M&T Bank (MTB) 10-Q 2000 Q1 Quarterly report

TABLE OF CONTENTS

PART I. FINANCIAL INFORMATION
Item 1. Financial Statements
	CONSOLIDATED BALANCE SHEET (Unaudited)
	CONSOLIDATED STATEMENT OF INCOME (Unaudited)
	CONSOLIDATED STATEMENT OF CASH FLOWS (Unaudited)
	CONSOLIDATED STATEMENT OF CHANGES IN STOCKHOLDERS’ EQUITY (Unaudited)
	CONSOLIDATED SUMMARY OF CHANGES IN ALLOWANCE FOR CREDIT LOSSES (Unaudited)
	NOTES TO FINANCIAL STATEMENTS
Item 2. Management’s Discussion and Analysis of Financial Condition and Results of Operations.
Item 3. Quantitative and Qualitative Disclosures About Market Risk
PART II. OTHER INFORMATION
Item 1. Legal Proceedings.
Item 2. Changes in Securities and Use of Proceeds.
Item 3. Defaults Upon Senior Securities.
Item 4. Submission of Matters to a Vote of Security Holders.
Item 5. Other Information.
Item 6. Exhibits and Reports on Form 8-K.
SIGNATURES
EXHIBIT INDEX

UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549

FORM 10-Q

[x] QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE
SECURITIES EXCHANGE ACT OF 1934

For the quarterly period ended March 31, 2000

or

[ ] TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE
SECURITIES EXCHANGE ACT OF 1934

Commission File Number 1-9861

M&T BANK CORPORATION
(Exact name of registrant as specified in its charter)

New York (State or other jurisdiction of incorporation or organization)	16-0968385 (I.R.S. Employer Identification No.)
One M & T Plaza Buffalo, New York (Address of principal executive offices)	14203 (Zip Code)

(716) 842-5445
(Registrant’s telephone number, including area code)

      Indicate by check mark whether the registrant (1) has filed all reports required to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during the preceding 12 months (or for such shorter period that the registrant was required to file such reports), and (2) has been subject to such filing requirements for the past 90 days. Yes x No

      Number of shares of the registrant’s Common Stock, $5 par value, outstanding as of the close of business on April 21, 2000: 7,683,465 shares.

1

M&T BANK CORPORATION

FORM 10-Q

For the Quarterly Period Ended March 31, 2000

Table of Contents of Information Required in Report			Page
Part I. FINANCIAL INFORMATION
	Item 1.	Financial Statements.
		CONSOLIDATED BALANCE SHEET - March 31, 2000 and December 31, 1999		3
		CONSOLIDATED STATEMENT OF INCOME - Three months ended March 31, 2000 and 1999		4
		CONSOLIDATED STATEMENT OF CASH FLOWS - Three months ended March 31, 2000 and 1999		5
		CONSOLIDATED STATEMENT OF CHANGES IN STOCKHOLDERS’ EQUITY - Three months ended March 31, 2000 and 1999		6
		CONSOLIDATED SUMMARY OF CHANGES IN ALLOWANCE FOR CREDIT LOSSES - Three months ended March 31, 2000 and 1999		6
		NOTES TO FINANCIAL STATEMENTS		7
	Item 2.	Management’s Discussion and Analysis of Financial Condition and Results of Operations.		12
	Item 3.	Quantitative and Qualitative Disclosures About Market Risk.		28
Part II. OTHER INFORMATION
	Item 1.	Legal Proceedings.		28
	Item 2.	Changes in Securities and Use of Proceeds.		28
	Item 3.	Defaults Upon Senior Securities.		28
	Item 4.	Submission of Matters to a Vote of Security Holders.		28
	Item 5.	Other Information.		28
	Item 6.	Exhibits and Reports on Form 8-K.		29
SIGNATURES				30
EXHIBIT INDEX				31

2

PART I. FINANCIAL INFORMATION

Item 1. Financial Statements

M&T BANK CORPORATION AND SUBSIDIARIES

CONSOLIDATED BALANCE SHEET (Unaudited)

				March 31,			December 31,
Dollars in thousands, except per share					2000			1999
Assets	Cash and due from banks			$	476,969			592,755
	Money-market assets
		Interest-bearing deposits at banks			1,359			1,092
		Federal funds sold and agreements to resell securities			591,181			643,555
		Trading account			646,417			641,114
			Total money-market assets		1,238,957			1,285,761
	Investment securities
		Available for sale (cost: $1,893,775 at March 31, 2000;
			$1,724,713 at December 31, 1999)		1,853,362			1,680,760
		Held to maturity (market value: $98,494 at March 31, 2000;
			$92,909 at December 31, 1999)		100,424			94,571
		Other (market value: $125,163 at March 31, 2000;
			$125,191 at December 31, 1999)		125,163			125,191
			Total investment securities		2,078,949			1,900,522
	Loans and leases				17,860,069			17,572,861
		Unearned discount			(157,406	)		(166,090	)
		Allowance for credit losses			(318,595	)		(316,165	)
			Loans and leases, net		17,384,068			17,090,606
	Premises and equipment				169,194			173,815
	Goodwill and core deposit intangible				638,245			648,040
	Accrued interest and other assets				775,172			717,616
			Total assets	$	22,761,554			22,409,115
Liabilities	Noninterest-bearing deposits			$	2,140,782			2,260,432
	NOW accounts				563,833			583,471
	Savings deposits				5,173,993			5,198,681
	Time deposits				7,084,930			7,088,345
	Deposits at foreign office				187,900			242,691
			Total deposits		15,151,438			15,373,620
	Federal funds purchased and agreements
		to repurchase securities			2,408,364			1,788,858
	Other short-term borrowings				660,183			765,301
	Accrued interest and other liabilities				934,857			909,157
	Long-term borrowings				1,774,456			1,775,133
			Total liabilities		20,929,298			20,612,069
Stockholders’ equity	Preferred stock, $1 par, 1,000,000 shares authorized,
		none outstanding			—			—
	Common stock, $5 par, 15,000,000 shares authorized,
		8,101,539 shares issued			40,508			40,508
	Common stock issuable, 8,808 shares at March 31, 2000;
		8,397 shares at December 31, 1999			4,070			3,937
	Additional paid-in capital				446,918			458,729
	Retained earnings				1,560,158			1,501,530
	Accumulated other comprehensive income, net				(23,928	)		(26,047	)
	Treasury stock - common, at cost - 420,254 shares at
		March 31, 2000; 377,738 shares at December 31, 1999			(195,470	)		(181,611	)
			Total stockholders' equity		1,832,256			1,797,046
			Total liabilities and stockholders' equity	$	22,761,554			22,409,115

3

M&T BANK CORPORATION AND SUBSIDIARIES

CONSOLIDATED STATEMENT OF INCOME (Unaudited)

