M&T BANK CORP Management’s Discussion and Analysis of Financial Condition and Results of Operations. (form 10-Q)

Overview


M&T Bank Corporation ("M&T") had net income of $647 million in the third quarter
of 2022, compared with $495 million in the corresponding quarter of 2021 and
$218 million in the second quarter of 2022. Diluted and basic earnings per
common share 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 $.22 of basic and diluted
earnings per common share in the recent quarter, $7 million ($9 million pre-tax)
or $.05 of basic and diluted earnings per common share in the third quarter of
2021 and $346 million ($465 million pre-tax) or $1.94 of basic and diluted
earnings per common share 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 2022, compared with
$1.40 billion or $10.43 of diluted and $10.44 of basic earnings per common share
in the 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 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 quarters of 2022
and 2021 was 1.28% compared with .42% in the second quarter of 2022. The
annualized rate of return on average common shareholders' equity was 10.43% in
the recent quarter, 12.16% in the third quarter of 2021 and 3.21% in the second
quarter of 2022. During the nine-month period ended September 30, 2022, the
annualized rates of return on average assets and average common shareholders'
equity were .87% and 7.24%, respectively, compared with 1.24% and 11.76%,
respectively, in the corresponding period of 2021.

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

The People's United transaction has been accounted for using the acquisition
method of accounting and, accordingly, assets acquired, liabilities assumed, and
consideration exchanged were recorded at estimated fair value on the acquisition
date. M&T preliminarily recorded assets acquired of $64.2 billion, including
$35.8 billion of loans and leases and $11.6 billion of investment securities,
and liabilities assumed totaling $55.5 billion, including $53.0 billion of
deposits. The transaction added $8.4 billion to M&T's common shareholders'
equity and $261 million to preferred equity. In connection with the acquisition
the Company recorded $3.9 billion of goodwill and $261 million of core deposit
and other intangible assets. The acquisition of People's United formed a banking
franchise with approximately $200 billion in assets serving communities in the
Northeast and Mid-Atlantic from Maine to Virginia, including Washington, D.C.
M&T completed the transfer of most financial records of People's United to M&T's
core operating systems in the recent quarter.

On July 19, 2022 the Company's Board of Directors authorized a program to
repurchase up to $3.0 billion of M&T's common stock. The action replaced the
previous program under which the repurchases in the second quarter of 2022 were
conducted. In accordance with the program and its capital plan, M&T repurchased
3,282,449 shares of its common stock during the recent quarter at an average
cost per share of $182.79 resulting in a total cost of $600 million. During the
first nine months of 2022, M&T repurchased 6,788,395 shares of its common stock
at an average cost per share of $176.77 resulting in a total cost of $1.2
billion.

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Supplemental Reporting of Non-GAAP Results of Operations


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

Net operating income totaled $700 million in the third quarter of 2022, compared
with $504 million in the year-earlier quarter and $578 million in the second
2022 quarter. Diluted net operating earnings per common share in the third
quarters of 2022 and 2021 were $3.83 and $3.76, respectively, compared with
$3.10 in the second quarter of 2022. For the first nine months of 2022, net
operating income and diluted net operating earnings per common share were $1.65
billion and $9.78, respectively, compared with $1.42 billion and $10.61,
respectively, in the first nine months of 2021.

Net operating income in the recent quarter expressed as an annualized rate of
return on average tangible assets was 1.44%, compared with 1.34% in the third
quarter of 2021 and 1.16% in 2022's second quarter. Net operating income
represented an annualized return on average tangible common equity of 17.89% in
the third quarter of 2022, 17.54% in the year-earlier quarter and 14.41% in the
second quarter of 2022. For the first nine months of 2022, net operating income
represented an annualized return on average tangible assets and average tangible
common shareholders' equity of 1.23% and 15.13%, respectively, compared with
1.30% and 17.10%, respectively, in the corresponding 2021 period.

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

Taxable-equivalent Net Interest Income


Taxable-equivalent net interest income was $1.69 billion in the third quarter of
2022, 74% higher than $971 million recorded in the year-earlier quarter. That
increase reflects the impact of $42.0 billion in additional average earning
assets predominantly resulting from the People's United transaction, and a 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 3.68% in the recent quarter from 2.74% in the third
quarter of 2021. That increase resulted from higher 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 the rates paid on
interest-bearing liabilities. Taxable-equivalent net interest income in the
recent quarter increased $268 million from the second quarter of 2022 reflecting
an increase in the net interest margin in the recent quarter from 3.01% in the
prior quarter. For the first nine months of 2022, taxable-equivalent net
interest income was $4.02 billion, up 39% from $2.90 billion in the
corresponding 2021 period. The increase was 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 3.15%
in the 2022 period from 2.83% in the year-earlier period. The higher net
interest margin in the recent periods is generally reflective of a rising
interest rate environment resulting from actions taken by the Federal Reserve to
raise interest rates in an attempt to temper inflationary pressures on the U.S.
economy.

Average loans and leases totaled $127.5 billion in the third quarter of 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 $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 2021. Average commercial real
estate loans were $46.3 billion in the recent quarter, up

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$8.7 billion or 23% from $37.5 billion in the corresponding quarter of 2021.
That increase was predominantly due to the impact of loans obtained in the
acquisition of People's United partially offset by a reduction in balances of
construction and permanent mortgage loans, reflecting repayments by customers.
Average residential real estate loans increased $6.6 billion or 40% to $23.0
billion in the third quarter of 2022 from $16.4 billion in the year-earlier
quarter. The growth in residential real estate loans was largely attributable to
the acquisition of loans from People's United and the Company's decision in the
third quarter of 2021 to retain rather than sell most originated residential
mortgage loans. Consumer loans averaged $20.0 billion in the third quarter of
2022, up $2.3 billion or 13% from $17.7 billion in the year-earlier quarter,
reflecting the impact of loans obtained in the acquisition of People's United
(that consisted predominantly of outstanding balances of home equity lines of
credit) and growth in average recreational finance loans (consisting
predominantly of loans secured by recreational vehicles and boats).

Average loan and lease balances in the third quarter of 2022 were $127.5
billion, little changed from $127.6 billion in the second quarter of 2022.
Commercial loan and lease average balances in the recent quarter increased $504
million from $37.8 billion in the second quarter of 2022. Average commercial
real estate loans in the third quarter of 2022 declined $946 million from $47.2
billion in the second quarter of 2022. Average balances of residential real
estate loans in the recently completed quarter increased $201 million from $22.8
billion in 2022's second quarter. Average consumer loans in the recent quarter
increased $167 million 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.

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    %                 -   %


For the first nine months of 2022, average loans and leases totaled $115.9
billion, up 19% from $97.7 billion in the corresponding 2021 period. The impact
of loans obtained in the People's United acquisition was the most significant
factor for that increase offset, in part, by lower average balances of PPP loans
of $549 million and $4.9 billion in the first nine months of 2022 and 2021,
respectively.

The investment securities portfolio averaged $23.9 billion in the third quarter
of 2022, up $17.9 billion from $6.0 billion in the year-earlier quarter and $1.6
billion higher than the $22.4 billion averaged in the second quarter of 2022.
For the first nine months of 2022 and 2021, investment securities averaged $18.1
billion and $6.3 billion, respectively. The higher average balance in the recent
periods reflect the acquisition of People's United, which added approximately
$11.6 billion to the investment securities portfolio on April 1, 2022, and
purchases of approximately $2.7 billion of investment securities during each of
the quarters ended September 30, 2022, June 30, 2022 and March 31, 2022. The
purchases in the first nine months of 2022 consisted predominantly of U.S.
Treasury notes and fixed rate residential mortgage-backed securities. There were
no significant sales of investment 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.

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

Fair value changes in equity securities with readily determinable fair values
are recognized in the consolidated statement of income. Net unrealized losses on
such equity securities were 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 indicative of credit-related losses. In
light of such reviews, there were no credit-related losses on debt investment
securities recognized in either of the nine-month periods ended September 30,
2022 or 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 13 of Notes to Financial Statements.

Other earning assets include interest-bearing deposits at the FRB of New York
and other banks, trading account assets, federal funds sold and agreements to
resell securities. Those other earning assets in the aggregate averaged $30.9
billion in the recently completed quarter, compared with $39.1 billion in the
year-earlier quarter and $39.8 billion in the second quarter of 2022.
Interest-bearing deposits at banks averaged $30.8 billion, $39.0 billion and
$39.4 billion during the three months ended September 30, 2022, September 30,
2021 and June 30, 2022, respectively. The amounts of interest-bearing deposits
at banks at the respective dates were predominantly comprised of deposits held
at the FRB of New York. The decline in the recent quarter reflects actions taken
by the Company including the purchases of 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 held
at the FRB of New York also fluctuates due to changes in deposits of commercial
entities, trust-related deposits and additions to or maturities of investment
securities or borrowings.

As a result of the changes described herein, average earning assets totaled
$182.4 billion in the most recent quarter, compared with $140.4 billion in the
third quarter of 2021 and $189.8 billion in the second quarter of 2022. Average
earning assets totaled $170.4 billion and $137.3 billion during the first nine
months of 2022 and 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 $162.8 billion in the third quarter of
2022, up 28% from $127.1 billion in the similar 2021 quarter, but down 4% from
$169.6 billion in the second quarter of 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 recent quarter as compared with the second quarter
of 2022 is largely reflective of the Company's initiative to reduce certain
historically higher-cost deposits as well as customer reactions to the generally
rising rate environment. The following table provides an analysis of quarterly
changes in the components of average core deposits.

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

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


The Company also receives funding from other deposit sources, including
branch-related time deposits over $250,000, brokered deposits and, prior to June
30, 2021, deposits associated with the Company's Cayman Islands office. Time
deposits over $250,000 averaged $681 million in the recent quarter, compared
with $357 million in the third quarter of 2021 and $808 million in the second
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
maintained at the Cayman Islands office and the office is closed. The Company
had brokered savings and interest-bearing transaction accounts, which in the
aggregate averaged $3.8 billion during each of the recent quarter and the third
quarter of 2021 and $4.2 billion during the second quarter of 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 accompanying table summarizes average total deposits for the quarters ended
September 30, 2022, June 30, 2022 and September 30, 2021.

