The company has intentionally reduced its relative concentration of investor-owned commercial real estate loans throughout 2023 and the first nine months of 2024. Criticized investor-owned commercial real estate loans totaled $6.7 billion or 23% of such loans at September 30, 2024, improved from $7.6 billion or 26% at June 30, 2024 and $8.8 billion or 27% of such loans at December 31, 2023.

The Company continues to adjust its funding sources in consideration of the changing interest rate environment as well as the competitive landscape for customer deposits. The company has diversified its wholesale funding sources to provide long-term funding stabilization and prepare for proposed regulations enumerating certain long-term debt requirements.

The investment securities portfolio averaged $31.0 billion in the third quarter of 2024, up $1.3 billion from the second quarter of 2024. That increase reflects the purchase of $4.0 billion of U.S. Treasury securities and government issued or guaranteed commercial and residential mortgage-backed securities in the recent quarter.

M&T and its subsidiary banks are required to comply with applicable Capital Rules. The company's CET1 ratio was 11.54% at September 30, 2024, and the company has been intentionally reducing commercial real estate concentration.

The Company utilizes interest rate swap agreements to help manage exposure to interest rate risk. At September 30, 2024, the aggregate notional amount of interest rate swap agreements entered into for interest rate risk management purposes that were currently in effect was $22.2 billion.

Management has assessed that the allowance for credit losses at September 30, 2024 appropriately reflected expected credit losses inherent in the portfolio as of that date. The allowance for credit losses totaled $2.2 billion at each of September 30, 2024 and June 30, 2024.

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.

M&T and its subsidiaries are subject in the normal course of business to various pending and threatened legal proceedings and other matters in which claims for monetary damages are asserted. Although the Company does not believe that the outcome of pending legal matters will be material to the Company's consolidated financial position, it cannot rule out the possibility that such outcomes will be material to the consolidated results of operations for a particular reporting period in the future.

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 faces competition in offering products and services from a large array of financial market participants, including banks, thrifts, mutual funds, securities dealers and others.

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.

The Company faces increasing price, product and service competition by competitors, including new entrants; 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.

The efficiency ratio measures the relationship of noninterest operating expenses, which exclude expenses M&T considers to be "nonoperating" in nature consisting of amortization of core deposit and other intangible assets and merger-related expenses, to revenues. The Company's efficiency ratio increased to 55.0% compared to 53.7% YoY.

Nonpersonnel expenses decreased $33 million to $1.62 billion in the nine months ended September 30, 2024 as compared with $1.66 billion in the first nine months of 2023, reflecting a decline in professional and other services expense of $50 million.

The Company modifies loans to maximize recovery efforts from borrowers experiencing financial difficulty. Such loan modifications typically include extensions of maturity dates but may also include other modified terms.

Nonpersonnel expenses decreased $33 million to $1.62 billion in the nine months ended September 30, 2024 as compared with $1.66 billion in the first nine months of 2023, reflecting a decline in professional and other services expense of $50 million, predominantly from lower sub-advisory fees following the sale of the CIT business in April 2023, and a decrease in losses associated with certain retail banking activities. Those favorable factors were partially offset by a rise in outside data processing and software costs of $44 million

The Company faces increasing price, product and service competition by competitors, including new entrants; 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.

The Company's Executive ALCO Committee 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.

M&T repurchased 1,190,054 shares of its common stock in accordance with its capital plan during the recent quarter at an average cost per share of $166.40 resulting in a total cost, including the share repurchase excise tax, of $200 million.

On May 13, 2024, M&T issued 75,000 shares of Perpetual Non-Cumulative Preferred Stock, Series J, with a liquidation preference of $10,000 per share.

On August 15, 2024, M&T redeemed all 350,000 outstanding shares of its Perpetual Fixed-to-Floating Rate Non-Cumulative Preferred Stock, Series E, for $350 million.

On March 6, 2024, the SEC adopted a final rule to enhance and standardize climate-related disclosures by public companies. The final rule requires registrants, including the Company, to disclose their risk management processes for material climate-related risks, governance and oversight of material climate-risks and any risks that have materially impacted, or are reasonably likely to have a material impact on, its business strategy, results of operations or financial condition.

The Company has invested as a limited partner in various partnerships that collectively had total assets of approximately $10.0 billion and $9.8 billion at September 30, 2024 and December 31, 2023, respectively. Those partnerships generally construct or acquire properties, including properties and facilities that produce renewable energy, for which the investing partners are eligible to receive certain federal income tax credits in accordance with government guidelines.

The partnership investments also assist the Company in achieving its community reinvestment initiatives.

Important factors that could cause actual outcomes and results to differ materially from those contemplated by forward-looking statements include the following, without limitation: economic conditions and growth rates, including inflation and market volatility; events and developments in the financial services industry, including industry conditions; domestic or international political developments and other geopolitical events, including international conflicts and hostilities.

Important factors that could cause actual outcomes and results to differ materially from those contemplated by forward-looking statements include the following, without limitation: changes and trends in the securities markets; common shares outstanding, common stock price volatility; fair value of and number of stock-based compensation awards to be issued in future periods.

Important factors that could cause actual outcomes and results to differ materially from those contemplated by forward-looking statements include the following, without limitation: federal, state or local legislation and/or regulations affecting the financial services industry, or M&T and its subsidiaries individually or collectively, including tax policy; regulatory supervision and oversight, including monetary policy and capital requirements; governmental and public policy changes; political conditions, either nationally or in the states in which M&T and its subsidiaries do business.