MTBM&T Bank

Targeted loan reviews are periodically performed over segments of loan portfolios that may be experiencing heightened credit risk due to current or anticipated economic conditions. The intention of such reviews is to identify trends across such portfolios and inform portfolio risk limits and loss mitigation strategies. In 2023 and 2024, 2025, the Company conducted targeted loan reviews covering the majority of its investor-owned assessed loans to certain not-for-profit borrowers, government contractors and other commercial real estate portfolio, inclusive of construction loans, with a focus on criticized loans borrowers that may be impacted by immigration policies and loans with maturities enforcement, changes to government funding and reductions in the next twelve months. federal workforce. The primary source of repayment of these loans Company is typically tenant lease payments to the investor/borrower. Elevated vacancies impacting some property types and higher interest rates have contributed to lower current and anticipated future debt service coverage ratios, which have and also monitoring commercial borrowers in certain industry sectors that may continue to influence the ability of borrowers to make existing loan payments. Lower debt service coverage ratios and reduced commercial real estate values also impact the ability of borrowers, in particular those borrowers with loans secured be affected by office properties, to refinance their obligations at loan maturity. Despite these challenges, the ability of borrowers to service loans secured by certain investor-owned real estate, international trade policy changes, such as tariffs, including health services, hotel, retail and multifamily properties, modestly improved wholesale trade, manufacturing and construction companies. The Company has considered the information gathered in such reviews in the recent year. Criticized investor-owned commercial real estate loans totaled $6.0 billion or 23% assignment of such loans at December 31, 2024, improved from $8.8 billion or 27% of such loans at December 31, 2023. Investor-owned commercial real estate loans comprised 61% of total criticized loans at December 31, 2024, compared with 70% at December 31, 2023. loan grades.

estate, Loan balances are charged-off when it becomes evident that such balances are not fully collectable. For commercial and industrial loans and commercial real estate loans, charge-offs are recognized after an assessment by credit personnel of the capacity and willingness of the borrower to repay, the estimated value of any collateral, and any other potential sources of repayment. A charge-off is recognized when, after such assessment, it becomes evident that the loan balance is not fully collectable. For residential real estate loans, including home equity loans and lines of credit, the excess of the loan balances balance over the net realizable value of the property collateralizing the loan is charged-off when the loan becomes 150 days delinquent. Consumer That charge-off is based on recent indications of value from external parties that are generally obtained shortly after a loan becomes nonaccrual. When evaluating individual home equity loans and lines of credit for charge-off and for purposes of estimating losses in determining the allowance for loan losses, the Company gives consideration to the required repayment of any first lien positions related to collateral property. Other consumer loans are generally charged-off when the loans are 91 to 180 days past due, depending on whether the loan is collateralized and the status of repossession activities with respect to such collateral. 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.

Factors that influence the Company’s credit loss experience include: (i) overall economic conditions affecting businesses and consumers, generally; (ii) the impact of commercial and residential real estate values on loans to real estate builders and developers and other loans secured by such real estate; (iii) the concentration of commercial real estate loans in the Company’s loan portfolio, including construction loans, loans secured by office, retail, health services, hospitality and multifamily properties and loans secured by property in the New York City and certain other large metropolitan areas; (iv) the concentration of commercial and industrial loans to businesses in the Northeastern and Mid-Atlantic regions of the U.S.; (v) the repayment performance associated with first and second lien loans secured by residential real estate; and (vi) the size of the Company’s portfolio of loans to individual consumers, which historically have experienced higher net charge-offs as a percent of loans outstanding than loans to other types of borrowers. The Company’s credit risk and the performance of its lending portfolios may be affected by concentration in an industry, geography or asset type. As described further in this "Risk Factors" section, the Company’s credit risks may be increased by the impacts of elevated inflation, poor or recessionary economic conditions and financial market volatility.

M&T and its subsidiaries are subject in the normal course of business to various pending and threatened legal proceedings and other matters in which claims for monetary damages are asserted. On an on-going basis management, after consultation with legal counsel, assesses the Company’s liabilities and contingencies in connection with such proceedings. For those matters where it is probable that the Company will incur losses and the amounts of the losses can be reasonably estimated, the Company records an expense and corresponding liability in its consolidated financial statements. To the extent the It is reasonably possible that pending or threatened litigation could result in exposure in excess of that liability, the amount of such excess is not currently estimable. liability. Although not considered probable, the range of reasonably possible losses for such matters in the aggregate, beyond the existing recorded liability, was between $ 0 and $ 25 liability is not likely to exceed $25 million in the aggregate at December 31, 2024. Although the Company 2025. That estimate is subject to significant judgment based on currently available information and various assumptions about known and unknown uncertainties. That estimate does not believe that the outcome of pending litigations will be material to represent the Company’s consolidated financial position, it cannot rule out the possibility maximum loss exposure and actual losses may vary significantly from that such outcomes will be material to the consolidated results of operations for a particular reporting period in the future. amount.