AVERAGE DEPOSITS
                                                                    Commercial
                                          Retail       Trust        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 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 one year or less. Average short-term borrowings totaled $913 million in the
third quarter of 2022, compared with $91 million in the year-earlier quarter and
$1.1 billion in the second quarter of 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.

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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 redeemed $650 million of fixed rate senior notes that were
due to mature on May 18, 2022. During May 2022, $250 million of variable rate
senior notes of M&T Bank matured. In January 2021, $350 million of variable rate
senior notes matured. Subordinated capital notes included in long-term
borrowings averaged $982 million in the third quarter of 2022, $500 million in
the three-month period ended September 30, 2021 and $983 million in the second
quarter of 2022. In March 2021, M&T Bank redeemed $500 million of subordinated
capital notes. Junior subordinated debentures associated with trust preferred
securities that were included in average long-term borrowings were $534 million,
$530 million and $533 million during the third quarters of 2022 and 2021 and the
second quarter of 2022, respectively. Additional information regarding junior
subordinated debentures is provided in note 5 of Notes to Financial Statements.
As of April 1, 2022, long-term borrowings assumed in the People's United
acquisition totaled $494 million and included $483 million of fixed-rate
subordinated notes and $11 million of FHLB advances.

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, 2022, interest rate swap agreements were used as fair value hedges
of approximately $1.5 billion of outstanding fixed rate long-term borrowings.
Additionally, interest rate swap agreements with a notional amount of $15.25
billion were used as cash flow hedges of interest payments associated with
variable rate commercial real estate loans. Further information on interest rate
swap agreements is provided herein and in note 11 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 3.49% in the recent quarter, up 81 basis
points from 2.68% in the third quarter of 2021. The yield on earning assets
during the third quarter of 2022 was 3.90%, up 108 basis points from 2.82% in
the similar 2021 period, while the rate paid on interest-bearing liabilities
increased 27 basis points to .41% in the recent quarter from .14% in the
year-earlier period. In the second quarter of 2022, the net interest spread was
2.92%, the yield on earning assets was 3.12% and the rate paid on
interest-bearing liabilities was .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 2022, the net
interest spread was 3.03%, up 27 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 first nine months of 2022 were 3.30% and .27%, respectively,
compared with 2.91% and .15%, respectively, in the initial nine months of 2021.
The Federal Reserve raised its target Federal funds rate 3.00% since September
30, 2021, including hikes of 1.50% and 1.25% in the third quarter of 2022 and
second quarter of 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 $83.8 billion in the third quarter of
2022, compared with $62.9 billion in the year-earlier quarter and $84.7 billion
in the second quarter of 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

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repurchased $600 million of its common stock in each of the third and second
quarters of 2022. Goodwill and core deposit and other intangible assets averaged
$8.7 billion and $8.8 billion in 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 transaction, intangible assets were
identified and 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 $2.6
billion in each of the third and second quarters of 2022, compared with $1.9
billion in the third quarter of 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 .19% in the
third quarter of 2022, compared with .06% and .09% in the third quarter of 2021
and the second quarter of 2022, respectively. The increased contribution 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 2022 and 2021 was .12% and .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
3.68% in the third quarter of 2022, compared with 2.74% in the year-earlier
period and 3.01% in the second quarter of 2022. During the first nine months of
2022 and 2021, the net interest margin was 3.15% and 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 changes to spreads, could impact the Company's net
interest income and net interest margin. The Federal Open Market Committee has
conducted a series of basis point increases in short-term interest rates 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 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 $16.75 billion (excluding $4.65 billion of forward-starting swap
agreements) at September 30, 2022, $19.0 billion (excluding $8.35 billion of
forward-starting swap agreements) at September 30, 2021 and $15.0 billion
(excluding $8.35 billion of forward-starting swap agreements) at December 31,
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. At September 30, 2022 interest rate 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 $13.35 billion at
December 31, 2021. Interest rate swap agreements with notional amounts of $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. The Company enters into forward-starting interest rate swap
agreements predominantly to extend the term of its interest rate swap agreements
serving as cash flow hedges and provide a hedge against changing interest rates
on certain of its variable rate loans.

                                     - 58 -
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In a fair value hedge, the fair value of the derivative (the interest rate swap
agreement) and changes in the fair value of the hedged item are recorded in the
Company's consolidated balance sheet with the corresponding gain or loss
recognized in current earnings. The difference between changes in the fair value
of the interest rate swap agreements and the hedged items represents hedge
ineffectiveness and is recorded as an adjustment to the interest income or
interest expense of the respective hedged item. In a cash flow hedge, the
derivative's gain or loss is initially reported as a component of other
comprehensive income and subsequently reclassified into earnings when the
forecasted transaction affects earnings. The amounts of hedge ineffectiveness
recognized during each of the quarters ended September 30, 2022, September 30,
2021 and June 30, 2022 were not material to the Company's consolidated results
of operations. Information regarding the fair value of interest rate swap
agreements and hedge ineffectiveness is presented in note 11 of Notes to
Financial Statements. Information regarding the valuation of cash flow hedges
included in other comprehensive income is presented in 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 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 11 of Notes to Financial Statements.

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   %



(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.

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 -
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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 Bank has access to additional funding sources through borrowings
from the FHLB of New York, lines of credit with the FRB of New York, 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. The Company's junior
subordinated debentures associated with trust preferred securities and other
subordinated capital notes are considered Tier 2 capital and are includable in
total regulatory capital. At each of September 30, 2022 and December 31, 2021,
long-term borrowings aggregated $3.5 billion.

Cayman Islands office deposits had been used by some customers of the Company as
an alternative to 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 outstanding as of September 30, 2022 and December 31,
2021. The Company has benefited from the placement of brokered deposits. The
Company had brokered savings and interest-checking deposit accounts which
aggregated approximately $3.3 billion at September 30, 2022, $3.2 billion at
December 31, 2021 and $3.4 billion at September 30, 2021. Brokered time deposits
were not a significant source of funding as of those dates.

The Company's ability to obtain funding from these sources could be negatively
impacted should the Company experience a substantial deterioration in its
financial condition or its debt ratings, or should the availability of funding
become restricted due to a disruption in the financial markets. The Company
attempts to quantify such 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. The value of VRDBs in the Company's trading account was not material at
September 30, 2022 or December 31, 2021. The total amounts of VRDBs outstanding
backed by M&T Bank letters of credit were $633 million at September 30, 2022,
$662 million at December 31, 2021 and $683 million at September 30, 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 14 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, 2022 approximately $937 million was
available for payment of dividends to M&T from bank subsidiaries. M&T also may

                                     - 60 -
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obtain funding through long-term borrowings. Outstanding senior notes of M&T 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 the acquisition of 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 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.

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 manage
interest rate risk. Management's philosophy toward interest rate risk management
is to limit the variability of net interest income. The balances of financial
instruments used in the projections are based on expected growth from forecasted
business opportunities, anticipated prepayments of loans and investment
securities, and expected maturities of investment securities, loans and
deposits. Management uses a "value of equity" model to supplement the modeling
technique described above. Those supplemental analyses are based on discounted
cash flows associated with on- and off-balance sheet financial instruments. Such
analyses are modeled to reflect changes in interest rates and provide management
with a long-term interest rate risk metric. The Company has entered into
interest rate swap agreements to help manage exposure to interest rate risk. At
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, 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. 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, 2022 and December 31, 2021 displays
the estimated impact on net interest income in the base scenario described above
resulting from parallel changes in interest rates across repricing categories
during the first modeling year.


                                     - 61 -
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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)



(a)

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


The Company utilized many assumptions to calculate the impact that changes in
interest rates may have on net interest income. The more significant of those
assumptions included the rate of prepayments of mortgage-related assets, cash
flows from derivative and other financial instruments, loan and deposit volumes
and pricing, and deposit maturities. In the scenarios presented, the Company
also assumed gradual changes in interest rates during a twelve-month period as
compared with the base scenario. In the declining rate scenario, the rate
changes may be limited to lesser amounts such that interest rates remain at or
above zero on all points of the yield curve. Changes in amounts presented since
December 31, 2021 reflect higher balances of earnings assets obtained in the
People's United acquisition, changes in portfolio composition, the level of
market-implied forward interest rates and hedging actions taken by the Company.
The assumptions used in interest rate sensitivity modeling are inherently
uncertain and, as a result, the Company cannot precisely predict the impact of
changes in interest rates on net interest income. Actual results may differ
significantly from those presented due to the timing, magnitude and frequency of
changes in interest rates and changes in market conditions and interest rate
differentials (spreads) between maturity/repricing categories, as well as any
actions, such as those previously described, which management may take to
counter such changes.

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 November 2020
and is in the process of remediating its interest rate swap transactions with
its end-user customers. With respect to the Company's cleared interest rate swap
agreements that reference LIBOR, clearinghouses have adopted the same relevant
Secured Overnight Financing Rate ("SOFR") benchmark alternatives of the
Supplement and Protocol.

As loans mature and new originations occur a larger percentage of the Company's
variable-rate loans are expected to reference SOFR or other indexes, including
the Bloomberg Short Term Bank Yield Index ("BSBY"). At 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 of
September 30, 2022, the Company had $15.6 billion of notional amount of interest
rate swap agreements designated as cash flow hedges of commercial real estate
loans,

                                     - 62 -
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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 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
interest rate risk profile and 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 in notes 3 and 13 of Notes to Financial
Statements.


