million at September 30, 2016 and $30 million at~~2022 or December 31, ~~2016.~~2021. The total ~~amount~~amounts of VRDBs outstanding backed by M&T Bank letters of credit ~~was $1.2 billion~~were $633 million at September 30, ~~2017, compared with $1.6 billion~~2022, $662 million at December 31, 2021 and ~~$1.3 billion~~$683 million at September 30, ~~2016 and December 31, 2016, respectively.~~2021. M&T Bank also serves as remarketing agent for most of those bonds.

The Company enters into contractual obligations in the normal course of business that require future cash payments. Such obligations include, among others, payments related to deposits, borrowings, leases and other contractual commitments. Off-balance sheet commitments to customers may impact liquidity, including commitments to extend credit, standby letters of credit, commercial letters of credit, financial guarantees and indemnification contracts, and commitments to sell real estate loans. Because many of these commitments or contracts expire without being funded in whole or in part, the contract amounts are not necessarily indicative of future cash flows. Further discussion of these commitments is provided in note 1314 of Notes to Financial Statements.

M&T’s primary source of funds to pay for operating expenses, shareholder dividends and treasury stock repurchases has historically been the receipt of dividends from its bank subsidiaries, which are subject to various regulatory limitations. Dividends from any bank subsidiary to M&T are limited by the amount of earnings of the subsidiary in the current year and the two preceding years. For purposes of that test, at September 30, ~~2017~~2022 approximately ~~$819~~$937 million was available for payment of dividends to M&T from bank subsidiaries. ~~Information regarding the~~M&T also may

- 60 -

obtain funding through long-term ~~debt obligations~~borrowings. Outstanding senior notes of M&T ~~is included~~at September 30, 2022 and December 31, 2021 were $1.22 billion and $766 million, respectively. M&T assumed $503 million of short-term borrowings and $78 million of long-term borrowings in ~~note 5~~the acquisition of ~~Notes to Financial Statements.~~People's United. In October 2022, M&T redeemed the short-term borrowings obtained in the acquisition of People's United. Junior subordinated debentures of M&T associated with trust preferred securities outstanding at September 30, 2022 and December 31, 2021 totaled $535 million and $532 million, respectively.

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~~ordinary course of business. Management does not anticipate engaging in any activities, either currently or in the long-term, for which adequate funding would not be available and would therefore result in a significant strain on liquidity at either M&T or its subsidiary banks. Banking regulators have enacted the LCR rules requiring a banking company to maintain a minimum amount of liquid assets to withstand a standardized supervisory liquidity stress scenario. The Company has taken steps to maintain appropriate liquidity and is in compliance with the LCR rules.

Market risk is the risk of loss from adverse changes in the market prices and/or interest rates of the Company’s financial instruments. The primary market risk the Company is exposed to is interest rate risk. Interest rate risk arises from the Company’s core banking activities of lending and deposit-taking, because assets and liabilities reprice at different times and by different amounts as interest rates change. As a result, net interest income earned by the Company is subject to the effects of changing interest rates. The Company measures interest rate risk by calculating the variability of net interest income in future periods under various interest rate scenarios using projected balances for earning assets, interest-bearing liabilities and derivatives used to ~~hedge~~manage interest rate risk. Management’s philosophy toward interest rate risk management is to limit the variability of net interest income. The

~~- 62 -~~

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 September 30, 2022, the aggregate notional amount of interest rate swap agreements entered into for interest rate risk management purposes that were currently in effect was $16.75 billion. In addition, the Company has entered into $4.65 billion of forward-starting interest rate swap agreements.

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

The accompanying table as of September 30, ~~2017~~2022 and December 31, ~~2016~~2021 displays the estimated impact on net interest income ~~from non-trading financial instruments~~ in the base scenario described above resulting from parallel changes in interest rates across repricing categories during the first modeling year.

- 61 -

SENSITIVITY OF NET INTEREST INCOME

TO CHANGES IN INTEREST RATES


	Calculated Increase (Decrease) in Projected Net Interest Income
Changes in interest rates	September 30, 2022			December 31, 2021
	(In thousands)

+200 basis points	$	251,494			533,317
+100 basis points		179,848			297,573
-100 basis points		(248,760	)		(204,760	)
-200 basis points		(520,661	)		—		(a)

Calculated Increase (Decrease)
in Projected Net Interest Income

Changes in interest rates

September 30, 2017

December 31, 2016

(In thousands)

+200 basis points

$
134,336

227,283

+100 basis points

96,895

147,400

-50 basis points

—

(a)

(98,945
)

-100 basis points

(180,632
)

—

(a)

(a)

The Company did not analyze this ~~scenario.~~

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, ~~held for non-trading purposes,~~ 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 ~~positive~~at or above zero on all points of the yield curve. ~~In 2016,~~Changes in amounts presented since December 31, 2021 reflect higher balances of earnings assets obtained in the ~~Company suspended~~People's United acquisition, changes in portfolio composition, the ~~-100 basis point scenario due to the persistent low~~ level of market-implied forward interest ~~rates. This scenario was reinstated as of June 30, 2017.~~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

~~- 63 -~~

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. ~~Given recent increases~~

A significant amount of the Company’s interest-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”). Various regulatory bodies have encouraged banks to transition away from LIBOR as soon as practicable, generally cease entering new contracts that use LIBOR as a reference rate no later than December 31, 2021, and for new contracts entered into before December 31, 2021 to utilize a reference rate other than LIBOR or include robust language that includes a clearly defined alternative reference rate after LIBOR’s discontinuation. 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.

At September 30, 2022 the Company had LIBOR-based commercial loans and leases and commercial real estate loans of $36.6 billion and residential mortgage and consumer loans of $4.3 billion outstanding. Approximately 70% 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 $731 million of borrowings and $1.1 billion of preferred equity instruments reference LIBOR as of September 30, 2022. 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 ~~short-term~~November 2020 and is in the process of remediating its interest ~~rates, management believes~~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 ~~likelihood~~same relevant Secured Overnight Financing Rate (“SOFR”) benchmark alternatives of ~~potential volatility~~the Supplement and Protocol.

As loans mature and new originations occur a larger percentage of ~~interest rates has increased. As a result,~~the Company’s variable-rate loans are expected to reference SOFR or other indexes, including the Bloomberg Short Term Bank Yield Index (“BSBY”). At September 30, 2022 the Company had approximately $21.3 billion and $274 million of outstanding loan balances that reference SOFR and BSBY, respectively. Additionally, as ~~previously described, in 2017 management added~~of September 30, 2022, the Company had $15.6 billion of notional amount of interest rate swap agreements designated as ~~hedging instruments~~cash flow hedges of commercial real estate loans,

- 62 -

including $4.7 billion of forward-starting interest rate swap agreements that become effective in 2023, and notional amounts of $4.3 billion of non-hedging derivative interest rate contracts that are referenced to ~~mitigate~~SOFR. The Company’s usage of interest rate swap agreements referenced to SOFR or BSBY is expected to increase in response to the discontinuation of LIBOR. 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 ~~exposure to such potential volatility. In light of the uncertainties~~interest rate risk profile and ~~assumptions associated with the process, the amounts presented in the table are not considered significant to the Company’s past or projected net interest income.~~its management thereof.

Changes in fair value of the Company’s financial instruments can also result from a lack of trading activity for similar instruments in the financial markets. That impact is most notable on the values assigned to some of the Company’s investment securities. Information about the fair valuation of investment securities is presented ~~herein under the heading “Capital” and~~ in notes 3 and 1213 of Notes to Financial Statements.

The Company ~~engages in limited trading account activities~~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 ~~to fund the Company’s obligations under certain deferred compensation plans.~~other liabilities. Financial instruments utilized ~~in trading account~~for such activities consist predominantly of interest rate ~~contracts, such as~~ swap agreements and forward and futures contracts related to foreign currencies. The Company generally mitigates the foreign currency and interest rate risk associated with ~~trading account~~customer activities by entering into offsetting ~~trading~~ positions with third parties that are also included in ~~the trading account.~~other assets and other liabilities. The fair values of ~~the offsetting trading account~~non-hedging derivative positions associated with interest rate contracts and foreign currency and other option and futures contracts are presented in note 1011 of Notes to Financial Statements. The amounts of gross and net trading account positions, as well as the type of trading account activities conducted by the Company, are subject to a well-defined series of potential loss exposure limits established by management and approved by M&T’s Board of Directors. However, asAs with any non-government guaranteed financial instrument, the Company is exposed to credit risk associated with counterparties to the Company’s ~~trading account~~non-hedging derivative activities.

The notional amounts of interest rate contracts entered into for trading account purposes were $15.5 billion at September 30, 2017, $21.2 billion at September 30, 2016 and $21.6 billion at December 31, 2016. The notional amounts of foreign currency and other option and futures contracts entered into for trading account purposes were $545 million at September 30, 2017, compared with $891 million at September 30, 2016 and $471 million at December 31, 2016. Although the notional amounts of these contracts are not recorded in the consolidated balance sheet, the unsettled fair values of ~~all~~such financial instruments ~~used for trading account activities~~ are recorded in the consolidated balance sheet. The fair values of ~~all trading account~~such non-hedging derivative assets and liabilities recognized on the balance sheet ~~totaled $171~~were $416 million and ~~$110 million,~~$1.42 billion, respectively, at September 30, 2017. Effective January 2017, certain clearinghouse exchanges revised their rules to re-characterize required collateral postings for changes in fair value of exchange-traded derivatives as legal settlements of those positions. As a result, the2022 and $418 million and $83 million, respectively, at December 31, 2021. The fair value asset and liability amounts at September 30, ~~2017~~2022 have been reduced by contractual settlements of ~~$89~~$1.15 billion and $20 million, respectively, and at December 31, 2021 have been reduced by contractual settlements of $54 million and ~~$29~~$305 million, respectively. The ~~fair~~ values ~~of trading account assets and liabilities were $489 million and $293 million, respectively,~~associated with the Company's non-hedging derivative activities at September 30, ~~2016 and $324~~2022 as compared with December 31, 2021 reflect changes in values associated with interest rate swap agreements entered into with commercial customers that are not subject to periodic variation margin settlement payments.

Trading account assets were $130 million ~~and $174~~at September 30, 2022, $50 million ~~respectively,~~ at December 31, ~~2016.~~2021 and $51 million at September 30, 2021. Included in trading account assets were assets related to deferred compensation plans ~~totaling~~aggregating $23 million at September 30, 2022, compared with $21 million at each of September 30, ~~2017~~2021 and ~~2016 and $22 million at~~ December 31, ~~2016.~~2021. Changes in the fair values of such assets are recorded as “trading account and ~~foreign exchange~~non-hedging derivative gains” in the consolidated statement of income. Included in “other liabilities” in the consolidated balance sheet ~~were~~at September 30, 2022 was $29 million of liabilities related to deferred compensation plans, ~~totaling $26~~compared with $25 million at ~~each of~~ September 30, ~~2017, September 30, 2016~~2021 and $24 million at December 31, ~~2016.~~2021. 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 ~~$25~~$107 million at September 30, ~~2017, $28~~2022 and $29 million at each of September 30, 2021 and December 31, 2021. The increase at September 30, ~~2016~~2022 as compared with the prior dates reflects assets obtained in the acquisition of the People's United non-qualified supplemental retirement and ~~$24 million at December 31, 2016.~~other benefit plans.

- 6463 -

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 ~~trading account~~actions to mitigate foreign currency and interest rate risk associated with customer activities. Additional information about the Company’s use of derivative financial instruments ~~in its trading account activities~~ is included in note 1011 of Notes to Financial Statements.

Provision for Credit Losses

~~The Company maintains an allowance for credit losses that in management’s judgment appropriately reflects losses inherent in the loan and lease portfolio.~~ A provision for credit losses is recorded to adjust the level of the allowance to reflect expected credit losses that are based on economic forecasts as of each reporting date. Provisions for credit losses of $115 million and $302 million were recorded in the third and second quarters of 2022, respectively, compared with a credit loss recapture of $20 million in the third quarter of 2021. The provision recorded in the second quarter of 2022 included $242 million on loans obtained in the acquisition of People's United not deemed ~~necessary by management. The~~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 ~~$30~~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 September 30, 2022 reflect anticipated increases in unemployment 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 the immediately preceding quarter and continued concerns about commercial real estate values in the hospitality 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.

Net charge-offs of loans were $63 million in the recent quarter, compared with ~~$47~~net charge-offs of $40 million in the third quarter of ~~2016~~2021 and ~~$52~~$50 million in the second quarter of 2017. For the nine-month periods ended September 30, 2017 and 2016, the provision for credit losses was $137 million and $128 million, respectively. Net charge-offs of loans were $25 million in the recent quarter, compared with $41 million in the corresponding 2016 quarter and $45 million in the second quarter of 2017.2022. Net charge-offs as an annualized percentage of average loans and leases were ~~.11%~~.20% in the ~~recent~~third quarter ~~compared with .19%~~of 2022, .17% in the year-earlier quarter and ~~.20%~~.16% in the second quarter of ~~2017.~~2022. As an annualized percentage by loan type, net charge-offs (recoveries) for the third quarter of 2022, third quarter of 2021 and the second quarter of 2022 were .16%, .38% and .31% for commercial loans and leases, .30%, .13% and .06% for commercial real estate loans and .25%, .12% and .26% for consumer loans, respectively. Net charge-offs of residential real estate loans as an annualized percentage of average loan balances were less than .01% for each of the three quarters noted herein. Net charge-offs for the nine-month periods ended September 30, ~~totaled $113~~2022 and 2021 were $120 million ~~in 2017~~ and ~~$108~~$161 million, ~~in 2016,~~respectively, representing an annualized ~~rate of .17%~~.14% and ~~.16%~~.22%, respectively, of average loans and ~~leases in those respective periods.~~leases. A summary of net charge-offs by loan type is presented in the table that follows.

- 64 -

NET CHARGE-OFFS (RECOVERIES)

BY LOAN/LEASE TYPE


	2022
	First Quarter			Second Quarter (a)			Third Quarter		Year- to-date (a)
	(In thousands)

Commercial, financial, leasing, etc.	$	5,569			29,502			15,374		50,445
Real estate:
Commercial		(13,143	)		7,140			34,812		28,809
Residential		865			256			338		1,459
Consumer		13,576			12,671			12,675		38,922
	$	6,867			49,569			63,199		119,635

	2021
	First Quarter			Second Quarter			Third Quarter		Year- to-date
	(In thousands)

Commercial, financial, leasing, etc.	$	4,434			29,242			22,813		56,489
Real estate:
Commercial		54,092			11,330			11,880		77,302
Residential		366			(149	)		22		239
Consumer		16,289			5,655			5,389		27,333
	$	75,181			46,078			40,104		161,363

��
2017

First
Quarter

Second Quarter

Third Quarter

Year-
to-date

(In thousands)

Commercial, financial, leasing, etc.

$
11,896

21,814

5,291

39,001

Real estate:

Commercial

3,971

1,419

(5,637
)

(247
)
Residential

4,752

3,169

2,178

10,099

Consumer

21,948

18,803

23,067

63,818

$
42,567

45,205

24,899

112,671

(a)

For the quarter ended June 30, 2022 and nine months ended September 30, 2022, net charge-offs do not reflect $33 million of charge-offs related to PCD acquired loans.

2016

First
Quarter

Second Quarter

Third Quarter

Year-
to-date

(In thousands)

Commercial, financial, leasing, etc.

$
902

(3,132
)

14,117

11,887

Real estate:

Commercial

(1,141
)

(1,866
)

(140
)

(3,147
)
Residential

5,085

3,115

4,835

13,035

Consumer

37,394

26,139

22,563

86,096

$
42,240

24,256

41,375

107,871

~~Reflected in~~The net charge-offs of commercial loans ~~and leases was: an $8~~in the third quarter of 2022 reflect a $23 million charge-off of a loan to a paper distribution company partially offset by recoveries of previously charged-off loan balances. Net charge-offs of commercial loans in the second quarter of ~~2017 associated with~~2022 include a provider of asset management, trading, and merger and acquisition advisory services; a $6 million charge-off in the first quarter of 2017 associated with a producer of powdered cellulose and fiber filler products used for food and industrial applications; a $12$23 million charge-off of ~~loans~~a loan to a consumer products manufacturer. The net charge-offs of commercial ~~maintenance services provider~~real estate loans in the third quarter of ~~2016~~2022 reflect a $20 million charge-off of a loan to a healthcare provider and a $7 million ~~recovery~~charge-off of a ~~previously charged-off~~ loan ~~in the second quarter of 2016.~~to a residential leasing company. Included in net charge-offs of consumer loans ~~and leases were~~were: net ~~charge-offs during the~~

~~- 65 -~~

~~quarters ended September 30, 2017, September 30, 2016 and June 30, 2017, respectively, of:~~recoveries of automobile loans of $9less than $1 million in the recent quarter, $2 million in the year-earlier quarter and $1 million in the second quarter of 2022; net charge-offs of recreational finance loans of $5 million in the third quarter of 2022, $1 million in the year-earlier quarter and $7 million in the second 2022 quarter; and ~~$7 million; recreational vehicle loans~~net recoveries of ~~$4 million, $4 million and $2 million; and~~ home equity loans and lines of credit secured by one-to-four family residential properties of $2less than $1 million ~~$5 million and $3 million. Beginning~~ in each of the ~~first~~recent quarter, the third quarter of 2016, the Company accelerated the charge off of consumer loans associated with customers who were either deceased or had filed for bankruptcy that, in accordance with GAAP, had previously been considered when determining the level of the allowance for credit losses2021 and ~~were charged-off following the Company’s normal charge-off procedures to the extent the loans subsequently became delinquent. Reflected in consumer loan charge-offs in~~ the second quarter of ~~2016 was a $6 million charge-off of a personal usage loan. For the nine-month periods ended September 30, 2017~~2022. Net charge-offs associated with other consumer loans including credit cards and ~~2016, net consumer loan charge-offs included the following: automobile~~installment loans ~~of $25 million and $24 million, respectively; recreational vehicle loans of $11 million and $19 million, respectively; and home equity loans and lines of credit of~~totaled $8 million ~~and $14 million, respectively.~~

~~Loans acquired~~ in ~~connection with acquisition transactions subsequent to 2008 were recorded at fair value with no carry-over of any previously recorded allowance for credit losses. Determining the fair value~~each of the acquired loans required estimating cash flows expected to be collected on the loans and discounting those cash flows at then-current interest rates. For acquired loans where fair value was less than outstanding principal as of the acquisition daterecent quarter and the ~~resulting discount was due, at least in part, to credit deterioration, the excess~~second quarter of expected cash flows over the carrying value of the loans is recognized as interest income over the lives of loans. The difference between contractually required payments and the cash flows expected to be collected is referred to as the nonaccretable balance and is not recorded on the consolidated balance sheet. The nonaccretable balance reflects estimated future credit losses and other contractually required payments that the Company does not expect to collect. The Company regularly evaluates the reasonableness of its cash flow projections associated2022, compared with such loans, including its estimates of lifetime principal losses. Any decreases to the expected cash flows require the Company to evaluate the need for an additional allowance for credit losses and could lead to charge-offs of loan balances. Any significant increases in expected cash flows result in additional interest income to be recognized over the then-remaining lives of the loans. The carrying amount of loans acquired at a discount subsequent to 2008 and accounted for based on expected cash flows was $1.1 billion, $2.0 billion and $1.8 billion at September 30, 2017, September 30, 2016 and December 31, 2016, respectively. The nonaccretable balance related to remaining principal losses associated with loans acquired at a discount as of September 30, 2017 and December 31, 2016 is presented$7 million in the ~~accompanying table.~~third quarter of 2021.

~~NONACCRETABLE BALANCE - PRINCIPAL~~

Remaining balance

September 30, 2017

December 31, 2016

(In thousands)

Commercial, financial, leasing, etc.

$
4,606

4,794

Commercial real estate

31,524

39,867

Residential real estate

36,128

59,657

Consumer

8,484

11,275

Total

$
80,742

115,593

For acquired loans where the fair value exceeded the outstanding principal balance, the resulting premium is recognized as a reduction of interest income over the lives of the loans. Immediately following the acquisition date and thereafter, an allowance for credit losses is recorded for incurred losses inherent in the portfolio, consistent with the accounting for originated loans and leases. The carrying amount of Hudson City loans acquired at a premium was $12.1 billion and $14.2 billion at September 30, 2017 and December 31, 2016, respectively. GAAP does not allow the credit loss component of the net premium associated with those loans to be bifurcated and accounted for as a nonaccreting balance as is the case with purchased impaired loans and other loans acquired at a discount. Rather, subsequent to the acquisition date, incurred losses associated with those loans are evaluated using methods consistent with those applied to originated loans and such losses are considered by management in evaluating the Company’s allowance for credit losses.

~~- 66 -~~

Nonaccrual loans aggregated ~~$869 million~~$2.43 billion or ~~.99%~~1.89% of total loans and leases outstanding at September 30, ~~2017,~~2022, compared with ~~$837 million~~$2.24 billion or ~~.93% a year earlier, $920 million~~2.40% at September 30, 2021, $2.06 billion or ~~1.01%~~2.22% at December 31, ~~2016~~2021 and ~~$872 million~~$2.63 billion or ~~.98%~~2.05% at June 30, ~~2017. The higher levels of nonaccrual loans since September 30, 2016 reflect the migration of previously performing residential real estate loans~~2022. Loans obtained in the acquisition of ~~Hudson City~~People's United that ~~became past due over 90 days after~~have been classified as nonaccrual totaled $581 million at September 30, ~~2016.~~2022 and $545 million at June 30, 2022. The ~~lower~~ level of nonaccrual loans ~~at September 30, 2017 as compared with December 31, 2016~~ reflects the ~~effect~~continuing impact of ~~borrower repayment performance~~economic conditions on borrowers’ abilities to make contractual payments on their loans, most notably commercial real estate loans in the hospitality, office, retail and ~~charge-offs.~~ health care-related sectors.

Accruing loans past due 90 days or more ~~(excluding loans acquired at a discount) totaled $261~~were $477 million or ~~.30%~~.37% of ~~total~~ loans and leases at September 30, ~~2017,~~2022, compared with ~~$317 million~~$1.03 billion or ~~.35%~~1.10% at September 30, ~~2016, $301~~2021, $963 million or ~~.33%~~1.04% at December 31, ~~2016~~2021 and ~~$265~~$524 million or ~~.30%~~.41% at June 30, ~~2017. Those amounts~~2022. Accruing loans past due 90 days or more were predominantly residential real estate loans and included loans guaranteed by government-related entities of ~~$252~~$423 million, ~~$282~~$947 million, ~~$283~~$928 million and ~~$235~~$468 million at September 30, ~~2017,~~2022, September 30, ~~2016,~~2021, December 31, ~~2016~~2021 and June 30, ~~2017,~~2022, respectively. The lower balance at September 30, 2022 and June 30, 2022 compared with the 2021 dates reflects residential real estate loans guaranteed by government-related entities receiving payment deferrals during the COVID-19 pandemic, but ineligible for treatment under the CARES act, that exited these arrangements and complied with modified terms to

- 65 -

become current. Guaranteed loans included one-to-four family residential mortgage loans serviced by the Company that were ~~repurchased~~purchased 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~~those purchased loans that are guaranteed by government-related entities totaled ~~$207~~$366 million at September 30, ~~2017, $225~~2022, $919 million ~~at September 30, 2016, $224~~a year earlier, $889 million at December 31, ~~2016~~2021 and ~~$185~~$435 million at June 30, ~~2017.~~2022. 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.

