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M&T expects up to 15% increase in loan loss provisions upon CECL adoption

M&T Bank Corp. expects an increase of 5% to 15% in loan loss provisions upon adoption of new accounting standards, CFO Darren King said.

On a call to discuss third-quarter earnings, King said complying with the current expected credit loss model is expected to impact the bank's capital ratios by less than 10 basis points. The CFO also said during the call that the company will continue to execute its capital plan. M&T's board in July approved a plan to repurchase up to $1.64 billion of common shares through June 30, 2020.

CECL is a new accounting standard that requires loan loss reserves to be made at the point of loan origination instead of when a loss becomes likely. The Buffalo, N.Y.-based superregional bank is required to comply with the standard by Jan. 1, 2020, while smaller banks must comply by 2023.

King said M&T has completed its second parallel run and expects to disclose those preliminary results in its third-quarter Form 10-Q.