The Company enters into interest rate and foreign exchange contracts to meet the
financial needs of customers that it includes in its financial statements as
non-hedging derivatives within other assets and other liabilities. Financial
instruments utilized for such activities consist predominantly of interest rate
swap agreements and forward and futures contracts related to foreign currencies.
The Company generally mitigates the foreign currency and interest rate risk
associated with customer activities by entering into offsetting positions with
third parties that are also included in other assets and other liabilities. The
fair values of non-hedging derivative positions associated with interest rate
contracts and foreign currency and other option and futures contracts are
presented in note 11 of Notes to Financial Statements. As with any
non-government guaranteed financial instrument, the Company is exposed to credit
risk associated with counterparties to the Company's non-hedging derivative
activities. Although the notional amounts of these contracts are not recorded in
the consolidated balance sheet, the unsettled fair values of such financial
instruments are recorded in the consolidated balance sheet. The fair values of
such non-hedging derivative assets and liabilities recognized on the balance
sheet were $416 million and $1.42 billion, respectively, at September 30, 2022
and $418 million and $83 million, respectively, at December 31, 2021. The fair
value asset and liability amounts at September 30, 2022 have been reduced by
contractual settlements of $1.15 billion and $20 million, respectively, and at
December 31, 2021 have been reduced by contractual settlements of $54 million
and $305 million, respectively. The values associated with the Company's
non-hedging derivative activities at September 30, 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 at September 30, 2022, $50 million at
December 31, 2021 and $51 million at September 30, 2021. Included in trading
account assets were assets related to deferred compensation plans aggregating
$23 million at September 30, 2022, compared with $21 million at each of
September 30, 2021 and December 31, 2021. Changes in the fair values of such
assets are recorded as "trading account and non-hedging derivative gains" in the
consolidated statement of income. Included in "other liabilities" in the
consolidated balance sheet at September 30, 2022 was $29 million of liabilities
related to deferred compensation plans, compared with $25 million at September
30, 2021 and $24 million at December 31, 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 $107 million at September 30, 2022 and $29 million at each of
September 30, 2021 and December 31, 2021. The increase at September 30, 2022 as
compared with the prior dates reflects assets obtained in the acquisition of the
People's United non-qualified supplemental retirement and other benefit plans.

                                     - 63 -
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Given the Company's policies and positions, management believes that the
potential loss exposure to the Company resulting from market risk associated
with trading account and non-hedging derivative activities was not material,
however, as previously noted, the Company is exposed to credit risk associated
with counterparties to transactions related to the Company's actions to mitigate
foreign currency and interest rate risk associated with customer activities.
Additional information about the Company's use of derivative financial
instruments is included in note 11 of Notes to Financial Statements.

Provision for Credit Losses


A provision for credit losses is recorded to adjust the level of the allowance
to reflect expected credit losses that are based on economic forecasts as of
each reporting date. 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 to be PCD.
GAAP requires a provision for credit losses to be recorded beyond the
recognition of the fair value of the loans at the acquisition date. In addition
to the recorded provision, the allowance for credit losses was also increased by
$99 million in the second quarter of 2022 to reflect the expected credit losses
on loans obtained in the acquisition of People's United deemed to be PCD. That
addition represents an increase of the carrying values of loans identified as
PCD at the time of the acquisition. The Company's estimates of expected credit
losses at 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
net charge-offs of $40 million in the third quarter of 2021 and $50 million in
the second quarter of 2022. Net charge-offs as an annualized percentage of
average loans and leases were .20% in the third quarter of 2022, .17% in the
year-earlier quarter and .16% in the second quarter of 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, 2022 and
2021 were $120 million and $161 million, respectively, representing an
annualized .14% and .22%, respectively, of average loans and leases. A summary
of net charge-offs by loan type is presented in the table that follows.

                                     - 64 -
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NET CHARGE-OFFS (RECOVERIES)
BY LOAN/LEASE TYPE
                                                                            2022
                                                                     Second            Third           Year-
                                             First Quarter        Quarter (a)         Quarter       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
                                                                                       Third           Year-
                                             First Quarter       Second Quarter       Quarter         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



(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.


The net charge-offs of commercial loans 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 2022 include a $23 million charge-off
of a loan to a consumer products manufacturer. The net charge-offs of commercial
real estate loans in the third quarter of 2022 reflect a $20 million charge-off
of a loan to a healthcare provider and a $7 million charge-off of a loan to a
residential leasing company. Included in net charge-offs of consumer loans were:
net recoveries of automobile loans of less 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 net recoveries of home equity loans and lines of
credit secured by one-to-four family residential properties of less than $1
million in each of the recent quarter, the third quarter of 2021 and the second
quarter of 2022. Net charge-offs associated with other consumer loans including
credit cards and installment loans totaled $8 million in each of the recent
quarter and the second quarter of 2022, compared with $7 million in the third
quarter of 2021.

Nonaccrual loans aggregated $2.43 billion or 1.89% of total loans and leases
outstanding at September 30, 2022, compared with $2.24 billion or 2.40% at
September 30, 2021, $2.06 billion or 2.22% at December 31, 2021 and $2.63
billion or 2.05% at June 30, 2022. Loans obtained in the acquisition of People's
United that have been classified as nonaccrual totaled $581 million at September
30, 2022 and $545 million at June 30, 2022. The level of nonaccrual loans
reflects the continuing impact of economic conditions on borrowers' abilities to
make contractual payments on their loans, most notably commercial real estate
loans in the hospitality, office, retail and health care-related sectors.

Accruing loans past due 90 days or more were $477 million or .37% of loans and
leases at September 30, 2022, compared with $1.03 billion or 1.10% at September
30, 2021, $963 million or 1.04% at December 31, 2021 and $524 million or .41% at
June 30, 2022. Accruing loans past due 90 days or more were predominantly
residential real estate loans and included loans guaranteed by
government-related entities of $423 million, $947 million, $928 million and $468
million at September 30, 2022, September 30, 2021, December 31, 2021 and June
30, 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 -
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become current. Guaranteed loans included one-to-four family residential
mortgage loans serviced by the Company that were 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 those purchased loans that are guaranteed by government-related
entities totaled $366 million at September 30, 2022, $919 million a year
earlier, $889 million at December 31, 2021 and $435 million at June 30, 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.

The direct and indirect effects of the COVID-19 pandemic resulted in a dramatic
reduction in 2020 in economic activity that severely hampered the ability of
some businesses and consumers to meet their repayment obligations. 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 the year ended December 31, 2021. COVID-19
related modifications with payment deferrals at September 30, 2022 were not
material.

The Company also modified the terms of select loans in an effort to assist
borrowers that were not related to the COVID-19 pandemic. If the borrower was
experiencing financial difficulty and a concession was granted, the Company
considered such modifications as troubled debt restructurings. Loan
modifications included such actions as the extension of loan maturity dates and
the lowering of interest rates and monthly payments. The objective of the
modifications was to increase loan repayments by customers and thereby reduce
net charge-offs. Information about modifications of loans that are considered
troubled debt restructurings is included in note 4 of Notes to Financial
Statements.

Residential real estate loans modified under specified loss mitigation programs
prescribed by government guarantors that were not related to the COVID-19
pandemic have not been included in renegotiated loans because the loan guarantee
remains in full force and, accordingly, the Company has not granted a concession
with respect to the ultimate collection of the original loan balance. Such loans
aggregated $382 million at September 30, 2022, $425 million at each of September
30, 2021 and December 31, 2021, and $356 million at June 30, 2022.

Commercial loans and leases classified as nonaccrual totaled $368 million, $280
million, $221 million and $442 million at September 30, 2022, September 30,
2021, December 31, 2021 and June 30, 2022, respectively. Commercial real estate
loans in nonaccrual status aggregated $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, 2022 and $188
million and $312 million, respectively, at June 30, 2022.

Nonaccrual residential real estate loans totaled $381 million at September 30,
2022, compared with $480 million at September 30, 2021, $479 million at December
31, 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 acquired from People's
United and classified as nonaccrual at September 30, 2022. Included in
residential real estate loans classified as nonaccrual were limited
documentation first mortgage loans of $95 million at September 30, 2022,
compared with $127 million at September 30, 2021, $123 million at December 31,
2021 and $113 million at June 30, 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. The Company no longer originates limited
documentation loans. Residential real estate loans past due 90 days or more and
accruing interest aggregated $412 million at September 30, 2022, compared with
$945 million at September 30, 2021, $920 million at December 31, 2021 and $474
million at June 30, 2022. Those amounts related predominantly to
government-guaranteed loans 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, 2022 is presented in
the accompanying table.

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Nonaccrual consumer loans were $206 million at September 30, 2022, $170 million
at September 30, 2021, $177 million at December 31, 2021 and $196 million at
June 30, 2022. Included in nonaccrual consumer loans at September 30, 2022,
September 30, 2021, December 31, 2021 and June 30, 2022 were: automobile loans
of $40 million, $31 million, $34 million and $36 million, respectively;
recreational finance loans of $39 million, $24 million, $28 million and $33
million, respectively; and outstanding balances of home equity loans and lines
of credit of $78 million, $71 million, $70 million and $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, 2022 is presented in the accompanying table.

Information about past due and nonaccrual loans as of September 30, 2022 and
December 31, 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 $37 million at September 30,
2022, compared with $25 million at September 30, 2021, $24 million at December
31, 2021 and $29 million at June 30, 2022. Net gains or losses associated with
real estate and other foreclosed assets were not material during the three
months and nine months ended September 30, 2022 and 2021. At September 30, 2022,
foreclosed assets are comprised predominantly of residential real estate-related
properties.

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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, 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 %




(a)

Predominantly residential real estate loans.