~~Purchased impaired loans are loans obtained in acquisition transactions subsequent to 2008 that as~~The direct and indirect effects of the ~~acquisition date were specifically identified as displaying signs~~COVID-19 pandemic resulted in a dramatic reduction in 2020 in economic activity that severely hampered the ability of ~~credit deterioration~~some businesses and consumers to meet their repayment obligations. Information regarding the Company's treatment of loan modifications subject to applicable regulatory guidance issued during the pandemic, including the CARES Act, can be found in Management's Discussion and Analysis of Financial Condition and Results of Operations within Form 10-K for ~~which~~ the Company did not expect to collect all contractually required principal and interest payments. Those loans were impaired at the date of acquisition, were recorded at estimated fair value and were generally delinquent in payments, but, in accordanceyear ended December 31, 2021. COVID-19 related modifications with ~~GAAP, the Company continues to accrue interest income on such loans based on the estimated expected cash flows associated with the loans. The carrying amount of such loans was $467 million~~payment deferrals at September 30, 2017, or .5% of total loans. Of that amount, $411 million was related to the Hudson City acquisition. Purchased impaired loans totaled $617 million and $578 million at September 30 and December 31, 2016, respectively.2022 were not material.

Accruing loans acquired at a discount past due 90 days or more are loans that could not be specifically identified as impaired as of the acquisition date, but were recorded at estimated fair value as of such date. Such loans totaled $56 million at September 30, 2017, compared with $65 million at September 30, 2016 and $61 million at December 31, 2016.

The Company also modified the terms of select loans in an effort to assist ~~borrowers.~~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. ~~In accordance with GAAP, the modified loans are included in impaired loans for purposes of determining the level of the allowance for credit losses.~~ Information about modifications of loans that are considered troubled debt restructurings is included in note 4 of Notes to Financial Statements.

Residential real estate loans modified under specified loss mitigation programs prescribed by government guarantors 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 aggregated ~~$184 million, $170 million and $171~~$382 million at September 30, ~~2017,~~2022, $425 million at each of September 30, ~~2016~~2021 and December 31, ~~2016, respectively.~~2021, and $356 million at June 30, 2022.

~~- 67 -~~

~~Nonaccrual commercial~~Commercial loans and leases ~~were $204~~classified as nonaccrual totaled $368 million, $280 million, $221 million and $442 million at September 30, ~~2017, $231 million at~~2022, September 30, ~~2016, $261 million at~~2021, December 31, 2016 and $201 million at June 30, 2017. Commercial real estate loans classified as nonaccrual aggregated $222 million at September 30, 2017, $198 million at September 30, 2016, $211 million at December 31, 2016 and $225 million at June 30, 2017. Nonaccrual commercial real estate loans included construction-related loans of $22 million, $41 million, $35 million and $23 million at September 30, 2017, September 30, 2016, December 31, 20162021 and June 30, ~~2017,~~2022, respectively. Those nonaccrual construction loans included loans to residential builders and developers of $2 million, $20 million, $17 million and $7 million at September 30, 2017, September 30, 2016, December 31, 2016 and June 30, 2017, respectively. Information about the location of nonaccrual and charged-off loans to residential real estate builders and developers as of and for the three-month period ended September 30, 2017 is presented in the accompanying table.

~~RESIDENTIAL BUILDER AND DEVELOPER LOANS, NET OF UNEARNED DISCOUNT~~

Quarter Ended

September 30, 2017

September 30, 2017

Nonaccrual

Net Charge-offs (Recoveries)

Outstanding
Balances(b)

Balances

Percent of
Outstanding
Balances

Balances

Annualized
Percent of
Average
Outstanding
Balances

(Dollars in thousands)

New York

$
430,628

$
382

.09

%

$
(33
)

(.03
)
%
Pennsylvania

100,932

263

.26

(3,608
)

(13.13
)

Mid-Atlantic (a)

469,064

1,691

.36

(249
)

(.21
)

Other

663,269

1,187

.18

(13
)

(.01
)

Total

$
1,663,893

$
3,523

.21

%

$
(3,903
)

(.93
)
%

~~(a)~~

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

~~(b)~~

~~Includes approximately $16 million of loans not secured by real estate, of which approximately $1 million are in nonaccrual status.~~

~~Residential~~Commercial real estate loans in nonaccrual status aggregated ~~$338~~$1.47 billion, $1.31 billion, $1.18 billion, and $1.55 billion September 30, 2022, September 30, 2021, December 31, 2021 and June 30, 2022, respectively. Commercial real estate loans in nonaccrual status were largely reflective of loans in the hospitality, office, retail and health care-related sectors. Commercial loans and leases and commercial real estate loans acquired from People's United and classified as nonaccrual totaled $136 million and $416 million, respectively, at September 30, ~~2017, compared with $303~~2022 and $188 million ~~at September 30, 2016, $336~~and $312 million, ~~at December 31, 2016 and $343 million~~respectively, at June 30, 2017. The increase in residential real estate loans classified as nonaccrual subsequent to September 30, 2016 reflects the migration of previously performing loans obtained in the acquisition of Hudson City that became more than 90 days delinquent. Such nonaccrual2022.

Nonaccrual residential real estate loans totaled ~~$211 million at each of September 30 and June 30, 2017, $149~~$381 million at September 30, ~~2016 and $190~~2022, compared with $480 million at September 30, 2021, $479 million at December 31, ~~2016. Those~~2021 and $444 million at June 30, 2022. The decreases since September 30, 2021 largely reflect borrower repayment performance since that date partially offset by $17 million of residential real estate loans ~~could not be identified~~acquired from People's United and classified as ~~purchased impaired loans~~nonaccrual at ~~the acquisition date because the borrowers were making loan payments at that time and the loans were not recorded at a discount.~~September 30, 2022. Included in residential real estate loans classified as nonaccrual were limited documentation first mortgage loans of ~~$102 million, $89 million, $107 million and $106~~$95 million at September 30, ~~2017,~~2022, compared with $127 million at September 30, ~~2016,~~2021, $123 million at December 31, ~~2016~~2021 and $113 million at June 30, ~~2017, respectively.~~2022. 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. ~~Such loans in the Company’s portfolio prior to the Hudson City transaction were originated by the~~The Company ~~before 2008. Hudson City discontinued its~~no longer originates limited documentation ~~loan program in January 2014.~~loans. Residential real estate loans past due 90 days or more and accruing interest ~~(excluding loans acquired at a discount)~~ aggregated ~~$250~~$412 million at September 30, ~~2017,~~2022, compared with ~~$281~~$945 million at ~~each of~~ September 30, ~~2016 and~~2021, $920 million at December 31, ~~2016~~2021 and ~~$233~~$474 million at June 30, ~~2017. A substantial portion of such~~2022. Those amounts related predominantly to ~~guaranteed~~government-guaranteed loans ~~repurchased from government-related entities.~~as previously noted. The lower balances at the two most recent quarter-ends also reflect improved borrower repayment performance. Information about the location of nonaccrual and charged-off residential real estate loans as of and for the quarter ended September 30, ~~2017~~2022 is presented in the accompanying table.

- 6866 -

~~SELECTED RESIDENTIAL REAL ESTATE-RELATED LOAN DATA~~

September 30, 2017

Quarter Ended September 30, 2017

Nonaccrual

Net Charge-offs (Recoveries)

Annualized
Percent of

Percent of

Average

Outstanding

Outstanding

Outstanding

Balances

Balances

Balances

Balances

Balances

(Dollars in thousands)

Residential mortgages:

New York

$
5,749,347

$
77,500

1.35
%

$
1,023

.07
%
Pennsylvania

1,449,304

15,090

1.04

50

.01

Maryland

1,149,341

13,122

1.14

(412
)

(.14
)
New Jersey

4,472,114

58,123

1.30

1,014

.09

Other Mid-Atlantic (a)

1,004,391

10,438

1.04

(11
)

(.01
)
Other

3,283,823

61,418

1.87

573

.07

Total

$
17,108,320

$
235,691

1.38
%

$
2,237

.05
%
Residential construction loans:

New York

$
5,032

$
—

—
%

$
—

—
%
Pennsylvania

1,936

343

17.74

(66
)

(16.23
)
Maryland

1,376

—

—

—

—

New Jersey

1,984

—

—

—

—

Other Mid-Atlantic (a)

3,742

—

—

—

—

Other

8,232

329

3.99

(17
)

(.90
)
Total

$
22,302

$
672

3.01
%

$
(83
)

(1.55
%)
Limited documentation first mortgages:

New York

$
1,351,590

$
40,086

2.97
%

$
39

.01
%
Pennsylvania

65,542

5,333

8.14

(112
)

(.66
)
Maryland

38,316

2,605

6.80

20

.21

New Jersey

1,207,609

25,694

2.13

158

.05

Other Mid-Atlantic (a)

31,445

2,210

7.03

84

1.00

Other

440,038

25,990

5.91

(165
)

(.14
)
Total

$
3,134,540

$
101,918

3.25
%

$
24

—
%
First lien home equity loans and lines of credit:

New York

$
1,293,963

$
15,927

1.23
%

$
699

.22
%
Pennsylvania

809,772

8,772

1.08

92

.05

Maryland

668,522

6,544

.98

468

.28

New Jersey

60,068

351

.58

43

.31

Other Mid-Atlantic (a)

207,006

1,701

.82

11

.02

Other

28,365

915

3.22

53

.82

Total

$
3,067,696

$
34,210

1.12
%

$
1,366

.18
%
Junior lien home equity loans and lines of credit:

New York

$
835,542

$
20,598

2.47
%

$
634

.30
%
Pennsylvania

326,133

3,844

1.18

(75
)

(.09
)
Maryland

719,782

11,402

1.58

287

.16

New Jersey

117,989

1,196

1.01

142

.47

Other Mid-Atlantic (a)

280,435

2,089

.74

204

.28

Other

41,420

1,761

4.25

(200
)

(1.92
)
Total

$
2,321,301

$
40,890

1.76
%

$
992

.17
%
Limited documentation junior lien:

New York

$
753

$
—

—
%

$
(1
)

(.48
%)
Pennsylvania

324

—

—

—

—

Maryland

1,373

91

6.64

—

—

New Jersey

382

—

—

—

—

Other Mid-Atlantic (a)

643

—

—

—

—

Other

4,190

393

9.38

19

1.77

Total

$
7,665

$
484

6.31
%

$
18

.92
%

~~(a)~~

~~Includes Delaware, Virginia, West Virginia and the District of Columbia.~~

~~- 69 -~~

Nonaccrual consumer loans were ~~$105~~$206 million at September 30, ~~2017, compared with $104~~2022, $170 million at September 30, ~~2016, $112~~2021, $177 million at December 31, ~~2016~~2021 and ~~$103~~$196 million at June 30, ~~2017.~~2022. Included in nonaccrual consumer loans at September 30, ~~2017,~~2022, September 30, ~~2016,~~2021, December 31, ~~2016~~2021 and June 30, ~~2017~~2022 were: automobile loans of ~~$21~~$40 million, ~~$14~~$31 million, ~~$19~~$34 million and ~~$17~~$36 million, respectively; recreational ~~vehicle~~finance loans of $5$39 million, $6$24 million, $7$28 million and $5$33 million, respectively; and outstanding balances of home equity loans and lines of credit of ~~$76~~$78 million, ~~$80~~$71 million, ~~$82~~$70 million and ~~$77~~$79 million, respectively. Consumer loans acquired from People's United and classified as nonaccrual at September 30, 2022 totaled $12 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 quarter ended September 30, ~~2017~~2022 is presented in the accompanying table.

Information about past due and nonaccrual loans as of September 30, ~~2017~~2022 and December 31, ~~2016~~2021 is also included in note 4 of Notes to Financial Statements.

SELECTED RESIDENTIAL REAL ESTATE-RELATED LOAN DATA


								Quarter Ended
	September 30, 2022							September 30, 2022
			Nonaccrual					Net Charge-offs (Recoveries)

											Percent of
					Percent of						Average
	Outstanding				Outstanding						Outstanding
	Balances		Balances		Balances			Balances			Balances
	(Dollars in thousands)
Residential mortgages:
New York	$	6,553,820	$	111,080		1.69	%	$	1,383			.09	%
Mid-Atlantic (a)		6,549,714		104,464		1.59			(185	)		.(01	)
New England (b)		6,187,859		49,177		.79			(124	)		.(01	)
Other		2,631,196		19,086		.73			(216	)		.(03	)
Total	$	21,922,589	$	283,807		1.29	%	$	858			.02	%
Residential construction loans:
New York	$	21,563	$	375		1.74	%	$	—			—	%
Mid-Atlantic (a)		21,688		336		1.55			—			—
New England (b)		18,439		877		4.76			—			—
Other		2,566		—		—			—			—
Total	$	64,256	$	1,588		2.47	%	$	—			—	%
Limited documentation first lien mortgages:
New York	$	501,679	$	40,427		8.06	%	$	45			.03	%
Mid-Atlantic (a)		442,905		34,664		7.83			—			—
New England (b)		99,097		15,358		15.50			—			—
Other		43,754		4,933		11.27			(565	)		(4.94	)
Total	$	1,087,435	$	95,382		8.77	%	$	(520	)		.(18	%)
First lien home equity loans and lines of credit:
New York	$	969,253	$	16,728		1.73	%	$	274			.17	%
Mid-Atlantic (a)		1,110,862		21,961		1.98			(18	)		.(01	)
New England (b)		704,555		2,551		.36			—			—
Other		20,620		1,010		4.90			(20	)		.(01	)
Total	$	2,805,290	$	42,250		1.51	%	$	236			.03	%
Junior lien home equity loans and lines of credit:
New York	$	768,949	$	16,106		2.09	%	$	(479	)		.(41	%)
Mid-Atlantic (a)		929,851		16,674		1.79			(539	)		.(45	)
New England (b)		538,721		2,802		.52			376			.36
Other		20,612		376		1.82			—			—
Total	$	2,258,133	$	35,958		1.59	%	$	(642	)		.(11	%)

(a)

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

(b)

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

Real estate and other foreclosed assets totaled ~~$111~~$37 million at September 30, ~~2017,~~2022, compared with ~~$160~~$25 million at September 30, ~~2016, $139~~2021, $24 million at December 31, ~~2016~~2021 and ~~$104~~$29 million at June 30, ~~2017.~~2022. Net gains or losses ~~resulting from sales of~~associated with real estate and other foreclosed assets were not material induring the ~~three-month periods~~three months and nine months ended September 30, ~~2017, September 30, 2016 or June 30, 2017.~~2022 and 2021. At September 30, ~~2017, the Company’s holding~~2022, foreclosed assets are comprised predominantly of residential real estate-related ~~properties comprised approximately 96% of foreclosed assets.~~properties.

- 67 -

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

NONPERFORMING ASSET AND PAST DUE, ~~RENOGIATED~~RENEGOTIATED AND IMPAIRED LOAN DATA


	2022 Quarters									2021 Quarters
	Third			Second			First			Fourth			Third
	(Dollars in thousands)

Nonaccrual loans	$	2,429,326			2,633,005			2,134,231			2,060,083			2,242,263
Real estate and other foreclosed assets		37,031			28,692			23,524			23,901			24,786
Total nonperforming assets	$	2,466,357			2,661,697			2,157,755			2,083,984			2,267,049
Accruing loans past due 90 days or more(a)	$	476,503			523,662			776,751			963,399			1,026,080
Government guaranteed loans included in totals above:
Nonaccrual loans	$	44,797			46,937			46,151			51,429			47,358
Accruing loans past due 90 days or more(a)		423,371			467,834			689,831			927,788			947,091
Renegotiated loans	$	356,797			276,584			242,108			230,408			242,955

Nonaccrual loans to total loans and leases, net of unearned discount		1.89	%		2.05	%		2.32	%		2.22	%		2.40	%
Nonperforming assets to total net loans and leases and real estate and other foreclosed assets		1.92	%		2.07	%		2.35	%		2.24	%		2.42	%
Accruing loans past due 90 days or more(a) to total loans and leases, net of unearned discount		.37	%		.41	%		.85	%		1.04	%		1.10	%

2017 Quarters

2016 Quarters

Third

Second

First

Fourth

Third

(Dollars in thousands)

Nonaccrual loans

$
869,362

872,374

926,675

920,015

837,362

Real estate and other foreclosed assets

110,515

104,424

119,155

139,206

159,881

Total nonperforming assets

$
979,877

976,798

1,045,830

1,059,221

997,243

Accruing loans past due 90 days or more(a)

$
261,288

265,461

280,019

300,659

317,282

Government guaranteed loans included in totals above:

Nonaccrual loans

$
34,687

39,296

39,610

40,610

47,130

Accruing loans past due 90 days or more

252,072

235,227

252,552

282,659

282,077

Renegotiated loans

$
226,672

221,892

191,343

190,374

217,559

Acquired accruing loans past due 90 days or more(b)

$
56,225

57,498

63,732

61,144

65,182

Purchased impaired loans(c):

Outstanding customer balance

$
779,340

838,476

890,431

927,446

981,105

Carrying amount

466,943

512,393

552,935

578,032

616,991

Nonaccrual loans to total loans and leases, net of unearned
   discount

.99
%

.98
%

1.04
%

1.01
%

.93
%

Nonperforming assets to total net loans and leases and real estate
   and other foreclosed assets

1.11
%

1.10
%

1.17
%

1.16
%

1.11
%

Accruing loans past due 90 days or more (a) to total loans and
   leases, net of unearned discount

.30
%

.30
%

.31
%

.33
%

.35
%

(a) ~~Excludes loans acquired at a discount.~~

Predominantly residential real estate loans.

~~(b) Loans acquired at a discount that were recorded at fair value at acquisition date. This category does not include purchased impaired loans that are presented separately.~~

~~(c) Accruing loans acquired at a discount that were impaired at acquisition date and recorded at fair value.~~

Management ~~determined~~determines the allowance for credit losses ~~by performing ongoing evaluations~~under accounting guidance that requires estimating the amount of current expected credit losses over the remaining contractual term of the loan and lease ~~portfolio, including such factors as~~portfolio. A description of the ~~differing economic risks associated with each loan category,~~methodologies used by the financial condition of specific borrowers, the economic environment in which borrowers operate, the level of delinquent loans, the value of any collateral and, where applicable, the existence of any guarantees or indemnifications. Management evaluated the impact of changes in interest rates and overall economic conditions on the ability of borrowersCompany to ~~meet repayment obligations when quantifying the Company’s exposure to~~estimate its allowance for credit losses ~~and~~can be found in note 4 of Notes to Financial Statements.

In establishing the allowance for ~~such~~credit losses, ~~as of each reporting date. Factors~~the Company estimates losses attributable to specific troubled credits identified through both normal and targeted credit review processes and also considered by management when performing its assessment, in addition to general economic conditions and the other factors described above, included, but were not limited to: (i) the impact of residential real estate values on the Company’s portfolio of loans to residential real estate builders and developers andestimates losses for other loans ~~secured by residential real estate; (ii)~~and leases with similar risk characteristics on a collective basis. For purposes of determining the concentrations of commercial real estate loans in the Company’s loan portfolio; (iii) the amount of commercial and industrial loans to businesses in areas of New York State outside of the New York City metropolitan area and in central Pennsylvania that have historically experienced less economic growth and vitality than the vast majority of other regions of the country; (iv) the expected repayment performance associated with the Company’s first and second lien loans secured by residential real estate, including loans obtained in the acquisition of Hudson City that were not classified as purchased impaired; and (v) the size of the Company’s portfolio of loans to individual consumers, which historically have experienced higher net charge-offs as a percentage of loans outstanding than other loan types. The level of the allowance ~~is adjusted based on~~for credit losses, the ~~results~~Company evaluates its loan and lease portfolio by type. At the time of ~~management’s analysis.~~

~~Management cautiously and conservatively evaluated~~the Company’s analysis regarding the determination of the allowance for credit losses as of September 30, 2017 in light of: (i) residential real estate values and the level of delinquencies of loans secured by residential real estate; (ii) economic conditions in the markets served by the Company; (iii) slower growth in private sector employment in upstate New York and central Pennsylvania than in other regions served by the Company and nationally; (iv) the significant subjectivity involved in commercial real estate valuations; and (v) the amount of loan growth experienced by the Company. While there has been general improvement in economic conditions,2022, concerns ~~continue to exist~~existed about the ~~strength~~somewhat incomplete recovery evident in some sectors of the economy; elevated levels of inflation; fears of a slowing economy and ~~sustainability of such improvements;~~possible recession in coming quarters; the volatile nature of global markets ~~including the impact~~and international economic conditions that could ~~have on~~impact the U.S. economy; Federal Reserve positioning of monetary policy; 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 central Pennsylvania regions (approximately ~~55%~~37% of the Company’s loans and leases are to customers in New York State and Pennsylvania).

that historically lag other regions of the country. The Company utilizes a loan grading system ~~which is applied~~ to ~~all~~differentiate risk amongst its commercial loans and commercial real estate loans. ~~Loan grades are utilized to differentiate risk within the portfolio and consider the expectations of default for each loan. Commercial loans and commercial real estate loans~~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~~while specific loans determined to have 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~~“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. Criticized commercial loans and commercial real estate loans ~~were $2.4~~totaled $10.9 billion, including $2.8 billion of loans acquired from People's United, at ~~each of~~ September 30, ~~2017 and December 31, 2016,~~2022, compared with ~~$2.5~~$9.6 billion at September 30, ~~2016~~2021, $9.0 billion at December 31, 2021 and ~~$2.3~~$11.6 billion at June 30, ~~2017. Approximately 97%~~2022, including $2.8 billion of ~~loan balances added to~~loans acquired from People's United. 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 $8.0 billion or 74% of total criticized ~~category during the recent quarter were less than 90 days past due and 86%~~loans at September 30, 2022. The weighted-average loan-to-value (“LTV”) ratio for investor-owned commercial real estate properties was approximately 60%. Criticized loans secured by investor-owned commercial real estate had a ~~current payment status. Given payment performance, amount~~weighted-average LTV ratio of ~~supporting collateral, and, in certain instances, the existence~~approximately 65%.

