Loans and Leases

12 Months Ended

Dec. 31, 2021

Receivables [Abstract]

Loans and leases

4.    Loans and leases

Total loans and leases outstanding were comprised of the following:

	December 31
	2021			2020
	(In thousands)
Loans
Commercial, financial, etc.	$	22,524,542		$	26,554,486
Commercial real estate		35,473,884			37,728,844
Residential real estate		16,077,275			16,786,673
Consumer		17,964,331			16,558,889
Total loans		92,040,032			97,628,892
Leases
Commercial		1,096,646			1,246,896
Total loans and leases		93,136,678			98,875,788
Less: unearned discount		(224,226	)		(339,921	)
Total loans and leases, net of unearned discount	$	92,912,452		$	98,535,867

One-to-four family residential mortgage loans held for sale were $474 million at December 31, 2021 and $777 million at December 31, 2020.  Commercial real estate loans held for sale were $425 million at December 31, 2021 and $278 million at December 31, 2020.

The amount of foreclosed residential real estate property held by the Company was $24 million and $28 million at December 31, 2021 and 2020, respectively. There were $151 million and $214 million at December 31, 2021 and 2020, respectively, in loans secured by residential real estate that were in the process of foreclosure. Of all loans in the process of foreclosure at December 31, 2021, approximately 44% were government guaranteed.

Borrowings by directors and certain officers of M&T and its banking subsidiaries, and by associates of such persons, exclusive of loans aggregating less than $60,000, amounted to $113 million and $72 million at December 31, 2021 and 2020, respectively. During 2021, new borrowings by such persons amounted to $42 million (including any borrowings of new directors or officers that were outstanding at the time of their election) and repayments and other reductions (including reductions resulting from individuals ceasing to be directors or officers) were $1 million.

At December 31, 2021, approximately $9.5 billion of commercial loans and leases, $11.9 billion of commercial real estate loans, $11.5 billion of one-to-four family residential real estate loans, $1.9 billion of home equity loans and lines of credit and $10.2 billion of other consumer loans were pledged to secure outstanding borrowings and available lines of credit from the FHLB and the Federal Reserve Bank of New York as described in note 9.

A summary of current, past due and nonaccrual loans as of December 31, 2021 and 2020 follows:

	Current		30-89 Days Past Due		Accruing Loans Past Due 90 Days or More		Nonaccrual		Total
	(In thousands)
December 31, 2021
Commercial, financial, leasing, etc.	$	23,101,810	$	142,208	$	8,284	$	221,022	$	23,473,324
Real estate:
Commercial		24,712,643		319,099		31,733		1,069,280		26,132,755
Residential builder and developer		1,400,437		2,904		—		3,005		1,406,346
Other commercial construction		7,722,049		17,175		—		111,405		7,850,629
Residential		13,294,872		239,561		920,080		355,858		14,810,371
Residential — limited    documentation		1,124,520		16,666		—		122,888		1,264,074
Consumer:
Home equity lines and loans		3,476,617		15,486		—		70,488		3,562,591
Recreational finance		7,985,173		40,544		—		27,811		8,053,528
Automobile		4,604,772		40,064		—		34,037		4,678,873
Other		1,620,147		12,223		3,302		44,289		1,679,961
Total	$	89,043,040	$	845,930	$	963,399	$	2,060,083	$	92,912,452

December 31, 2020
Commercial, financial, leasing, etc.	$	27,196,862	$	60,822	$	10,053	$	306,827	$	27,574,564
Real estate:
Commercial		26,688,515		168,917		47,014		775,894		27,680,340
Residential builder and developer		1,246,095		1,693		856		1,094		1,249,738
Other commercial construction		8,523,591		66,365		3,816		114,039		8,707,811
Residential		13,764,836		200,406		792,888		365,729		15,123,859
Residential — limited    documentation		1,462,277		19,687		—		147,170		1,629,134
Consumer:
Home equity lines and loans		3,881,885		24,329		—		79,392		3,985,606
Recreational finance		7,002,643		47,161		—		25,519		7,075,323
Automobile		4,007,349		55,498		—		39,404		4,102,251
Other		1,346,868		17,561		4,581		38,231		1,407,241
Total	$	95,120,921	$	662,439	$	859,208	$	1,893,299	$	98,535,867

A summary of outstanding loan balances for which COVID-19 related payment deferrals were in effect as of December 31, 2021 and 2020 is presented in the following table. These loans meet the criteria described in note 1 and, as such, are not considered past due or otherwise in default of loan terms as of the dates presented.  Substantially all of those deferrals are scheduled to expire during 2022 and/or are in the process of formal modification of repayment terms for previously deferred payments.

	COVID-19 Related Payment Deferrals (1)
	December 31
	2021		2020
	(In thousands)
Commercial, financial, leasing, etc.	$	—	$	95,823
Real estate:
Commercial		—		728,511
Residential builder and developer		—		653
Other commercial construction		—		61,235
Residential (2)		1,126,734		2,447,422
Residential — limited    documentation		63,078		337,108
Consumer:
Home equity lines and loans		3,419		18,440
Recreational finance		3,286		24,428
Automobile		7,365		51,550
Other		139		2,353
Total	$	1,204,021	$	3,767,523

(1) Represents accruing loans for which a COVID-19 related payment deferral (including maturity extensions) was in effect.

(2) Includes $974 million and $1.7 billion of government-guaranteed loans at December 31, 2021 and 2020, respectively.