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

In establishing the allowance for credit losses, the Company estimates losses
attributable to specific troubled credits identified through both normal and
targeted credit review processes and also estimates losses for other loans and
leases with similar risk characteristics on a collective basis. For purposes of
determining the level of the allowance for credit losses, the Company evaluates
its loan and lease portfolio by type. At the time of the Company's analysis
regarding the determination of the allowance for credit losses as of September
30, 2022, concerns existed about the somewhat incomplete recovery evident in
some sectors of the economy; elevated levels of inflation; fears of a slowing
economy and possible recession in coming quarters; the volatile nature of global
markets and international economic conditions that could 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 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 to
differentiate risk amongst its commercial loans and commercial real estate
loans. Loans with a lower expectation of default are assigned one of ten
possible "pass" loan grades while specific loans determined to have an elevated
level of credit risk are classified as "criticized." A criticized loan may be
classified as "nonaccrual" if the Company no longer expects to collect all
amounts according to the contractual terms of the loan agreement or the loan is
delinquent 90 days or more. Criticized commercial loans and commercial real
estate loans totaled $10.9 billion, including $2.8 billion of loans acquired
from People's United, at September 30, 2022, compared with $9.6 billion at
September 30, 2021, $9.0 billion at December 31, 2021 and $11.6 billion at June
30, 2022, including $2.8 billion of 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

                                     - 68 -
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comprised $8.0 billion or 74% of total criticized 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 weighted-average LTV ratio of
approximately 65%.

Line of business personnel in different geographic locations with support from
and review by the Company's credit risk personnel review and reassign loan
grades based on their detailed knowledge of individual borrowers and their
judgment of the impact on such borrowers resulting from changing conditions in
their respective regions. The Company's policy is that, at least annually,
updated financial information is obtained from commercial borrowers associated
with pass grade loans and additional analysis performed. On a quarterly basis,
the Company's centralized credit risk department reviews all criticized
commercial loans and commercial real estate loans greater than $1 million to
determine the appropriateness of the assigned loan grade, including whether the
loan should be reported as accruing or nonaccruing. For criticized nonaccrual
loans, additional meetings are held with loan officers and their managers,
workout specialists and senior management to discuss each of the relationships.
In analyzing criticized loans, borrower-specific information is reviewed,
including operating results, future cash flows, recent developments and the
borrower's outlook, and other pertinent data. The timing and extent of potential
losses, considering collateral valuation and other factors, and the Company's
potential courses of action are contemplated.

With regard to residential real estate loans, the Company's loss identification
and estimation techniques make reference to loan performance and house price
data in specific areas of the country where collateral securing the Company's
residential real estate loans is located. For residential real estate-related
loans, including home equity loans and lines of credit, the excess of the loan
balance over the net realizable value of the property collateralizing the loan
is charged-off when the loan becomes 150 days delinquent. That charge-off is
based on recent indications of value from external parties that are generally
obtained shortly after a loan becomes nonaccrual. Loans to consumers that file
for bankruptcy are generally charged off to estimated net collateral value
shortly after the Company is notified of such filings. At September 30, 2022,
approximately 55% of the Company's home equity portfolio consisted of first lien
loans and lines of credit and 45% were junior liens. With respect to junior lien
loans, to the extent known by the Company, if a related senior lien loan would
be on nonaccrual status because of payment delinquency, even if such senior lien
loan was not owned by the Company, the junior lien loan or line that is owned by
the Company is placed on nonaccrual status. In monitoring the credit quality of
its home equity portfolio for purposes of determining the allowance for credit
losses, the Company reviews delinquency and nonaccrual information and considers
recent charge-off experience. When evaluating individual home equity loans and
lines of credit for charge off and for purposes of determining the allowance for
credit losses, the Company 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, 2022 approximately 86% of all outstanding balances of home equity lines of
credit related to lines that were still in the draw period, the weighted-average
remaining draw periods were approximately five years, and approximately 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

                                     - 69 -
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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 establishing the allowance for credit losses the Company also considers the
impact of portfolio concentrations, imprecision in economic forecasts,
geopolitical conditions and other risk factors that might influence the loss
estimation process. With respect to economic forecasts the Company assessed the
likelihood of alternative economic scenarios during the two-year reasonable and
supportable time period. Generally, an increase in unemployment rate or a
decrease in any of the rate of change in gross domestic product, commercial real
estate prices or home prices could have an adverse impact on expected credit
losses and may result in an increase to the allowance for credit losses. Forward
looking economic forecasts are subject to inherent imprecision and future events
may differ materially from forecasted events. In consideration of such
uncertainty, the following alternative economic scenarios were considered to
estimate the possible impact on modeled credit losses.

A potential downside economic scenario assumed the unemployment rate averages
7.1% in the reasonable and supportable forecast period. The scenario also
assumed gross domestic product contracts 2.4% in the first year of the
reasonable and supportable forecast period before recovering to 2.2% growth in
the second year and commercial real estate and residential real estate prices
cumulatively decline 18.4% and 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.

                                     - 70 -
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The scenario analyses resulted in an additional $370 million of modeled credit
losses under the assumptions of the downside economic scenario, whereas under
the assumptions of the upside economic scenario a $161 million reduction in
modeled credit losses could occur. These examples are only a few of the numerous
possible economic scenarios that could be utilized in assessing the sensitivity
of expected credit losses. The estimated impacts on credit losses in such
scenarios pertain only to modeled credit losses and do not include consideration
of other factors the Company may evaluate when determining its allowance for
credit losses.

As a result, it is possible that the Company may, at another point in time,
reach different conclusions regarding credit loss estimates. The Company's
process for determining the allowance for credit losses undergoes quarterly and
periodic evaluations by independent risk management personnel, which among many
other considerations, evaluate the reasonableness of management's methodology
and significant assumptions. Further information about the Company's methodology
to estimate expected credit losses is included in note 4 of Notes to Financial
Statements.

Management believes that the allowance for credit losses at September 30, 2022
appropriately reflected expected credit losses inherent in the portfolio as of
that date. The allowance for credit losses totaled $1.88 billion at September
30, 2022, compared with $1.52 billion at September 30, 2021, $1.47 billion at
December 31, 2021 and $1.82 billion at June 30, 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 the allowance
for credit losses related to the $35.8 billion of loans and leases obtained in
the acquisition of People's United on April 1, 2022. The combined Company
allowance for credit losses at April 1, 2022 as a percentage of loans
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 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 at
September 30, 2022 and December 31, 2021 was 77% and 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
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.

Other Income


Other income totaled $563 million in the third quarter of 2022, compared with
$569 million in the year-earlier quarter. Trust income, service charges on
deposit accounts and 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 2022. The
modest decline in the recent quarter resulted from lower service charges on
deposit accounts and trust income, offset by higher credit-related fees.

Mortgage banking revenues were $83 million in each of the third quarter and
second quarter of 2022, compared with $160 million in the third quarter of 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 $55 million in the
third quarter of 2022, $110 million in the similar quarter of 2021 and $50
million in the second 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

                                     - 71 -
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rather than sell such loans. Residential mortgage banking revenues were $5
million
lower in the second quarter of 2022 as compared with the recent quarter
as a result of the Company recognizing a loss on lower-yielding repurchased
mortgage loans in the second quarter of 2022.


New commitments to originate residential real estate loans to be sold were
approximately $47 million in the third quarter of 2022, compared with $1.1
billion in the year-earlier quarter and $78 million in the second quarter of
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 gains of $1 million in the third
quarter of 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 aggregated $43
million at September 30, 2022, $279 million at September 30, 2021 and $474
million at December 31, 2021. Commitments to sell residential real estate loans
and commitments to originate residential real estate loans for sale at
pre-determined rates totaled $80 million and $57 million, respectively, at
September 30, 2022, compared with $795 million and $751 million, respectively,
at September 30, 2021 and $617 million and $233 million, respectively, at
December 31, 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 $1 million at September 30, 2022, $22 million at September
30, 2021 and $10 million at December 31, 2021. Changes in net unrealized gains
or losses are recorded in mortgage banking revenues and resulted in a net
increase in revenues of $1 million in the recent quarter and $10 million in the
third quarter of 2021, compared with a net decrease of $5 million in the second
quarter of 2022.

Revenues from servicing residential real estate loans for others were $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,
2022, respectively. Residential real estate loans serviced for others totaled
$104.0 billion at September 30, 2022, $97.1 billion at September 30, 2021, $97.9
billion at December 31, 2021 and $102.5 billion at June 30, 2022. Reflected in
residential real estate loans serviced for others were loans sub-serviced for
others of $81.2 billion, $73.2 billion, $74.7 billion and $79.0 billion at
September 30, 2022, September 30, 2021, December 31, 2021 and June 30, 2022,
respectively. Revenues earned for sub-servicing loans totaled $33 million during
the 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 modifying and selling reperforming
loans previously repurchased by the holder of the 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"). Information about the Company's relationship with BLG and its
affiliates is included in note 16 of Notes to Financial Statements. Capitalized
residential mortgage servicing assets totaled $208 million at September 30,
2022, $218 million at September 30, 2021, $217 million at December 31, 2021 and
$215 million at June 30, 2022.

Commercial mortgage banking revenues totaled $28 million in the third quarter of
2022 compared to $50 million in the third quarter of 2021 and $33 million in the
second quarter of 2022. Included in such amounts were revenues from loan
origination and sales activities of $12 million and $24 million in the third
quarters of 2022 and 2021, respectively, compared with $14 million in the second
quarter of 2022. Commercial real estate loans originated for sale to other
investors were $906 million in the recent quarter, compared with $1.7 billion in
the third quarter of 2021 and $692 million in the second 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 were $129 million and
$131 million at September 30, 2022 and September 30, 2021, respectively, and
$133 million at December 31, 2021. Commercial real estate loans serviced for
other investors totaled $25.1 billion at September 30, 2022, $23.1 billion at
September 30, 2021 and $23.7 billion at December 31, 2021. Those servicing
amounts included $3.7 billion at September 30, 2022, $3.9 billion at September
30, 2021 and $4.0 billion at December 31, 2021 of loan balances for which
investors had recourse to the Company if such balances are ultimately
uncollectable. Included in commercial real estate loans serviced for others were
loans sub-serviced for others of $3.7 billion at September 30, 2022, $3.4
billion at September 30, 2021 and $3.5 billion at December 31, 2021. Commitments
to sell commercial real estate loans and commitments to originate commercial
real estate loans for sale were $703 million and $401 million, respectively, at
September 30, 2022, $993 million and $434 million,

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respectively, at September 30, 2021 and $751 million and $325 million,
respectively, at December 31, 2021. Commercial real estate loans held for sale
at September 30, 2022, September 30, 2021 and December 31, 2021 were $300
million
, $559 million and $425 million, respectively.