Line of ~~loan guarantees, the Company still expects to collect the full outstanding principal balance on most of those loans.~~

~~Loan officers~~business personnel in different geographic locations with ~~the~~ support offrom and review by the Company’s credit ~~department~~risk personnel ~~are responsible to continuously~~ review and reassign loan grades ~~to pass and criticized loans~~ based on their detailed knowledge of individual borrowers and their judgment of the impact on such borrowers resulting from changing conditions in their respective regions. AtThe Company’s policy is that, at least annually, updated financial information is obtained from commercial borrowers associated with pass grade loans and additional analysis is performed. On a quarterly basis, the Company’s centralized credit 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 reviewed. To the extent that these loans are collateral-dependent, they are evaluated based on the fair value of the loan’s collateral as estimated at or near the financial statement date. As the quality of a loan deteriorates to the point of classifying the loan as “criticized,” the process of obtaining updated collateral valuation information is usually initiated, unless it is not considered warranted given factors such as the relative size of the loan, the characteristics of the collateral or the age of the last valuation. In those cases where current appraisals may not yet be available, prior appraisals are utilized with adjustments, as deemed necessary, for estimates of subsequent declines in value as determined by line of business and/or loan workout personnel in the respective geographic regions. Those adjustments are reviewed and assessed for reasonableness by the Company’s credit department. Accordingly, for real estate collateral securing larger commercial loans and commercial real estate loans, estimated collateral values are based on current appraisals and estimates of value. For non-real estate loans, collateral is assigned a discounted estimated liquidation value and, depending on the nature of the collateral, is verified through field exams or other procedures. In assessing collateral, real estate and non-real estate values are reduced by an estimate of selling costs. 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 September 30, ~~2017,~~2022, approximately ~~57%~~55% of the Company’s home equity portfolio consisted of first lien loans and lines of ~~credit. Of the remaining~~credit and 45% were junior liens. With respect to junior lien loans, ~~in the portfolio, approximately 69% (or approximately 30% of the aggregate home equity portfolio)consisted of junior lien loans that were behind a first lien mortgage loan that was not owned or serviced by the Company. To~~to the extent known by the Company, if a related senior lien loan would be on nonaccrual status because of payment delinquency, even if such senior lien loan was not owned by the Company, the junior lien loan or line that is owned by the Company is placed on nonaccrual status. At September 30, 2017, the balance of junior lien loans and lines that were in nonaccrual status solely as a result of first lien loan performance was $10 million, compared with $14 million at September 30, 2016, $12 million at December 31, 2016 and $11 million at June 30, 2017. 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~~charge off and for purposes of ~~estimating incurred 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. 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 September 30, ~~2017,~~2022 approximately ~~83%~~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 ~~20%~~18% were making contractually allowed payments that do not include any repayment of principal.

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

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 September 30, 2022, September 30, 2021 and December 31, 2021 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. Events posing emerging risks to the macroeconomic environment, such as international conflicts and other events, inflation and supply chain issues, are considered when developing economic forecasts even if the events do not directly and materially impact the Company’s financial results. Supply chain disruptions, inflationary pressures or other peripheral impacts of global events may alter economic forecasts and the Company monitors this activity as part of its risk management procedures in assessing the allowance for credit losses. Among the assumptions utilized as of September 30, 2022 was that the national unemployment rate will average 3.9% through the reasonable and supportable forecast period. The forecast also assumed gross domestic product grows at a 1.5% average rate during the first year of the reasonable and supportable forecast period and at a 2.7% average rate in the second year. Commercial real estate prices were assumed to cumulatively grow 6.5% and residential real estate prices were assumed to contract 4.4% over the two-year reasonable and supportable forecast period. As of June 30, 2022 the national unemployment rate was assumed to average 3.4% through the reasonable and supportable period. The forecast also assumed gross domestic product would grow during the first year of the reasonable and supportable period at a 2.4% average annual rate and at a 2.9% average rate in the second year. Commercial real estate and residential real estate prices were assumed to cumulatively grow 11.6% and 0.4%, respectively, over the two-year reasonable and supportable forecast period. As of December 31, 2021 the forecast assumed that national unemployment 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 would grow during 2022 at a 3.1% average annual rate and during 2023 at a 2.7% annual rate. Commercial 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. Among the assumptions utilized as of September 30, 2021 was that the national unemployment rate would continue to be at then elevated levels, on average 4.6%, through the remainder of 2021, followed by a gradual improvement reaching 3.5% within the reasonable and supportable forecast period. The forecast also assumed gross domestic product would grow at an average annualized rate of 3.3% during the eight-quarter forecast period. The commercial real estate price index was assumed to be down modestly in 2021, but improving in 2022 and 2023. Residential real estate prices were not assumed to fluctuate significantly. The assumptions utilized were based on the information available to the Company at or near September 30, 2022, June 30, 2022, December 31, 2021 and September 30, 2021 (at the time the Company was preparing its estimate of expected credit losses as of those dates).

In ~~determining~~establishing the allowance for credit losses the Company ~~estimates losses attributable~~also considers the impact of portfolio concentrations, imprecision in economic forecasts, geopolitical conditions and other risk factors that might influence the loss estimation process. With respect to specific troubled credits identified through both normal and detailed or intensified credit review processes and also estimates losses inherent in other loans and leases. In quantifying incurred losses,economic forecasts the Company ~~considers~~assessed the ~~factors~~likelihood of alternative economic scenarios during the two-year reasonable and ~~uses~~supportable time period. Generally, an increase in unemployment rate or a decrease in any of the ~~techniques described herein~~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 ~~note 4 of Notes~~an increase to ~~Financial Statements. For purposes of determining the level of~~ the allowance for credit ~~losses,~~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 ~~Company segments its loan and lease portfolio by loan type. The amount of specific loss components~~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 ~~Company’s loan~~reasonable and ~~lease portfolios is determined through a loan-by-loan analysis~~supportable forecast period. The scenario also assumed gross domestic product contracts 2.4% in the first year of ~~commercial loans~~the reasonable and supportable forecast period before recovering to 2.2% growth in the second year and commercial real estate loans in nonaccrual status. Measurement of the specific loss components is typically based on expected future cash flows, collateral values or other factors that may impact the borrower’s ability to pay. Losses associated withand residential real estate ~~loans~~prices cumulatively decline 18.4% and ~~consumer loans~~11.4%, respectively, by the end of the reasonable and supportable forecast period.

A potential upside economic scenario assumed the unemployment rate declines to approximately 3.4% for the duration of the reasonable and supportable forecast period. The scenario also assumes gross domestic product grows 5.2% in the initial year of the reasonable and supportable forecast period and 2.0% in the second year while commercial real estate and residential real estate prices cumulatively rise 8.9% and 1.4%, respectively, over the two-year reasonable and supportable forecast period.

As a junior lien position. Approximately 43% of the Company’s home equity portfolio consists of junior lien loans and lines of credit. Except for consumer loans and residential real estate loans that are considered smaller balance homogeneous loans and are evaluated collectively and loans obtained at a discount in acquisition transactions, the Company considers a loan to be impaired when, based on current information and events,result, it is ~~probable~~possible that the Company ~~will be unable to collect all amounts according to the contractual terms of the loan agreement or the loan is delinquent 90 days or more and has been placed~~may, at another point in ~~nonaccrual status. Those impaired loans are evaluated for specific~~time, reach different conclusions regarding credit loss components. Modified loans, including smaller balance homogenous loans, that are considered to be troubled debt restructurings are evaluated for impairment giving consideration to the impact of the modified loan terms on the present value of the loan’s expected cash flows. Loans less than 90 days delinquent are deemed to have a minimal delay in payment and are generally not considered to be impaired. Loans acquired in connection with acquisition transactions subsequent to 2008 were recorded at fair value with no carry-over of any previously recorded allowance for credit losses. Determining the fair value of the acquired loans required estimating cash flows expected to be collected on the loans and discounting those cash flows at then-current interest rates. For loans acquired at a discount, the impact of estimated future credit losses represents the predominant difference between contractually required payments and the cash flows expected to be collected. Subsequent decreases to those expected cash flows require the Company to evaluate the need for an additional allowance for credit losses and could lead to charge-offs of acquired loan balances. Additional information regarding theestimates. The Company’s process for determining the allowance for credit losses undergoes quarterly and periodic evaluations by independent risk management personnel, which among many other considerations, evaluate the reasonableness of management’s methodology and significant assumptions. Further information about the Company’s methodology to estimate expected credit losses is included in note 4 of Notes to Financial Statements.

Management believes that the allowance for credit losses at September 30, ~~2017~~2022 appropriately reflected expected credit losses inherent in the portfolio as of that date. The allowance for credit losses ~~was $1.01~~totaled $1.88 billion ~~or 1.15% of total loans and leases~~ at September 30, ~~2017,~~2022, compared with ~~$976 million or 1.09%~~$1.52 billion at September 30, ~~2016, $989 million or 1.09%~~2021, $1.47 billion at December 31, ~~2016~~2021 and ~~$1.01~~$1.82 billion ~~or 1.13%~~ at June 30, ~~2017. The ratio~~2022. As a percentage of loans outstanding, the allowance was 1.46% at September 30, 2022, 1.62% at September 30, 2021, 1.58% at December 31, 2021 and 1.42% at June 30, 2022. Using the same methodology described herein, the Company added $341 million to ~~total loans and leases at each respective date reflects~~ the ~~impact of loans obtained in acquisition transactions subsequent to 2008 that have been recorded at estimated fair value. As noted earlier, GAAP prohibits any carry-over of an~~ allowance for credit losses ~~for acquired~~related to the $35.8 billion of loans ~~recorded at fair value. However, for loans acquired at a premium, GAAP provides that an~~and leases obtained in the acquisition of People's United on April 1, 2022. The combined Company allowance for credit losses ~~be recognized for incurred losses inherent in the portfolio.~~at April 1, 2022 as a percentage of loans 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 management in establishing the allowance for credit losses change and should management’s assessment of losses ~~inherent~~ 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.

The ratio of the allowance for credit losses to total nonaccrual loans ~~was 117%~~ at ~~each of~~ September 30, ~~2017~~2022 and ~~2016, compared with 107% at~~ December 31, ~~2016~~2021 was 77% and ~~116% at June 30, 2017.~~71%, respectively. Given the Company’s general position as a secured lender and its practice of charging off loan balances when collection is deemed doubtful, that ratio and changes in ~~that~~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 level of the allowance reflects management’s evaluation of the loan and lease portfolio as of each respective date.~~

Other income totaled ~~$459~~$563 million in the third quarter of ~~2017,~~2022, compared with ~~$491~~$569 million in the ~~corresponding 2016 period~~year-earlier quarter. Trust income, service charges on deposit accounts and ~~$461~~credit-related fees all increased reflecting the acquisition of People's United, but were offset by a decline in mortgage banking revenues resulting from the Company's decision to retain the substantial majority of recently originated mortgage loans in portfolio rather than sell such loans. Other income was $571 million in the second quarter of ~~2017.~~2022. The higher other income in last year’s third quarter resulted predominantly from $28 million of gains on bank investment securities. As compared with the second quarter of 2017, higher mortgage banking revenuesmodest decline in the recent quarter ~~were largely~~resulted from lower service charges on deposit accounts and trust income, offset by ~~lower~~higher credit-related fees.

Mortgage banking revenues were ~~$97~~$83 million in each of the ~~recent~~third quarter and second quarter of 2022, compared with ~~$104~~$160 million in the third quarter of ~~2016 and $86 million in the second quarter of 2017.~~2021. 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 multi-family 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 and losses 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 ~~$63~~$55 million in the third quarter of ~~2017, compared with $67~~2022, $110 million in the ~~year-earlier~~similar quarter of 2021 and ~~$61~~$50 million in ~~2017’s~~the second ~~quarter. The decline in~~quarter of 2022. As compared with the third quarter of 2021, lower residential mortgage banking revenues in the recent quarter resulted from decreased gains associated with loans held for sale and related commitments, reflecting the Company’s decision late in the third quarter of 2021 to retain most originated mortgage loans in portfolio

rather than sell such loans. Residential mortgage banking revenues were $5 million lower in the second quarter of 2022 as compared with the ~~corresponding 2016~~recent quarter ~~was the~~as a result of ~~lower gains from origination activities, reflecting~~the Company recognizing a ~~9% decline~~loss on lower-yielding repurchased mortgage loans in ~~origination volumes. The improvement from 2017’s~~the second quarter ~~was due to higher servicing fees.~~of 2022.

New commitments to originate residential real estate loans to be sold were approximately ~~$757 million in the recently completed quarter, compared with $836~~$47 million in the third quarter of ~~2016~~2022, compared with $1.1 billion in the year-earlier quarter and ~~$773~~$78 million in the second quarter of ~~2017.~~2022. Realized gains and losses 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 totaled to gains of ~~$17 million in each of the second and third quarters of 2017, compared with gains of $21~~$1 million in the third quarter of ~~2016.~~2022 and $49 million in the corresponding period of 2021, compared with losses of $17 million in 2022’s second quarter.

Loans held for sale that were secured by residential real estate ~~were $347~~aggregated $43 million at September 30, ~~2017, $415~~2022, $279 million at September 30, ~~2016~~2021 and ~~$414~~$474 million at December 31, ~~2016.~~2021. Commitments to sell residential real estate loans and commitments to originate residential real estate loans for sale at pre-determined rates ~~aggregated $658~~totaled $80 million and ~~$483~~$57 million, respectively, at September 30, ~~2017, $845~~2022, compared with $795 million and ~~$636~~$751 million, respectively, at September 30, ~~2016,~~2021 and ~~$777~~$617 million and ~~$479~~$233 million, respectively, at December 31, ~~2016.~~2021. Net recognized unrealized gains on residential real estate loans held for sale, commitments to sell loans, and commitments to originate loans for sale were ~~$15~~$1 million at ~~each of~~ September 30, ~~2017 and December 31, 2016, and~~2022, $22 million at September 30, ~~2016.~~2021 and $10 million at December 31, 2021. Changes in ~~such~~ net unrealized gains or losses are recorded in mortgage banking revenues and resulted in a net ~~decreases~~increase in revenues of $2$1 million in the recent quarter ~~compared with net increases of $3~~and $10 million in the third quarter of ~~2016 and $4~~2021, compared with a net decrease of $5 million in the second quarter of ~~2017.~~2022.

Revenues from servicing residential real estate loans for others were ~~$46 million in each of the third quarters of 2017 and 2016, compared with $44~~$54 million during the quarter ended September 30, 2022, compared with $61 million and $67 million during the three months ended September 30, 2021 and June 30, ~~2017.~~2022, respectively. Residential real estate loans serviced for others ~~aggregated $81.9~~totaled $104.0 billion at September 30, ~~2017, $55.0~~2022, $97.1 billion at September 30, ~~2016, $53.2~~2021, $97.9 billion at December 31, ~~2016~~2021 and ~~$72.6~~$102.5 billion at June 30, ~~2017.~~2022. Reflected in residential real estate loans serviced for others were loans sub-serviced for others of ~~$59.3~~$81.2 billion, $73.2 billion, $74.7 billion and $79.0 billion at September 30, ~~2017, $32.1 billion at~~2022, September 30, ~~2016, $30.4 billion at~~2021, December 31, ~~2016~~2021 and ~~$49.9 billion at~~ June 30, ~~2017.~~2022, respectively. Revenues earned for sub-servicing loans ~~aggregated $26~~totaled $33 million ~~for~~during the ~~three-month period ended September 30, 2017, compared~~recent quarter, $39 million in the third quarter of 2021 and $44 million in the second quarter of 2022. The decrease in sub-servicing fees in the recent quarter reflects lower fees associated with ~~$25 million for~~

~~each~~modifying and selling reperforming loans previously repurchased by the holder of the ~~three-month periods ended June 30, 2017 and September 30, 2016.~~ During 2017, the Company acquired additional sub-servicing of residential real estate loans as follows: in March, approximately $12.4 billion of outstanding principal balances were added; in June, outstanding principal balances of approximately $11.2 billion were added; and during September, approximately $12.0 billion of outstanding principal balances were added.contractual servicing rights. The contractual servicing rights associated with loans sub-serviced by the Company were predominantly held by affiliates of Bayview Lending Group LLC ~~(“BLG”~~("BLG"). Information about the Company’s relationship with BLG and its affiliates is included in note 1516 of Notes to Financial Statements.

~~Capitalized servicing rights consist largely of servicing associated with loans sold by the Company.~~ Capitalized residential mortgage ~~loan~~ servicing assets totaled ~~$116~~$208 million at September 30, ~~2017, compared with $117~~2022, $218 million at ~~each of~~ September 30, ~~2016 and~~2021, $217 million at December 31, ~~2016.~~2021 and $215 million at June 30, 2022.

Commercial mortgage banking revenues totaled ~~$34~~$28 million in the third quarter of ~~2017,~~2022 compared ~~with $37~~to $50 million in the ~~corresponding 2016 period~~third quarter of 2021 and ~~$25~~$33 million in the second quarter of ~~2017.~~2022. Included in such amounts were revenues from loan origination and sales activities of ~~$21 million in the recently completed quarter, compared with $25~~$12 million and ~~$11~~$24 million in the third ~~quarter~~quarters of ~~2016~~2022 and 2021, respectively, compared with $14 million in the second quarter of ~~2017, respectively.~~2022. Commercial real estate loans originated for sale to other investors ~~aggregated approximately $839 million in the third quarter of 2017, compared with $721 million in the year-earlier quarter and $510 million in the second quarter of 2017. Loan servicing revenues~~ were ~~$13~~$906 million in the recent quarter, compared with ~~$11 million~~$1.7 billion in the third quarter of ~~2016~~2021 and ~~$14~~$692 million in the second ~~2017 quarter.~~quarter of 2022. Loan servicing revenues totaled $16 million and $26 million in the third quarters of 2022 and 2021, respectively, compared with $19 million in the second quarter of 2022. Capitalized commercial mortgage servicing assets ~~totaled $111~~were $129 million and ~~$92~~$131 million at September 30, ~~2017~~2022 and ~~2016,~~September 30, 2021, respectively, and ~~$104~~$133 million at December 31, ~~2016.~~2021. Commercial real estate loans serviced for other investors totaled ~~$15.7 billion, $11.3 billion, and $11.8~~$25.1 billion at September 30, ~~2017,~~2022, $23.1 billion at September 30, ~~2016~~2021 and $23.7 billion at December 31, ~~2016, respectively,~~2021. Those servicing amounts included $3.7 billion at September 30, 2022, $3.9 billion at September 30, 2021 and ~~included $3.2~~$4.0 billion ~~$2.7 billion and $2.8 billion, respectively,~~at December 31, 2021 of loan balances for which investors had recourse to the Company if such balances are ultimately ~~uncollectible. In January 2017, the Company purchased~~uncollectable. Included in commercial ~~mortgage servicing rights~~real estate loans serviced for others were loans sub-serviced for others of $3.7 billion at September 30, 2022, $3.4 billion at September 30, 2021 and ~~other assets associated with approximately $2.7~~$3.5 billion ~~of loans. The purchase price and assets acquired were not material to the Company’s consolidated financial position.~~at December 31, 2021. Commitments to sell commercial real estate loans and commitments to originate commercial real estate loans for sale were ~~$394~~$703 million and ~~$171~~$401 million, respectively, at September 30, ~~2017, $694~~2022, $993 million and ~~$403~~$434 million,

respectively, at September 30, ~~2016~~2021 and ~~$713~~$751 million and ~~$70~~$325 million, respectively, at December 31, ~~2016.~~2021. Commercial real estate loans held for sale at September 30, ~~2017,~~2022, September 30, ~~2016~~2021 and December 31, ~~2016~~2021 were ~~$224~~$300 million, ~~$290~~$559 million and ~~$643~~$425 million, respectively. ~~The higher balance at December 31, 2016 reflected loans originated late in 2016 that were not delivered to investors until 2017.~~

Service charges on deposit accounts were ~~$109~~$115 million and $105 million in the third ~~quarter~~quarters of ~~2017,~~2022 and 2021, respectively, compared with ~~$108 million in the similar 2016 quarter and $106~~$124 million in the second quarter of ~~2017. Brokerage services income, which includes revenues from~~2022. The People's United acquisition contributed $20 million to the ~~sale of mutual funds and annuities and securities brokerage fees, aggregated $15 million during the recently completed quarter, compared with $16 million~~service charges on deposit accounts total in the ~~third~~most recent quarter ~~of 2016~~ and ~~$17~~$33 million in the second ~~2017 quarter. Trading account~~quarter of 2022. The lower fees associated with People's United reflect waivers of certain fees in September following conversion of customer deposit accounts to the Company's deposit servicing system. The Company is waiving additional fees and ~~foreign exchange activity resulted in gains of $7 million~~reimbursing select customers in the ~~third quarter~~fourth quarter. The Company does not expect those amounts to ultimately be material to its consolidated financial position or results of ~~2017, compared~~operations. Excluding the contribution associated with ~~gains of $13 million and $8 million~~the People's United acquisition, the decrease in the ~~third~~recent quarter ~~of 2016 and the second quarter of 2017, respectively. The decline in such gains in the two most recent quarters~~ as compared with the ~~third~~year-earlier quarter, reflected the Company's planned elimination, announced in February 2022, of ~~2016 reflects reduced activity related to interest rate swap transactions executed on behalf of commercial customers. Information about the notional amount of interest rate, foreign exchange~~certain non-sufficient funds fees and other contracts entered into by the Company for trading account purposes is included in note 10 of Notes to Financial Statements and herein under the heading “Taxable-equivalent Net Interest Income.”overdraft protection transfer charges from linked deposit accounts.