				Three months ended March 31
In thousands, except per share				2000		1999
Interest income	Loans and leases, including fees			$	358,802		314,973
	Money-market assets
		Deposits at banks			10		7
		Federal funds sold and agreements to resell securities			9,588		3,823
		Trading account			111		1,245
	Investment securities
		Fully taxable			27,801		34,374
		Exempt from federal taxes			2,546		2,123
			Total interest income		398,858		356,545
Interest expense	NOW accounts				1,308		1,280
	Savings deposits				31,723		28,810
	Time deposits				98,248		90,892
	Deposits at foreign office				3,046		3,429
	Short-term borrowings				39,759		25,735
	Long-term borrowings				29,647		25,092
			Total interest expense		203,731		175,238
	Net interest income				195,127		181,307
	Provision for credit losses				9,000		8,500
	Net interest income after provision for credit losses				186,127		172,807
Other income	Mortgage banking revenues				14,559		21,474
	Service charges on deposit accounts				20,460		15,868
	Trust income				9,980		10,326
	Brokerage services income				9,408		6,176
	Trading account and foreign exchange gains				294		1,169
	Gain on sales of bank investment securities				—		220
	Other revenues from operations				17,297		17,483
			Total other income		71,998		72,716
Other expense	Salaries and employee benefits				76,701		68,437
	Equipment and net occupancy				18,119		18,024
	Printing, postage and supplies				4,494		4,110
	Amortization of goodwill and core deposit intangible				14,407		10,852
	Other costs of operations				36,876		38,043
			Total other expense		150,597		139,466
	Income before taxes				107,528		106,057
	Income taxes				39,293		39,151
	Net income			$	68,235		66,906
	Net income per common share
		Basic		$	8.85		8.65
		Diluted			8.61		8.34
	Cash dividends per common share				1.25		1.00
	Average common shares outstanding
		Basic			7,711		7,731
		Diluted			7,922		8,023

4

M&T BANK CORPORATION AND SUBSIDIARIES

CONSOLIDATED STATEMENT OF CASH FLOWS (Unaudited)

		Three months ended March 31
In thousands		2000			1999
Cash flows from	Net income	$	68,235			66,906
operating activities	Adjustments to reconcile net income to net cash provided by operating activities
	Provision for credit losses		9,000			8,500
	Depreciation and amortization of premises     and equipment		6,893			7,028
	Amortization of capitalized servicing rights		4,929			4,923
	Amortization of goodwill and core deposit     intangible		14,407			10,852
	Provision for deferred income taxes		(1,830	)		(721	)
	Asset write-downs		543			519
	Net gain on sales of assets		(172	)		(123	)
	Net change in accrued interest receivable,     payable		(12,542	)		(4,079	)
	Net change in other accrued income and expense		28,211			(75,041	)
	Net change in loans held for sale		58,562			121,134
	Net change in trading account assets and     liabilities		(5,928	)		40,175
	Net cash provided by operating activities		170,308			180,073
Cash flows from	Proceeds from sales of investment securities
investing activities	Available for sale		—			24,789
	Other		20,026			1,250
	Proceeds from maturities of investment securities
	Available for sale		72,059			725,457
	Held to maturity		5,375			7,360
	Purchases of investment securities
	Available for sale		(240,647	)		(62,819	)
	Held to maturity		(11,300	)		(4,990	)
	Other		(19,998	)		—
	Net (increase) decrease in interest-bearing deposits at banks		(267	)		39
	Additions to capitalized servicing rights		(8,286	)		(4,707	)
	Net increase in loans and leases		(362,946	)		(151,217	)
	Capital expenditures, net		(2,018	)		(3,383	)
	Acquisitions, net of cash acquired		(4,303	)		—
	Purchases of bank owned life insurance		(35,000	)		—
	Other, net		905			(2,829	)
	Net cash provided (used) by investing activities		(586,400	)		528,950
Cash flows from	Net decrease in deposits		(222,025	)		(260,947	)
financing activities	Net increase (decrease) in short-term borrowings		514,387			(510,397	)
	Proceeds from long-term borrowings		—			153,152
	Payments on long-term borrowings		(621	)		(3,737	)
	Purchases of treasury stock		(32,364	)		(789	)
	Dividends paid — common		(9,596	)		(7,725	)
	Other, net		(1,849	)		4,821
	Net cash provided (used) by financing activities		247,932			(625,622	)
	Net increase (decrease) in cash and cash equivalents	$	(168,160	)		83,401
	Cash and cash equivalents at beginning of period		1,236,310			722,858
	Cash and cash equivalents at end of period	$	1,068,150			806,259
Supplemental	Interest received during the period	$	382,872			354,885
disclosure of cash	Interest paid during the period		199,942			177,236
flow information	Income taxes paid during the period		216			101,663
Supplemental schedule of
noncash investing and	Real estate acquired in settlement of loans	$	3,289			2,647
financing activities

5

M&T BANK CORPORATION AND SUBSIDIARIES

CONSOLIDATED STATEMENT OF CHANGES IN STOCKHOLDERS’ EQUITY (Unaudited)

																Accumulated
								Common		Additional						other
			Preferred			Common		stock		paid-in			Retained			comprehensive			Treasury
In thousands, except per share			stock			stock		issuable		capital			earnings			income, net			stock			Total
1999
Balance — January 1, 1999				$	—		40,508		3,752		480,014			1,271,071			2,869			(195,848	)	$	1,602,366
Comprehensive income:
	Net income				—		—		—		—			66,906			—			—			66,906
	Other comprehensive income, net of tax:
		Unrealized losses on investment securities, net of reclassification adjustment			—		—		—		—			—			(2,249	)		—			(2,249	)
																							64,657
Purchases of treasury stock					—		—		—		—			—			—			(789	)		(789	)
Stock-based compensation plans:
	Exercise of stock options				—		—		—		(9,757	)		—			—			17,886			8,129
	Directors’ stock plan				—		—		—		4			—			—			61			65
	Deferred bonus plan, net, including dividend equivalents				—		—		298		(11	)		(8	)		—			264			543
Common stock cash dividends -
	$1.00 per share				—		—		—		—			(7,725	)		—			—			(7,725	)
Balance — March 31,1999				$	—		40,508		4,050		470,250			1,330,244			620			(178,426	)	$	1,667,246
2000
Balance — January 1, 2000				$	—		40,508		3,937		458,729			1,501,530			(26,047	)		(181,611	)	$	1,797,046
Comprehensive income:
	Net income				—		—		—		—			68,235			—			—			68,235
	Other comprehensive income, net of tax:
		Unrealized gains on investment securities, net of reclassification adjustment			—		—		—		—			—			2,119			—			2,119
																							70,354
Purchases of treasury stock					—		—		—		—			—			—			(32,364	)		(32,364	)
Stock-based compensation plans:
	Exercise of stock options				—		—		—		(11,800	)		—			—			18,186			6,386
	Directors’ stock plan				—		—		—		(11	)		—			—			76			65
	Deferred bonus plan, net, including dividend equivalents				—		—		133		—			(11	)		—			243			365
Common stock cash dividends -
	$1.25 per share				—		—		—		—			(9,596	)		—			—			(9,596	)
Balance — March 31, 2000				$	—		40,508		4,070		446,918			1,560,158			(23,928	)		(195,470	)	$	1,832,256