Service charges on deposit accounts were $115 million and $105 million in the
third quarters of 2022 and 2021, respectively, compared with $124 million in the
second quarter of 2022. The People's United acquisition contributed $20 million
to the service charges on deposit accounts total in the most recent quarter and
$33 million in the second 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 reimbursing select customers
in the fourth quarter. The Company does not expect those amounts to ultimately
be material to its consolidated financial position or results of operations.
Excluding the contribution associated with the People's United acquisition, the
decrease in the recent quarter as compared with the year-earlier quarter,
reflected the Company's planned elimination, announced in February 2022, of
certain non-sufficient funds fees and 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 offers personal trust, planning, fiduciary,
asset management, family office and other services designed to help high net
worth individuals and families grow, preserve and transfer wealth. Trust income
aggregated $187 million in the third quarter of 2022, compared with $157 million
in the year-earlier quarter and $190 million in the second quarter of 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 $114 million
during the quarter ended September 30, 2022 and $109 million during the quarter
ended June 30, 2022, each inclusive of $2 million of People's United-related
revenue, compared with $94 million during the quarter ended September 30, 2021.
The higher revenues in the recent quarter as compared with the prior year third
quarter were largely 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 second quarter of 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 service fees of $4 million
recognized in the second quarter of 2022. Trust assets under management were
$153.5 billion, $152.2 billion, $165.6 billion and $151.8 billion at September
30, 2022, September 30, 2021, December 31, 2021 and June 30, 2022, respectively.
Trust assets under management include the Company's proprietary mutual funds'
assets of $12.7 billion, $13.0 billion, $13.2 billion and $11.9 billion at
September 30, 2022, September 30, 2021, December 31, 2021 and June 30, 2022,
respectively. Additional trust income from investment management activities
comprised of fees earned from retail customer investment accounts was $2 million
in the third quarter of 2022, less than $1 million in the third quarter of 2021
and $3 million in the second quarter of 2022.

Brokerage services income, which includes revenues from the sale of mutual funds
and annuities and securities brokerage fees, and, since June 2021, sales of
select investment products of LPL Financial, 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 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 interest rate, foreign exchange and
other contracts entered into by the Company is included in note 11 of Notes to
Financial Statements and herein under the heading "Taxable-equivalent Net
Interest Income."

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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 $54 million in the recent quarter, compared with
$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 credit and other credit-related fees in the recent
quarter as compared with the year-earlier quarter reflects both higher loan
syndication 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 changes in the
cash surrender value of life insurance policies and benefits received, totaled
$12 million in the third quarter of 2022, $11 million in the third quarter of
2021 and $14 million in the second quarter of 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 partially offset
by lower mortgage banking revenues. The acquisition of People's United
contributed approximately $140 million to other income in the second and third
quarters of 2022.

Mortgage banking revenues totaled $275 million during the first nine months of
2022, compared with $432 million during the similar period in 2021. Residential
mortgage banking revenues aggregated $181 million and $315 million during the
nine-month periods ended September 30, 2022 and 2021, respectively. New
commitments to originate residential real estate loans to be sold aggregated
$286 million and $3.7 billion in the initial nine months of 2022 and 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 losses of $2 million in the first nine
months of 2022, compared with gains of $138 million in the first nine months of
2021. The reductions in volume and 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 real
estate loans for others were $183 million in the first nine months of 2022 and
$177 million in the corresponding 2021 period. Included in servicing revenues
were sub-servicing revenues aggregating $119 million and $110 million in the
first nine months of 2022 and 2021, respectively. For the nine months ended
September 30, commercial mortgage banking revenues were $94 million and $117
million in 2022 and 2021, respectively. Commercial real estate loans originated
for sale to other investors totaled $2.2 billion and $2.7 billion during the
nine-month periods ended September 30, 2022 and 2021, respectively. The decline
in commercial mortgage banking revenues is predominantly reflective of the
origination volumes.

Service charges on deposit accounts aggregated $341 million during the first
nine months of 2022, compared with $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 $546 million and $476 million during the first
nine months of 2022 and 2021, respectively. The increase in trust income in 2022
as compared with 2021 was largely due to higher revenues from the ICS business,
reflecting lower money market fund fee waivers, increased sales

                                     - 74 -
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activities and higher retirement services income from growth in collective fund
balances, as well as WAS revenues associated with the People's United
acquisition. Brokerage services income totaled $65 million in the first nine
months of 2022, compared with $44 million in the nine-month period ended
September 30, 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 $437 million (including approximately $55
million associated with the acquisition of People's United) in the first nine
months of 2022, compared with $344 million in the year-earlier period. Other
revenues from operations include the following significant components. Letter of
credit and other credit-related fees aggregated $119 million (including $21
million associated with the acquisition of People's United) and $96 million in
2022 and 2021, respectively. 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 first nine months of 2022 and 2021,
respectively. Income from bank owned life insurance totaled $36 million in the
first nine months of 2022, compared with $34 million in the corresponding 2021
period. Insurance-related commissions and other revenues aggregated $42 million
and $35 million in the first nine months of 2022 and 2021, respectively. M&T's
investment in BLG resulted in income of $30 million in the first nine months of
2022; there was no similar income in the first nine months of 2021.

Other Expense


Other expense totaled $1.28 billion in the third quarter of 2022, compared with
$899 million in the year-earlier quarter and $1.40 billion in the second 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 $18 million in each of the second and third quarter of 2022 and $3 million in
the third quarter of 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 $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 2021. Factors
contributing to the higher level of operating expenses in 2022's third quarter
as compared with the year-earlier quarter, in addition to People's
United-related noninterest operating expenses, were higher costs for salaries
and 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 2022, the 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 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 2022 totaled $3.64 billion, compared
with $2.68 billion in the 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 $38 million and $8 million in the
nine-month periods ended September 30, 2022 and 2021, respectively, and
merger-related expenses of $293 million and $23 million during the same
respective periods. Exclusive of those nonoperating expenses, noninterest
operating expenses for the first nine months of 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 operating expenses
associated with the People's United acquisition. In addition, the year-over-year
increase reflects higher costs for salaries and employee benefits, outside data
processing and software, equipment and net occupancy and professional services
expenses partially offset by lower defined benefit pension-related expenses
included in other costs of operations.

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Salaries and employee benefits expense totaled $736 million in the third quarter
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 2022 and
2021, salaries and employee benefits expense aggregated $2.09 billion and $1.53
billion, respectively. Excluding nonoperating expenses described herein,
salaries and employee benefits expense in the first nine months of 2022 totaled
$1.99 billion. The higher operating expense level in 2022 largely reflects
increased staffing levels, including the addition of People's United employees
at the beginning of the second quarter, higher salaries resulting from merit
increases and a rise in incentive compensation. The Company, in accordance with
GAAP, has accelerated the recognition of compensation 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 $21 million, $12 million
and $23 million, in the three-month periods ended September 30, 2022, September
30, 2021 and June 30, 2022, respectively, and $94 million and $74 million during
the nine-month periods ended September 30, 2022 and September 30, 2021,
respectively. The number of full-time equivalent employees was 22,879 at
September 30, 2022, compared with 17,103 and 22,680 at September 30, 2021 and
June 30, 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,
non-personnel operating expenses were $485 million, $377 million and $471
million in the quarters ended September 30, 2022, September 30, 2021 and June
30, 2022, respectively. On that same basis, such expenses were $1.32 billion and
$1.12 billion in the nine-month periods ended September 30, 2022 and 2021,
respectively. The increase in non-personnel operating expenses in 2022's third
quarter as compared with 2022's second quarter reflects higher FDIC assessments
and professional services expenses. The higher non-personnel operating expenses
in the 2022 periods as compared with the corresponding 2021 periods is
predominantly attributable to the impact of the People's United acquisition. In
addition to those expenses, higher 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 of operations reflect the 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 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 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 53.6% during the recent quarter,
compared with 57.7% and 58.3% in the third quarter of 2021 and second quarter of
2022, respectively. The efficiency ratios for the nine-month periods ended
September 30, 2022 and 2021 were 58.1% and 58.8%, respectively. The calculation
of the efficiency ratio is presented in Table 2.

Income Taxes


Income tax expense was $201 million in the third quarter of 2022, compared with
$162 million in the year-earlier quarter and $60 million in the second quarter
of 2022. For the nine-month periods ended September 30, 2022 and 2021, income
tax expense was $374 million and $454 million, respectively. The effective tax
rates were 23.7%, 24.6% and 21.7% for the quarters ended September 30, 2022,
September 30, 2021 and June 30, 2022, respectively, and 23.4% and 24.5% for the
nine-month periods ended September 30, 2022 and 2021, respectively.

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The effective tax rate is affected by the level of income earned that is exempt
from tax relative to the overall level of pre-tax income, the level of income
allocated to the various state and local jurisdictions where the Company
operates, because tax rates differ among such jurisdictions, and the impact of
any large discrete or infrequently occurring items. The Company's effective tax
rate in future periods will also be affected by any change in income tax laws or
regulations and interpretations of income tax regulations that differ from the
Company's interpretations by any of various tax authorities that may examine tax
returns filed by M&T or any of its subsidiaries.

Capital


Shareholders' equity was $25.3 billion at September 30, 2022, representing
12.76% of total assets, compared with $17.5 billion or 11.54% a year earlier and
$17.9 billion or 11.54% at December 31, 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 $2.01 billion at September 30, 2022, compared with $1.75
billion at each of September 30, 2021 and December 31, 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 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 may be redeemed at M&T's option, in whole or in part,
from time to time, on or after April 1, 2027 or, in whole but not in part, at
any time within 90 days following a regulatory capital treatment event whereby
the full liquidation value of the shares no longer qualifies as "additional Tier
1 capital". The Series H Preferred Stock is listed on the NYSE under the symbol
MTPrH.