Trust income includes fees related to two significant businesses. The Institutional Client Services (“ICS”) business provides a variety of trustee, agency, investment management and administrative services for corporations and institutions, investment bankers, corporate tax, finance and legal executives, and other institutional clients who: (i) use capital markets financing structures; (ii) use independent trustees to hold retirement plan and other assets; and (iii) need investment and cash management services. The Wealth Advisory Services (“WAS”) business ~~helps~~offers personal trust, planning, fiduciary, asset management, family office and other services designed to help high net worth ~~clients~~individuals and families grow, ~~their wealth, protect it,~~preserve and transfer ~~it to their heirs. A comprehensive array of wealth~~

~~management services are offered, including asset management, fiduciary services and family office services.~~wealth. Trust income ~~totaled $125~~aggregated $187 million in the third quarter of ~~2017,~~2022, compared with ~~$119~~$157 million in the ~~third~~year-earlier quarter ~~of 2016~~ and ~~$127~~$190 million in the second quarter of ~~2017.~~2022. Trust income contributed from the acquisition of People's United totaled approximately $11 million in the recent quarter and $14 million in the second quarter of 2022. Revenues associated with the ICS business were ~~approximately $64 million, $58 million and $63~~$114 million during the ~~quarters~~quarter ended September 30, ~~2017, September 30, 2016~~2022 and $109 million during the quarter ended June 30, ~~2017, respectively. The higher revenues in the two most recent quarters as~~2022, each inclusive of $2 million of People's United-related revenue, compared with $94 million during the ~~third~~ quarter of 2016 reflect increased fees earned from money-market funds and stronger sales activities. Revenues attributable to WAS were approximately $56 million, $52 million and $60 million for the three-month periods ended September 30, ~~2017, September 30, 2016 and June 30, 2017, respectively.~~2021. The ~~increase~~higher revenues in the recent quarter as compared with the ~~similar 2016 period~~prior year third quarter were largely ~~reflects~~attributable to reduced fee waivers of $13 million resulting from higher rates on money market fund accounts and incremental fees from sales. Relative to the ~~impact of improved equity market performance and stronger sales activities. The~~ second quarter of ~~2017 included $4~~2022, the higher level of ICS revenues resulted from lower money market fund account fee waivers and higher collective fund fees. Revenues attributable to WAS, including $8 million of People's United-related fees, totaled approximately $71 million in the three-month period ended September 30, 2022, compared with $78 million, including $10 million of People's United-related fees, during the quarter ended June 30, 2022 and $63 million during the quarter ended September 30, 2021. The decline in WAS revenues in the recent quarter as compared with the second quarter of 2022 was largely reflective of annual tax preparation fees. Total trust assets, which include assets under management and assets under administration, totaled $230.5 billion at September 30, 2017, compared with $208.4 billion at September 30, 2016 and $210.6 billion at December 31, 2016.service fees of $4 million recognized in the second quarter of 2022. Trust assets under management were ~~$76.9~~$153.5 billion, ~~$70.8~~$152.2 billion, $165.6 billion and ~~$70.7~~$151.8 billion at September 30, ~~2017,~~2022, September 30, ~~2016 and~~2021, December 31, ~~2016,~~2021 and June 30, 2022, respectively. Trust assets under management include the Company’s proprietary mutual funds’ assets of ~~$10.7~~$12.7 billion, ~~$11.5~~$13.0 billion, $13.2 billion and ~~$10.9~~$11.9 billion at September 30, ~~2017,~~2022, September 30, ~~2016 and~~2021, December 31, ~~2016,~~2021 and June 30, 2022, respectively. Additional trust income from investment management activities ~~aggregated $5 million in the recent quarter, $8 million in the third quarter~~comprised of ~~2016 and $4 million in the second quarter of 2017. That income largely relates to~~ fees earned from retail customer investment accounts and from an affiliated investment manager. Assets managed by that affiliated manager totaled $6.6 billion at September 30, 2017, $7.0 billion at September 30, 2016 and $7.3 billion at December 31, 2016. The Company’s trust income from that affiliate was ~~not material during any of the quarters then-ended.~~

The Company realized gains from sales of investment securities of $28 million during the third quarter of 2016, when the Company sold substantially all of its collateralized debt obligations that had been held in the available-for-sale investment securities portfolio and that had been obtained through the acquisition of other banks. In total, securities with an amortized cost of $28 million were sold. Divestiture of the majority of those securities would have been required prior to July 21, 2017 in accordance with the provisions of the Volcker Rule. There were no significant gains or losses on investment securities in the second or third quarters of 2017.

~~Other revenues from operations were $107~~$2 million in the third quarter of ~~2017, compared with $104~~2022, less than $1 million in the ~~year-earlier~~third quarter of 2021 and ~~$117~~$3 million in the second quarter of ~~2017. The higher other~~2022.

Brokerage services income, which includes revenues from ~~operations~~the sale of mutual funds and annuities and securities brokerage fees, and, since June 2021, sales of select investment products of LPL Financial, totaled $21 million in the third quarter of 2022, $20 million in the third quarter of 2021 and $24 million in the second quarter of ~~2017 reflects a greater~~2022. The acquisition of People's United contributed approximately $2 million and $3 million to brokerage services income in the third and second quarters of 2022, respectively. Trading account and non-hedging derivative gains were $5 million, $6 million and $2 million during the quarters ended September 30, 2022, September 30, 2021 and June 30, 2022, respectively. Information about the notional amount of ~~letter of credit~~interest rate, foreign exchange and other ~~credit-related fees~~contracts entered into by the Company is included in ~~that quarter.~~note 11 of Notes to Financial Statements and herein under the heading “Taxable-equivalent Net Interest Income.”

Other revenues from operations were $153 million in the third quarter of 2022, compared with $120 million in the corresponding 2021 period and $148 million in the second quarter of 2022. Other revenues from operations associated with the People's United acquisition totaled $28 million and $29 million in the third and second quarters of 2022, respectively. Included in other revenues from operations were the following significant components. Letter of credit and other credit-related fees aggregated ~~$25~~$54 million in the recent quarter, compared with ~~$31 million and $35~~$36 million in the year-earlier quarter and $38 million in the second quarter of 2022. As compared with the second quarter of 2022, the higher credit-related fees in 2022's third quarter resulted from an increase in loan syndication fees. The increase in letter of ~~2016~~credit and ~~the second 2017 quarter, respectively. The lower revenues~~other credit-related fees in the recent quarter as compared with ~~those prior periods predominantly resulted from declines in fees for providing~~the year-earlier quarter reflects both higher loan syndication ~~services.~~fees and the impact resulting from the acquisition of People's United. Reflecting increased customer activity and incremental revenues associated with the People's United acquisition, revenues from merchant discount and credit card fees were $45 million in each of the recent quarter and second quarter of 2022, compared with $39 million in the year-earlier quarter. Tax-exempt income from bank owned life insurance, which includes ~~increases~~changes in the cash surrender value of life insurance policies and benefits received, ~~aggregated $16 million in the most recent quarter, compared with~~totaled $12 ~~million and $14~~ million in the third quarter of ~~2016~~2022, $11 million in the third quarter of 2021 and $14 million in the second quarter of ~~2017, respectively. Revenues~~2022. 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 has led to reductions of the market values of assets in some separate account bank owned life insurance policies below previously recorded cash surrender value. While the resultant reductions in recognized cash surrender value have not been material, a continued rise in interest rates could result in additional adjustments. Insurance-related sales commissions and other revenues totaled $13 million in the quarter ended September 30, 2022, compared with $10 million in the third quarter of 2021 and $14 million in the second quarter of 2022.

Other income totaled $1.68 billion during the first nine months of 2022, compared with $1.59 billion during the year-earlier period. Higher trust income, service charges on deposit accounts, brokerage services income, income resulting from a distribution received from the Company's investment in BLG in 2022, a reduction in unrealized losses on investment securities, and an increase in credit-related and merchant discount and credit card fees were ~~$31~~partially offset by lower mortgage banking revenues. The acquisition of People's United contributed approximately $140 million in the quarter ended September 30, 2017, compared with $28 million and $29 million during the quarters ended September 30, 2016 and June 30, 2017, respectively. Insurance-related sales commissions andto other revenues were $10 million in the third quarter of 2017, compared with $11 million in each of the year-earlier quarter and the second quarter of 2017. M&T’s share of the operating losses of BLG recognized using the equity method of accounting and cash distributions received resulted in losses of $2 million in the third quarter of 2016 and income ~~of $1 million~~ in the second ~~quarter~~and third quarters of 2017. There was no income or loss attributable to M&T’s investment in BLG in the recent quarter. During the second quarter of 2017, the operating losses of BLG resulted in M&T reducing the carrying value of its investment in BLG to zero. During that quarter, M&T received a cash distribution from BLG that resulted 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 at this time. BLG is entitled to receive distributions from affiliates that provide asset management and2022.

other services that are available for distribution to BLG’s owners, including M&T. Information about the Company’s relationship with BLG and its affiliates is included in note 15 of Notes to Financial Statements.

~~Other income aggregated $1.37 billion~~Mortgage banking revenues totaled $275 million during the first nine months of ~~2017, $7~~2022, compared with $432 million ~~higher than $1.36 billion~~during the similar period in the first nine months of 2016. That increase was largely attributable to higher trust income, merchant discount and credit card fees, and credit-related fees, and lower losses related to M&T’s share of the operating losses of BLG. Partially offsetting those improvements were lower2021. Residential mortgage banking revenues ~~and trading account and foreign exchange gains in the 2017 period and gains on investment securities recognized during the 2016 period.~~

~~Mortgage banking revenues totaled $268~~aggregated $181 million and ~~$275~~$315 million during the nine-month periods ended September 30, ~~2017~~2022 and ~~2016,~~2021, respectively. ~~Residential mortgage banking revenues aggregated $183 million in the first nine months of 2017, compared with $192 million during the nine-month period ended September 30, 2016.~~ New commitments to originate residential real estate loans to be sold aggregated ~~$2.3~~$286 million and $3.7 billion ~~and $2.4 billion during~~in the ~~first~~initial nine months of ~~2017~~2022 and ~~2016,~~2021, respectively. Realized gains from sales of residential real estate loans and loan servicing rights and recognized unrealized gains and losses on residential real estate loans held for sale, commitments to originate loans for sale and commitments to sell loans aggregated to ~~gains~~losses of ~~$47 million and $54~~$2 million in the ~~nine-month periods ended September 30, 2017~~first nine months of 2022, compared with gains of $138 million in the first nine months of 2021. The reductions in volume and ~~2016, respectively.~~revenues reflect the Company’s decision to retain the substantial majority of recently originated mortgage loans in portfolio rather than sell such loans. Revenues from servicing residential ~~mortgage~~real estate loans for others ~~through September 30~~ were ~~$136~~$183 million in ~~2017~~the first nine months of 2022 and ~~$137~~$177 million in ~~2016.~~the corresponding 2021 period. Included in servicing revenues were sub-servicing revenues aggregating ~~$74~~$119 million and ~~$73~~$110 million in the first nine months of ~~2017~~2022 and ~~2016,~~2021, respectively. ~~Commercial mortgage banking revenues were $85 million and $83 million in~~For the nine months ended September 30, ~~2017~~commercial mortgage banking revenues were $94 million and ~~2016,~~$117 million in 2022 and 2021, respectively. Commercial real estate loans originated for sale to other investors totaled ~~$1.7~~$2.2 billion and ~~$1.6~~$2.7 billion induring the nine-month periods ended September 30, ~~2017~~2022 and ~~2016,~~2021, respectively. The decline in commercial mortgage banking revenues is predominantly reflective of the origination volumes.

Service charges on deposit accounts aggregated ~~$320~~$341 million during the first nine months of ~~2017,~~2022, compared with ~~$314~~$297 million in the year-earlier period. The increase can be attributed to the acquisition of People's United and increased consumer activity, partially offset by reductions resulting from the Company's planned elimination of certain fees and charges beginning in the second quarter of 2022. Trust income totaled ~~$372~~$546 million and ~~$350~~$476 million during the first nine months of ~~2017~~2022 and ~~2016,~~2021, respectively. The increase in trust income in ~~2017~~2022 as compared with ~~2016~~2021 was largely due to higher revenues from the ICS business, reflecting lower money market fund fee waivers, increased ~~fees earned from money-market funds and stronger~~ sales

activities and higher retirement services income from growth in collective fund balances, as well as WAS revenues associated with the ~~WAS business, resulting from improved equity market performance and stronger sales activities.~~People's United acquisition. Brokerage services income ~~was $49~~totaled $65 million ~~and $48 million~~ in ~~the nine-month periods ended September 30, 2017 and 2016, respectively. Trading account and foreign exchange activity resulted in gains of $25 million and $33 million for~~ the first nine months of ~~2017 and 2016, respectively. The decline resulted predominantly from reduced activity associated~~2022, compared with ~~interest rate swap agreements executed on behalf of commercial customers. Gains on investment securities were not significant in 2017 and were $29~~$44 million in the nine-month period ended September 30, ~~2016.~~2021. That increase reflects 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 from providing those customers with proprietary trust products managed by the Company were reported as trust income.

Net unrealized losses on investment securities, including investments of Fannie Mae and Freddie Mac preferred stock, totaling $2 million were recognized during the first nine months of 2022, compared with net unrealized losses of $23 million in the corresponding 2021 period.

Other revenues from operations totaled ~~$335~~$437 million (including approximately $55 million associated with the acquisition of People's United) in the first nine months of ~~2017,~~2022, compared with ~~$311~~$344 million in the ~~similar 2016~~year-earlier period. Other revenues from operations include the following significant components. Letter of credit and other credit-related fees aggregated ~~$94~~$119 million (including $21 million associated with the acquisition of People's United) and ~~$89~~$96 million in ~~2017~~2022 and ~~2016,~~2021, respectively. ~~The higher revenues~~Merchant discount and credit card fees were $124 million (including $5 million associated with the acquisition of People's United) and $101 million in the ~~2017 period were largely attributable to fees for providing loan syndication services.~~first nine months of 2022 and 2021, respectively. Income from bank owned life insurance totaled ~~$44 million in 2017 and $41 million in 2016. Merchant discount and credit card fees were $88 million and $81~~$36 million in the first nine months of ~~2017 and 2016, respectively. The higher revenues~~2022, compared with $34 million in the ~~2017 period were largely attributable to increased transaction volumes related to merchant activity and usage of the Company’s credit card products.~~corresponding 2021 period. Insurance-related commissions and other revenues aggregated ~~$33~~$42 million and ~~$32~~$35 million in ~~2017~~the first nine months of 2022 and ~~2016,~~2021, respectively. M&T’s investment in BLG resulted in ~~losses~~income of $1$30 million in ~~2017 and $8 million~~the first nine months of 2022; there was no similar income in ~~2016.~~the first nine months of 2021.

Other expense ~~aggregated $806 million~~totaled $1.28 billion in the third quarter of ~~2017,~~2022, compared with ~~$752~~$899 million in the year-earlier quarter and ~~$751 million~~$1.40 billion in the ~~2017’s~~ second ~~quarter.~~quarter of 2022. Included in those amounts are expenses considered to be “nonoperating” in nature consisting of amortization of core deposit and other intangible assets of $8$18 million in each of the ~~two most recent quarters~~second and ~~$10~~third quarter of 2022 and $3 million in the third quarter of ~~2016.~~2021, and merger-related expenses of $53 million, $9 million and $223 million in the recent quarter, third quarter of 2021 and second quarter of 2022, respectively. Exclusive of those nonoperating expenses, noninterest operating expenses were ~~$798~~$1.21 billion in the recent quarter, compared with $888 million in the year-earlier quarter and $1.16 billion in the second quarter of 2022. Operations acquired from People's United were the largest contributor to the rise in noninterest operating expenses in the third and second quarters of 2022 as compared with the third quarter of ~~2017, compared with $743 million in each of~~2021. Factors contributing to the ~~third quarter of 2016 and the second quarter of 2017. The most significant factors for the increased~~higher level of operating expenses in ~~the recent~~2022’s third quarter as compared with the ~~earlier quarters~~year-earlier quarter, in addition to People's United-related noninterest operating expenses, were ~~increased legal-related~~higher costs for salaries and ~~professional services costs.~~employee benefits and outside data processing and software, offset by lower defined benefit pension-related expenses included in other costs of operations. As compared with the second quarter of ~~September 30, 2017,~~2022, the ~~Company increased~~increase in the recent quarter was predominantly attributed to higher salaries and benefits expenses resulting from an additional pay day and M&T's continued investment in its ~~reserve for legal matters by $50 million.~~talent base through salaries and incentive compensation. Table 2 provides a reconciliation of other expense to noninterest operating expense.

Other expense for the first nine months of ~~2017 aggregated $2.34~~2022 totaled $3.64 billion, ~~$66 million higher than $2.28~~compared with $2.68 billion in the ~~first nine months of 2016.~~year-earlier period. Included in those amounts are expenses considered to be “nonoperating” in nature consisting of amortization of core deposit and other intangible assets of ~~$24~~$38 million and ~~$34~~$8 million in the nine-month periods ended September 30, ~~2017~~2022 and ~~2016,~~2021, respectively, and merger-related expenses of ~~$36~~$293 million inand $23 million during the ~~first nine months of 2016.~~same respective periods. Exclusive of those nonoperating expenses, noninterest operating expenses for the first nine months of ~~2017 increased 5%~~2022 were $3.31 billion, compared with $2.65 billion in the first nine months of 2021. Approximately three-fourths of that increase can be attributed to ~~$2.32 billion from $2.21 billion from~~operating expenses associated with the ~~corresponding 2016 period. That $111 million~~People's United acquisition. In addition, the year-over-year increase ~~was largely due to~~reflects higher ~~legal-related~~costs for salaries and employee benefits, outside data processing and software, equipment and net occupancy and professional ~~service~~services expenses partially offset by lower defined benefit pension-related expenses included in other costs ~~and increased expenses for salaries, including incentive compensation.~~of operations.

Salaries and employee benefits expense totaled ~~$399 million in each of the recent quarter and the second quarter of 2017, compared with $400~~$736 million in the third quarter ~~2016.~~of 2022, compared with $510 million in the year-earlier quarter and $776 million in the second quarter of 2022. Excluding the nonoperating expense items described earlier, salaries and employee benefits expense totaled $723 million and $691 million in the third and second quarters of 2022, respectively. The higher operating expense in the recent quarter as compared with the third quarter of 2021 reflects higher employee staffing levels, including employees retained from the acquisition of People's United, and higher salaries from merit increases and incentive compensation. Comparing the recent quarter with the second quarter of 2022, the increase reflected an additional pay day in the recent quarter and M&T's continued investment in its talent base through salaries and incentive compensation. During the first nine months of ~~2017~~2022 and ~~2016,~~2021, salaries and employee benefits expense ~~totaled $1.25~~aggregated $2.09 billion and ~~$1.23~~$1.53 billion, respectively. ~~The higher level of~~Excluding nonoperating expenses described herein, salaries and employee benefits expense in the first nine months of ~~2017 as compared with~~2022 totaled $1.99 billion. The higher operating expense level in 2022 largely reflects increased staffing levels, including the ~~similar 2016 period was largely attributable to~~addition of People's United employees at the ~~impact~~beginning of ~~annual~~the second quarter, higher salaries resulting from merit increases and ~~higher~~a rise in incentive compensation. The Company, in accordance with GAAP, has accelerated the recognition of compensation ~~costs.~~costs for stock-based awards granted to retirement-eligible employees and employees who will become retirement-eligible prior to full vesting of the award. Salaries and employee benefits expense included stock-based compensation of ~~$10~~$21 million, $12 million and $23 million, in ~~each of~~ the three-month periods ended September 30, ~~2017,~~2022, September 30, ~~2016~~2021 and June 30, ~~2017,~~2022, respectively, and ~~$52~~$94 million and ~~$55~~$74 million during the nine-month periods ended September 30, ~~2017~~2022 and ~~2016,~~September 30, 2021, respectively. The number of full-time equivalent employees was ~~16,478~~22,879 at September 30, ~~2017, 16,709~~2022, compared with 17,103 and 22,680 at September 30, ~~2016, 16,593 at December 31, 2016~~2021 and ~~16,526 at~~ June 30, ~~2017,~~2022, respectively. The increase in staffing levels since September 30, 2021 was predominantly the result of the acquisition of People's United.

Excluding the nonoperating expense items described earlier from each quarter, ~~nonpersonnel~~non-personnel operating expenses were ~~$399~~$485 million, $377 million and ~~$343~~$471 million in the quarters ended September 30, ~~2017 and~~2022, September 30, ~~2016, respectively,~~2021 and ~~$344 million in the second quarter of 2017.~~June 30, 2022, respectively. On that same basis, such expenses were ~~$1.07~~$1.32 billion and ~~$984 million~~$1.12 billion in the nine-month periods ended September 30, ~~2017~~2022 and ~~2016,~~2021, respectively. The ~~increases~~increase in ~~nonpersonnel~~non-personnel operating expenses ~~reflected~~ in ~~the~~2022’s third ~~2017~~ quarter as compared with ~~the year-earlier quarter and the~~2022’s second quarter ~~of 2017,~~reflects higher FDIC assessments and professional services expenses. The higher non-personnel operating expenses in the ~~first nine months of 2017~~2022 periods as compared with the ~~first nine months~~corresponding 2021 periods is predominantly attributable to the impact of ~~2016, were predominantly~~ the ~~result of~~People's United acquisition. In addition to those expenses, higher ~~legal-related~~costs for outside data processing and software, professional services and equipment and net occupancy were offset by reduced defined benefit pension-related expenses. Components of pension expense included in other costs ~~including~~of operations reflect the ~~$50 million increase~~amortization of net unrecognized losses included in accumulated other comprehensive income. Such net unrecognized losses had been 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 period. Substantially all of the participants in the Company’s ~~reserve for legal matters as~~qualified defined benefit pension plan were inactive and beginning in 2022 the average remaining life expectancy was utilized prospectively to amortize the net unrecognized gains and losses of ~~September 30, 2017.~~the Plan existent at each measurement date. The change increased the amortization period by approximately sixteen years and reduced the amount of quarterly amortization of unrecognized losses recorded in 2022 from what would have been recorded without such change in the amortization period by $9 million.

The efficiency ratio measures the relationship of noninterest operating expenses to revenues. The Company’s efficiency ratio was ~~56.0%~~53.6% during the recent quarter, compared with ~~55.9% during~~57.7% and 58.3% in the third quarter of ~~2016~~2021 and ~~52.7% in the~~ second quarter of ~~2017.~~2022, respectively. The efficiency ratios for the nine-month periods ended September 30, ~~2017~~2022 and ~~2016~~2021 were ~~55.2%~~58.1% and ~~56.0%~~58.8%, respectively. The calculation of the efficiency ratio is presented in Table 2.