CONSOLIDATED SUMMARY OF CHANGES IN ALLOWANCE FOR CREDIT LOSSES (Unaudited)

				Three months ended March 31
In thousands				2000			1999
Beginning balance				$	316,165			306,347
Provision for credit losses					9,000			8,500
	Net charge-offs
		Charge-offs			(10,162	)		(12,956	)
		Recoveries			3,592			4,848
			Total net charge-offs		(6,570	)		(8,108	)
	Ending balance			$	318,595			306,739

6

NOTES TO FINANCIAL STATEMENTS

1. Significant accounting policies

      The consolidated financial statements of M&T Bank Corporation (“M&T”) and subsidiaries (“the Company”) were compiled in accordance with the accounting policies set forth in note 1 of Notes to Financial Statements included in the Company’s 1999 Annual Report, except as described below. In the opinion of management, all adjustments necessary for a fair presentation have been made and were all of a normal recurring nature. Certain reclassifications have been made to the 1999 financial statements to conform with the current year presentation.

2. Earnings per share

      The computations of basic earnings per share follow:

		Three months ended
		March 31
		2000		1999
		(in thousands, except per share)
Income available to common stockholders:
	Net income	$	68,235		66,906
Weighted-average shares outstanding (including common stock issuable)			7,711		7,731
Basic earnings per share		$	8.85		8.65

      The computations of diluted earnings per share follow:

	Three months ended
	March 31
	2000		1999
	(in thousands, except per share)
Income available to common stockholders	$	68,235		66,906
Weighted-average shares outstanding		7,711		7,731
Plus: incremental shares from assumed conversion of stock options		211		292
Adjusted weighted-average shares outstanding		7,922		8,023
Diluted earnings per share	$	8.61		8.34

7

NOTES TO FINANCIAL STATEMENTS, CONTINUED

3. Comprehensive income

      The following table displays the components of other comprehensive income:

		Three months ended March 31, 2000
		Before-tax		Income
		amount		taxes		Net
Unrealized gains on investment securities:
	Unrealized holding gains during period	$	3,540		1,421		2,119
	Reclassification adjustment for gains realized in net income		—		—		—
	Net unrealized gains	$	3,540		1,421		2,119

		Three months ended March 31, 1999
		Before-tax			Income
		amount			taxes			Net
Unrealized losses on investment securities:
	Unrealized holding losses during period	$	(3,573	)		(1,454	)		(2,119	)
	Less: reclassification adjustment for gains realized in net income		220			90			130
	Net unrealized losses	$	(3,793	)		(1,544	)		(2,249	)

4. Borrowings

      In January 1997, M&T Capital Trust I (“Trust I”), issued $150 million of 8.234% preferred capital securities. In June 1997, M&T Capital Trust II (“Trust II”), issued $100 million of 8.277% preferred capital securities. In February 1997, M&T Capital Trust III (“Trust III” and, together with Trust I and Trust II, the “Trusts”) issued $60 million of 9.25% preferred capital securities. Including the unamortized portion of a purchase accounting adjustment to reflect estimated fair value at the April 1, 1998 acquisition of the common securities of Trust III, the preferred capital securities of Trust III had a financial statement carrying value of approximately $69 million at March 31, 2000 and December 31, 1999.

      Other than the following payment terms (and the redemption terms described below), the preferred capital securities issued by the Trusts (“Capital Securities”) are identical in all material respects:

	Distribution		Distribution
Trust	Rate		Dates
Trust I		8.234%	February 1 and August 1
Trust II		8.277%	June 1 and December 1
Trust III		9.25%	February 1 and August 1

      The common securities of Trust I and Trust II are wholly owned by M&T and the common securities of Trust III are wholly owned by Olympia Financial Corp. (“Olympia”), a wholly owned subsidiary of M&T. The common securities of each trust (“Common Securities”) are the only class of each Trust’s securities possessing general voting powers. The Capital Securities represent preferred undivided interests in the assets of the corresponding Trust and are classified in the Company’s consolidated balance sheet as long-term borrowings, with

8

NOTES TO FINANCIAL STATEMENTS, CONTINUED

4. Borrowings, continued

accumulated distributions on such securities included in interest expense. Under the Federal Reserve Board’s current risk-based capital guidelines, the Capital Securities are includable in the Company’s Tier 1 capital.

      The proceeds from the issuances of the Capital Securities and Common Securities were used by the Trusts to purchase the following amounts of junior subordinated deferrable interest debentures (“Junior Subordinated Debentures”) of M&T in the case of Trust I and Trust II and Olympia in the case of Trust III:

	Capital	Common	Junior Subordinated
Trust	Securities	Securities	Debentures
Trust I	$150 million	$4.64 million	$154.64 million aggregate liquidation amount of 8.234% Junior Subordinated Debentures due February 1, 2027.
Trust II	$100 million	$3.09 million	$103.09 million aggregate liquidation amount of 8.277% Junior Subordinated Debentures due June 1, 2027.
Trust III	$60 million	$1.856 million	$61.856 million aggregate liquidation amount of 9.25% Junior Subordinated Debentures due February 1, 2027.

      The Junior Subordinated Debentures represent the sole assets of each Trust and payments under the Junior Subordinated Debentures are the sole source of cash flow for each Trust.

      Holders of the Capital Securities receive preferential cumulative cash distributions semi-annually on each distribution date at the stated distribution rate unless M&T, in the case of Trust I and Trust II, or Olympia, in the case of Trust III, exercise the right to extend the payment of interest on the Junior Subordinated Debentures for up to ten semi-annual periods, in which case payment of distributions on the respective Capital Securities will be deferred for a comparable period. During an extended interest period, M&T and/or Olympia may not pay dividends or distributions on, or repurchase, redeem or acquire any shares of the respective company’s capital stock. The agreements governing the Capital Securities, in the aggregate, provide a full, irrevocable and unconditional guarantee by M&T in the case of Trust I and Trust II and Olympia in the case of Trust III of the payment of distributions on, the redemption of, and any liquidation distribution with respect to the Capital Securities. The obligations under such guarantee and the Capital Securities are subordinate and junior in right of payment to all senior indebtedness of M&T and Olympia.