Common shareholders' equity was $23.2 billion, or $134.45 per share, at
September 30, 2022, compared with $15.8 billion, or $122.60 per share, a year
earlier and $16.2 billion, or $125.51 per share, at December 31, 2021. Tangible
equity per common share, which excludes goodwill and core deposit and other
intangible assets and applicable deferred tax balances, was $84.28 at the end of
the recent quarter, compared with $86.88 at September 30, 2021 and $89.80 at
December 31, 2021. The Company's ratio of tangible common equity to tangible
assets was 7.70% at September 30, 2022, compared with 7.59% a year earlier and
7.68% at December 31, 2021. Reconciliations of total common shareholders' equity
and tangible common equity and total assets and tangible assets as of each of
those dates are presented in table 2.

Shareholders' equity reflects accumulated other comprehensive income or loss,
which includes the net after-tax impact of unrealized gains or losses on
investment securities classified as available for sale, remaining unrealized
losses on held-to-maturity securities transferred from available for sale that
have not yet been amortized, gains or losses associated with interest rate swap
agreements designated as cash flow hedges, foreign currency translation
adjustments and adjustments to reflect the funded status of defined benefit
pension and other postretirement plans. Net unrealized losses on investment
securities reflected in shareholders' equity, net of applicable tax effect, were
$348 million or $2.01 per common share, at September 30, 2022 compared with net
unrealized gains of $105 million, or $.81 per common share, at September 30,
2021 and $78 million, or $.60 per common share, at December 31, 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. Information about unrealized gains and losses as of September 30,
2022 and December 31, 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 notes 3 and 13 of Notes to Financial Statements.

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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, 2022, based on a review of each of the securities in the
available-for-sale investment securities portfolio, the Company concluded that
it expected to realize the amortized cost basis of each security. As of
September 30, 2022, the Company did not intend to sell nor is it anticipated
that it would be required to sell any securities for which fair value was less
than the amortized cost basis of the security. The Company intends to continue
to closely monitor the performance of its securities because changes in their
underlying credit performance or other events could cause the amortized cost
basis of those securities to become uncollectable.

Accounting guidance requires investment securities held to maturity to be
presented at their net carrying value that is expected to be collected over
their contractual term. The Company estimated no material credit losses for its
investment securities classified as held-to-maturity at September 30, 2022 and
December 31, 2021. The amortized cost basis of obligations of states and
political subdivisions in the held-to-maturity portfolio totaled $2.7 billion at
September 30, 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, 2021, the Company had in its
held-to-maturity portfolio privately issued mortgage-backed securities with an
amortized cost basis of $52 million and $62 million, respectively, and a fair
value of $53 million and $57 million, respectively. At September 30, 2022, 83%
of those mortgage-backed securities were in the most senior tranche of the
securitization structure. The mortgage-backed securities are generally
collateralized by residential and small-balance commercial real estate loans
originated between 2004 and 2008. After considering the repayment structure and
estimated future collateral cash flows of each individual bond, the Company
concluded that as of September 30, 2022, it expected to recover the amortized
cost basis of those privately issued mortgage-backed 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 $258 million, or $1.49 per common share, at September
30, 2022, $436 million or $3.38 per common share, at September 30, 2021 and $267
million or $2.08 per common share, at December 31, 2021.

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 Board reaffirmed that plan. M&T
repurchased 3,505,946 shares of its common stock for $600 million in the second
quarter of 2022. There were no repurchases pursuant to that repurchase plan
during 2021. On July 19, 2022, M&T's Board of Directors authorized a new stock
purchase program to repurchase up to $3.0 billion of common shares subject to
all applicable regulatory reporting limitations. The new plan authorized in July
2022 replaced the 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 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 dividend to $1.20 per common share from the previous rate of $1.10 per
common share. Common stock cash dividends declared during the nine-month periods
ended September 30, 2022 and 2021 were $581 million and $428 million,
respectively. Cash dividends declared on preferred stock aggregated $25 million
in both the recent quarter and second quarter of 2022 compared with $17 million
in the third quarter of 2021. Preferred stock dividends totaled $72 million and
$51 million during the first nine months of 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:

4.5% Common Equity Tier 1 (“CET1”) to risk-weighted assets (each as defined in
the capital regulations);

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6.0% Tier 1 capital (that is, CET1 plus Additional Tier 1 capital) to
risk-weighted assets (each as defined in the capital regulations);

8.0% Total capital (that is, Tier 1 capital plus Tier 2 capital) to
risk-weighted assets (each as defined in the capital regulations); and

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

Capital regulations require buffers in addition to the minimum risk-based
capital ratios noted above. M&T is subject to a stress capital buffer
requirement that is determined through the Federal Reserve's supervisory stress
tests and M&T's bank subsidiaries are subject to a capital conservation 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 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 rules and the impact is reflected in the
regulatory capital 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, 2022 are presented in the
accompanying table.


REGULATORY CAPITAL RATIOS
September 30, 2022
                           M&T              M&T        Wilmington
                      (Consolidated)       Bank       Trust, N.A.

Common equity Tier 1            10.75 %     11.37 %         257.25 %
Tier 1 capital                  12.13 %     11.37 %         257.25 %
Total capital                   13.96 %     12.87 %         257.76 %
Tier 1 leverage                  9.13 %      8.56 %          83.96 %



The Company is subject to the comprehensive regulatory framework applicable to
bank and financial holding companies and their subsidiaries, which includes
examinations by a number of regulators. Regulation of financial institutions
such as M&T and its subsidiaries is intended primarily for the protection of
depositors, the Deposit Insurance Fund of the FDIC and the banking and financial
system as a whole, and generally is not intended for the protection of
shareholders, investors or creditors other than insured depositors. Changes in
laws, regulations and regulatory policies applicable to the Company's operations
can increase or decrease the cost of doing business, limit or expand permissible
activities or affect the competitive environment in which the Company operates,
all of which could have a material effect on the business, financial condition
or results of operations of the 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, 2021.

Segment Information


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 15 of
Notes to Financial Statements. The reportable segments are Business Banking,
Commercial Banking, Commercial Real Estate, Discretionary Portfolio, Residential
Mortgage Banking and Retail Banking.

The Business Banking segment contributed net income of $94 million in the third
quarter of 2022, up from $72 million in the third quarter of 2021 and $71
million
in the second quarter of 2022. As compared with 2021’s third

                                     - 79 -
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quarter, the recent quarter's higher net income primarily reflected 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 resulted
largely from a widening of the net interest margin on deposits of 126 basis
points and higher average deposit balances of $7.1 billion, which was offset, in
part, by a narrowing of the net interest margin on loans. The growth in net
income in the recent quarter as compared with the second quarter of 2022
reflected a $40 million increase in net interest 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 net interest income of
$82 million, an increase in service charges on deposit accounts of $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 59 basis points and higher average balances of deposits of $5.5
billion, partially offset by a narrowing of the net interest margin on loans of
67 basis points.

Net income earned by the Commercial Banking segment totaled $214 million during
the recent quarter, up from $144 million in the year-earlier 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 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 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 other support services
provided to the Commercial Banking segment, higher personnel-related costs of
$28 million and a $27 million increase in the provision for credit 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 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 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

                                     - 80 -
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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 56 basis points and higher
average outstanding balances of loans and deposits of $2.7 billion and $2.0
billion, respectively, partially offset by a narrowing of the net interest
margin on loans of 24 basis 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 $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 year-earlier quarter reflected a $291
million increase in net interest income, largely driven by a widening of 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

                                     - 81 -
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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 the Retail Banking segment of $32 million, 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
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 $137 million, which was offset, in part, by lower service charges on
deposit accounts of $5 million, higher personnel-related costs of $20 million
and increases in other operating expenses of $26 million. The increase in net
interest income reflected a widening of the net interest margin on deposits of
81 basis points, partially offset by lower average deposit balances of $2.0
billion. The Retail Banking segment recorded net income of $380 million and $263
million in the first nine months of 2022 and 2021, respectively. The improvement
from the 2021 period reflected higher net interest income of $449 million and
higher consumer service charges on deposit accounts of $16 million. Those
favorable factors were partially offset by 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 net occupancy costs of $49 million, higher professional services
expense of $20 million, and an increase in the provision for credit losses of $6
million (all reflecting a six-month impact of the People's United acquisition).
The increase in net interest income reflected a 54 basis point widening of the
net interest margin on deposits and higher average outstanding deposit and loan
balances of $18.2 billion and $2.1 billion, respectively, partially offset by a
25 basis point narrowing of the net interest margin on 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, 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 reported net income totaling $53 million
for the quarter ended September 30, 2022 as compared with net losses of $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 nine-month periods ended September 30, 2022 and 2021,
respectively. As compared with the respective 2021 periods the recent quarter
and first nine months of 2022 each reflected higher net interest income and
trust income, as well 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 provision for
credit losses and expenses resulting from the acquisition of People's United
(inclusive of merger-related expenses). The net loss recorded in the second
quarter of 2022 reflected an increased provision for credit losses and
merger-related expenses associated with the acquisition of People's United.

Recent Accounting Developments

A discussion of recent accounting developments is included in note 17 of Notes
to Financial Statements.

                                     - 82 -
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Forward-Looking Statements


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

Statements regarding the potential effects of events or factors specific to the
Company and/or the financial industry as a whole, as well as national and global
events generally, on the Company's business, financial condition, liquidity and
results of operations may constitute forward-looking statements 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," or
"potential," by future conditional verbs such as "will," "would," "should,"
"could," or "may," or by variations of such words or by similar expressions.
These statements are not guarantees of future performance and involve certain
risks, uncertainties and assumptions ("future factors") which are difficult to
predict. Therefore, actual outcomes and results may differ materially from what
is expressed or forecasted in such forward-looking statements.

