Diluted GAAP earnings per common share were $3.41 for the second quarter of 2021, improved from $3.33 in the first quarter of 2021 and $1.74 in the second quarter of 2020.
Net income for the quarter was $458 million, compared with $447 million in the linked quarter and $241 million in the year-ago quarter.
On a GAAP basis, M&T's second-quarter results produced an annualized rate of return on average assets of 1.22% and an annualized rate of return on average common equity of 11.55%.
This compares with rates of 1.22% and 11.57%, 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 $2 million or $0.02 per common share, little changed from the prior quarter.
Also included in the quarter's results were merger-related charges of $4 million related to M&T's proposed acquisition of People's United Financial.
This amounted to $3 million after tax or $0.02 per common share.
Results for this year's first quarter included $10 million of such charges amounting to $8 million after-tax effect or $0.06 per common share.
M&T's net operating income for the second quarter, which excludes intangible amortization and the merger-related expenses, was $463 million, compared with $457 million in the linked quarter and $244 million in last year's second quarter.
Diluted net operating earnings per common share were $3.45 for the recent quarter, up from $3.41 in 2021's first quarter and up from $1.76 in the second quarter of 2020.
Net operating income yielded annualized rates of return on average tangible assets and average tangible common shareholders' equity of 1.27% and 16.68% for the recent quarter.
The comparable returns were 1.29% and 17.05% in the first quarter of 2021.
Taxable equivalent net interest income was $946 million in the second quarter of 2021, compared with $985 million in the linked quarter.
The net interest margin for the past quarter was 2.77%, down 20 basis points from 2.97% in the linked quarter.
Compared with the first quarter of 2021, average earning assets increased by some 2%, reflecting a 13% increase in money market placements, primarily cash on deposit at the Fed and a 6% decline in investable securities.
Average loans outstanding declined just under 1%, compared with the previous quarter.
Looking at the loans by category on an average basis compared with the linked quarter, overall, commercial and industrial loans declined by $668 million or 2.4%.
Dealer floor plan loans declined by $859 million, reflecting the well-documented auto production and inventory issues experienced by the industry.
Due to the late first quarter timing of round two originations and delays in forgiveness of loans over $2 million in size, average PPP loans declined by less than $50 million from the prior quarter.
All other C&I loan categories grew slightly over 1%.
Commercial real estate loans declined by about 0.5%, similar to what we saw in the first quarter.
Residential real estate loans declined by 2%.
Consumer loans were up 3%, consistent with recent quarters, as growth in indirect auto and recreation finance loans has been outpacing declines in home equity lines and loans.
On an end-of-period basis, total loans were down 2%, reflecting the same factors I just mentioned.
PPP loans totaled $4.3 billion at June 30, compared with $6.2 billion at the end of the first quarter.
Average core customer deposits, which exclude deposits received at M&T's Cayman Islands office and CDs over $250,000 increased over 3% or $4 billion, compared with the first quarter.
That figure includes $2.6 billion of noninterest-bearing deposits.
On an end-of-period basis, core deposits were up by just under $700 million.
Noninterest income totaled $514 million in the second quarter, compared with $506 million in the linked quarter.
The recent quarter included $11 million of valuation losses on equity securities, largely on our remaining holdings of GSE preferred stock, while the prior quarter included $12 million of such valuation losses.
Mortgage banking revenues were $133 million in the recent quarter, compared with $139 million in the linked quarter.
Revenues for our residential mortgage business, including both origination and servicing activities, were $98 million in the second quarter, compared with $107 million in the prior quarter.
In addition, residential mortgage loans originated for sale were down about 5% to $1.2 billion, compared with the first quarter.
Commercial mortgage banking revenues were $35 million in the second quarter, compared with $32 million in the linked quarter.
Trust income rose to $163 million in the recent quarter, improved from $156 million in the previous quarter.
This quarter's results included $4 million of seasonal fees arising from tax preparation work we undertake for clients, as well as the result of the growth in assets under management in the wealth and institutional businesses.
Service charges on deposit accounts were $99 million, compared with $93 million in the first quarter.
Operating expenses for the second quarter, which exclude the amortization of intangible assets and merger-related expenses, were $859 million.
The comparable figure was $907 million in the linked quarter.
Salaries and benefits declined by $62 million to $479 million from the prior quarter.
Recall that the first quarter's results included $69 million of seasonal salary and benefit costs.
Our deposit insurance increased by $4 million to $18 million during the quarter, primarily reflecting higher levels of criticized loans, which factor into the FDIC's assessment calculation.
Other costs of operations for the past quarter included an $8 million addition to the valuation allowance on our capitalized mortgage servicing rights.
Recall there was a $9 million reversal from the allowance in 2021's first quarter.
The efficiency ratio, which excludes intangible amortization from the numerator and securities gains or losses from the denominator was 58.4% in the recent quarter, compared with 60.3% in 2021's first quarter, which included the seasonally elevated compensation costs.
The allowance for credit losses declined by $61 million to $1.6 billion at the end of the second quarter.
That reflects a $15 million recapture of previous provisions for credit losses, combined with $46 million of net charge-offs in the quarter.
The allowance for credit losses as a percentage of loans outstanding declined to 1.6% -- 1.62%.
That ratio was little changed from 1.65% of loans at the end of the prior quarter.
Annualized net charge-offs as a percentage of loans were 19 basis points for the second quarter, compared with 31 basis points in the first quarter.
Our forecast assumes the national unemployment rate continues to be at elevated levels, on average, 5.4% through 2021, followed by a gradual improvement, reaching 3.5% by mid-2023.
The forecast assumes that GDP grows at a 7.4% annual rate during 2021, resulting in GDP returning to pre-pandemic levels during 2022.
Nonaccrual loans increased by $285 million to $2.2 billion or 2.31% of loans at the end of June.
This was up from 1.97% at the end of March.
Loans 90 days past due, on which we continue to accrue interest, were $1.1 billion at the end of the recent quarter, and 96% of these loans were guaranteed by government-related entities.
M&T's common equity Tier 1 ratio was an estimated 10.7%, compared with 10.4% at the end of the first quarter, and which reflects lower risk-weighted assets and earnings net of dividends.

Summary:
Diluted GAAP earnings per common share were $3.41 for the second quarter of 2021, improved from $3.33 in the first quarter of 2021 and $1.74 in the second quarter of 2020.
Diluted net operating earnings per common share were $3.45 for the recent quarter, up from $3.41 in 2021's first quarter and up from $1.76 in the second quarter of 2020.
Taxable equivalent net interest income was $946 million in the second quarter of 2021, compared with $985 million in the linked quarter.