      The Capital Securities are mandatorily redeemable in whole, but not in part, upon repayment at the stated maturity dates of the Junior Subordinated Debentures or the earlier redemption of the Junior Subordinated Debentures in whole upon the occurrence of one or more events (“Events”) set forth in the indentures relating to the Capital Securities, and in whole or in part at any time after the stated optional redemption dates (February 1, 2007 in the case of Trust I and Trust III, and June 1, 2007 in the case of Trust II) contemporaneously with the Company’s optional redemption of the related Junior Subordinated Debentures in whole or in part. The Junior Subordinated Debentures are redeemable prior to their stated maturity dates at M&T’s option in the case of Trust I and Trust II and Olympia’s option in the case of Trust III (i) on or after the stated optional redemption dates, in whole at any time or in part from time to time, or (ii) in whole, but not in part, at any time within 90 days following the occurrence and during the continuation of one or more of the Events, in each case subject to possible regulatory approval. The redemption price of the Capital Securities upon their early redemption will be expressed as a percentage of the liquidation amount plus

9

NOTES TO FINANCIAL STATEMENTS, CONTINUED

4. Borrowings, continued

accumulated but unpaid distributions. In the case of Trust I, such percentage adjusts annually and ranges from 104.117% at February 1, 2007 to 100.412% for the annual period ending January 31, 2017, after which the percentage is 100%, subject to a make-whole amount if the early redemption occurs prior to February 1, 2007. In the case of Trust II, such percentage adjusts annually and ranges from 104.139% at June 1, 2007 to 100.414% for the annual period ending May 31, 2017, after which the percentage is 100%, subject to a make-whole amount if the early redemption occurs prior to June 1, 2007. In the case of Trust III, such percentage adjusts annually and ranges from 104.625% at February 1, 2007 to 100.463% for the annual period ending January 31, 2017, after which the percentage is 100%, subject to a make-whole amount if the early redemption occurs prior to February 1, 2007.

5. Segment information

      Reportable segments have been determined based upon the Company’s internal profitability reporting system, which is organized by strategic business units. Certain strategic business units have been combined for segment information reporting purposes where the nature of the products and services, the type of customer and the distribution of those products and services are similar. The reportable segments are Commercial Banking, Commercial Real Estate, Discretionary Portfolio, Residential Mortgage Banking and Retail Banking.

      The financial information of the Company’s segments was compiled utilizing the accounting policies described in note 19 to the Company’s consolidated financial statements as of and for the year ended December 31, 1999. The management accounting policies and processes utilized in compiling segment financial information are highly subjective and, unlike financial accounting, are not based on authoritative guidance similar to generally accepted accounting principles. As a result, the financial information of the reported segments is not necessarily comparable with similar information reported by other financial institutions. Information about the Company’s segments is presented in the following table:

	Three months ended March 31
	2000								1999
			Inter-			Net					Inter-			Net
	Total		segment			income			Total		segment			income
	revenues(a)		revenues			(loss)			revenues(a)		revenues			(loss)
	(in thousands)
Commercial Banking	$	51,031		87			21,494			45,454		124			20,736
Commercial Real Estate		33,265		201			17,244			28,641		268			14,394
Discretionary Portfolio		16,179		(94	)		8,389			16,703		—			8,844
Residential Mortgage Banking		24,746		5,215			1,855			37,568		9,569			6,980
Retail Banking		127,981		2,434			33,104			105,412		1,941			24,544
All Other		13,923		(7,843	)		(13,851	)		20,245		(11,902	)		(8,592	)
Total	$	267,125		—			68,235			254,023		—			66,906

(a) Total revenues are comprised of net interest income and other income. Net interest income is the difference between taxable-equivalent interest earned on assets and interest paid on liabilities owned by a segment and a funding charge (credit) based on the Company’s internal funds transfer pricing methodology. Segments are charged a cost to fund any assets (e.g., loans)

10

NOTES TO FINANCIAL STATEMENTS, CONTINUED

5. Segment information, continued

and are paid a funding credit for any funds provided (e.g., deposits). The taxable-equivalent adjustment aggregated $2,206,000 and $1,825,000 for the three-month periods ended March 31, 2000 and 1999, respectively, and is eliminated in “All Other” total revenues. Intersegment revenues are included in total revenues of the reportable segments. The elimination of intersegment revenues is included in the determination of “All Other” total revenues.

	Average total assets
	Three months ended				Year ended
	March 31,				December 31,
	2000		1999		1999
			(in millions)
Commercial Banking	$	4,784		4,118		4,277
Commercial Real Estate		4,585		3,862		4,118
Discretionary Portfolio		6,944		6,823		6,827
Residential Mortgage Banking		528		659		635
Retail Banking		4,503		4,023		4,244
All Other		1,094		813		956
Total	$	22,438		20,298		21,057

11

Item 2. Management’s Discussion and Analysis of Financial Condition and Results of Operations.

Overview

      Net income of M&T Bank Corporation (“M&T”) was $68.2 million or $8.61 of diluted earnings per common share in the first quarter of 2000, increases of 2% and 3%, respectively, from the year-earlier quarter when net income was $66.9 million or $8.34 of diluted earnings per common share. Net income was $66.1 million or $8.20 of diluted earnings per common share in the fourth quarter of 1999. Basic earnings per common share increased 2% to $8.85 in the initial quarter of 2000 from $8.65 in the first quarter of 1999 and 4% from $8.48 earned in 1999’s fourth quarter. The annualized rate of return on average total assets for M&T and its consolidated subsidiaries (“the Company”) in the first quarter of 2000 was 1.22%, compared with 1.34% in the corresponding quarter of 1999 and 1.18% in 1999’s final quarter. The annualized return on average common stockholders’ equity was 15.14% in the recent quarter, compared with 16.56% and 14.58% in the first and fourth quarters of 1999, respectively.

      On March 1, 2000, M&T Bank completed the acquisition of Matthews, Bartlett & Dedecker, Inc. (“MBD”), an insurance agency located in Buffalo, New York. MBD provides insurance services principally to the commercial market and operates as a subsidiary of Manufacturers and Traders Trust Company (“M&T Bank”), the principal bank subsidiary of M&T. The acquisition is not expected to have a material impact on the Company’s financial position or results of operations.

      On March 31, 2000, The Chase Manhattan Bank (“Chase”) transferred trust and fiduciary accounts with assets of approximately $147 million to M&T Bank completing a transaction that began in September 1999 with the acquisition from Chase of 29 branch offices in Upstate New York and investment management and custody accounts. At the time of closing in September 1999, the branches had approximately $634 million of deposits and approximately $44 million of retail installment and commercial loans, and the investment management and custody accounts had assets of approximately $286 million.

      On June 1, 1999, M&T completed the acquisition of FNB Rochester Corp. (“FNB”), a bank holding company headquartered in Rochester, New York. Immediately after the acquisition, FNB’s banking subsidiary, First National Bank of Rochester, which had 17 banking offices in western and central New York State, was merged with and into M&T Bank. The acquisition was accounted for using the purchase method of accounting, and, accordingly, the operations of FNB have been included in the financial results of the Company since the acquisition date. FNB’s stockholders received $76 million in cash and 122,516 shares of M&T common stock in exchange for FNB shares outstanding at the time of acquisition. Assets acquired totaled approximately $676 million and included loans and leases of $393 million and investment securities of $148 million. Liabilities assumed on June 1, 1999 were approximately $541 million and included $511 million of deposits.