~~The provision for income taxes for~~Income tax expense was $201 million in the third quarter of ~~2017 was $225 million,~~2022, compared with ~~$200 million and $215~~$162 million in the year-earlier quarter and $60 million in the second quarter of ~~2017, respectively.~~2022. For the nine-month periods ended September 30, ~~2017~~2022 and 2016, the provision for income taxes was $609 million and $564 million, respectively. As noted earlier, M&T adopted new accounting guidance for share-based transactions during the first quarter of 2017. That guidance requires that all excess tax benefits and tax deficiencies associated with share-based compensation be recognized as a component of2021, income tax expense in the income statement. Previously, tax effects resulting from changes to M&T’s share price subsequent to the grant date were recorded through shareholders’ equity at the time of vesting or exercise. The adoption of the amended accounting guidance resulted in an $18was $374 million ~~reduction of income tax expense in the initial 2017 quarter. The impact of the amended guidance on the second~~ and third quarters of 2017 was not significant. As discussed earlier, the October 2017 settlement between Wilmington Trust Corporation and the U.S. Attorney’s Office for the District of Delaware resulted in a $44$454 million, ~~payment by Wilmington Trust Corporation that is not deductible for income tax purposes, resulting in a higher effective tax rate in the recent quarter.~~respectively. The effective tax rates were ~~38.7%~~23.7%, ~~36.4%~~24.6% and ~~36.1%~~21.7% for the quarters ended September 30, ~~2017,~~2022, September 30, ~~2016~~2021 and June 30, ~~2017,~~2022, respectively, and ~~35.9%~~23.4% and ~~36.4%~~24.5% for the nine-month periods ended September 30, ~~2017~~2022 and ~~2016,~~2021, respectively. ~~Excluding the impact on income tax expense of the Wilmington Trust Corporation matter, the effective tax rate would have been 35.8% in the third quarter of 2017.~~

The effective tax rate is affected by the level of income earned that is exempt from tax relative to the overall level of pre-tax income, the level of income allocated to the various state and local jurisdictions where the Company operates, because tax rates differ among such jurisdictions, and the impact of any large ~~but~~discrete or infrequently occurring items.

The Company’s effective tax rate in future periods will also be affected by ~~the results of operations allocated to the various tax jurisdictions within which the Company operates,~~ any change in income tax laws or regulations ~~within those jurisdictions,~~ and interpretations of income tax regulations that differ from the Company’s interpretations by any of various tax authorities that may examine tax returns filed by M&T or any of its subsidiaries.

Shareholders’ equity was ~~$16.3~~$25.3 billion at ~~each of~~ September 30, ~~2017 and 2016,~~2022, representing ~~13.55% and 12.88%~~12.76% of total assets, ~~respectively,~~ compared with ~~$16.5~~$17.5 billion or ~~13.35%~~11.54% a year earlier and $17.9 billion or 11.54% at December 31, ~~2016.~~2021. The increase in shareholders' equity 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 ~~$1.2~~$2.01 billion at September 30, 2022, compared with $1.75 billion at each of September 30, ~~2017, September 30, 2016~~2021 and December 31, ~~2016. Further information concerning~~2021. 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~~&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 an annual rate of the three-month LIBOR plus 402 basis points. The Series H preferred stock ~~can~~may be ~~found~~redeemed at M&T's option, in ~~note 6~~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 capital treatment event whereby the full liquidation value of ~~Notes to Financial Statements.~~ the shares no longer qualifies as "additional Tier 1 capital". The Series H Preferred Stock is listed on the NYSE under the symbol MTPrH.

~~Reflecting the impact of repurchases of M&T’s common stock, common~~Common shareholders’ equity was ~~$15.1~~$23.2 billion, or $134.45 per share, at ~~each of~~ September 30, ~~2017 and 2016,~~2022, compared with $15.8 billion, or ~~$99.70~~$122.60 per share, a year earlier and ~~$97.47~~$16.2 billion, or $125.51 per share, ~~respectively, compared with $15.3 billion, or $97.64~~ at December 31, ~~2016.~~2021. Tangible equity per common share, which excludes goodwill and core deposit and other intangible assets and applicable deferred tax balances, was ~~$69.02~~$84.28 at the end of the recent quarter, compared with ~~$67.42 a year earlier~~$86.88 at September 30, 2021 and ~~$67.85~~$89.80 at December 31, ~~2016.~~2021. The Company’s ratio of tangible common equity to tangible assets was ~~9.02%~~7.70% at September 30, ~~2017,~~2022, compared with ~~8.55%~~7.59% a year earlier and ~~8.92%~~7.68% at December 31, ~~2016.~~2021. Reconciliations of total common shareholders’ equity and tangible common equity and total assets and tangible assets as of each of those ~~respective~~ dates are presented in table 2.

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 ~~which an other-than-temporary impairment charge has~~sale that have not yet been ~~recognized,~~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 ~~gains~~losses on investment securities reflected in shareholders’ equity, net of applicable tax effect, were ~~$18~~$348 million or ~~$.12~~$2.01 per common share, at September 30, ~~2017 and $175~~2022 compared with net unrealized gains of $105 million, or ~~$1.13~~$.81 per common share, at September 30, ~~2016, compared with net unrealized losses of $16~~2021 and $78 million, or ~~$.10~~$.60 per common share, at December

31, ~~2016.~~2021. 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.

Reflected in the carrying amount of available for sale investment securities at September 30, 2017 were pre-tax effect unrealized losses of $86 million on securities with an amortized cost of $6.3 billion and pre-tax effect unrealized gains of $133 million on securities with an amortized cost of $5.1 billion. Information about unrealized gains and losses as of September 30, ~~2017~~2022 and December 31, ~~2016~~2021 is included in note 3 of Notes to Financial Statements.

Reflected in the carrying amount of available-for-sale investment securities at September 30, 2022 were pre-tax effect unrealized gains of $1 million on securities with an amortized cost of $261 million and pre-tax effect unrealized losses of $471 million on securities with an amortized cost of $11.1 billion. Information concerning the Company’s fair valuations of investment securities is provided in ~~note 12~~notes 3 and 13 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 September 30, ~~2017,~~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 ~~declines in the values~~amortized cost basis of ~~any securities containing an unrealized loss were temporary and that any other-than-temporary impairment charges were not appropriate.~~each security. As of September 30, ~~2017,~~2022, the Company did not intend to sell nor is it anticipated that it would be required to sell any ~~of its impaired~~ securities ~~that is, where~~for which fair value iswas 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 ~~other-than-temporarily impaired. However, because the unrealized losses on available-for-sale~~uncollectable.

Accounting guidance requires investment securities ~~have generally already been reflected in the financial statement values~~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 credit losses for its investment securities classified as held-to-maturity at September 30, 2022 and ~~shareholders’ equity, any recognition~~December 31, 2021. The amortized cost basis of ~~an other-than-temporary decline in value~~obligations of those investment securities would not have a material effect on the Company’s consolidated financial condition. Any other-than-temporary impairment charge related to held-to-maturity securities would result in reductions in the financial statement values for investment securitiesstates and shareholders’ equity. Additional information concerning fair value measurements and the Company’s approach to the classification of such measurements is included in note 12 of the Notes to Financial Statements.

~~The Company assessed impairment losses on privately issued mortgage-backed securities~~political subdivisions in the held-to-maturity portfolio by performing internal modeling to estimate bond-specific cash flows considering recent performance of the mortgage loan collateral and utilizing assumptions about future defaults and loss severity. These bond-specific cash flows also reflect the placement of the bond in the overall securitization structure and the remaining subordination levels. In total,totaled $2.7 billion at September 30, ~~2017~~2022 and less than $1 million at December 31, 2021. The increase reflected municipal securities obtained in the acquisition of People's United. At September 30, 2022 and December 31, ~~2016,~~2021, the Company had in its held-to-maturity portfolio privately issued mortgage-backed securities with an amortized cost basis of ~~$141~~$52 million and ~~$158~~$62 million, respectively, and a fair value of ~~$112~~$53 million and ~~$121~~$57 million, respectively. At September 30, ~~2017, 85%~~2022, 83% of ~~the~~those mortgage-backed securities were in the most senior tranche of the securitization ~~structure with 22% being independently rated as investment grade.~~structure. The mortgage-backed securities are generally collateralized by residential and small-balance commercial real estate loans originated between 2004 and 2008 and had a weighted-average credit enhancement of 17% at September 30, 2017, calculated by dividing the remaining unpaid principal balance of bonds subordinate to the bonds owned by the Company plus any overcollateralization remaining in the securitization structure by the remaining unpaid principal balance of all bonds in the securitization structure. The weighted-average default percentage and loss severity assumptions utilized in the Company’s internal modeling were 33% and 64% respectively. Given the terms of the securitization structure, the bonds held by the Company may defer interest payments in certain circumstances, but after2008. After considering the repayment structure and estimated future collateral cash flows of each individual ~~senior and subordinate tranche~~ bond, the Company ~~has~~ concluded that as of September 30, ~~2017,~~2022, it expected to recover the amortized cost basis of those privately issued mortgage-backed ~~securities were not other-than-temporarily impaired.~~securities. Nevertheless, it is possible that adverse 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 ~~$260~~$258 million, or ~~$1.72~~$1.49 per common share, at September 30, ~~2017, $285~~2022, $436 million or ~~$1.84~~$3.38 per common share, at September 30, ~~2016~~2021 and ~~$273~~$267 million or ~~$1.75~~$2.08 per common share, at December 31, ~~2016.~~2021.

~~Consistent with its revised 2016 Capital Plan filed with~~In January 2021 M&T’s Board of Directors authorized a plan to repurchase up to $800 million of shares of M&T’s common stock subject to all applicable regulatory limitations. In February 2022, the ~~Federal Reserve,~~Board reaffirmed that plan. M&T repurchased ~~3,233,196~~3,505,946 shares of its common ~~shares~~stock for ~~$532 million during the first quarter of 2017 and 1,409,807 common shares for $225~~$600 million in the second quarter of ~~2017.~~2022. There were no repurchases pursuant to that repurchase plan during 2021. On ~~June 28, 2017,~~July 19, 2022, M~~&T announced that the Federal Reserve did not object~~&T's Board of Directors authorized a new stock purchase program to ~~M&T’s 2017 Capital Plan. That plan includes the~~ repurchase of up to ~~$900 million~~$3.0 billion of common shares ~~during~~subject to all applicable regulatory reporting limitations. The new plan authorized in July 2022 replaced the ~~four-quarter period beginning~~previous plan. M&T repurchased 3,282,449 shares of its common stock for $600 million under the new program in the third quarter of 2022.

Cash dividends declared on ~~July 1, 2017~~M&T's common stock totaled $210 million in the recent quarter, compared with $143 million and $215 million in the quarters ended September 30, 2021 and June 30, 2022, respectively. During the fourth quarter of 2021, M&T's Board of Directors authorized an increase in the quarterly common stock ~~cash~~ dividend into $1.20 per common share from the ~~second quarter~~previous rate of ~~2018 of up to $.05~~$1.10 per ~~share to $.80 per~~common share. ~~M&T may also continue to pay dividends and interest on other equity and debt instruments included in regulatory capital, including preferred~~Common stock trust preferred securities and subordinated debt that were outstanding at December 31, 2016, consistent with the contractual terms of those instruments. Dividends are subject to declaration by M&T’s Board of Directors. Furthermore, on July 18, 2017, M&T’s Board of Directors authorized a new stock repurchase program to repurchase up to $900 million of shares of its common stock subject to all applicable regulatory reporting limitations, including those set forth in M&T’s 2017 Capital Plan. During the recent quarter, M&T repurchased 1,382,746 common shares for $225 million in accordance with that program. In total, M&T repurchased 6,025,749 common shares during the first nine months of 2017 for an aggregate amount of $982 million. M&T repurchased 5,307,595 shares of common stock during the first nine months of 2016 at a total cost of $604 million.

~~Cash~~cash dividends declared on M&T’s common stock aggregated $114 million in the recent quarter, compared with $109 million and $115 million in the quarters ended September 30, 2016 and June 30, 2017, respectively. Cash dividends on common stock during the nine-month periods ended September 30, ~~2017~~2022 and ~~2016~~2021 were ~~$344~~$581 million and ~~$332~~$428 million, respectively.

Cash dividends declared on preferred stock ~~totaled $18~~aggregated $25 million ~~during each~~in both the recent quarter and second quarter of ~~the two most recent quarters, as~~2022 compared with ~~$20~~$17 million in the third quarter of ~~2016. The decline in preferred~~2021. Preferred stock dividends intotaled $72 million and $51 million during the ~~two most recent quarters as compared with the third quarter~~first nine months of 2016 resulted from the lower dividend rate for the $500 million of Series F preferred stock issued in October 2016 as compared with the like-amount of Series D preferred stock that had been redeemed in December 2016.2022 and 2021, respectively.

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:

InCapital regulations require buffers in addition to the minimum risk-based capital ~~regulations provide for~~ratios noted above. M&T is subject to a stress capital buffer requirement that is determined through the ~~phase-in of~~Federal Reserve’s supervisory stress tests and M&T’s bank subsidiaries are subject to a ~~“capital~~capital conservation ~~buffer”~~buffer requirement. The buffer requirement must be composed entirely of CET1 and for each entity was 2.5% of risk-weighted assets at September 30, 2022. In June 2022, the Federal Reserve released the results of its most recent supervisory stress tests. Based on ~~top~~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 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. M&T and its subsidiary banks adopted these ~~minimum risk-weighted asset ratios. When fully phased-in on January 1, 2019~~rules and the impact is reflected in the regulatory capital ~~conservation buffer will be 2.5%. For 2017, the phase-in transition portion of that buffer is 1.25%.~~ratios presented herein.

The regulatory capital ratios of the Company and its bank subsidiaries, M&T Bank and Wilmington Trust, N.A., as of September 30, ~~2017~~2022 are presented in the accompanying table.

The Company is subject to the comprehensive regulatory framework applicable to bank and financial holding companies and their subsidiaries, which includes ~~regular~~ 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 Company and in M&T’s ability to pay dividends. For additional information concerning this comprehensive regulatory framework, refer to Part I, Item 1 of M&T’s Form 10-K for the year ended December 31, ~~2016.~~2021.

~~As required by GAAP, the~~The Company's reportable segments have been determined based upon its internal profitability reporting system, which is organized by strategic business unit. Financial information about the Company's segments is presented in note 1415 of Notes to Financial Statements. As disclosed in M&T’s Form 10-K for the year ended December 31, 2016, in the fourth quarter of 2016 the Company revised its funds transfer pricing allocation related to borrowings. Additionally, during the second quarter of 2017, the Company revised its funds transfer pricing allocation related to certain deposit categories. As a result of the changesThe reportable segments are Business Banking, Commercial Banking, Commercial Real Estate, Discretionary Portfolio, Residential Mortgage Banking and ~~as described in note 14 of Notes to Financial Statements, prior period financial information has been reclassified to provide segment information on a comparable basis.~~Retail Banking.

The Business Banking segment contributed net income of ~~$31 million during the quarter ended September 30, 2017, compared with $24~~$94 million in the third quarter of ~~2016~~2022, up from $72 million in the third quarter of 2021 and ~~$29~~$71 million in the second quarter of ~~2017.~~2022. As compared with ~~the~~2021’s third

quarter, ~~of 2016,~~ the recent quarter’s higher net income primarily reflected ~~an $8~~a rise in net interest income of $54 million and higher service charges on deposit accounts of $5 million partially offset by a $20 million increase in centrally-allocated costs associated with data processing, risk management and other support services provided to the Business Banking segment and higher personnel-related costs of $6 million (each reflecting the impact of the People’s United acquisition). The increase in net interest income ~~that~~ resulted largely from a widening of the net interest margin on deposits of 16126 basis points and ~~an increase in~~higher average ~~outstanding~~ deposit balances of ~~$629 million.~~$7.1 billion, which was offset, in part, by a narrowing of the net interest margin on loans. The ~~improvement~~growth in net income in ~~2017’s third~~the recent quarter as compared with the ~~immediately preceding~~second quarter of 2022 reflected a $4$40 million increase in net interest ~~income. That improvement~~income, resulting largely from an 80 basis point widening of the net interest margin on deposits. Partially offsetting that increase in net interest income was a $7 million rise in centrally-allocated costs associated with data processing, risk management and other support services provided to the Business Banking segment. Net income for the Business Banking segment totaled $206 million during the first nine months of 2022, compared with $160 million in the corresponding 2021 period. The 29% year-over-year increase reflected a six-month impact of the People’s United acquisition and was predominantly attributable to higher ~~average outstanding~~net interest income of $82 million, an increase in service charges on deposit ~~balances~~accounts of ~~$254~~$14 million and higher merchant discount and credit card fees of $8 million, 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 $32 million and higher personnel-related costs of $6 million. The higher net interest income reflected a widening of the net interest margin on deposits of 359 basis points and higher average balances of deposits of $5.5 billion, partially offset by a narrowing of the ~~impact~~net interest margin on loans of ~~one additional day in the current quarter.~~ 67 basis points.

Net income earned by the ~~Business~~Commercial Banking segment totaled ~~$85~~$214 million during the ~~first nine months of 2017, compared with $77~~recent quarter, up from $144 million in the year-earlier ~~period. That 10%~~quarter and $163 million in the second quarter of 2022. As compared with the third quarter of 2021, the recent quarter included a $178 million increase ~~in net income was attributable to a $16 million rise~~ in net interest income reflecting a 140 basis point widening of the net interest margin on deposits and an increase in average outstanding loan and deposit balances of $18.8 billion and $3.2 billion, respectively, and higher ~~merchant discount~~credit-related fees each reflecting the impact of the People’s United acquisition. Partially offsetting that higher net interest income was a $58 million increase in centrally-allocated costs associated with data processing, risk management and ~~credit card fees~~other support services provided to the Commercial Banking segment, higher personnel-related costs of $2$28 million ~~offset, in part, by~~and a $5$27 million increase in the provision for credit ~~losses,~~losses. The 31% rise in net income in the recent quarter as compared with the second quarter of 2022 was primarily due to a $57 million increase in net interest income, driven by a 94 basis point widening of the net interest margin on deposits and higher credit-related fees of $13 million. Through the first nine months of the year, net income for the Commercial Banking segment totaled $522 million in 2022, compared with $378 million in the corresponding 2021 period. That rise in net income was predominantly due to an increase in net interest income of $305 million, reflecting a widening of the net interest margin on deposits of 98 basis points and higher average outstanding balances in loans of $11.1 billion (including the six-month impact of the People’s United acquisition), an increase of $35 million in letter of credit and other credit-related fees, and higher deposit service charges. 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, personnel-related expenses and other costs of operations (all largely reflecting the six-month impact of the People’s United acquisition).

The Commercial Real Estate segment recorded net income of $95 million in the third quarter of 2022, compared with $85 million in the similar 2021 period and $122 million in the second quarter of 2022. The higher net ~~charge-offs.~~income as compared with the year-earlier quarter reflected an $18 million increase in net interest income, a $19 million decrease in the provision for credit losses and a $6 million decline in other costs of operations. The ~~improvement~~higher net interest income predominantly resulted from a 129 basis point widening of the net interest margin on deposits and higher loan balances of $5.1 billion, partially offset by a reduction in the net interest margin on loans of 56 basis points. A decrease in commercial mortgage banking revenues and a rise in centrally-allocated costs associated with data processing, risk management and other support services provided to the Commercial Real Estate segment largely offset those favorable factors. The decline in commercial mortgage banking revenues reflects reduced origination volume and lower servicing revenues. The $27 million decrease in the recent quarter’s net income as compared with the immediately preceding quarter was largely the result of a $9 million increase in each of centrally-allocated costs associated with data processing, risk management and other support services provided to the Commercial Real Estate segment and the

provision for credit losses, and a decline in commercial mortgage banking revenues mainly resulting from lower servicing revenues. Net income for the Commercial Real Estate segment was $314 million during the nine-month period ended September 30, 2022, up 30% from $243 million in the corresponding 2021 period. That rise reflects a $72 million decrease in the provision for credit losses and higher revenues of $46 million that includes an increase in net interest income of $45 million. Higher credit-related and other fees were offset by a decline in commercial mortgage banking revenues. The impact of those overall improvements was reduced by higher centrally-allocated costs associated with data processing, risk management and other support services provided to the Commercial Real Estate segment. The increase in net interest income reflected a widening of the net interest margin on deposits of ~~15 basis points and an increase in average outstanding deposit balances of $399 million.~~

~~Net income of the Commercial Banking segment was $110 million in the recent quarter,~~ compared with $103 million in 2016’s third quarter and $106 million in the second quarter of 2017. The recent quarter’s 7% rise in net income as compared with the third quarter of 2016 was largely due to a $12 million decrease in the provision for credit losses and a $6 million increase in net interest income. Those favorable factors were partially offset by an $8

million decline in letter of credit and credit-related fees, primarily due to lower loan syndication fees. The higher net interest income resulted predominately from a widening of the net interest margin on deposits of 4056 basis points and higher average outstanding balances of loans and deposits of ~~$780 million,~~$2.7 billion and $2.0 billion, respectively, partially offset by a narrowing of the net interest margin on loans of 1524 basis ~~points~~points.

Net income recorded by the Discretionary Portfolio segment aggregated $12 million during the three-month period ended September 30, 2022, compared with $75 million in the year-earlier period and $56 million earned in the second quarter of 2022. The decline in the recent quarter’s net income as compared with the third quarter of 2021 was due primarily to a $63 million decrease in net interest income. The lower net interest income was mainly driven by a decline in average outstanding deposit balances of ~~$795~~$4.0 billion and reduced income from interest rate swap agreements entered into for interest rate risk management purposes, partially offset by an increase in average balances of investment securities and loans of $17.8 billion and $7.9 billion, respectively, reflecting balances obtained in the acquisition of People’s United and the purchase of investment securities during 2022. The lower net income in the recent quarter as compared with the 2022’s second quarter reflected decreases in net interest income of $57 million. The decline in net interest income was primarily due to reduced income from interest rate swap agreements entered into for interest rate risk management purposes. Net income for this segment for the first nine months totaled $103 million in 2022 and $244 million in 2021. The decline in net income can be attributed to lower net interest income due to 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 the first nine months of 2022 increased $40 million. Partially offsetting those unfavorable factors was a $22 million reduction of valuation losses on investment securities as compared with the corresponding 2021 period.

The Residential Mortgage Banking segment recorded a net loss of $3 million in the recent quarter, compared with net income of $46 million in the third quarter of 2021 and $9 million in the second quarter of 2022. The decline in the recent quarter from the third quarter of 2021 predominantly resulted from a $38 million decrease in revenues (including intersegment revenues) associated with lower mortgage origination and sales activities, lower net interest income and a rise in centrally-allocated costs associated with data processing, risk management and other support services provided to the Residential Mortgage Banking segment. As compared with the net income in the second quarter of 2022, the net loss in the recent quarter reflected lower mortgage banking revenues of $13 million, predominantly associated with servicing residential real estate loans (including intersegment revenues) and a decline in net interest income of $11 million, partially offset by higher revenues of $7 million (including intersegment revenues) associated with mortgage origination and sales activities. The Residential Mortgage Banking segment earned $35 million in the first nine months of 2022, compared with $126 million in the similar period of 2021. The decline compared with the corresponding 2021 period was largely due to a decrease in revenues of $95 million (including intersegment revenues) resulting from lower mortgage origination and sales activities, lower net interest income of $31 million and a $19 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 $20 million in revenues associated with servicing residential real estate loans (including intersegment revenues). The decline in net interest income was driven by a decline in average outstanding balances in loans and deposits of $1.7 billion and $1.4 billion, respectively.

