You are given a text that consists of multiple sentences. Your task is to perform abstractive summarization on this text. Use your understanding of the content to express the main ideas and crucial details in a shorter, coherent, and natural sounding text. 
Text: Specifically, we saw strong debit and credit card usage, both by consumers and business, which also manifested in an increase in merchant volumes.
The mortgage market was robust in the third quarter, where we witnessed an uptick in both residential origination volumes and margins.
Our trust business experienced the increase in money fund fee waivers we had been anticipating, but those were offset by strong equity and debt markets during the quarter.
Expense trends were in line with our expectations as we continue to exercise diligence in a particularly difficult revenue environment.
Also encouraging are the trends for commercial customers granted some form of COVID-19 forbearance and for which have reached its end point.
Approximately 10% have asked for additional relief.
The common equity Tier 1 ratio improved by 31 basis points to 9.81%.
At the same time, the allowance for loan losses grew to 1.79% of loans, positioning M&T to meet the needs of our customers and communities.
Now, let's review our results for the quarter.
Diluted GAAP earnings per common share were $2.75 for the third quarter of 2020 compared with $1.74 in the second quarter of 2020 and $3.47 in the third quarter of 2019.
Net income for the quarter was $372 million compared with $241 million in the linked quarter and $480 million in the year-ago quarter.
On a GAAP basis, M&T's third-quarter results produced an annualized rate of return on average assets of 1.06% and an annualized return on average common equity of 9.53%.
This compares with rates of 0.71% and 6.13%, respectively, in the previous quarter.
Included in GAAP results in the recent quarter were after-tax expenses from the amortization of intangible assets amounting to $3 million or $0.02 per common share, little change from the prior quarter.
Consistent with our long-term practice, M&T provides supplemental reporting of its results on a net operating or tangible basis, from which we have only ever excluded the after-tax effect of amortization of intangible assets, as well as any gains or expenses associated with mergers and acquisitions when they occur.
M&T's net operating income for the third quarter, which excludes intangible amortization, was $375 million compared with $244 million in the linked quarter and $484 million in last year's third quarter.
Diluted net operating earnings per common share were $2.77 for the recent quarter compared with $1.76 in 2020 second quarter and $3.50 in the third quarter of 2019.
Net operating income yielded annualized rates of return on average tangible assets and average tangible common shareholders' equity of 1.1% and 13.94% for the recent quarter.
The comparable returns were 0.74% and 9.04% in the second quarter of 2020.
Turning to the balance sheet and income statement.
Taxable equivalent net interest income was $947 million in the third quarter of 2020, marking a decline of $14 million or 1% from the linked quarter.
That decrease primarily reflects the impact on loan yields from the 20 basis point decline in average one-month LIBOR compared to the second quarter.
Higher premium amortization on residential mortgage loans and mortgage-backed securities was also a factor.
The net interest margin declined by 18 basis points to 2.95% compared with 3.13% in the linked quarter.
Average interest-earning assets increased by $4 billion to $128 billion for the third quarter, primarily reflecting a $4.4 billion increase in funds invested with either the Federal Reserve Bank of New York or into resale agreements.
Those investments were funded by a similar increase in deposits, approximately evenly divided between interest and non-interest-bearing DDA.
The increase in cash equivalent investments caused an estimated 10 basis points of pressure on the net interest margin while having little effect on net interest income.
The lower interest rate environment, primarily the lower average rate on one-month LIBOR that I mentioned previously, contributed to approximately four basis points of the margin decline.
The net impact of lower loan yields was somewhat mitigated by a six-basis-point decrease in the cost of interest-bearing deposits.
The accelerated premium amortization on both residential mortgage loans and on mortgage backed securities contributed some three basis points of margin pressure.
All other factors contributed to an additional one basis point of the decline.
For context, since the fourth quarter of 2019, the combination of short term liquidity investments primarily placed at the Fed and investment securities has increased by $9.1 billion, reducing the net interest margin by approximately 25 basis points, while incrementally benefiting net interest income.