Cash Operating Results

      As a result of using the purchase method of accounting for acquisitions, M&T had recorded as assets goodwill and core deposit intangible totaling $638 million at March 31, 2000, $648 million at December 31, 1999 and $534 million at March 31, 1999. Since the amortization of goodwill and core deposit intangible does not result in a cash expense, M&T believes that supplemental reporting of its operating results on a “cash” (or “tangible”) basis (which excludes the after-tax effect of amortization of goodwill and core deposit intangible and the related asset balances) represents a relevant measure of financial performance. The supplemental cash basis data presented herein do not exclude the effect of other non-cash operating expenses such as depreciation, provision for credit losses, or deferred income taxes associated with the results of operations.

12

      Cash net income rose 5% to $79.8 million in the first quarter of 2000 from $76.3 million in the year-earlier quarter. Diluted cash earnings per share for the recent quarter were $10.08, up 6% from $9.51 in the first quarter of 1999. Cash net income and diluted cash earnings per share were $78.4 million and $9.73, respectively, in the final quarter of 1999.

      Cash return on average tangible assets was an annualized 1.47% in the initial 2000 quarter, compared with 1.57% and 1.45% in the first and fourth quarters of 1999, respectively. Cash return on average tangible common equity was an annualized 26.95% in the first quarter of 2000, compared with 27.66% in the year-earlier quarter and 26.67% in the fourth quarter of 1999.

Taxable-equivalent Net Interest Income

      Growth in average loans and leases was the most significant factor contributing to an 8% improvement in taxable-equivalent net interest income to $197.3 million in the first quarter of 2000 from $183.1 million in the corresponding 1999 quarter. Average loans and leases increased $1.7 billion, or 11%, to $17.5 billion in the recent quarter from $15.8 billion in the year-earlier quarter. Despite a $354 million, or 2%, increase in the average balance of loans outstanding, taxable-equivalent net interest income in the first 2000 quarter decreased slightly from the fourth quarter of 1999 total of $199.0 million. A narrowing of the Company’s net interest spread, or the difference between the taxable-equivalent yield on earning assets and the rate paid on interest-bearing liabilities, contributed to the decline. The accompanying table summarizes quarterly changes in the major components of the loan and lease portfolio.

AVERAGE LOANS AND LEASES
(net of unearned discount)
Dollars in millions

						Percent increase
						(decrease) from
				1st Qtr.		1st Qtr.			4th Qtr.
				2000		1999			1999
Commercial, financial, etc.				$	3,741		18	%		5	%
Real estate — commercial					6,592		19			5
Real estate — consumer					4,062		(2	)		(3	)
Consumer
	Automobile				1,380		(5	)		(4	)
	Home equity				900		22			4
	Other				826		19			3
		Total consumer			3,106		7			—
			Total	$	17,501		11	%		2	%

      Average investment securities were $2.0 billion in the first quarter of 2000 and last quarter of 1999, compared with $2.5 billion in the first quarter of 1999. The investment securities portfolio is largely comprised of residential mortgage-backed securities and collateralized mortgage obligations, commercial real estate mortgage-backed securities, and shorter-term U.S. Treasury notes. The Company has also invested in debt securities issued by municipalities and debt and preferred equity securities issued by government sponsored agencies and certain financial institutions. When purchasing investment securities, the Company considers its overall interest-rate risk profile as well as the adequacy of expected returns relative to prepayment and other risks assumed. The Company occasionally sells investment securities as a result of changes in interest rates and spreads, actual or anticipated prepayments, or credit risk associated with a particular security.

      Money-market assets, which are comprised of interest-earning deposits at banks, interest-earning trading account assets, Federal funds sold and agreements to resell securities, averaged $669 million in the first quarter of 2000, compared with $406 million and $686 million in the first and fourth

13

quarters of 1999, respectively. In general, the size of the investment securities and money-market assets portfolios are influenced by such factors as demand for loans, which generally yield more than investment securities and money-market assets, ongoing repayments, the levels of deposits, and management of balance sheet size and resulting capital ratios.

      As a result of the changes described herein, average earning assets totaled $20.1 billion in the first quarter of 2000, up 8% from $18.7 billion in the year-earlier quarter and up 2% from $19.8 billion in the fourth quarter of 1999.

      Core deposits represent the most significant source of funding to the Company and generally carry lower interest rates than wholesale funds of comparable maturities. Core deposits consist of noninterest-bearing deposits, interest-bearing transaction accounts, savings deposits and nonbrokered domestic time deposits under $100,000. The Company’s branch network is the principal source of core deposits. Certificates of deposit under $100,000 generated on a nationwide basis by M&T Bank, National Association (“M&T Bank, N.A.”), a wholly owned bank subsidiary of M&T, are also included in core deposits. Average core deposits increased to $12.5 billion in the initial quarter of 2000, from $11.4 billion in the first quarter of 1999. Core deposits obtained in the 1999 Chase branch and FNB acquisitions were $618 million and $419 million, respectively. Core deposits also averaged $12.5 billion in the final quarter of 1999. The accompanying table provides an analysis of quarterly changes in the components of average core deposits.

AVERAGE CORE DEPOSITS
Dollars in millions

				Percent increase
				(decrease) from
		1st Qtr.		1st Qtr.			4th Qtr.
		2000		1999			1999
NOW accounts		$	432		8	%		4	%
Savings deposits			5,331		9			(3	)
Time deposits less than $100,000			4,615		7			3
Noninterest-bearing deposits			2,113		13			—
	Total	$	12,491		9	%		—	%

      Supplementing core deposits, the Company obtains funding through domestic time deposits of $100,000 or more, deposits originated through the Company’s offshore branch office, and brokered certificates of deposit. Brokered deposits have been used as an alternative to short-term borrowings to lengthen the average maturity of interest-bearing liabilities. Brokered deposits averaged $864 million during the first quarter of 2000, compared with $1.3 billion and $1.1 billion in the first and fourth quarters of 1999, respectively. At March 31, 2000, brokered deposits totaled $838 million and had a weighted average remaining term to maturity of 1.3 years. However, certain of the deposits have provisions that allow early redemption. In connection with the Company’s management of interest rate risk, interest rate swaps have been entered into under which the Company receives a fixed rate of interest and pays a variable rate and that have notional amounts and terms similar to the amounts and terms of many of the brokered deposits. Additional amounts of brokered deposits may be solicited in the future depending on market conditions and the cost of funds available from alternative sources at the time.

      The Company also uses borrowings from banks, securities dealers, the Federal Home Loan Bank of New York and the Federal Home Loan Bank of Pittsburgh (together, the “FHLB”), and others as sources of funding. Short- term borrowings averaged $2.8 billion in the recent quarter, compared with $2.1 billion in the comparable quarter of 1999 and $2.2 billion in the final 1999 quarter. Long-term borrowings averaged $1.8 billion in the first quarter of 2000 and in the fourth quarter of 1999 and $1.6 billion in the first quarter of 1999. Included in average long-term borrowings during the two most recent quarters were $1.3 billion of FHLB borrowings, compared with

14

$1.1 billion in the first quarter of 1999. Long-term borrowings also include $319 million of trust preferred securities and $175 million of subordinated capital notes. Further information regarding the trust preferred securities is provided in note 4 of Notes to Financial Statements.