Net income for the Retail Banking segment totaled $182 million in the third quarter of 2022, compared with $88 million in the corresponding quarter of 2021 and $114 million in the second quarter of 2022. The rise in net income in the recent quarter as compared with the ~~second~~year-earlier quarter reflected a $291 million increase in net interest income, largely driven by a widening of ~~2017 was largely due~~the net interest margin earned on deposits of 119 basis points and higher average outstanding deposit and loan balances of $24.4 billion and $2.2 billion, respectively (reflecting the impact of the People’s United acquisition). Those favorable factors were partially offset by higher expenses, also reflecting the

impact of the People's United acquisition, including higher personnel-related costs of $73 million, a rise in centrally-allocated expenses associated with support services provided to ~~a $13~~the Retail Banking segment of $32 million, ~~decrease~~an increase in equipment and net occupancy costs of $28 million, higher other costs of operations of $21 million and an increase in the provision for credit losses ~~and higher~~of $7 million. The 59% improvement in net income in the current quarter as compared with the second quarter of 2022 reflected an increase in net interest income of $3$137 million, ~~reflecting the impact~~which was offset, in part, by lower service charges on deposit accounts of ~~one additional day~~$5 million, higher personnel-related costs of $20 million and increases in the current quarter, partially offset by a $9 million decrease in credit-related fees, primarily due to lower loan syndication fees. Year-to-date net income for the Commercial Banking segment totaled $328 million in 2017, compared with $309 million in 2016. That improvement was largely due to higher net interest incomeother operating expenses of ~~$19 million, a $7 million decline in the provision for credit losses and a $4 million~~$26 million. The increase ~~on gains on sales of previously leased equipment. The improvement~~ in net interest income reflected a widening of the net interest margin on deposits of 3181 basis points, ~~and higher average loan balances of $1.3 billion,~~ partially offset by ~~a narrowing~~lower average deposit balances of ~~the net interest margin on loans of 17 basis points.~~

$2.0 billion. The ~~Commercial Real Estate~~Retail Banking segment recorded net income of ~~$97~~$380 million ~~in the third quarter of 2017, compared with $90 million in the year-earlier period~~ and $87 million in the second quarter of 2017. The recent quarter’s improvement in net income as compared with the third quarter of 2016 reflects a $10 million rise in net interest income and a $3 million decrease in the provision for credit losses, partially offset by lower trading account and foreign exchange gains of $5 million, due predominately to reduced activity related to interest rate swap transactions executed on behalf of customers. The higher net interest income resulted from an increase in average outstanding loan balances of $1.1 billion and a widening of the net interest margin on deposits of 46 basis points, partially offset by a narrowing of the net interest margin on loans of 5 basis points. The recent quarter’s 11% increase in net income as compared with the immediately preceding quarter reflected higher mortgage banking revenues as previously noted, resulting from increased loan origination activities, and a $5 million increase in net interest income. The higher net interest income resulted largely from a widening of net interest margin on loans of 4 basis points and the impact of one additional day in the current quarter. Net income for the Commercial Real Estate segment totaled $269$263 million in the first nine months of ~~2017, compared with $255 million in~~2022 and 2021, respectively. The improvement from the ~~similar 2016 period. That improvement resulted from a rise in~~2021 period reflected higher net interest income of ~~$33~~$449 million and higher ~~letter~~consumer service charges on deposit accounts of ~~credit and other credit-related fees of $4 million,~~$16 million. Those favorable factors were partially offset by ~~lower trading account~~higher personnel-related costs of $122 million, a rise in centrally-allocated expenses associated with support services provided to the Retail Banking segment of $104 million, an increase in equipment and ~~foreign exchange gains~~net occupancy costs of ~~$11~~$49 million, higher professional services expense of $20 million, and ~~a $5 million~~an increase in personnel-related expenses. The higher net interest income resulted from increased average outstanding loan balances of $2.2 billion and a widening of the net interest margin on deposits of 37 basis points offset, in part, by a narrowing of the net interest margin on loans of 13 basis points. The lower trading account and foreign exchange gains during the nine-month period ended September 30, 2017 resulted from decreased activity related to interest rate swap transactions executed on behalf of customers.

Net income earned by the Discretionary Portfolio segment totaled $32 million during the three-month period ended September 30, 2017, compared with $46 million in the year-earlier period and $30 million in the second quarter of 2017. Reflected in the results for the third quarter of 2016 were net after-tax investment securities gains of $17 million ($28 million pre-tax), while there were no significant gains or losses on investment securities in 2017. Largely in response to the provisions of the Dodd-Frank Act commonly referred to as the “Volcker Rule,” the Company sold substantially all of its collateralized debt obligations in 2016’s third quarter. In addition to those gains on investment securities, contributing to the recent quarter decline in net income as compared with the third quarter of 2016 was a $17 million decline in net interest income, due largely to lower average outstanding loan balances of $3.4 billion and a narrowing of the net interest margin on loans of 9 basis points. Partially offsetting those unfavorable factors were a $6 million decline in the provision for credit losses ~~and lower loan and other real estate servicing costs. As compared with the second quarter~~ of ~~2017, a~~ $6 million ~~decrease in the provision for credit losses and lower operating expenses in the recent quarter were largely offset by~~(all reflecting a ~~$7 million decline in net interest income. The lower net interest income reflected decreased average outstanding loan balances of $758 million and a narrowing~~six-month impact of the ~~net interest margin on investment securities of 6 basis points.~~People’s United acquisition). The Discretionary Portfolio segment recorded net income of $95 million and $135 million in the first nine months of 2017 and 2016, respectively. That year-over-year decline was predominantly the result of a $57 million decrease in net interest income and the noted

~~investment securities gains recorded in 2016, partially offset by lower loan and other real estate-related servicing costs. The decrease~~increase in net interest income reflected ~~lower average outstanding loan balances of $3.6 billion and~~ a 12 basis point narrowing of the net interest margin on loans, each largely due to pay downs of loans obtained in the acquisition of Hudson City, partially offset by a widening of the net interest margin on investment securities of 9 basis points.

Net income recorded by the Residential Mortgage Banking segment aggregated $14 million in each of the two most recent quarters, compared with $16 million in the third quarter of 2016. The decline in net income for the third quarter of 2017 as compared with the year-earlier period was predominantly attributable to lower revenues of $7 million associated with mortgage origination and sales activities (including intersegment revenues) and servicing income. As compared with the second quarter of 2017, increased personnel expenses and a decrease in net interest income were largely offset by higher origination and servicing income. Year-to-date net income for this segment totaled $37 million in 2017 and $43 million in 2016. Contributing to that decline were decreased revenues from mortgage origination and sales activities (including intersegment revenues) and from servicing residential real estate loans.

Net income for the Retail Banking segment totaled $96 million in the quarter ended September 30, 2017, compared with $75 million in the year-earlier period and $100 million in the second quarter of 2017. As compared with the third quarter of 2016, a $30 million rise in net interest income in the recent quarter and decreases in advertising, marketing and personnel-related costs contributed to the improvement. The higher net interest income was due to a 3954 basis point widening of the net interest margin on deposits ~~offset, in part, by lower~~and higher average outstanding deposit and loan balances of ~~$3.9 billion. The modest decline in net income in the recent quarter as compared with the second quarter of 2017 reflected~~$18.2 billion and $2.1 billion, respectively, partially offset by a $7 million rise in the provision for credit losses and an increase in equipment and net occupancy costs of $5 million. Partially offsetting those unfavorable factors was a $7 million increase in net interest income, resulting largely from a widening25 basis point narrowing of the net interest margin on deposits of 6 basis points, the impact of one additional day in the current quarter and an increase in the average outstanding loan balances of $420 million, partially offset by lower average outstanding deposit balances of $1.4 billion. The Retail Banking segment recorded net income of $283 million and $219 million in the first nine months of 2017 and 2016, respectively. That improvement was predominantly due to a $79 million rise in net interest income, primarily reflecting a widening of the net interest margin on deposits of 34 basis points that was offset, in part, by lower average outstanding deposit balances of $3.1 billion, and a $14 million decrease in the provision for credit losses due, in part, to higher levels of partial charge-offs recognized in the first quarter of 2016 associated with loans for which the Company identified that the customer was either bankrupt or deceased.loans.

The “All Other” category reflects other activities of the Company that are not directly attributable to the reported segments. Reflected in this category are the amortization of core deposit and other intangible assets resulting from the acquisitions of financial institutions, ~~M&T’s share of the operating results of~~distributed income from BLG, merger-related expenses resulting from 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~~reported net income totaling $53 million for the quarter ended September 30, 2022 as compared with net losses of ~~$24~~$14 million and $317 million in the year-earlier quarter and second quarter of 2022, respectively. The “All Other” category had net losses of $333 million and $12 million for the ~~third quarter of 2017~~nine-month periods ended September 30, 2022 and ~~$3 million in the corresponding 2016 quarter,~~2021, respectively. As compared with ~~net income of $16 million in~~ the ~~second quarter of 2017. The higher net loss in~~respective 2021 periods the recent quarter and first nine months of 2022 each reflected higher net interest income and trust income, as compared with the year-earlier quarter resulted largely from increased legal-related and professional services costs of $66 million (including additions to the reserve for legal matters of $50 million in 2017’s third quarter) and a $6 million increase in personnel-related expenses. Those unfavorable factors were partially offset bywell as 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. Those favorable factors were offset by increases in the ~~recent quarter~~provision for credit losses and ~~higher trust income~~expenses resulting from the acquisition of ~~$6 million. As compared with the~~People’s United (inclusive of merger-related expenses). The net ~~income earned~~loss recorded in the second quarter of ~~2017, the recent quarter’s net loss predominately~~2022 reflected ~~the $50 million addition to the reserve~~an increased provision for ~~legal matters, partially offset by the favorable impact from the Company’s allocation methodology. The “All Other” category had net~~credit losses ~~of $12 million~~ and ~~$54 million for the nine-month periods ended September 30, 2017 and 2016, respectively. The lower net~~

~~loss in the 2017 period was predominantly due to:~~ merger-related expenses ~~of $36 million in 2016(there were no such expenses in 2017); higher trust income of $22 million; tax benefits of $19 million recognized in 2017~~ associated with the ~~adoption~~acquisition of new accounting guidance requiring that excess tax benefits associated with share-based compensation be recognized in income tax expense in the income statement; and the favorable impact from the Company’s allocation methodology. Those favorable factors were partially offset by higher legal-related and professional services costs and personnel-related expenses during 2017.People's United.

A discussion of recent accounting developments is included in note 1617 of Notes to Financial Statements.

Management’s Discussion and Analysis of Financial Condition and Results of Operations and other sections of this quarterly report contain forward-looking statements within the meaning of the Private Securities Litigation Reform Act of 1995 and the rules and regulations of the SEC. Any statement that ~~are~~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~~and management's beliefs and ~~assumptions made by management.~~ assumptions.

Statements regarding the potential effects of events or factors specific to the Company and/or the financial industry as a whole, as well as national and global events generally, on the Company's business, financial condition, liquidity and results of operations may constitute forward-looking statements and 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. As described further below, statements regarding M&T's expectations or predictions regarding the acquisition of People's United are also forward-looking statements, including statements regarding the 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”~~"believe," "expect," "anticipate," "intend," "target," "estimate," "continue," or ~~“potential,”~~"potential," by future conditional verbs such as ~~“will,” “would,” “should,” “could,”~~"will," "would," "should," "could," or ~~“may,”~~"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”~~("future factors") which are difficult to predict. Therefore, actual outcomes and results may differ materially from what is expressed or forecasted in such forward-looking statements. ~~Forward-looking statements speak only as~~

Examples of future factors include: the impact of the ~~date they are made~~People's United transaction (as described in the next paragraph); economic conditions including inflation and supply chain issues; the ~~Company assumes no duty to update forward-looking statements.~~

~~Future Factors include~~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 ofon 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 ~~regulation~~regulations affecting the financial services industry ~~as a whole, and~~and/or M&T and its subsidiaries individually or collectively, including tax ~~legislation or regulation;~~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 ~~FASB~~Financial Accounting Standards Board, regulatory agencies or ~~regulatory agencies;~~legislation; increasing price, product and ~~product/~~service competition by competitors, including new entrants; rapid technological developments and changes; the ability to continue to introduce competitive new products and services on a timely, cost-effective basis; the mix of ~~products/~~products and services; containing costs and expenses; ~~governmental and public policy changes;~~ protection and validity of intellectual property rights; reliance on large customers; technological, implementation and cost/financial risks in large, multi-year contracts; ~~the outcome of pending and future litigation and governmental proceedings, including tax-related examinations and other matters;~~ continued availability of financing; financial resources in the amounts, at the times and on the terms required to support M&T and its ~~subsidiaries’~~subsidiaries' future businesses; and material differences in the actual financial results of merger, acquisition and investment activities compared with M~~&T’s~~&T's initial expectations, including the full realization of anticipated cost savings and revenue enhancements.

In addition, future factors related to the acquisition of People's United include, among others: the outcome of any legal proceedings that may be instituted against M&T or its subsidiaries; the possibility that the anticipated benefits of the transaction will not be realized when expected or at all, including as a result of the impact of, or problems arising from, the integration of the two companies or as a result of the strength of the economy and competitive factors in the areas where the Company does business; diversion of management's attention from ongoing business operations and opportunities; potential adverse reactions or changes to business or employee relationships; the Company's success in executing its business plans and strategies and managing the risks involved in the foregoing; the business, economic and political conditions in the markets in which the Company operates; and other factors that may affect future results of the Company.

Future factors related to the acquisition also include risks, such as, among others: that there could be an adverse effect on the Company's ability to retain customers and retain or hire key personnel and maintain relationships with customers; that integration efforts may be more difficult or time-consuming than anticipated, including in areas such as sales force, cost containment, asset realization, systems integration and other key strategies; that profitability following the combination may be lower than expected including for possible reasons such as lower than expected revenues or higher or unexpected costs, charges or expenses resulting from the transaction; unforeseen risks that may exist; and other factors that may affect future results of the Company.

These are representative of the ~~Future Factors~~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.~~future factors.

M&T provides further detail regarding these risks and uncertainties in its Form 10-K for the year ended December 31, 2021, including in the Risk Factors section of such report, as well as in other SEC filings. Forward-looking statements speak only as of the date made, and M&T does not assume any duty and does not undertake to update forward-looking statements.

Incorporated by reference to the discussion contained under the caption “Taxable-equivalent Net Interest Income” in Part I, Item 2, “Management’s Discussion and Analysis of Financial Condition and Results of Operations.”

(a) Evaluation of disclosure controls and procedures. Based upon their evaluation of the effectiveness of M&T’s disclosure controls and procedures (as defined in Exchange Act rules 13a-15(e) and 15d-15(e)), ~~Robert G. Wilmers,~~René F. Jones, Chairman of the Board and Chief Executive Officer, and Darren J. King, Senior Executive Vice President and Chief Financial Officer, concluded that M&T’s disclosure controls and procedures were effective as of September 30, ~~2017.~~2022.

(b) Changes in internal control over financial reporting. M&T regularly assesses the adequacy of its internal control over financial reporting and enhances its controls in response to internal control assessments and internal and external audit and regulatory recommendations. No changes in internal control over financial reporting have been identified in connection with the evaluation of disclosure controls and procedures during the quarter ended September 30, ~~2017~~2022 that have materially affected, or are reasonably likely to materially affect, M&T’s internal control over financial reporting. Management has excluded processes and controls of People’s United from its assessment of internal control over financial reporting for the quarter ended September 30, 2022. Assets and liabilities associated with the People's United transaction that have not yet been converted to M&T's systems or processes as of September 30, 2022 include loans and leases of $5.5 billion, other assets of $106 million and other liabilities of $170 million. Approximately $94 million and $182 million of total revenues for the three and six months ended September 30, 2022, respectively, was contributed from business activities of People's United that have not yet been converted to M&T's systems or processes.

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 ~~$50 million.~~$25 million as of September 30, 2022. Although the Company does not believe that the outcome of pending ~~litigations~~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.

~~DOJ Investigation (United States v. Wilmington Trust Corp., et al, District of Delaware, Crim. No. 15-23-RGA):~~ Prior to M&T’s acquisition of Wilmington Trust Corporation, the Department of Justice (“DOJ”) commenced an investigation of Wilmington Trust Corporation relating to Wilmington Trust Corporation’s financial reporting and securities filings, as well as certain commercial real estate lending relationships involving its subsidiary bank, Wilmington Trust Company, all of which relate to filings and activities occurring prior to the acquisition of Wilmington Trust Corporation by M&T. On January 6, 2016, the U.S. Attorney for the District of Delaware obtained an indictment against Wilmington Trust Corporation relating to alleged conduct that occurred prior to M&T’s acquisition of Wilmington Trust Corporation in May 2011. On October 9, 2017, Wilmington Trust Corporation reached a civil settlement with the U.S. Attorney’s Office for the District of Delaware to resolve this matter. Under the terms of the agreement, Wilmington Trust Corporation agreed to pay $60 million. The settlement amount included $16 million previously paid by Wilmington Trust Corporation to the U.S. Securities and Exchange Commission in a related action. Wilmington Trust Corporation did not admit any liability, nor was there any finding of wrongdoing.~~All indictments and charges against Wilmington Trust Corporation were dismissed by Court order on October 12, 2017.~~Item 1A. Risk Factors.

~~In Re Wilmington Trust Securities Litigation (U.S. District Court, District of Delaware, Case No. 10-CV-0990-SLR):~~ Beginning on November 18, 2010, a series of parties, purporting to be class representatives, commenced a putative class action lawsuit against Wilmington Trust Corporation, alleging that Wilmington Trust Corporation’s financial reporting and securities filings were in violation of securities laws. The cases were consolidated and Wilmington Trust Corporation moved to dismiss. The Court issued an order denying Wilmington Trust Corporation’s motion to dismiss on March 20, 2014. Fact discovery commenced. Plaintiffs’ motion for class certification was granted on September 3, 2015. On April 13, 2016, the Court issued an order staying fact discovery in the case pending completion of the trial in ~~U.S. v. Wilmington Trust Corp., et al.~~ On September 19, 2016, the plaintiffs filed a motion to modify the stay of discovery in this matter to allow for additional, limited discovery. On December 19, 2016, the Court issued an order lifting the existing stay in its entirety. The Court has removed this matter from the trial calendar, to be rescheduled at some future date.

Due to their complex nature, it is difficult to estimate when litigation or investigatory matters such as these may be resolved. As set forth in the introductory paragraph to this Item 1 — Legal Proceedings, losses from current litigation and regulatory matters which the Company is subject to that are not currently considered probable are within a range of reasonably possible losses for such matters in the aggregate, beyond the existing recorded liability, and are included in the range of reasonably possible losses set forth above.

There have been no material changes in risk factors relating to M&T to those disclosed in response to Item 1A. to Part I of Form 10-K for the year ended December 31, ~~2016.~~2021.

Pursuant to the requirements of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned thereunto duly authorized.


New York		16-0968385
(State or other jurisdiction of incorporation or organization)		(I.R.S. Employer Identification No.)

One M & T Plaza Buffalo, New York		14203
(Address of principal executive offices)		(Zip Code)


Title of Each Class	Trading Symbols	Name of Each Exchange on Which Registered
Common Stock, $.50 par value	MTB	New York Stock Exchange
Perpetual Fixed-to-Floating Rate Non-Cumulative Preferred Stock, Series H	MTBPrH	New York Stock Exchange


Large accelerated filer	☒		Accelerated filer	☐
Non-accelerated filer	☐	~~(Do not check if a smaller reporting company)~~	Smaller reporting company	☐
Emerging growth company	☐


Table of Contents of Information Required in Report		Page

Part I. FINANCIAL INFORMATION

Item 1.	Financial ~~Statements.~~Statements

	CONSOLIDATED BALANCE SHEET -– September 30, ~~2017~~2022 and December 31, ~~2016~~2021	3

	CONSOLIDATED STATEMENT OF INCOME -– Three and nine months ended September 30, ~~2017~~2022 and ~~2016~~2021	4

	CONSOLIDATED STATEMENT OF COMPREHENSIVE INCOME -– Three and nine months ended September 30, ~~2017~~2022 and ~~2016~~2021	5

	CONSOLIDATED STATEMENT OF CASH FLOWS -– Nine months ended September 30, ~~2017~~2022 and ~~2016~~2021	6

	CONSOLIDATED STATEMENT OF CHANGES IN SHAREHOLDERS' EQUITY ~~- Nine~~– Three and nine months ended September 30, ~~2017~~2022 and ~~2016~~2021	7

	NOTES TO FINANCIAL STATEMENTS	8

Item 2.	Management's Discussion and Analysis of Financial Condition and Results of ~~Operations.~~Operations	5352

Item 3.	Quantitative and Qualitative Disclosures About Market ~~Risk.~~Risk	9089

Item 4.	Controls and ~~Procedures.~~Procedures	9089

Part II. OTHER INFORMATION

Item 1.	Legal ~~Proceedings.~~Proceedings	90

Item 1A.	Risk ~~Factors.~~Factors	9290

Item 2.	Unregistered Sales of Equity Securities and Use of ~~Proceeds.~~Proceeds	9290

Item 3.	Defaults Upon Senior ~~Securities.~~Securities	9291

Item 4.	Mine Safety ~~Disclosures.~~Disclosures	9291

Item 5.	Other ~~Information.~~Information	9291

Item 6.	~~Exhibits.~~Exhibits	9391

SIGNATURES		9392

		September 30,			December 31,
Dollars in thousands, except per share		2017			2016

Assets	Cash and due from banks	$	1,368,252			1,320,549
	Interest-bearing deposits at banks		6,306,484			5,000,638
	Trading account		170,516			323,867		September 30,			December 31,
	Investment securities (includes pledged securities that can be sold or repledged of $488,200 at September 30, 2017; $1,203,473 at December 31, 2016)
	Available for sale (cost: $11,369,815 at September 30, 2017; $13,338,301 at December 31, 2016)		11,416,824			13,332,072
	Held to maturity (fair value: $3,247,954 at September 30, 2017; $2,451,222 at December 31, 2016)		3,242,124			2,457,278
	Other (fair value: $414,978 at September 30, 2017; $461,118 at December 31, 2016)		414,978			461,118
	Total investment securities		15,073,926			16,250,468
	Loans and leases		88,171,225			91,101,677
	Unearned discount		(246,091	)		(248,261	)
	Loans and leases, net of unearned discount		87,925,134			90,853,416
	Allowance for credit losses		(1,013,326	)		(988,997	)
	Loans and leases, net		86,911,808			89,864,419
	Premises and equipment		656,713			675,263
	Goodwill		4,593,112			4,593,112
	Core deposit and other intangible assets		78,614			97,655
	Accrued interest and other assets		5,242,379			5,323,235
	Total assets	$	120,401,804			123,449,206