Average total loans increased by $413 million or a little less than one half percent compared with the previous quarter.
Looking at loans by category.
On an average basis, compared with the linked quarter, commercial and industrial loans declined by $1.4 billion or 5%, primarily the results of a $1.2 billion decline in vehicle dealer floor plan loans.
That reflects the usual seasonal softness, as well as the delays some dealers are having in replacing inventory being sold.
PPP loans were effectively unchanged from the end of the second quarter at $6.5 billion.
Commercial real estate loans grew by less than 1% compared with the second quarter.
Residential real estate loans increased by just under $1 billion or 6%, reflecting loans purchased from Ginnie Mae servicing pools, pending resolution, partially offset by repayments.
Consumer loans were up by 4%, reflecting higher indirect recreation finance loans, partially offset by lower auto loans and home equity lines of credit.
Average core customer deposits, which exclude deposits received at M&T's Cayman Islands office and CDs over $250,000, grew by $4 billion, primarily in interest and noninterest checking or about 4% compared with the second quarter.
Turning to noninterest income.
Non-interest income totaled $521 million in the third quarter compared with $487 million in the prior quarter.
The recent quarter included $3 million of valuation gains on equity securities, largely on our remaining holdings of GSE preferred stock, while the second quarter included $7 million of such gains.
Mortgage banking revenues were $153 million in the recent quarter, improving from $145 million in the linked quarter.
Residential mortgage loans originated for sale were $1.2 billion in the quarter, up 7% from $1.1 billion in the second quarter.
Total residential mortgage banking revenues, including origination and servicing activities, were $119 million in the third quarter, improved from $111 million in the prior quarter.
The increase reflects the higher volume of loans originated for sale, combined with strong gain on sale margins.
Residential servicing revenues declined very slightly.
Commercial mortgage banking revenues totaled $34 million, encompassing both originations and servicing and which was little changed from the second quarter.
Trust income was $150 million in the recent quarter, down slightly from $152 million in the previous quarter.
Recall that second quarter figures included $5 million of seasonal tax preparation fees.
Aside from that, business remains solid with slightly higher money market fund fee waivers, offset by continued strong debt capital markets activity.
Service charges on deposit accounts were $91 million, improved sharply from $77 million in the second quarter.
The improvement comes primarily from some of the COVID-19 impacted categories on the consumer side, the result of higher levels of spending compared with the prior quarter.
Similarly, the $20 million improvement in other revenues from operations compared with the linked quarter reflects a rebound in COVID-19-impacted payments revenues that are not included in service charges, such as credit card interchange and merchant discount with a slight improvement in loan-related fees, including syndications.
Operating expenses for the third quarter, which exclude the amortization of intangible assets, were $823 million compared with $803 million in the second quarter.
The $20 million linked quarter increase in salaries and benefits reflect the impact of one additional workday during the quarter and higher compensation tied to the uptick in both mortgage banking and trust related activity compared with the prior quarter.
Recall that other cost of operations for each of the first and second quarters included a $10 million addition to the valuation allowance on our capitalized mortgage servicing rights.
There was neither an addition nor release from the valuation allowance during the third quarter.
The efficiency ratio, which excludes intangible amortization from the numerator and securities gains or losses from the denominator, was 56.2% in the recent quarter compared with 55.7% in the second quarter and 56% in the third quarter of 2019.
Next, let's turn to credit.
Net charge-offs for the recent quarter amounted to $30 million.
Annualized net charge-offs as a percentage of total loans were 12 basis points for the third quarter compared with 29 basis points in the second quarter.
The provision for loan losses in the third quarter amounted to $150 million, exceeding net charge-offs by $120 million and increasing the allowance for credit losses to $1.8 billion or 1.79% of loans.