Examples of future factors include: the impact of the People's United
transaction (as described in the next paragraph); economic conditions including
inflation and supply chain issues; the impact of international conflicts and
other events; the impact of the COVID-19 pandemic; changes in interest rates,
spreads on earning assets and interest-bearing liabilities, and interest rate
sensitivity; prepayment speeds, loan originations, credit losses and market
values on loans, collateral securing loans, and other assets; sources of
liquidity; common shares outstanding; common stock price volatility; fair value
of and number of stock-based compensation awards to be issued in future periods;
the impact of changes in market values on trust-related revenues; legislation
and/or regulations affecting the financial services industry and/or M&T and its
subsidiaries individually or collectively, including tax policy; regulatory
supervision and oversight, including monetary policy and capital requirements;
governmental and public policy changes; the outcome of pending and future
litigation and governmental proceedings, including tax-related examinations and
other matters; changes in accounting policies or procedures as may be required
by the Financial Accounting Standards Board, regulatory agencies or legislation;
increasing price, product and service competition by competitors, including new
entrants; rapid technological developments and changes; the ability to continue
to introduce competitive new products and services on a timely, cost-effective
basis; the mix of products and services; containing costs and expenses;
protection and validity of intellectual property rights; reliance on large
customers; technological, implementation and cost/financial risks in large,
multi-year contracts; continued availability of financing; financial resources
in the amounts, at the times and on the terms required to support M&T and its
subsidiaries' future businesses; and material differences in the actual
financial results of merger, acquisition and investment activities compared with
M&T's initial expectations, including the full realization of anticipated cost
savings and revenue enhancements.

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.

                                     - 83 -
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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 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.

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.

                                     - 84 -
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                     M&T BANK CORPORATION AND SUBSIDIARIES
                                                                         Table 1
QUARTERLY TRENDS

                                                         2022 Quarters                                       2021 Quarters
                                              Third          Second          First        Fourth         Third        Second          First
Earnings and dividends
Amounts in thousands, except per share
Interest income (taxable-equivalent
basis)                                     $ 1,793,340     $ 1,475,868       931,490       962,081       996,649       974,090       1,020,695
Interest expense                               102,822          53,425        24,082        24,725        25,696        28,018          35,567
Net interest income                          1,690,518       1,422,443     

907,408 937,356 970,953 946,072 985,128
Less: provision for credit losses

              115,000         302,000        10,000       (15,000 )     (20,000 )     (15,000 )       (25,000 )
Other income                                   563,079         571,100       540,887       578,637       569,126       513,633         505,598
Less: other expense                          1,279,253       1,403,154       959,741       927,500       899,334       865,345         919,444
Income before income taxes                     859,344         288,389       478,554       603,493       660,745       609,360         596,282
Applicable income taxes                        200,921          60,141     

113,146 141,962 161,582 147,559 145,300
Taxable-equivalent adjustment

                   11,827          10,726         3,234         3,563         3,703         3,732           3,733
Net income                                 $   646,596     $   217,522       362,174       457,968       495,460       458,069         447,249
Net income available to common
shareholders-diluted                       $   620,554     $   192,236       339,590       434,171       475,961       438,759         428,093
Per common share data
Basic earnings                             $      3.55     $      1.08          2.63          3.37          3.70          3.41            3.33
Diluted earnings                                  3.53            1.08          2.62          3.37          3.69          3.41            3.33
Cash dividends                             $      1.20     $      1.20          1.20          1.20          1.10          1.10            1.10
Average common shares outstanding
Basic                                          174,609         177,367      

128,945 128,698 128,689 128,671 128,537
Diluted

                                        175,682         178,277       129,416       128,888       128,844       128,842         128,669
Performance ratios, annualized
Return on
Average assets                                    1.28   %         .42   %  

.97 % 1.15 % 1.28 % 1.22 % 1.22 %
Average common shareholders’ equity

              10.43   %        3.21   %  

8.55 % 10.91 % 12.16 % 11.55 % 11.57 %
Net interest margin on average earning
assets

  (taxable-equivalent basis)                      3.68   %        3.01   %  

2.65 % 2.58 % 2.74 % 2.77 % 2.97 %
Nonaccrual loans to total loans and
leases, net of

  unearned discount                               1.89   %        2.05   %  

2.32 % 2.22 % 2.40 % 2.31 % 1.97 %
Net operating (tangible) results (a)
Net operating income (in thousands) $ 700,030 $ 577,622

       375,999       475,477       504,030       462,959         457,372
Diluted net operating income per common
share                                      $      3.83     $      3.10          2.73          3.50          3.76          3.45            3.41
Annualized return on
Average tangible assets                           1.44   %        1.16   %      1.04   %      1.23   %      1.34   %      1.27   %        1.29   %
Average tangible common shareholders'
equity                                           17.89   %       14.41   %     12.44   %     15.98   %     17.54   %     16.68   %       17.05   %
Efficiency ratio (b)                              53.6   %        58.3   %      64.9   %      59.7   %      57.7   %      58.4   %        60.3   %
Balance sheet data
In millions, except per share
Average balances
Total assets (c)                           $   201,131     $   208,865       151,648       157,722       154,037       150,641         148,157
Total tangible assets (c)                      192,450         200,170       147,053       153,125       149,439       146,041         143,554
Earning assets                                 182,382         189,755       138,624       144,420       140,420       136,951         134,355
Investment securities                           23,945          22,384         7,724         6,804         6,019         6,211           6,605
Loans and leases, net of unearned
discount                                       127,525         127,599      

92,159 93,250 95,314 98,610 99,356
Deposits

                                       167,271         174,683      

128,055 134,444 131,255 128,413 125,733
Common shareholders’ equity (c)

                 23,654          24,079      

16,144 15,863 15,614 15,321 15,077
Tangible common shareholders’ equity (c) 14,973 15,384

  11,549        11,266        11,016        10,721          10,474
At end of quarter
Total assets (c)                           $   197,955     $   204,033       149,864       155,107       151,901       150,623         150,481
Total tangible assets (c)                      189,281         195,344       145,269       150,511       147,304       146,023         145,879
Earning assets                                 178,351         185,109       137,237       141,990       138,527       137,171         137,367
Investment securities                           24,604          22,802         9,357         7,156         6,448         6,143           6,611
Loans and leases, net of unearned
discount                                       128,226         128,486      

91,808 92,912 93,583 97,113 99,299
Deposits

                                       163,845         170,358      

126,319 131,543 128,701 128,269 128,476
Common shareholders’ equity (c)

                 23,245          23,784      

16,126 16,153 15,779 15,470 15,197
Tangible common shareholders’ equity (c) 14,571 15,095

11,531 11,557 11,182 10,870 10,595
Equity per common share

                         134.45          135.16      

124.93 125.51 122.60 120.22 118.12
Tangible equity per common share

                 84.28           85.78         89.33         89.80         86.88         84.47           82.35




(a)
Excludes amortization and balances related to goodwill and core deposit and
other intangible assets and merger-related expenses which, except in the
calculation of the efficiency ratio, are net of applicable income tax effects. A
reconciliation of net income and net operating income appears in Table 2.
(b)
Excludes impact of merger-related expenses and net securities transactions.
(c)
The difference between total assets and total tangible assets, and common
shareholders' equity and tangible common shareholders' equity, represents
goodwill, core deposit and other intangible assets, net of applicable deferred
tax balances. A reconciliation of such balances appears in Table 2.

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M&T BANK CORPORATION AND SUBSIDIARIES

Table 2

RECONCILIATION OF QUARTERLY GAAP TO NON-GAAP MEASURES

                                              2022 Quarters                                           2021 Quarters
                                  Third          Second           First          Fourth           Third          Second           First

Income statement data (in thousands,

  except per share)
Net income
Net income                         646,596     $   217,522         362,174  

457,968 495,460 458,069 447,249
Amortization of core deposit
and other

  intangible assets (a)             14,141          14,138             933           1,447           2,028           2,023           2,034

Merger-related expenses (a) 39,293 345,962 12,892

         16,062           6,542           2,867           8,089
Net operating income               700,030     $   577,622         375,999         475,477         504,030         462,959         457,372
Earnings per common share
Diluted earnings per common
share                                 3.53     $      1.08            2.62            3.37            3.69            3.41            3.33
Amortization of core deposit
and other
  intangible assets (a)                .08             .08             .01             .01             .02             .02             .02
Merger-related expenses (a)            .22            1.94             .10             .12             .05             .02             .06
Diluted net operating
earnings per
 common share                         3.83     $      3.10            2.73            3.50            3.76            3.45            3.41
Other expense
Other expense                    1,279,253     $ 1,403,154         959,741         927,500         899,334         865,345         919,444
Amortization of core deposit
and other
  intangible assets                (18,384 )       (18,384 )        (1,256 )        (1,954 )        (2,738 )        (2,737 )        (2,738 )
Merger-related expenses            (53,027 )      (222,809 )       (17,372 )       (21,190 )        (8,826 )        (3,893 )        (9,951 )
Noninterest operating
expense                          1,207,842     $ 1,161,961         941,113         904,356         887,770         858,715         906,755
Merger-related expenses
Salaries and employee
benefits                            13,094     $    85,299              87             112              60               4               -
Equipment and net occupancy          2,106             502           1,807             340               1               -               -
Outside data processing and
software                             2,277             716             252             250             625             244               -
Advertising and marketing            2,177           1,199             628             337             505              24               -
Printing, postage and
supplies                               651           2,460             722             186             730           2,049               -
Other costs of operations           32,722         132,633          13,876          19,965           6,905           1,572           9,951
Other expense                       53,027         222,809          17,372          21,190           8,826           3,893           9,951
Provision for credit losses              -         242,000               -               -               -               -               -
Total                               53,027     $   464,809     $    17,372     $    21,190     $     8,826     $     3,893     $     9,951
Efficiency ratio
Noninterest operating
expense (numerator)              1,207,842     $ 1,161,961         941,113 