      Net interest income is impacted by changes in the composition of the Company’s earning assets and interest-bearing liabilities, as described herein, as well as changes in interest rates and spreads. A general rise in interest rates following actions taken by the Federal Reserve since the third quarter of 1999 have contributed to increases in the Company’s yield on earning assets and the rate paid on interest-bearing liabilities. The yield on earning assets was 8.01% during the first quarter of 2000, up 22 basis points (hundredths of one percent) from 7.79% in the first quarter of 1999 and up 16 basis points from 7.85% in the final quarter of 1999. Similarly, the rate paid on interest-bearing liabilities at 4.64% in the recent quarter increased 31 basis points from 4.33% in the first quarter of 1999 and increased 21 basis points from 4.43% in 1999’s final quarter. As a result of the changes noted above, net interest spread was 3.37% in the first quarter of 2000, compared with 3.46% in the comparable 1999 quarter and 3.42% in the fourth quarter of 1999.

      Net interest-free funds consist largely of noninterest-bearing demand deposits and stockholders’ equity, partially offset by goodwill and core deposit intangible, bank owned life insurance and other non-earning assets. Net interest free funds contributed .57% to net interest margin, or taxable equivalent net interest income expressed as an annualized percentage of average earning assets, in the initial quarter of 2000 and the final 1999 quarter, compared with .52% in the first quarter of 1999. The higher contribution to net interest margin of net interest-free funds in the first quarter of 2000 compared with the first quarter of 1999 was due largely to the 31 basis point increase in the average rate paid on interest-bearing liabilities that were used to impute the value of interest-free funds. Average interest-free funds totaled $2.5 billion in the first quarter of 2000, little changed from the fourth quarter of 1999, but up from $2.2 billion in the first 1999 quarter. Goodwill and core deposit intangible averaged $642 million and $540 million during the first quarter of 2000 and 1999, respectively, and $655 million during the final 1999 quarter. The cash surrender value of bank owned life insurance averaged $414 million and $372 million in the first quarter of 2000 and 1999, respectively, and $387 million in the fourth quarter of 1999. Tax-exempt income earned from increases in the cash surrender value of bank owned life insurance is not included in interest income, but rather is recorded in “other revenues from operations.”

      Due largely to the changes described above, the Company’s net interest margin was 3.94% in 2000’s initial quarter, down from 3.98% in the comparable quarter of 1999 and 3.99% in the fourth quarter of 1999.

      The Company utilizes interest rate swap agreements as part of the management of interest rate risk to modify the repricing characteristics of certain portions of its portfolios of earning assets and interest-bearing liabilities. Revenue and expense arising from these agreements are reflected in either the yields earned on assets or, as appropriate, the rates paid on interest-bearing liabilities. Excluding forward-starting swaps, the notional amount of interest rate swap agreements entered into for interest rate risk management purposes as of March 31, 2000 and 1999 was $1.2 billion and $2.3 billion, respectively, and $1.7 billion as of December 31, 1999. In general, under the terms of these swaps, the Company receives payments based on the outstanding notional amount of the swaps at fixed rates of interest and makes payments at variable rates. However, under the terms of $99 million of swaps, the Company pays a fixed rate of interest and receives a variable rate. At March 31, 2000, the weighted average rates to be received and paid under interest rate swap agreements currently in effect were 6.33% and 6.07%, respectively. To help manage exposure resulting from changing interest rates in future periods, as of March 31, 2000, the Company had also entered into forward-starting swaps with an aggregate notional amount of $373 million in which the Company will pay a fixed rate of interest and receive a variable rate. Such forward-starting swaps had no effect on the Company’s net

15

interest income through March 31, 2000. The average notional amounts of interest rate swaps and the related effect on net interest income and margin are presented in the accompanying table.

INTEREST RATE SWAPS
Dollars in thousands

		Three months ended March 31
		2000						1999
		Amount			Rate*			Amount			Rate*
Increase (decrease) in:
	Interest income	$	636			.01	%	$	3,993			.09	%
	Interest expense		(395	)		(.01	)		(4,346	)		(.11	)
	Net interest income/margin	$	1,031			.02	%	$	8,339			.18	%
Average notional amount**		$	1,389,291					$	2,338,562

*	Computed as an annualized percentage of average earning assets or interest-bearing liabilities.
**	Excludes forward-starting interest rate swaps.

      The Company estimates that as of March 31, 2000 it would have received approximately $20 million if all interest rate swap agreements entered into for interest rate risk management purposes had been terminated, compared with $25 million at March 31, 1999 and December 31, 1999. This estimated fair value of the interest rate swap portfolio results from the effects of changing interest rates and should be considered in the context of the entire balance sheet and the Company’s overall interest rate risk profile. With the exception of swaps having a notional amount of $50 million that were entered into for the purpose of modifying repricing characteristics of fixed-rate, available for sale investment securities, changes in the estimated fair value of interest rate swaps entered into for interest rate risk management purposes are not recorded in the consolidated financial statements.

      As a financial intermediary, the Company is exposed to various risks, including liquidity and market risk. Liquidity refers to the Company’s ability to ensure that sufficient cash flow and liquid assets are available to satisfy demands for loans and deposit withdrawals, to fund operating costs, and to be used for other corporate purposes. Liquidity risk arises whenever the maturities of financial instruments included in assets and liabilities differ. Deposits and borrowings, maturities of money-market assets and investment securities, repayments of loans and investment securities, and cash generated from operations, such as fees collected for services, provide the Company with sources of liquidity. M&T’s banking subsidiaries have access to additional funding sources through membership in the FHLB, as well as other available borrowing facilities. M&T’s primary source of funds to pay for operating expenses, stockholder dividends and treasury stock repurchases has historically been the receipt of dividends from its banking subsidiaries, which are subject to various regulatory limitations. These historic sources of cash flows were augmented in 1997 by the proceeds from issuance of trust preferred securities. M&T also maintains a $30 million line of credit with an unaffiliated commercial bank, of which borrowings outstanding at March 31, 2000 totaled $27 million.

      Management closely monitors the Company’s liquidity position for compliance with internal policies and believes that available sources of liquidity are adequate to meet funding needs anticipated in the normal course of business. Furthermore, management does not anticipate engaging in any activities, either currently or in the long-term, which would cause a significant strain on liquidity at either M&T or its subsidiary banks.

      Market risk is the risk of loss from adverse changes in market prices and/or interest rates of the Company’s financial instruments. The primary market risk the Company is exposed to is interest rate risk. The core banking activities of lending and deposit-taking expose the Company to interest rate risk. Interest rate risk occurs when assets and liabilities reprice at different times as interest rates change. As a result, net

16

interest income earned by the Company is subject to the effects of changing interest rates. The Company measures interest rate risk by calculating the variability of net interest income in future periods under various interest rate scenarios using projected balances for earning assets, interest-bearing liabilities and off-balance sheet financial instruments. Management’s philosophy toward interest rate risk management is to attempt to limit the variability of net interest income. The balances of both on- and off-balance sheet financial instruments used in the projections are based on expected growth from forecasted business opportunities, anticipated prepayments of mortgage-related assets and expected maturities of investment securities, loans and deposits. Management supplements the modeling technique described above with analyses of market values of the Company’s financial instruments.

