v3.25.2
Fair value measurements
 6 Months Ended
Jun. 30, 2025
Fair Value Disclosures [Abstract]  
Fair value measurements


13. Fair value measurements
GAAP permits an entity to choose to measure eligible financial instruments and other items at fair value. The Company has not made any fair value elections at June 30, 2025.
Pursuant to GAAP, fair value is defined as the price that would be received to sell an asset or paid to transfer a liability in an orderly transaction between market participants at the measurement date. A three-level hierarchy exists in GAAP for fair value measurements based upon the inputs to the valuation of an asset or liability.
•Level 1 — Valuation is based on quoted prices in active markets for identical assets and liabilities.
•Level 2 — Valuation is determined from quoted prices for similar assets or liabilities in active markets, quoted prices for identical or similar instruments in markets that are not active or by model-based techniques in which all significant inputs are observable in the market.
•Level 3 — Valuation is derived from model-based and other techniques in which at least one significant input is unobservable and which may be based on the Company's own estimates about the assumptions that market participants would use to value the asset or liability.
When available, the Company attempts to use quoted market prices in active markets to determine fair value and classifies such items as Level 1 or Level 2. If quoted market prices in active markets are not available, fair value is often determined using model-based techniques incorporating various assumptions including interest rates, prepayment speeds and credit losses. Assets and liabilities valued using model-based techniques are classified as either Level 2 or Level 3, depending on the lowest level classification of an input that is considered significant to the overall valuation. A description of the valuation methodologies used for the Company's assets and liabilities that are measured at estimated fair value on a recurring basis and on a nonrecurring basis is included in note 19 of Notes to Financial Statements in M&T's 2024 Annual Report.
The following tables present assets and liabilities at June 30, 2025 and December 31, 2024 measured at estimated fair value on a recurring basis:
(Dollars in millions)Fair Value MeasurementsLevel 1Level 2Level 3 (a)
June 30, 2025    
Trading account$93 $93 $— $— 
Investment securities available for sale:   
U.S. Treasury7,837 — 7,837 — 
Mortgage-backed securities:    
Government issued or guaranteed:   
Commercial4,767 — 4,767 — 
Residential8,933 — 8,933 — 
Other3 — 3 — 
 21,540 — 21,540 — 
Equity securities274 274 — — 
Real estate loans held for sale583 — 583 — 
Other assets (b)265 — 260 5 
Total assets$22,755 $367 $22,383 $5 
Other liabilities (b)$554 $— $554 $— 
Total liabilities$554 $— $554 $— 
December 31, 2024    
Trading account$101 $101 $— $— 
Investment securities available for sale:    
U.S. Treasury7,931 — 7,931 — 
Mortgage-backed securities:    
Government issued or guaranteed:    
Commercial3,702 — 3,702 — 
Residential7,214 — 7,214 — 
Other 2 — 2 — 
 18,849 — 18,849 — 
Equity securities235 235 — — 
Real estate loans held for sale521 — 521 — 
Other assets (b)255 — 251 4 
Total assets$19,961 $336 $19,621 $4 
Other liabilities (b)$822 $— $790 $32 
Total liabilities$822 $— $790 $32 
__________________________________________________________________________________
(a)Significant unobservable inputs used in the fair value measurement of certain commitments to originate real estate loans held for sale included weighted-average commitment expirations of 30% at June 30, 2025 and 6% at December 31, 2024. An increase (decrease) in the estimate of expirations for commitments to originate real estate loans would generally result in a lower (higher) fair value measurement. Estimated commitment expirations are derived considering loan type, changes in interest rates and remaining length of time until closing.
(b)Comprised predominantly of interest rate swap agreements used for interest rate risk management (Level 2), interest rate and foreign exchange contracts not designated as hedging instruments (Level 2), commitments to sell real estate loans (Level 2) and commitments to originate real estate loans to be held for sale (Level 2 and Level 3).