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

The tables that follow summarize the Company’s loan modification activities that were considered troubled debt restructurings for the years ended December 31, 2021, 2020 and 2019:

					Post-modification (a)
Year Ended December 31, 2021	Number		Pre- modification Recorded Investment		Principal Deferral		Interest Rate Reduction		Other		Combination of Concession Types		Total
	(Dollars in thousands)
Commercial, financial, leasing, etc.		284	$	185,458	$	46,806	$	—	$	40,558	$	95,516	$	182,880
Real estate:
Commercial		99		202,878		67,387		—		31,202		102,248		200,837
Residential builder and developer		1		3		3		—		—		—		3
Other commercial construction		3		542		532		—		—		—		532
Residential		373		108,325		95,769		—		—		12,866		108,635
Residential — limited    documentation		21		2,920		2,865		—		—		—		2,865
Consumer:
Home equity lines and loans		89		6,430		6,054		—		—		321		6,375
Recreational finance		281		9,931		9,931		—		—		—		9,931
Automobile		807		14,668		14,654		—		—		14		14,668
Other		362		2,597		2,597		—		—		—		2,597
Total		2,320	$	533,752	$	246,598	$	—	$	71,760	$	210,965	$	529,323
Year Ended December 31, 2020
Commercial, financial, leasing, etc.		394	$	246,479	$	70,671	$	298	$	31,605	$	97,344	$	199,918
Real estate:
Commercial		161		310,578		204,591		505		4,874		85,261		295,231
Residential builder and developer		1		91		—		—		—		90		90
Other commercial construction		2		13,602		13,573		—		—		—		13,573
Residential		631		202,985		183,878		—		—		23,639		207,517
Residential — limited    documentation		30		7,413		7,100		—		—		1,232		8,332
Consumer:
Home equity lines and loans		259		17,228		5,882		—		—		11,372		17,254
Recreational finance		428		16,392		16,388		—		—		4		16,392
Automobile		2,249		39,951		39,949		—		—		2		39,951
Other		1,095		7,788		3,383		—		—		4,405		7,788
Total		5,250	$	862,507	$	545,415	$	803	$	36,479	$	223,349	$	806,046

					Post-modification (a)
Year Ended December 31, 2019	Number		Pre- modification Recorded Investment		Principal Deferral		Interest Rate Reduction		Other		Combination of Concession Types		Total
	(Dollars in thousands)
Commercial, financial, leasing, etc.		150	$	63,715	$	10,485	$	—	$	—	$	52,871	$	63,356
Real estate:
Commercial		51		48,315		5,193		—		—		26,152		31,345
Residential builder and developer		2		1,330		1,068		—		—		—		1,068
Other commercial construction		3		1,559		—		—		—		1,500		1,500
Residential		83		21,695		10,819		—		—		11,907		22,726
Residential — limited    documentation		6		1,409		399		—		—		1,044		1,443
Consumer:
Home equity lines and loans		41		4,127		176		—		—		4,004		4,180
Recreational finance		10		265		265		—		—		—		265
Automobile		66		1,141		1,076		—		—		65		1,141
Total		412	$	143,556	$	29,481	$	—	$	—	$	97,543	$	127,024

(a) Financial effects impacting the recorded investment included principal payments or advances, charge-offs and capitalized escrow arrearages. The present value of interest rate concessions, discounted at the effective rate of the original loan, was not material.

Loans that were modified as troubled debt restructurings during the twelve months ended December 31, 2021, 2020 and 2019 and for which there was a subsequent payment default during the respective year were not material.

A summary of changes in the accretable yield for loans acquired at a discount for the year ended December 31, 2019 follows:

	2019
	Purchased Impaired			Other Acquired
	(In thousands)
Balance at beginning of period	$	147,210		$	96,907
Interest income		(49,017	)		(36,452	)
Reclassifications from    nonaccretable balance		36,718			15,534
Other (a)		—			(3,909	)
Balance at end of period	$	134,911		$	72,080

(a) Other changes in expected cash flows including changes in interest rates and prepayment assumptions.

The Company’s loan and lease portfolio includes commercial lease financing receivables consisting of direct financing and leveraged leases for machinery and equipment, railroad equipment, commercial trucks and trailers, and aircraft. Certain leases contain payment schedules that are tied to variable interest rate indices.  In general, early termination options are provided if the lessee is not in default, returns the leased equipment and pays an early termination fee. Additionally, options to

purchase the underlying asset by the lessee are generally at the fair market value of the equipment. A summary of lease financing receivables follows:

	December 31,
	2021			2020
	(In thousands)
Commercial leases:
Direct financings:
Lease payments receivable	$	873,089		$	1,017,222
Estimated residual value of leased assets		75,140			79,621
Unearned income		(68,456	)		(83,673	)
Investment in direct financings		879,773			1,013,170
Leveraged leases:
Lease payments receivable		75,003			76,453
Estimated residual value of leased assets		73,414			73,600
Unearned income		(25,374	)		(28,388	)
Investment in leveraged leases		123,043			121,665
Total investment in leases	$	1,002,816		$	1,134,835
Deferred taxes payable arising from leveraged leases	$	56,759		$	61,905

Included within the estimated residual value of leased assets at December 31, 2021 and 2020 were $29 million and $34 million, respectively, in residual value associated with direct financing leases that are guaranteed by the lessees or others.

At December 31, 2021, the minimum future lease payments to be received from lease financings were as follows:

	(In thousands)
Year ending December 31:
2022	$	282,388
2023		247,084
2024		171,176
2025		107,998
2026		67,528
Later years		71,918
	$	948,092