The allowance at the end of the third quarter reflects an updated macroeconomic scenario that is different and modestly less severe than those used at the end of the first and second quarters, which modeled the uncertainty of the COVID-19-driven damage to the economy.
The allowance and the related provision in the recent quarter reflect the ongoing impacts of the COVID-19 pandemic on economic activity in the hospitality and retail sectors, the uncertainty over additional economic stimulus and the ultimate collectability of commercial real estate loans where borrowers are requesting repayment forbearance.
Our current macroeconomic forecast uses a number of economic variables, with the largest drivers being the unemployment rate and GDP.
Our forecast assumes the quarterly unemployment rate increases to 9% in the fourth quarter of this year, followed by a sustained high single-digit unemployment rate through 2022.
The forecast assumes GDP contracts 5.1% during 2020 and recovers to prerecession peak levels by the third quarter of 2022.
Our forecast assumes no additional government stimulus.
Nonaccrual loans as of September 30 amounted to $1.2 billion, an increase of $83 million from the end of June.
At the end of the quarter, nonaccrual loans as a percentage of loans was 1.26%.
It is important to keep in mind that some of the usual credit metrics have been affected by the PPP loans on the balance sheet, which are zero risk-weighted and carry little or no credit risk.
Excluding the impact of PPP loans, the ratio of the allowance for credit losses to loans would be 1.91%.
Similarly, the ratio of nonaccrual loans to total loans would be 1.35% and annualized net charge-offs as a percentage of total loans would be 13 basis points.
Loans 90 days past due, on which we continue to accrue interest, were $527 million at the end of the recent quarter.
Of these loans, $505 million or 96% were guaranteed by government-related entities.
Government-guaranteed loans under COVID forbearance in which we have purchased from servicing pools are generally not reflected in these figures.
Consistent with regulatory and CARES Act provisions, loans that have received some sort of forbearance, whether payment deferrals, covenant modifications or other form of relief as a result of COVID-19-related stress, for the most part, are not yet reflected in our nonaccrual or delinquency numbers.
A significant majority of commercial loans that were granted COVID-19 payment relief were for 90 days, with the ability for clients to request a second 90 days.
For example, substantially all of the $4.2 billion of forbearance as of June 30 given to vehicle dealers was for 90 days, and less than $100 million are under some form of forbearance relief at the end of the third quarter.
For the total commercial and industrial portfolio, including the aforementioned dealer portfolio, loans under COVID-19 forbearance have declined by 85% to slightly higher than $800 million or about 3% as of September 30.
Customers in the commercial real estate portfolio generally received 180-day COVID-19 deferrals.
In total, deferrals in the CRE portfolio have declined by 41% to $5.1 billion.
Over two-thirds of the loans on active forbearance as of September 30 that have not reached their end point relate to the CRE portfolio segments most impacted by COVID-19, notably, hotels and retail CRE.
We'll know more over the next 60 days or so as the 180-day deferrals reach their end of term.
For the consumer portfolios, deferrals declined from just under $700 million at June 30 to under $150 million or less than 1% at the end of September.
For residential mortgage loans we own, nongovernment-guaranteed loans under deferral amount to $1.6 billion, down about 19% from the second quarter.
Total deferrals have increased to $3.3 billion from $2.3 billion 90 days ago.
All of that increase reflects government guaranteed loans purchased from servicing pools that represent no credit risk to M&T.
All of these figures do not include approximately $10 billion of forbearance on residential mortgage loans we service for others.
M&T's common equity Tier 1 capital ratio was an estimated 9.81% as of September 30 compared to 9.5% at the end of the second quarter.
This reflects the impact of earnings in excess of dividends paid and slightly lower risk weighted assets.
M&T did not repurchase shares during the third quarter and will not be doing so in the fourth quarter.
M&T's net income comfortably exceeded its common stock dividend, both for the quarter and under the trailing four-quarter calculation outlined by the Federal Reserve.
Now, turning to the outlook.