The Company is required, on a nonrecurring basis, to adjust the carrying value of certain assets or provide valuation allowances related to certain assets using fair value measurements. The more significant of those assets follow.
Loans
Loans subject to nonrecurring fair value measurement were $644 million at June 30, 2025 ($166 million and $478 million of which were classified as Level 2 and Level 3, respectively), $847 million at December 31, 2024 ($187 million and $660 million of which were classified as Level 2 and Level 3, respectively) and $1.0 billion at June 30, 2024 ($248 million and $783 million of which were classified as Level 2 and Level 3, respectively). Changes in fair value recognized for partial charge-offs of loans and loan impairment reserves on loans held by the Company on June 30, 2025 were decreases of $115 million and $157 million for the three-month and six-month periods ended June 30, 2025, respectively. Changes in fair value recognized for partial charge-offs of loans and loan impairment reserves on loans held by the Company on June 30, 2024 were decreases of $93 million and $221 million for the three-month and six-month periods ended June 30, 2024, respectively.
Assets taken in foreclosure of defaulted loans
Assets taken in foreclosure of defaulted loans subject to nonrecurring fair value measurement were not material at each of June 30, 2025, December 31, 2024 and June 30, 2024. Changes in fair value recognized during the three-month and six-month periods ended June 30, 2025 and 2024 for foreclosed assets held by the Company were not material.
Capitalized servicing rights
Capitalized servicing rights related to mortgage loans required no valuation allowance at each of June 30, 2025, December 31, 2024 and June 30, 2024.
Disclosures of fair value of financial instruments
The carrying amounts and estimated fair value for certain financial instruments that are not recorded at fair value in the Company's Consolidated Balance Sheet are presented in the following table:
(Dollars in millions)
Carrying
Amount
Estimated
Fair Value
Level 1
Level 2
Level 3
June 30, 2025
Financial assets:
Cash and cash equivalents$2,128 $2,128 $1,985 $143 $— 
Interest-bearing deposits at banks19,297 19,297 — 19,297 — 
Investment securities held to maturity13,024 12,073 — 12,028 45 
Loans, net133,919 133,683 — 6,811 126,872 
Financial liabilities:
Time deposits14,094 14,055 — 14,055 — 
Short-term borrowings2,071 2,071 — 2,071 — 
Long-term borrowings12,380 12,552 — 12,552 — 
December 31, 2024
Financial assets:
Cash and cash equivalents1,909 1,909 1,749 160 — 
Interest-bearing deposits at banks18,873 18,873 — 18,873 — 
Investment securities held to maturity14,195 12,955 — 12,909 46 
Loans, net133,397 131,334 — 6,806 124,528 
Financial liabilities:
Time deposits14,476 14,463 — 14,463 — 
Short-term borrowings1,060 1,060 — 1,060 — 
Long-term borrowings12,605 12,754 — 12,754 — 
With the exception of marketable securities and mortgage loans originated for sale, the Company’s financial instruments presented in the preceding tables are not readily marketable and market prices do not exist. Generally, the Company has not attempted to market its financial instruments to potential buyers, if any exist. Since negotiated prices in illiquid markets depend greatly upon the then present motivations of the buyer and seller, it is reasonable to assume that actual sales prices could vary widely from any estimate of fair value made without the benefit of negotiations. Additionally, changes in market interest rates can dramatically impact the value of financial instruments in a short period of time.
The Company does not believe that the estimated information presented herein is representative of the earnings power or value of the Company. The preceding analysis, which is inherently limited in depicting fair value, also does not consider any value associated with existing customer relationships nor the ability of the Company to create value through loan origination, deposit gathering or fee generating activities. Many of the estimates presented herein are based upon the use of highly subjective information and assumptions and, accordingly, the results may not be precise. Management believes that fair value estimates may not be comparable between financial institutions due to the wide range of permitted valuation techniques and numerous estimates which must be made. Furthermore, because the disclosed fair value amounts were estimated as of the balance sheet date, the amounts actually realized or paid upon maturity or settlement of the various financial instruments could be significantly different.