M
&T Bank made significant progress in reducing its at-risk commercial real estate debt through 2024. The bank's concentration of CRE loans decreased to 136% of total debts from 183%, according to a fourth-quarter earnings presentation. This reduction came as total loans and leases remained relatively flat, increasing by just 2% to $135 billion.

    M&T trimmed its troubled debts to about $1.7 billion by the end of 2024, down from $2.2 billion a year prior. Chief Financial Officer Daryl Bible attributed this decline to "full payoffs" of at-risk CRE loans, as well as partial paydowns and net charge-offs or debt written off as unlikely to be paid back.

    The bank reported an 8% increase in net charge-offs in the fourth quarter compared to the same period a year earlier. However, it also cut its provision for credit losses by 38%, indicating it expects less pain to come. Bible stated that M&T got out of many high-risk credits and now has a better quality criticized book.

    M&T's office loan book was particularly affected in recent years, with about 20% of its $5.1 billion portfolio reported as questionable at the end of 2022. The bank had marked 29% of its office loans criticized by the third quarter of 2024. However, the breakdown for the end of 2024 is not yet available.

    The bank's ability to further reduce its share of criticized loans depends on the yield curve's slope in 2025. A flatter yield curve allowed borrowers to refinance in the second half of 2024, but a steeper curve has since emerged due to the Fed's projections and market concerns about inflationary tariffs. Despite this, M&T expects improvement in its criticized commercial loans, although at a more modest pace than in 2024.