      The Company’s Asset-Liability Committee, which includes members of senior management, monitors interest rate sensitivity with the aid of a computer model that considers the impact of ongoing lending and deposit gathering activities, as well as statistically derived interrelationships in the magnitude and timing of the repricing of financial instruments, including the effect of changing interest rates on expected prepayments and maturities. When deemed prudent, management has taken action, and intends to do so in the future, to mitigate exposure to interest rate risk through the use of on- or off-balance sheet financial instruments. Possible actions include, but are not limited to, changes in the pricing of loan and deposit products, modifying the composition of earning assets and interest-bearing liabilities, and entering into or modifying existing interest rate swap agreements.

      The accompanying table as of March 31, 2000 and December 31, 1999 displays the estimated impact on net interest income from non-trading financial instruments resulting from changes in interest rates during the first modeling year.

SENSITIVITY OF NET INTEREST INCOME
TO CHANGES IN INTEREST RATES
(dollars in thousands)

	Calculated increase (decrease)
	in projected net interest income
Changes in Interest Rates	March 31, 2000			December 31, 1999
+200 basis points	$	659			7,996
+100 basis points		(2,158	)		4,476
-100 basis points		(648	)		4,198
-200 basis points		(402	)		2,462

      The calculation of the impact of changes in interest rates on net interest income was based upon many assumptions, including prepayments of mortgage-related assets, cash flows from derivative and other financial instruments held for non-trading purposes, loan and deposit volumes and pricing, and deposit maturities. The Company also assumed gradual changes in interest rates of 100 and 200 basis points up and down during a twelve-month period. As these assumptions are inherently uncertain, the Company cannot precisely predict the impact of changes in interest rates on net interest income. However, the calculations displayed above indicate that the projected impact upon net interest income as a result of gradual changes in interest rates of 100 and 200 basis points up and down was not significant. Actual results may differ significantly from those presented due to timing, magnitude and frequency of interest rate changes and changes in market conditions, as well as any actions, such as those previously described, which management may take to counter these changes.

      The Company engages in trading activities to meet the financial needs of customers and to profit from perceived market opportunities. Trading activities are conducted utilizing financial instruments that include forward and futures contracts related to foreign currencies and mortgage-backed securities, U.S. Treasury and other government securities, mortgage-backed securities and interest rate contracts, such as swaps. The Company generally mitigates the foreign currency and interest rate risk associated with trading activities by entering into offsetting trading positions. The amounts of

17

gross and net trading positions as well as the type of trading activities conducted by the Company are subject to a well-defined series of potential loss exposure limits established by the Asset-Liability Committee.

      The notional amounts of interest rate and foreign currency and other option and futures trading contracts totaled $2.4 billion and $728 million, respectively, at March 31, 2000, $1.7 billion and $1.6 billion, respectively, at March 31, 1999, and $799 million and $573 million, respectively, at December 31, 1999. The notional amounts of these trading contracts are not recorded in the consolidated balance sheet. However, the fair values of all financial instruments used for trading activities are recorded in the consolidated balance sheet. The fair values of all trading account assets and liabilities were $646 million and $632 million, respectively, at March 31, 2000, $473 million and $391 million, respectively, at March 31, 1999, and $641 million and $633 million, respectively, at December 31, 1999. Included in trading account assets were mortgage-backed securities which M&T held as collateral securing certain agreements to resell securities. The obligations to return such collateral were recorded in noninterest-bearing trading account liabilities, which were included in accrued interest and other liabilities in the Company’s consolidated balance sheet. The fair values of such collateral (and the related obligation to return collateral) were $588 million, $348 million and $600 million at March 31, 2000, March 31, 1999 and December 31, 1999, respectively. Given the Company’s policies, limits and positions, management believes that the potential loss exposure to the Company resulting from market risk associated with trading activities was not material.

Provision for Credit Losses

      The purpose of the provision for credit losses is to adjust the Company’s allowance for credit losses to a level that is adequate to absorb losses inherent in the loan and lease portfolio. The provision for credit losses in the first quarter of 2000 was $9.0 million, compared with $8.5 million in the year-earlier quarter and $14.0 million in 1999’s fourth quarter. Net loan charge-offs totaled $6.6 million in the recent quarter, compared with $8.1 million and $12.8 million in the first and fourth quarters of 1999, respectively. The higher level of net charge-offs in the final 1999 quarter was due to a $5.0 million partial charge-off of a commercial loan in that period. Net charge-offs as an annualized percentage of average loans and leases were .15% in the recent quarter, compared with .21% and .30% in the first and fourth quarters of 1999, respectively. Net charge-offs of consumer loans in the recent quarter were $4.6 million, compared with $5.3 million in the first quarter of 1999 and $6.2 million in the last quarter of 1999. Net consumer loan charge-offs as an annualized percentage of average consumer loans and leases were .59% in the initial quarter of 2000, compared with .75% in the year-earlier period and .80% in 1999’s fourth quarter.

      Nonperforming loans were $96.4 million or .54% of total loans and leases outstanding at March 31, 2000, compared with $115.4 million or .73% a year earlier and $103.2 million or .59% at December 31, 1999. Nonperforming commercial real estate loans totaled $12.3 million at March 31, 2000, $21.6 million at March 31, 1999 and $13.4 million at December 31, 1999. Nonperforming consumer loans and leases totaled $24.2 million at March 31, 2000, compared with $26.1 million at March 31, 1999 and $27.3 million at December 31, 1999. As a percentage of consumer loan balances outstanding, nonperforming consumer loans and leases were .78% at March 31, 2000, compared with .89% at March 31, 1999 and .88% at December 31, 1999. Nonperforming residential mortgage loans totaled $40.1 million and $49.1 million at March 31, 2000 and 1999, respectively, and $40.0 million at December 31, 1999. Commercial loans and leases classified as nonperforming aggregated $19.8 million at March 31, 2000, $22.5 million at December 31, 1999 and $18.6 million at March 31, 1999. Assets acquired in settlement of defaulted loans were $9.2 million at March 31, 2000 compared with $11.1 million at March 31, 1999 and $10.0 million at December 31, 1999.

18

      A comparative summary of nonperforming assets and certain credit quality ratios is presented in the accompanying table.