(Dollars in thousands, except per share)								2022			2021
Assets
Cash and due from banks								$	2,255,810		$	1,337,577
Interest-bearing deposits at banks									25,391,528			41,872,304
Trading account									129,672			49,745
Investment securities
Available for sale (cost: $11,340,155 at September 30, 2022; $3,849,347 at December 31, 2021)									10,870,346			3,955,804
Held to maturity (fair value: $11,554,655 at September 30, 2022; $2,771,290 at December 31, 2021)									12,898,862			2,734,674
Equity and other securities (cost: $832,604 at September 30, 2022; $461,516 at December 31, 2021)									834,557			465,382
Total investment securities									24,603,765			7,155,860
Loans and leases									128,608,538			93,136,678
Unearned discount									(382,951	)		(224,226	)
Loans and leases, net of unearned discount									128,225,587			92,912,452
Allowance for credit losses									(1,875,591	)		(1,469,226	)
Loans and leases, net									126,349,996			91,443,226
Premises and equipment									1,620,339			1,144,765
Goodwill									8,501,357			4,593,112
Core deposit and other intangible assets									226,974			3,998
Accrued interest and other assets									8,876,038			7,506,573
Total assets								$	197,955,479		$	155,107,160
Liabilities	Noninterest-bearing deposits	$	33,111,246			32,813,896
	Savings and interest-checking deposits		52,936,615			52,346,207
	Time deposits		7,233,518			10,131,846
	Deposits at Cayman Islands office		232,014			201,927
	Total deposits		93,513,393			95,493,876
	Federal funds purchased and agreements to repurchase securities		200,768			163,442
	Accrued interest and other liabilities		1,791,946			1,811,431
	Long-term borrowings		8,577,645			9,493,835
	Total liabilities		104,083,752			106,962,584
Noninterest-bearing deposits								$	73,023,271		$	60,131,480
Savings and interest-checking deposits									86,015,700			68,603,966
Time deposits									4,806,417			2,807,963
Total deposits									163,845,388			131,543,409
Short-term borrowings									917,806			47,046
Accrued interest and other liabilities									4,476,456			2,127,931
Long-term borrowings									3,459,336			3,485,369
Total liabilities									172,698,986			137,203,755
Shareholders' equity	Preferred stock, $1.00 par, 1,000,000 shares authorized; Issued and outstanding: Liquidation preference of $1,000 per share: shares 731,500 at September 30, 2017 and December 31, 2016; Liquidation preference of $10,000 per share: 50,000 shares at September 30, 2017 and December 31, 2016		1,231,500			1,231,500
	Common stock, $.50 par, 250,000,000 shares authorized, 159,819,892 shares issued at September 30, 2017; 159,945,678 shares issued at December 31, 2016		79,910			79,973
	Common stock issuable, 27,019 shares at September 30, 2017; 32,403 shares at December 31, 2016		1,827			2,145
	Additional paid-in capital		6,598,048			6,676,948
	Retained earnings		9,909,415			9,222,488
	Accumulated other comprehensive income (loss), net		(247,915	)		(294,636	)
	Treasury stock — common, at cost — 8,555,636 shares at September 30, 2017; 3,764,742 shares at December 31, 2016		(1,254,733	)		(431,796	)
	Total shareholders’ equity		16,318,052			16,486,622
	Total liabilities and shareholders’ equity	$	120,401,804			123,449,206
Preferred stock, $1.00 par, 20,000,000 shares authorized; Issued and outstanding: Liquidation preference of $1,000 per share: 350,000 shares at September 30, 2022 and December 31, 2021; Liquidation preference of $10,000 per share: 140,000 shares at September 30, 2022 and December 31, 2021; Liquidation preference of $25 per share: 10,000,000 shares at September 30, 2022									2,010,600			1,750,000
Common stock, $.50 par, 250,000,000 shares authorized, 179,436,779 shares issued at September 30, 2022 and 159,741,898 shares issued at December 31, 2021									89,718			79,871
Common stock issuable, 13,951 shares at September 30, 2022; 15,769 shares at December 31, 2021									1,098			1,212
Additional paid-in capital									9,994,395			6,635,000
Retained earnings									15,219,828			14,646,448
Accumulated other comprehensive income (loss), net									(899,993	)		(127,578	)
Treasury stock — common, at cost — 6,551,133 shares at September 30, 2022; 31,052,845 shares at December 31, 2021									(1,159,153	)		(5,081,548	)
Total shareholders’ equity									25,256,493			17,903,405
Total liabilities and shareholders’ equity								$	197,955,479		$	155,107,160


	Three Months Ended September 30						Nine Months Ended September 30
(In thousands, except per share)	2022			2021			2022			2021
Interest income
Loans and leases, including fees	$	1,455,612		$	944,422		$	3,572,954		$	2,843,969
Investment securities
Fully taxable		135,766			33,209			294,290			104,736
Exempt from federal taxes		16,555			48			34,388			113
Deposits at banks		172,956			14,923			272,009			30,507
Other		624			344			1,270			941
Total interest income		1,781,513			992,946			4,174,911			2,980,266
Interest expense
Savings and interest-checking deposits		68,690			7,000			103,344			26,556
Time deposits		1,124			3,573			3,748			15,667
Deposits at Cayman Islands office		—			—			—			201
Short-term borrowings		2,670			2			6,090			5
Long-term borrowings		30,338			15,121			67,147			46,852
Total interest expense		102,822			25,696			180,329			89,281
Net interest income		1,678,691			967,250			3,994,582			2,890,985
Provision for credit losses		115,000			(20,000	)		427,000			(60,000	)
Net interest income after provision for credit losses		1,563,691			987,250			3,567,582			2,950,985
Other income
Mortgage banking revenues		83,041			159,995			275,115			432,062
Service charges on deposit accounts		115,213			105,426			340,890			296,721
Trust income		186,577			156,876			545,874			475,889
Brokerage services income		21,086			20,490			65,414			43,868
Trading account and non-hedging derivative gains		5,081			5,563			12,743			18,349
Gain/(loss) on bank investment securities		(1,108	)		291			(1,913	)		(22,646	)
Other revenues from operations		153,189			120,485			436,943			344,114
Total other income		563,079			569,126			1,675,066			1,588,357
Other expense
Salaries and employee benefits		736,354			510,422			2,090,075			1,530,634
Equipment and net occupancy		127,117			80,738			337,584			244,057
Outside data processing and software		95,068			72,782			268,607			213,025
FDIC assessments		28,105			18,810			66,266			50,874
Advertising and marketing		21,398			15,208			58,057			43,200
Printing, postage and supplies		14,768			7,917			40,488			28,367
Amortization of core deposit and other intangible assets		18,384			2,738			38,024			8,213
Other costs of operations		238,059			190,719			743,047			565,753
Total other expense		1,279,253			899,334			3,642,148			2,684,123
Income before taxes		847,517			657,042			1,600,500			1,855,219
Income taxes		200,921			161,582			374,208			454,441
Net income	$	646,596		$	495,460		$	1,226,292		$	1,400,778
Net income available to common shareholders
Basic	$	620,549		$	475,958		$	1,152,400		$	1,342,805
Diluted		620,554			475,961			1,152,406			1,342,812
Net income per common share
Basic	$	3.55		$	3.70		$	7.18		$	10.44
Diluted		3.53			3.69			7.14			10.43
Average common shares outstanding
Basic		174,609			128,689			160,474			128,632
Diluted		175,682			128,844			161,295			128,786

		Three Months Ended September 30				Nine Months Ended September 30
In thousands, except per share		2017		2016		2017			2016

Interest income	Loans and leases, including fees	$	953,662		871,345	$	2,776,340			2,602,208
	Investment securities
	Fully taxable		87,937		84,893		276,057			274,092
	Exempt from federal taxes		345		623		1,154			2,081
	Deposits at banks		14,970		12,354		39,345			33,684
	Other		296		300		760			905
	Total interest income		1,057,210		969,515		3,093,656			2,912,970
Interest expense	Savings and interest-checking deposits		37,714		24,067		93,891			60,906
	Time deposits		13,992		27,886		49,293			79,075
	Deposits at Cayman Islands office		310		204		856			578
	Short-term borrowings		554		169		1,148			3,474
	Long-term borrowings		47,506		58,849		138,874			174,814
	Total interest expense		100,076		111,175		284,062			318,847
	Net interest income		957,134		858,340		2,809,594			2,594,123
	Provision for credit losses		30,000		47,000		137,000			128,000
	Net interest income after provision for credit losses		927,134		811,340		2,672,594			2,466,123
Other income	Mortgage banking revenues		96,737		103,747		267,592			275,193
	Service charges on deposit accounts		109,356		107,935		319,589			314,212
	Trust income		124,900		118,654		371,712			350,181
	Brokerage services income		14,676		15,914		48,677			48,190
	Trading account and foreign exchange gains		7,058		12,754		24,833			33,434
	Gain (loss) on bank investment securities		—		28,480		(17	)		28,748
	Other revenues from operations		106,702		103,866		334,704			310,579
	Total other income		459,429		491,350		1,367,090			1,360,537
Other expense	Salaries and employee benefits		399,089		399,786		1,247,851			1,230,246
	Equipment and net occupancy		75,558		75,263		223,721			225,165
	Outside data processing and software		45,761		42,878		134,637			128,402
	FDIC assessments		23,969		28,459		78,149			76,054
	Advertising and marketing		17,403		21,996		49,837			66,063
	Printing, postage and supplies		8,732		8,972		27,397			30,865
	Amortization of core deposit and other intangible assets		7,808		9,787		24,341			33,524
	Other costs of operations		227,705		165,251		558,579			488,063
	Total other expense		806,025		752,392		2,344,512			2,278,382
	Income before taxes		580,538		550,298		1,695,172			1,548,278
	Income taxes		224,615		200,314		609,269			563,735
	Net income	$	355,923		349,984	$	1,085,903			984,543
	Net income available to common shareholders
	Basic	$	335,801		326,992	$	1,025,011			915,670
	Diluted		335,804		326,998		1,025,023			915,686
	Net income per common share
	Basic	$	2.22		2.10	$	6.71			5.82
	Diluted		2.21		2.10		6.69			5.80
	Cash dividends per common share	$	.75		.70	$	2.25			2.10
	Average common shares outstanding
	Basic		151,347		155,493		152,866			157,336
	Diluted		151,691		156,026		153,293			157,843

	Three Months Ended September 30						Nine Months Ended September 30
In thousands	2017			2016			2017			2016
													Three Months Ended September 30						Nine Months Ended September 30
(In thousands)													2022			2021			2022			2021

Net income	$	355,923			349,984		$	1,085,903			984,543		$	646,596		$	495,460		$	1,226,292		$	1,400,778
Other comprehensive income, net of tax and reclassification adjustments:
Net unrealized gains (losses) on investment securities		18,258			(17,133	)		33,834			127,331
Other comprehensive income (loss), net of tax and reclassification adjustments:
Net unrealized losses on investment securities														(218,852	)		(9,314	)		(425,770	)		(39,808	)
Cash flow hedges adjustments		(1,120	)		(23	)		(2,098	)		(70	)		(172,285	)		(38,038	)		(344,534	)		(152,175	)
Foreign currency translation adjustment		863			(229	)		2,489			(1,847	)
Foreign currency translation adjustments														(5,359	)		(1,579	)		(11,271	)		(886	)
Defined benefit plans liability adjustments		4,165			3,847			12,496			11,654			2,993			15,486			9,160			45,482
Total other comprehensive income (loss)		22,166			(13,538	)		46,721			137,068			(393,503	)		(33,445	)		(772,415	)		(147,387	)
Total comprehensive income	$	378,089			336,446		$	1,132,624			1,121,611		$	253,093		$	462,015		$	453,877		$	1,253,391


														Accumulated
														Other
					Common			Additional						Comprehensive
	Preferred		Common		Stock			Paid-in			Retained			Income			Treasury
Dollars in thousands, except per share	Stock		Stock		Issuable			Capital			Earnings			(Loss), Net			Stock			Total
Three Months Ended September 30, 2022
Balance — July 1, 2022	$	2,010,600	$	89,718	$	1,090		$	9,986,881		$	14,808,637		$	(506,490	)	$	(595,905	)	$	25,794,531
Total comprehensive income		—		—		—			—			646,596			(393,503	)		—			253,093
Preferred stock cash dividends (a)		—		—		—			—			(24,941	)		—			—			(24,941	)
Purchases of treasury stock		—		—		—			—			—			—			(600,000	)		(600,000	)
Stock-based compensation transactions, net		—		—		8			7,514			(327	)		—			36,752			43,947
Common stock cash dividends — $1.20 per share		—		—		—			—			(210,137	)		—			—			(210,137	)
Balance — September 30, 2022	$	2,010,600	$	89,718	$	1,098		$	9,994,395		$	15,219,828		$	(899,993	)	$	(1,159,153	)	$	25,256,493

Nine Months Ended September 30, 2022
Balance — January 1, 2022	$	1,750,000	$	79,871	$	1,212		$	6,635,000		$	14,646,448		$	(127,578	)	$	(5,081,548	)	$	17,903,405
Total comprehensive income		—		—		—			—			1,226,292			(772,415	)		—			453,877
Acquisition of People's United Financial, Inc.:
Common stock issued		—		9,824		—			3,256,821			—			—			5,019,870			8,286,515
Common stock awards converted		—		—		—			104,810			—			—			—			104,810
Conversion of Series H preferred stock		260,600		—		—			—			—			—			—			260,600
Preferred stock cash dividends (a)		—		—		—			—			(71,647	)		—			—			(71,647	)
Purchases of treasury stock		—		—		—			—			—			—			(1,200,000	)		(1,200,000	)
Stock-based compensation transactions, net		—		23		(114	)		(2,236	)		(970	)		—			102,525			99,228
Common stock cash dividends — $3.60 per share		—		—		—			—			(580,295	)		—			—			(580,295	)
Balance — September 30, 2022	$	2,010,600	$	89,718	$	1,098		$	9,994,395		$	15,219,828		$	(899,993	)	$	(1,159,153	)	$	25,256,493

Three Months Ended September 30, 2021
Balance — July 1, 2021	$	1,250,000	$	79,871	$	1,179		$	6,620,528		$	14,030,215		$	(176,974	)	$	(5,084,515	)	$	16,720,304
Total comprehensive income		—		—		—			—			495,460			(33,445	)		—			462,015
Preferred stock cash dividends (a)		—		—		—			—			(17,050	)		—			—			(17,050	)
Issuance of Series I preferred stock		500,000		—		—			(5,000	)		—			—			—			495,000
Stock-based compensation transactions, net		—		—		17			9,128			(207	)		—			2,069			11,007
Common stock cash dividends — $1.10 per share		—		—		—			—			(142,505	)		—			—			(142,505	)
Balance — September 30, 2021	$	1,750,000	$	79,871	$	1,196		$	6,624,656		$	14,365,913		$	(210,419	)	$	(5,082,446	)	$	17,528,771

Nine Months Ended September 30, 2021
Balance — January 1, 2021	$	1,250,000	$	79,871	$	1,344		$	6,617,404		$	13,444,428		$	(63,032	)	$	(5,142,732	)	$	16,187,283
Total comprehensive income		—		—		—			—			1,400,778			(147,387	)		—			1,253,391
Preferred stock cash dividends (a)		—		—		—			—			(51,150	)		—			—			(51,150	)
Issuance of Series I preferred stock		500,000		—		—			(5,000	)		—			—			—			495,000
Stock-based compensation transactions, net		—		—		(148	)		12,252			(616	)		—			60,286			71,774
Common stock cash dividends — $3.30 per share		—		—		—			—			(427,527	)		—			—			(427,527	)
Balance — September 30, 2021	$	1,750,000	$	79,871	$	1,196		$	6,624,656		$	14,365,913		$	(210,419	)	$	(5,082,446	)	$	17,528,771


	(In thousands)
Consideration:
Common stock issued (50,325,004 shares)	$	8,286,515
Common stock awards converted		104,810
Cash		1,824
Total consideration		8,393,149

Net assets acquired:
Identifiable assets
Cash and due from banks		395,747
Interest-bearing deposits at banks		9,193,346
Investment securities		11,574,689
Loans and leases		35,840,648
Core deposit and other intangible assets		261,000
Other assets		2,979,388
Total identifiable assets acquired		60,244,818
Liabilities and preferred stock
Deposits		52,967,915
Borrowings		1,389,012
Other liabilities		1,142,387
Total liabilities assumed		55,499,314
Preferred stock		260,600
Total liabilities and preferred stock		55,759,914
Net assets acquired		4,484,904
Goodwill	$	3,908,245


	Total

Unpaid principal balance (a)	$	3,410,506
Allowance for credit losses at acquisition (a)		(99,000	)
Non-credit discount		(106,814	)
Fair value	$	3,204,692


	December 31, 2021		Acquisition of People's United		September 30, 2022
	(In thousands)

Business Banking	$	864,366	$	693,905	$	1,558,271
Commercial Banking		1,401,873		2,686,253		4,088,126
Commercial Real Estate		654,389		291,217		945,606
Discretionary Portfolio		—		—		—
Residential Mortgage Banking		—		—		—
Retail Banking		1,309,191		221,196		1,530,387
All Other		363,293		15,674		378,967
Total	$	4,593,112	$	3,908,245	$	8,501,357


	Pro forma				Pro forma
	Nine Months Ended September 30,				Three Months Ended September 30
	2022		2021		2021
	(In thousands)				(In thousands)
Total revenues(a)	$	6,134,400	$	6,056,364	$	2,054,462
Net income		1,399,913		1,769,781		664,820

	Nine Months Ended September 30, 2016
	(In thousands)

Salaries and employee benefits	$	5,334
Equipment and net occupancy		1,278
Outside data processing and software		1,067
Advertising and marketing		10,522
Printing, postage and supplies		1,482
Other costs of operations		16,072
Total	$	35,755


	Amortized Cost		Gross Unrealized Gains		Gross Unrealized Losses		Estimated Fair Value
	(In thousands)
September 30, 2022
Investment securities available for sale:
U.S. Treasury and federal agencies	$	7,908,153	$	413	$	249,838	$	7,658,728
Mortgage-backed securities:
Government issued or guaranteed
Commercial		613,752		—		7,181		606,571
Residential		2,635,976		127		205,157		2,430,946
Other debt securities		182,274		311		8,484		174,101
		11,340,155		851		470,660		10,870,346
Investment securities held to maturity:
U.S. Treasury and federal agencies		1,199,539		—		49,633		1,149,906
Obligations of states and political subdivisions		2,663,917		6		221,631		2,442,292
Mortgage-backed securities:
Government issued or guaranteed
Commercial		927,503		—		106,215		821,288
Residential		8,053,619		—		967,653		7,085,966
Privately issued		52,479		9,260		8,341		53,398
Other debt securities		1,805		—		—		1,805
		12,898,862		9,266		1,353,473		11,554,655
Total debt securities	$	24,239,017	$	10,117	$	1,824,133	$	22,425,001
Equity and other securities:
Readily marketable equity — at fair value	$	192,584	$	4,943	$	2,990	$	194,537
Other — at cost		640,020		—		—		640,020
Total equity and other securities	$	832,604	$	4,943	$	2,990	$	834,557

December 31, 2021
Investment securities available for sale:
U.S. Treasury and federal agencies	$	682,267	$	229	$	3,806	$	678,690
Mortgage-backed securities:
Government issued or guaranteed
Residential		3,042,771		113,102		561		3,155,312
Other debt securities		124,309		1,974		4,481		121,802
		3,849,347		115,305		8,848		3,955,804
Investment securities held to maturity:
U.S. Treasury and federal agencies		3,052		—		9		3,043
Obligations of states and political subdivisions		177		2		—		179
Mortgage-backed securities:
Government issued or guaranteed
Residential		2,667,328		49,221		8,376		2,708,173
Privately issued		61,555		10,520		14,742		57,333
Other debt securities		2,562		—		—		2,562
		2,734,674		59,743		23,127		2,771,290
Total debt securities	$	6,584,021	$	175,048	$	31,975	$	6,727,094
Equity and other securities:
Readily marketable equity — at fair value	$	73,774	$	4,460	$	594	$	77,640
Other — at cost		387,742		—		—		387,742
Total equity and other securities	$	461,516	$	4,460	$	594	$	465,382


	Less Than 12 Months				12 Months or More
	Fair Value		Unrealized Losses		Fair Value		Unrealized Losses
	(In thousands)
September 30, 2022
Investment securities available for sale:
U.S. Treasury and federal agencies	$	7,159,893	$	224,986	$	253,585	$	24,852
Mortgage-backed securities:
Government issued or guaranteed
Commercial		606,571		7,181		—		—
Residential		2,401,907		204,279		18,668		878
Other debt securities		99,347		2,827		68,872		5,657
		10,267,718		439,273		341,125		31,387
Investment securities held to maturity:
U.S. Treasury and federal agencies		1,146,912		49,618		2,994		15
Obligations of states and political subdivisions		2,426,287		221,631		—		—
Mortgage-backed securities:
Government issued or guaranteed
Commercial		821,288		106,215		—		—
Residential		6,416,154		819,363		669,812		148,290
Privately issued		—		—		37,642		8,341
		10,810,641		1,196,827		710,448		156,646
Total	$	21,078,359	$	1,636,100	$	1,051,573	$	188,033

December 31, 2021
Investment securities available for sale:
U.S. Treasury and federal agencies	$	598,566	$	3,806	$	—	$	—
Mortgage-backed securities:
Government issued or guaranteed
Residential		10,111		54		20,824		507
Other debt securities		3,760		74		66,419		4,407
		612,437		3,934		87,243		4,914
Investment securities held to maturity:
U.S. Treasury and federal agencies		3,043		9		—		—
Mortgage-backed securities:
Government issued or guaranteed
Residential		1,372,236		8,356		1,251		20
Privately issued		—		—		43,692		14,742
		1,375,279		8,365		44,943		14,762
Total	$	1,987,716	$	12,299	$	132,186	$	19,676

	Current		30-89 Days Past Due		Accruing Loans Past Due 90 Days or More (a)		Accruing Loans Acquired at a Discount Past Due 90 days or More (b)		Purchased Impaired (c)		Nonaccrual		Total
	(In thousands)
September 30, 2017
Commercial, financial, leasing, etc.	$	21,486,942		48,159		3,710		369		75		203,996	$	21,743,251
Real estate:
Commercial		24,724,768		273,539		1,710		7,523		20,509		200,193		25,228,242
Residential builder and developer		1,604,095		26,182		—		4,413		10,717		2,416		1,647,823
Other commercial construction		5,952,636		51,132		1,220		—		13,972		19,263		6,038,223
Residential		15,868,656		458,066		249,983		10,025		307,529		236,363		17,130,622
Residential — limited documentation		2,829,667		88,814		—		—		114,141		101,918		3,134,540
Consumer:
Home equity lines and loans		5,275,572		34,878		772		9,856		—		75,584		5,396,662
Automobile		3,327,148		67,280		—		1		—		21,267		3,415,696
Other		4,120,712		33,070		3,893		24,038		—		8,362		4,190,075
Total	$	85,190,196		1,081,120		261,288		56,225		466,943		869,362	$	87,925,134