904,356 887,770 858,715 906,755
Taxable-equivalent net
interest income

                  1,690,518     $ 1,422,443         907,408  

937,356 970,953 946,072 985,128
Other income

                       563,079         571,100         540,887         578,637         569,126         513,633         505,598
Less: Gain (loss) on bank
investment
 securities                         (1,108 )           (62 )          (743 )         1,426             291         (10,655 )       (12,282 )
Denominator                      2,254,705     $ 1,993,605       1,449,038       1,514,567       1,539,788       1,470,360       1,503,008
Efficiency ratio                      53.6 %          58.3 %          64.9 %          59.7 %          57.7 %          58.4 %          60.3 %
Balance sheet data (in
millions)
Average assets
Average assets                     201,131     $   208,865         151,648         157,722         154,037         150,641         148,157
Goodwill                            (8,501 )        (8,501 )        (4,593 )        (4,593 )        (4,593 )        (4,593 )        (4,593 )
Core deposit and other
intangible assets                     (236 )          (254 )            (3 )            (5 )            (7 )           (10 )           (13 )
Deferred taxes                          56              60               1               1               2               3               3
Average tangible assets            192,450     $   200,170         147,053 

153,125 149,439 146,041 143,554
Average common equity
Average total equity

                25,665     $    26,090          17,894  

17,613 17,109 16,571 16,327
Preferred stock

                     (2,011 )        (2,011 )        (1,750 

) (1,750 ) (1,495 ) (1,250 ) (1,250 )
Average common equity

               23,654          24,079          16,144  

15,863 15,614 15,321 15,077
Goodwill

                            (8,501 )        (8,501 )        (4,593 )        (4,593 )        (4,593 )        (4,593 )        (4,593 )
Core deposit and other
intangible assets                     (236 )          (254 )            (3 )            (5 )            (7 )           (10 )           (13 )
Deferred taxes                          56              60               1               1               2               3               3
Average tangible common
equity                              14,973     $    15,384          11,549          11,266          11,016          10,721          10,474
At end of quarter
Total assets
Total assets                       197,955     $   204,033         149,864         155,107         151,901         150,623         150,481
Goodwill                            (8,501 )        (8,501 )        (4,593 )        (4,593 )        (4,593 )        (4,593 )        (4,593 )
Core deposit and other
intangible assets                     (227 )          (245 )            (3 )            (4 )            (6 )            (9 )           (12 )
Deferred taxes                          54              57               1               1               2               2               3
Total tangible assets              189,281     $   195,344         145,269 
       150,511         147,304         146,023         145,879
Total common equity
Total equity                        25,256     $    25,795          17,876          17,903          17,529          16,720          16,447
Preferred stock                     (2,011 )        (2,011 )        (1,750 )        (1,750 )        (1,750 )        (1,250 )        (1,250 )
Common equity                       23,245          23,784          16,126          16,153          15,779          15,470          15,197
Goodwill                            (8,501 )        (8,501 )        (4,593 )        (4,593 )        (4,593 )        (4,593 )        (4,593 )
Core deposit and other
intangible assets                     (227 )          (245 )            (3 )            (4 )            (6 )            (9 )           (12 )
Deferred taxes                          54              57               1               1               2               2               3

Total tangible common equity 14,571 $ 15,095 11,531

        11,557          11,182          10,870          10,595




(a)

After any related tax effect.

                                     - 86 -
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                     M&T BANK CORPORATION AND SUBSIDIARIES

Table 3

AVERAGE BALANCE SHEETS AND ANNUALIZED TAXABLE-EQUIVALENT RATES

                                               2022 Third Quarter                          2022 Second Quarter                        2022 First Quarter
                                      Average                       Average       Average                       Average       Average                     Average
                                      Balance       Interest         Rate         Balance       Interest         Rate         Balance      Interest        Rate
Average balance in millions;
interest in thousands
Assets
Earning assets
Loans and leases, net of unearned
  discount (a)
Commercial, financial, etc.          $  38,321     $   470,738          4.87   % $  37,818     $   373,543          3.96   % $  23,305     $ 207,715          3.61   %
Real estate - commercial                46,282         531,225          4.49        47,227         461,594          3.87        34,957       337,100          3.86
Real estate - consumer                  22,962         220,464          3.84        22,761         207,080          3.64        15,870       141,001          3.55
Consumer                                19,960         239,471         

4.76 19,793 210,290 4.26 18,027 188,017 4.23
Total loans and leases, net

            127,525       1,461,898          

4.55 127,599 1,252,507 3.94 92,159 873,833 3.85
Interest-bearing deposits at banks 30,752 172,956 2.23 39,386 80,773

           .82        38,693        18,280           .19

Federal funds sold and agreements

  to resell securities                      29              41           .55           250             253           .41             -             -           .71
Trading account                            131             583          1.78           136             199           .59            48           194          1.61
Investment securities (b)
U.S. Treasury and federal agencies      20,227         124,084          2.43        18,644         109,755          2.36         7,077        35,911          2.06
Obligations of states and
political subdivisions                   2,688          23,626          3.49         2,768          23,344          3.38             -             3          6.99
Other                                    1,030          10,152          3.91           972           9,037          3.73           647         3,269          2.05
Total investment securities             23,945         157,862          2.62        22,384         142,136          2.55         7,724        39,183          2.06
Total earning assets                   182,382       1,793,340          3.90       189,755       1,475,868          3.12       138,624       931,490          2.72
Allowance for credit losses             (1,822 )                                    (1,814 )                                    (1,475 )
Cash and due from banks                  1,962                                       1,690                                       1,448
Other assets                            18,609                                      19,234                                      13,051
Total assets                         $ 201,131                                   $ 208,865                                   $ 151,648
Liabilities and shareholders'
equity
Interest-bearing liabilities
Interest-bearing deposits
Savings and interest-checking
deposits                             $  89,360     $    68,690           .31     $  95,149     $    27,907           .12     $  67,267     $   6,747           .04
Time deposits                            5,050           1,124           .09         5,480           1,227           .09         2,647         1,397 

.21

Total interest-bearing deposits         94,410          69,814           .29       100,629          29,134           .12        69,914         8,144           .05
Short-term borrowings                      913           2,670          1.16         1,126           3,419          1.22            56             1           .01
Long-term borrowings                     3,281          30,338         

3.67 3,282 20,872 2.55 3,442 15,937 1.88
Total interest-bearing liabilities 98,604 102,822 .41 105,037 53,425

           .20        73,412        24,082           .13
Noninterest-bearing deposits            72,861                                      74,054                                      58,141
Other liabilities                        4,001                                       3,684                                       2,201
Total liabilities                      175,466                                     182,775                                     133,754
Shareholders' equity                    25,665                                      26,090                                      17,894
Total liabilities and
shareholders' equity                 $ 201,131                                   $ 208,865                                   $ 151,648
Net interest spread                                                     3.49                                        2.92                                      2.59
Contribution of interest-free
funds                                                                    .19                                         .09                                       .06
Net interest income/margin on
earning assets                                     $ 1,690,518         
3.68   %               $ 1,422,443          3.01   %               $ 907,408          2.65   %




(a)
Includes nonaccrual loans.
(b)
Includes available-for-sale securities at amortized cost.

                                                                     

(continued)

                                     - 87 -
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                     M&T BANK CORPORATION AND SUBSIDIARIES

                                                             Table 3 (continued)

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

                                    2021 Fourth Quarter                          2021 Third Quarter
                            Average                     Average         Average                     Average
                            Balance      Interest         Rate          Balance      Interest         Rate
Average balance in millions;
interest in thousands
Assets
Earning assets
Loans and leases, net of
unearned
  discount (a)
Commercial, financial,
etc.                       $  22,330     $ 205,491           3.65   %  $  23,730     $ 236,820           3.96   %
Real estate - commercial      36,717       364,795           3.89         37,547       371,150           3.87
Real estate - consumer        16,290       143,675           3.53         16,379       146,898           3.59
Consumer                      17,913       194,619           4.31         17,658       193,256           4.34
Total loans and leases,
net                           93,250       908,580           3.87         95,314       948,124           3.95
Interest-bearing
deposits at banks             44,316        16,984            .15         39,036        14,922            .15
Federal funds sold and
agreements
  to resell securities             -             -            .47              -             -              -
Trading account                   50           202           1.62             51           345           2.71
Investment securities
(b)
U.S. Treasury and
federal agencies               6,150        32,516           2.10          5,352        30,362           2.25
Obligations of states
and political
 subdivisions                      -             3           6.82              -             3           6.44
Other                            654         3,796           2.30            667         2,893           1.72
Total investment
securities                     6,804        36,315           2.12          6,019        33,258           2.19
Total earning assets         144,420       962,081           2.64        140,420       996,649           2.82
Allowance for credit
losses                        (1,521 )                                    (1,577 )
Cash and due from banks        1,483                                       1,480
Other assets                  13,340                                      13,714
Total assets               $ 157,722                                   $ 154,037
Liabilities and
shareholders' equity
Interest-bearing
liabilities
Interest-bearing
deposits
Savings and
interest-checking
deposits                   $  70,518     $   6,443            .04      $  70,976     $   7,000            .04
Time deposits                  2,914         2,968            .40          3,061         3,573            .46
Total interest-bearing
deposits                      73,432         9,411            .05         74,037        10,573            .06
Short-term borrowings             58             -            .01             91             2            .01
Long-term borrowings           3,441        15,314           1.77          3,431        15,121           1.75
Total interest-bearing
liabilities                   76,931        24,725            .12         77,559        25,696            .14
Noninterest-bearing
deposits                      61,012                                      57,218
Other liabilities              2,166                                       2,151
Total liabilities            140,109                                     136,928
Shareholders' equity          17,613                                      17,109
Total liabilities and
shareholders' equity       $ 157,722                                   $ 154,037
Net interest spread                                          2.52                                        2.68
Contribution of
interest-free funds                                           .06                                         .06
Net interest
income/margin on earning
assets                                   $ 937,356           2.58    %               $ 970,953           2.74    %




(a)
Includes nonaccrual loans.
(b)
Includes available-for-sale securities at amortized cost.

                                     - 88 -

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