Our usual practice is to offer thoughts on the coming year in the January earnings call after we've completed our planning process.
So, my remarks today will be somewhat brief.
We're all pleased to see that the economy has improved, while recognizing that we're still a long way from conditions we saw in January and February.
Core commercial loan growth, excluding PPP loans, has slowed, and we expect those balances to remain flat to slightly down over the remainder of 2020 compared to where we ended the quarter.
Given that the auto manufacturers are still not running at normal levels, we don't expect the normal seasonal rebound in dealer floor plan loans during the fourth quarter.
Our portal for receiving forgiveness requests of PPP loans is open and applications are being processed and sent on to the SBA.
Most of the activity so far is on the smaller loans on which the SBA is expediting relief.
The residential mortgage loans we purchased from servicing pools aren't fully reflected in the third-quarter average.
Combined with the potential for further base, we should see modest growth in average residential mortgage loans for the current quarter.
All in, we expect modest linked-quarter growth in total loans.
More difficult to forecast has been our liquidity assets or short term investments in the deposits with the Fed, which continued to rise over the past quarter, although at a much slower pace.
As I noted earlier, this was primarily the result of further deposit inflows.
Although uncertain at present, we may be approaching the peak and may see declines in the current quarter.
As those deposits and associated short-term investments decline, we'd expect that the net interest margin would benefit by about two to three basis points per $1 billion decline, with limited impact on net interest income.
With LIBOR having reached a steady state and our expectation for additional modest downward trends in deposit costs, we expect net interest income to be slightly higher in the final quarter of 2020.
If a significant balance of PPP loans are forgiven, the accelerated recognition of the PPP loan fees would be a further benefit.
We've previously mentioned that the size of the active cash flow hedge position on our floating rate loan portfolio will step up during this quarter.
To be more specific, the $13.4 billion notional amount of active cash flow hedges will step up to $17.4 billion this quarter and then remain at those levels for about one year.
The benefit to net interest income is less substantive as the older swaps with higher fixed received rates mature and forward starting swaps with lower receive rates become active.
Residential mortgage applications continue to be strong with rates as low as they are.
We expect continued solid origination volumes this quarter, but likely with some pressure on margin.
For trust income, we have seen the increase in waivers of money market mutual fund management be somewhat offset by strong debt capital markets activity.
We expect those waivers will reach a steady state shortly and will persist while the zero rate environment endures.
Service charge income was boosted by higher levels of customer activity, notably in payments, with some volumes at or even better than pre-COVID levels.
Further upside from the current levels appears likely -- sorry, unlikely.
We have no change to our expense guidance for the remainder of 2020.
We continue to expect expenses for the second quarter -- or second half of the year to be in line with the first half, excluding the seasonal factors in this year's first quarter.
Any additional loan loss provisioning will be determined by changes to the macroeconomic variables that we see at the end of the year and by the portfolio composition.
Lastly, turning to capital.
We are continuing to build capital levels as limited loan growth and profits in excess of the dividend bolster our capital ratios.
Consistent with the guidance from our regulators, we won't repurchase stock or recommend that the board consider a change to the dividend during the fourth quarter.
Of course, as you're aware, our projections are subject to a number of uncertainties and various assumptions regarding national and regional economic growth, changes in interest rates, political events and other macroeconomic factors, which may differ materially from what actually unfolds in the future.
Now, let's open the call up to questions, before which, Maria will briefly review the instructions.

user
q3 operating earnings per share $2.77.
q3 gaap earnings per share $2.75.
net interest income expressed on a taxable-equivalent basis totaled $947 million in recent quarter, compared with $1.04 billion in q3 of 2019.
m&t bank - provision for credit losses totaled $150 million in q3 of 2020, up from $45 million in year-earlier quarter.
m&t bank - allowance for credit losses totaled $1.76 billion or 1.79% of loans outstanding at sept 30, versus $1.04 billion or 1.16% at sept 30, 2019.

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