December 31, 2016
Commercial, financial, leasing, etc.	$	22,287,857		53,503		6,195		417		641		261,434	$	22,610,047
Real estate:
Commercial		25,076,684		183,531		7,054		12,870		31,404		176,201		25,487,744
Residential builder and developer		1,884,989		4,667		5		1,952		14,006		16,707		1,922,326
Other commercial construction		5,985,118		77,701		922		198		14,274		18,111		6,096,324
Residential		17,631,377		485,468		281,298		11,537		378,549		229,242		19,017,471
Residential — limited documentation		3,239,344		88,366		—		—		139,158		106,573		3,573,441
Consumer:
Home equity lines and loans		5,502,091		44,565		—		12,678		—		81,815		5,641,149
Automobile		2,869,232		56,158		—		1		—		18,674		2,944,065
Other		3,491,629		31,286		5,185		21,491		—		11,258		3,560,849
Total	$	87,968,321		1,025,245		300,659		61,144		578,032		920,015	$	90,853,416

	September 30, 2017						December 31, 2016
	Recorded Investment		Unpaid Principal Balance		Related Allowance		Recorded Investment		Unpaid Principal Balance		Related Allowance
	(In thousands)
With an allowance recorded:
Commercial, financial, leasing, etc.	$	148,747		179,120		49,447		168,072		184,432		48,480
Real estate:
Commercial		73,144		81,244		10,200		71,862		86,666		11,620
Residential builder and developer		6,537		6,842		288		7,396		8,361		506
Other commercial construction		1,626		1,785		292		2,475		2,731		448
Residential		97,483		118,030		3,475		86,680		105,944		3,457
Residential — limited documentation		79,030		94,194		4,600		82,547		97,718		6,000
Consumer:
Home equity lines and loans		48,231		52,975		8,711		44,693		48,965		8,027
Automobile		14,225		16,743		3,011		16,982		18,272		3,740
Other		3,176		5,633		650		3,791		5,296		776
		472,199		556,566		80,674		484,498		558,385		83,054
With no related allowance recorded:
Commercial, financial, leasing, etc.		80,952		97,073		—		100,805		124,786		—
Real estate:
Commercial		148,733		158,815		—		113,276		121,846		—
Residential builder and developer		1,174		1,174		—		14,368		21,124		—
Other commercial construction		17,850		37,237		—		15,933		35,281		—
Residential		17,312		23,291		—		16,823		24,161		—
Residential — limited documentation		11,091		18,480		—		15,429		24,590		—
		277,112		336,070		—		276,634		351,788		—
Total:
Commercial, financial, leasing, etc.		229,699		276,193		49,447		268,877		309,218		48,480
Real estate:
Commercial		221,877		240,059		10,200		185,138		208,512		11,620
Residential builder and developer		7,711		8,016		288		21,764		29,485		506
Other commercial construction		19,476		39,022		292		18,408		38,012		448
Residential		114,795		141,321		3,475		103,503		130,105		3,457
Residential — limited documentation		90,121		112,674		4,600		97,976		122,308		6,000
Consumer:
Home equity lines and loans		48,231		52,975		8,711		44,693		48,965		8,027
Automobile		14,225		16,743		3,011		16,982		18,272		3,740
Other		3,176		5,633		650		3,791		5,296		776
Total	$	749,311		892,636		80,674		761,132		910,173		83,054

	Three Months Ended September 30, 2017						Three Months Ended September 30, 2016
			Interest Income Recognized						Interest Income Recognized
	Average Recorded Investment		Total		Cash Basis		Average Recorded Investment		Total		Cash Basis
	(In thousands)

Commercial, financial, leasing, etc.	$	224,526		391		391		262,796		744		744
Real estate:
Commercial		233,572		1,425		1,425		175,256		1,806		1,806
Residential builder and developer		8,550		895		895		26,996		405		405
Other commercial construction		16,578		25		25		21,500		190		190
Residential		113,892		1,903		905		96,961		1,572		570
Residential — limited documentation		91,974		1,624		569		101,877		1,501		378
Consumer:
Home equity lines and loans		47,831		419		99		41,740		368		112
Automobile		14,588		251		22		18,571		303		19
Other		3,269		80		2		4,077		72		11
Total	$	754,780		7,013		4,333		749,774		6,961		4,235

	Nine Months Ended September 30, 2017						Nine Months Ended September 30, 2016
			Interest Income Recognized						Interest Income Recognized
	Average Recorded Investment		Total		Cash Basis		Average Recorded Investment		Total		Cash Basis
	(In thousands)

Commercial, financial, leasing, etc.	$	242,410		1,674		1,674		283,783		7,055		7,055
Real estate:
Commercial		205,814		3,213		3,213		177,579		3,891		3,891
Residential builder and developer		14,551		1,791		1,791		30,832		488		488
Other commercial construction		15,474		958		958		19,774		563		563
Residential		108,741		5,004		2,285		97,229		4,778		2,591
Residential — limited documentation		94,680		4,573		1,292		104,382		4,580		1,648
Consumer:
Home equity lines and loans		46,829		1,240		290		33,998		937		295
Automobile		15,483		788		62		20,358		964		83
Other		3,430		227		8		10,987		371		74
Total	$	747,412		19,468		11,573		778,922		23,627		16,688

			Real Estate
	Commercial,				Residential		Other
	Financial,				Builder and		Commercial
	Leasing, etc.		Commercial		Developer		Construction
	(In thousands)
September 30, 2017
Pass	$	20,561,077		24,309,923		1,580,763		5,830,122
Criticized accrual		978,178		718,126		64,644		188,838
Criticized nonaccrual		203,996		200,193		2,416		19,263
Total	$	21,743,251		25,228,242		1,647,823		6,038,223
December 31, 2016
Pass	$	21,398,581		24,570,269		1,789,071		5,912,351
Criticized accrual		950,032		741,274		116,548		165,862
Criticized nonaccrual		261,434		176,201		16,707		18,111
Total	$	22,610,047		25,487,744		1,922,326		6,096,324

	Shares Issued and Outstanding		Carrying Value
	(Dollars in thousands)
Series A (a)
Fixed Rate Cumulative Perpetual Preferred Stock, $1,000 liquidation preference per share		230,000	$	230,000
Series C (a)
Fixed Rate Cumulative Perpetual Preferred Stock, $1,000 liquidation preference per share		151,500	$	151,500
Series E (b)
Fixed-to-Floating Rate Non-cumulative Perpetual Preferred Stock, $1,000 liquidation preference per share		350,000	$	350,000
Series F (c)
Fixed-to-Floating Rate Non-cumulative Perpetual Preferred Stock, $10,000 liquidation preference per share		50,000	$	500,000


	Pension Benefits						Other Postretirement Benefits
	Three Months Ended September 30
	2022			2021			2022			2021
	(In thousands)

Service cost	$	4,423		$	5,128		$	689		$	254
Interest cost on projected benefit obligation		22,060			15,468			581			328
Expected return on plan assets		(50,188	)		(35,862	)		—			—
Amortization of prior service cost (credit)		129			139			(693	)		(1,185	)
Amortization of net actuarial loss (gain)		4,974			22,254			(370	)		(324	)
Net periodic cost (benefit)	$	(18,602	)	$	7,127		$	207		$	(927	)

	Pension Benefits						Other Postretirement Benefits
	Nine Months Ended September 30
	2022			2021			2022			2021
	(In thousands)

Service cost	$	13,237		$	15,385		$	1,914		$	760
Interest cost on projected benefit obligation		60,407			46,404			1,607			984
Expected return on plan assets		(137,421	)		(107,586	)		—			—
Amortization of prior service cost (credit)		387			415			(2,079	)		(3,554	)
Amortization of net actuarial loss (gain)		14,921			66,763			(1,111	)		(971	)
Net periodic cost (benefit)	$	(48,469	)	$	21,381		$	331		$	(2,781	)


	Investment			Defined Benefit						Total Amount				Income
	Securities			Plans			Other			Before Tax				Tax			Net
	(In thousands)

Balance — January 1, 2022	$	104,691			(360,276	)		83,531		$	(172,054	)			44,476		$	(127,578	)
Other comprehensive income (loss) before reclassifications:
Unrealized holding losses, net		(576,266	)		—			—			(576,266	)			149,186			(427,080	)
Foreign currency translation adjustment		—			—			(14,564	)		(14,564	)			3,293			(11,271	)
Unrealized losses on cash flow hedges		—			—			(429,310	)		(429,310	)			111,150			(318,160	)
Total other comprehensive income (loss) before reclassifications		(576,266	)		—			(443,874	)		(1,020,140	)			263,629			(756,511	)
Amounts reclassified from accumulated other comprehensive income (loss) that (increase) decrease net income:
Amortization of unrealized holding losses on held-to-maturity securities		1,766			—			—			1,766		(a)		(456	)		1,310
Accretion of net gain on terminated cash flow hedges		—			—			(90	)		(90	)	(c)		24			(66	)
Net yield adjustment from cash flow hedges currently in effect		—			—			(35,500	)		(35,500	)	(a)		9,192			(26,308	)
Amortization of prior service credit		—			(1,692	)		—			(1,692	)	(d)		413			(1,279	)
Amortization of actuarial losses		—			13,810			—			13,810		(d)		(3,371	)		10,439
Total other comprehensive income (loss)		(574,500	)		12,118			(479,464	)		(1,041,846	)			269,431			(772,415	)
Balance — September 30, 2022	$	(469,809	)		(348,158	)		(395,933	)	$	(1,213,900	)			313,907		$	(899,993	)


Balance — January 1, 2021	$	195,386			(650,087	)		369,558		$	(85,143	)			22,111		$	(63,032	)
Other comprehensive income (loss) before reclassifications:
Unrealized holding losses, net		(57,388	)		—			—			(57,388	)			15,124			(42,264	)
Foreign currency translation adjustment		—			—			(1,246	)		(1,246	)			360			(886	)
Unrealized gains on cash flow hedges		—			—			821			821				(214	)		607
Total other comprehensive income (loss) before reclassifications		(57,388	)		—			(425	)		(57,813	)			15,270			(42,543	)
Amounts reclassified from accumulated other comprehensive income (loss) that (increase) decrease net income:
Amortization of unrealized holding losses on held-to-maturity securities		3,333			—			—			3,333		(a)		(871	)		2,462
Gains realized in net income		(8	)		—			—			(8	)	(b)		2			(6	)
Accretion of net gain on terminated cash flow hedges		—			—			(90	)		(90	)	(c)		24			(66	)
Net yield adjustment from cash flow hedges currently in effect		—			—			(206,713	)		(206,713	)	(a)		53,997			(152,716	)
Amortization of prior service credit		—			(3,139	)		—			(3,139	)	(d)		860			(2,279	)
Amortization of actuarial losses		—			65,792			—			65,792		(d)		(18,031	)		47,761
Total other comprehensive income (loss)		(54,063	)		62,653			(207,228	)		(198,638	)			51,251			(147,387	)
Balance — September 30, 2021	$	141,323			(587,434	)		162,330		$	(283,781	)			73,362		$	(210,419	)

	Investment Securities						Defined Benefit						Total Amount				Income
	With OTTI (a)			All Other			Plans			Other			Before Tax				Tax			Net
	(In thousands)

Balance — January 1, 2017	$	46,725			(73,785	)		(449,917	)		(8,268	)	$	(485,245	)			190,609		$	(294,636	)
Other comprehensive income before reclassifications:
Unrealized holding gains (losses), net		(7,365	)		60,586			—			—			53,221				(20,934	)		32,287
Foreign currency translation adjustment		—			—			—			3,829			3,829				(1,340	)		2,489
Unrealized losses on cash flow hedges		—			—			—			(1,076	)		(1,076	)			424			(652	)
Total other comprehensive income (loss) before reclassifications		(7,365	)		60,586			—			2,753			55,974				(21,850	)		34,124
Amounts reclassified from accumulated other comprehensive income that (increase) decrease net income:
Amortization of unrealized holding losses on held-to-maturity (“HTM”) securities		—			2,535			—			—			2,535		(b)		(998	)		1,537
(Gains) losses realized in net income		(50	)		67			—			—			17		(c)		(7	)		10
Accretion of net gain on terminated cash flow hedges		—			—			—			(109	)		(109	)	(d)		43			(66	)
Net yield adjustment from cash flow hedges currently in effect		—			—			—			(2,275	)		(2,275	)	(b)		895			(1,380	)
Amortization of prior service credit		—			—			(601	)		—			(601	)	(e)		236			(365	)
Amortization of actuarial losses		—			—			21,206			—			21,206		(e)		(8,345	)		12,861
Total reclassifications		(50	)		2,602			20,605			(2,384	)		20,773				(8,176	)		12,597
Total gain (loss) during the period		(7,415	)		63,188			20,605			369			76,747				(30,026	)		46,721
Balance — September 30, 2017	$	39,310			(10,597	)		(429,312	)		(7,899	)	$	(408,498	)			160,583		$	(247,915	)

Balance — January 1, 2016	$	16,359			62,849			(489,660	)		(4,093	)	$	(414,545	)			162,918		$	(251,627	)
Other comprehensive income before reclassifications:
Unrealized holding gains, net		1,228			234,438			—			—			235,666				(92,714	)		142,952
Foreign currency translation adjustment		—			—			—			(2,836	)		(2,836	)			989			(1,847	)
Total other comprehensive income (loss) before reclassifications		1,228			234,438			—			(2,836	)		232,830				(91,725	)		141,105
Amounts reclassified from accumulated other comprehensive income that (increase) decrease net income:
Amortization of unrealized holding losses on HTM securities		—			2,998			—			—			2,998		(b)		(1,180	)		1,818
Gains realized in net income		—			(28,748	)		—			—			(28,748	)	(c)		11,309			(17,439	)
Accretion of net gain on terminated cash flow hedges		—			—			—			(116	)		(116	)	(d)		46			(70	)
Amortization of prior service credit		—			—			(3,440	)		—			(3,440	)	(e)		1,354			(2,086	)
Amortization of actuarial losses		—			—			22,654			—			22,654		(e)		(8,914	)		13,740
Total reclassifications		—			(25,750	)		19,214			(116	)		(6,652	)			2,615			(4,037	)
Total gain (loss) during the period		1,228			208,688			19,214			(2,952	)		226,178				(89,110	)		137,068
Balance — September 30, 2016	$	17,587			271,537			(470,446	)		(7,045	)	$	(188,367	)			73,808		$	(114,559	)


				Defined
	Investment			Benefit
	Securities			Plans			Other			Total
	(In thousands)

Balance — December 31, 2021	$	77,625		$	(267,145	)	$	61,942		$	(127,578	)
Net gain (loss) during period		(425,770	)		9,160			(355,805	)		(772,415	)
Balance — September 30, 2022	$	(348,145	)	$	(257,985	)	$	(293,863	)	$	(899,993	)

	Investment Securities						Defined Benefit
	With OTTI			All Other			Plans			Other			Total
	(In thousands)

Balance — December 31, 2016	$	28,338			(44,657	)		(272,874	)		(5,443	)	$	(294,636	)
Net gain (loss) during period		(4,496	)		38,330			12,496			391			46,721
Balance — September 30, 2017	$	23,842			(6,327	)		(260,378	)		(5,052	)	$	(247,915	)



					Weighted-						Estimated
	Notional		Average		Average Rate						Fair Value
	Amount		Maturity		Fixed			Variable			Gain (Loss) (a)
	(In thousands)		(In years)								(In thousands)
September 30, 2022
Fair value hedges:
Fixed rate long-term borrowings (b)	$	1,500,000		3.5		2.98	%		3.59	%	$	(2,765	)
Cash flow hedges:
Interest payments on variable rate commercial real estate loans (b)(c)		19,900,000		1.3		1.80	%		3.09	%		(8,730	)
Total	$	21,400,000		1.5							$	(11,495	)
December 31, 2021
Fair value hedges:
Fixed rate long-term borrowings (b)	$	1,650,000		2.3		2.86	%		0.74	%	$	41
Cash flow hedges:
Interest payments on variable rate commercial real estate loans (b)(d)		21,700,000		0.6		1.24	%		0.09	%		(248	)
Total	$	23,350,000		0.7							$	(207	)

					Weighted- Average Rate
	Notional Amount		Average Maturity		Fixed			Variable			Estimated Fair Value Gain (a)
	(In thousands)		(In years)								(In thousands)
September 30, 2017
Fair value hedges:
Fixed rate long-term borrowings (b)	$	4,950,000		2.9		2.63	%		2.04	%	$	697
Cash flow hedges:
Variable rate commercial real estate loans (b)		2,000,000		1.6		1.46	%		1.24	%		—
Total	$	6,950,000		2.5							$	697
December 31, 2016
Fair value hedges:
Fixed rate long-term borrowings (b)	$	900,000		1.1		3.75	%		2.08	%	$	11,892


	Asset Derivatives				Liability Derivatives
	Fair Value				Fair Value
	September 30,		December 31,		September 30,		December 31,
	2022		2021		2022		2021
	(In thousands)
Derivatives designated and qualifying as hedging instruments (a)
Interest rate swap agreements	$	228	$	258	$	11,723	$	465
Commitments to sell real estate loans		18,364		4,044		4		548
		18,592		4,302		11,727		1,013
Derivatives not designated and qualifying as hedging instruments (a)
Mortgage banking:
Mortgage-related commitments to originate real estate loans for sale		843		11,728		49,149		5,288
Commitments to sell real estate loans		56,167		8,137		—		4,108
Other:
Interest rate contracts (b)		371,834		410,056		1,378,145		76,278
Foreign exchange and other option and futures contracts		44,431		8,230		42,343		7,156
		473,275		438,151		1,469,637		92,830
Total derivatives	$	491,867	$	442,453	$	1,481,364	$	93,843


	Amount of Gain (Loss) Recognized
	Three Months Ended September 30
	2022					2021
	Derivative			Hedged Item		Derivative			Hedged Item
	(In thousands)
Derivatives in fair value hedging relationships
Interest rate swap agreements:
Fixed rate long-term borrowings (a)	$	(50,976	)		50,821	$	(9,713	)		9,636
Derivatives not designated as hedging instruments
Interest rate contracts (b)	$	6,946				$	2,068
Foreign exchange and other option and futures contracts (b)		4,462					3,060
Total	$	11,408				$	5,128


	Amount of Gain (Loss) Recognized
	Nine Months Ended September 30
	2022					2021
	Derivative			Hedged Item		Derivative			Hedged Item
	(In thousands)
Derivatives in fair value hedging relationships
Interest rate swap agreements:
Fixed rate long-term borrowings (a)	$	(114,932	)		114,581	$	(42,217	)		41,456
Derivatives not designated as hedging instruments
Interest rate contracts (b)	$	17,907				$	8,047
Foreign exchange and other option and futures contracts (b)		10,701					6,286
Total	$	28,608				$	14,333


	Carrying Amount of the Hedged Item				Cumulative Amount of Fair Value Hedging Adjustment Increasing (Decreasing) the Carrying Amount of the Hedged Item
	September 30, 2022		December 31, 2021		September 30, 2022			December 31, 2021
	(In thousands)
Location in the Consolidated Balance Sheet of the Hedged Items in Fair Value Hedges

Long-term debt	$	1,427,977	$	1,692,943	$	(70,971	)	$	43,610

	Fair Value Measurements		Level 1 (a)		Level 2 (a)		Level 3
	(In thousands)
September 30, 2017
Trading account assets	$	170,516		47,927		122,589		—
Investment securities available for sale:
U.S. Treasury and federal agencies		2,007,117		—		2,007,117		—
Obligations of states and political subdivisions		2,678		—		2,678		—
Mortgage-backed securities:
Government issued or guaranteed		9,184,483		—		9,184,483		—
Privately issued		30		—		—		30
Other debt securities		128,530		—		128,530		—
Equity securities		93,986		50,917		43,069		—
		11,416,824		50,917		11,365,877		30
Real estate loans held for sale		571,199		—		571,199		—
Other assets (b)		20,830		—		6,868		13,962
Total assets	$	12,179,369		98,844		12,066,533		13,992
Trading account liabilities	$	109,730		—		109,730		—
Other liabilities (b)		4,078		—		3,838		240
Total liabilities	$	113,808		—		113,568		240

December 31, 2016
Trading account assets	$	323,867		46,135		277,732		—
Investment securities available for sale:
U.S. Treasury and federal agencies		1,902,544		—		1,902,544		—
Obligations of states and political subdivisions		3,641		—		3,641		—
Mortgage-backed securities:
Government issued or guaranteed		10,954,861		—		10,954,861		—
Privately issued		44		—		—		44
Other debt securities		118,516		—		118,516		—
Equity securities		352,466		301,711		50,755		—
		13,332,072		301,711		13,030,317		44
Real estate loans held for sale		1,056,180		—		1,056,180		—
Other assets (b)		58,351		—		50,291		8,060
Total assets	$	14,770,470		347,846		14,414,520		8,104
Trading account liabilities	$	174,376		—		174,376		—
Other liabilities (b)		2,481		—		1,746		735
Total liabilities	$	176,857		—		176,122		735

	Investment Securities Available for Sale
	Privately Issued Mortgage-Backed Securities			Other Assets and Other Liabilities
	(In thousands)

Balance — June 30, 2017	$	35			12,425
Total gains (losses) realized/unrealized:
Included in earnings		—			22,313		(b)
Settlements		(5	)		—
Transfers in and/or out of Level 3 (a)		—			(21,016	)	(d)
Balance — September 30, 2017	$	30			13,722
Changes in unrealized gains included in earnings related to assets still held at September 30, 2017	$	—			12,659		(b)

	Investment Securities Available for Sale
	Privately Issued Mortgage-Backed Securities			Collateralized Debt Obligations				Other Assets and Other Liabilities
	(In thousands)

Balance — June 30, 2016	$	57			43,305				21,383
Total gains (losses) realized/unrealized:
Included in earnings		—			28,475				45,534		(b)
Included in other comprehensive income		—			(15,050	)	(c)		—
Sales		—			(56,730	)			—
Settlements		(6	)		—				—
Transfers in and/or out of Level 3 (a)		—			—				(37,117	)	(d)
Balance — September 30, 2016	$	51			—				29,800
Changes in unrealized gains included in earnings related to assets still held at September 30, 2016	$	—			—				27,663		(b)