NONPERFORMING ASSETS
Dollars in thousands

	2000			1999 Quarters
	First Quarter			Fourth			Third			Second			First
Nonaccrual loans	$	58,060			61,816			77,716			68,285			69,393
Loans past due 90 days or more		29,407			31,017			29,618			31,988			37,988
Renegotiated loans		8,910			10,353			8,958			8,146			8,014
Total nonperforming loans		96,377			103,186			116,292			108,419			115,395
Real estate and other assets owned		9,244			10,000			10,237			10,108			11,052
Total nonperforming assets	$	105,621			113,186			126,529			118,527			126,447
Government guaranteed nonperforming loans*	$	17,156			16,529			16,137			14,618			13,368
Nonperforming loans to total loans and leases, net of unearned discount		.54	%		.59	%		.68	%		.66	%		.73	%
Nonperforming assets to total net loans and leases and real estate and other assets owned		.60	%		.65	%		.74	%		.72	%		.80	%

* Included in total nonperforming loans.

      The allowance for credit losses was $318.6 million, or 1.80% of total loans and leases at March 31, 2000, compared with $306.7 million or 1.94% a year earlier and $316.2 million or 1.82% at December 31, 1999. The ratio of the allowance for credit losses to nonperforming loans was 331% at the most recent quarter-end, compared with 266% a year earlier and 306% at December 31, 1999. The decline in the allowance as a percentage of total loans at March 31, 2000 as compared with a year earlier reflects management’s evaluation of the loan and lease portfolio as of each date, the relatively favorable economic environment for many commercial and consumer borrowers, and other factors. Management regularly assesses the adequacy of the allowance by performing an ongoing evaluation of the loan and lease portfolio, including such factors as the differing economic risks associated with each credit category, the current financial condition of specific borrowers, the economic environment in which borrowers operate, the level of delinquent loans and the value of any collateral. Significant loans are individually analyzed, while other smaller balance loans are evaluated by loan category. Given the concentration of commercial real estate loans in the Company’s loan portfolio, particularly the large concentration of loans secured by properties in New York State, in general, and in the New York City metropolitan area, in particular, coupled with the amount of commercial and industrial loans to businesses in New York State outside of the New York City metropolitan area and significant growth in recent years in loans to individual consumers, management cautiously evaluated the impact of interest rates and overall economic conditions on the ability of borrowers to meet repayment obligations when assessing the adequacy of the Company’s allowance for credit losses as of March 31, 2000. Based upon the results of such review, management believes that the allowance for credit losses at March 31, 2000 was adequate to absorb credit losses inherent in the Company’s portfolio as of that date.

Other Income

      Other income totaled $72.0 million in the first quarter of 2000, compared with $72.7 million in the year-earlier quarter and $70.4 million in the final 1999 quarter.

19

      Mortgage banking revenues totaled $14.6 million in the initial 2000 quarter, compared with $21.5 million in the corresponding 1999 quarter and $14.8 million in the fourth quarter of 1999. The decline in revenues as compared with the year-earlier quarter was largely due to the impact of rising interest rates on residential mortgage loan origination volume. In particular, mortgage banking revenues in the first quarter of 1999 reflected a generally favorable interest rate environment for borrowers, whereas higher interest rates initiated by the Federal Reserve in the second half of 1999 and first quarter of 2000 negatively impacted mortgage loan origination volume. Residential mortgage loans originated for sale to other investors totaled $409 million during the first quarter of 2000, compared with $652 million in 1999’s first quarter and $536 million in the fourth 1999 quarter. Gains from sales of residential mortgage loans and loan servicing rights were $6.7 million in the recently completed quarter, compared with $13.0 million in the first quarter of 1999 and $6.9 million in the final quarter of 1999. Residential mortgage loan servicing fees were $6.4 million in the recent quarter, compared with $7.0 million a year earlier and $6.7 million in 1999’s fourth quarter. Residential mortgage loans serviced for others totaled $7.4 billion at March 31, 2000, $7.1 billion a year earlier and $7.2 billion at December 31, 1999. Capitalized servicing assets were $64 million at March 31, 2000, compared with $62 million at March 31, 1999 and $61 million at December 31, 1999. Residential mortgage loans held for sale totaled $180 million and $324 million at March 31, 2000 and 1999, respectively, and $239 million at December 31, 1999.

      Service charges on deposit accounts were $20.5 million in the first quarter of 2000, up from $15.9 million in the corresponding quarter of the previous year, but little changed from $20.8 million in the fourth quarter of 1999. The higher levels of income in the fourth quarter of 1999 and first quarter of 2000 were the result of a third quarter 1999 increase in fees, combined with the impact of the 1999 acquisitions of FNB and the Chase branches. Trust income totaled $10.0 million in the recent quarter, compared with $10.3 million in last year’s first quarter and $9.9 million in the fourth quarter of 1999. Brokerage services income, which is comprised of revenues from the sale of mutual funds and annuities and securities brokerage fees, totaled $9.4 million in the recent quarter, compared with $6.2 million in 1999’s initial quarter and $6.7 million in the fourth quarter of 1999. Trading account and foreign exchange activity resulted in gains of $294 thousand in the first quarter of 2000, compared with gains of $1.2 million in the corresponding quarter of 1999 and $1.6 million in 1999’s final quarter. Other revenues from operations totaled $17.3 million in the recent quarter, compared with $17.5 million in the corresponding quarter of 1999 and $16.4 million in the fourth quarter of 1999. Included in other revenues from operations is tax-exempt income from bank owned life insurance, which represents increases in the cash surrender value of life insurance policies and benefits received. Such income totaled $5.6 million in 2000’s first quarter, compared with $5.0 million and $5.3 million in the first and fourth quarter of 1999, respectively. The carrying value of bank owned life insurance is included in other assets in the consolidated balance sheet and totaled $430 million and $375 million at March 31, 2000 and 1999, respectively, and $389 million at December 31, 1999. Other revenues from operations in the first quarter of 1999 included a nonrecurring $2.9 million award received in recognition of the Company’s community reinvestment activities.

Other Expense

      Excluding amortization of goodwill and core deposit intangible assets of $14.4 million in the first quarter of 2000, $10.9 million in the year-earlier quarter and $15.1 million in the fourth quarter of 1999, other expense totaled $136.2 million in the initial quarter of 2000, compared with $128.6 million in the year-earlier quarter and $133.9 million in the fourth quarter of 1999.

      Salaries and employee benefits expense was $76.7 million in the recent quarter, 12% higher than the $68.4 million in the corresponding 1999 quarter

20

and 4% above the $73.4 million in the fourth quarter of 1999. Contributing to the higher expense level in the initial 2000 quarter over 1999’s first quarter were merit salary increases and higher costs associated with incentive-based compensation arrangements, including expense associated with stock appreciation rights. Salaries and benefits associated with the FNB and Chase branch acquisitions also contributed to the higher expenses. A significant factor contributing to the increased expense level from the final 1999 quarter was higher expenses for incentive compensation, including costs related to stock appreciation rights.

      Nonpersonnel expenses, excluding amortization of goodwill and core deposit intangible, totaled $59.5 million in the recent quarter, little changed from $60.2 million in the first quarter of 1999 and $60.5 million in 1999’s fourth quarter.

      The Company’s efficiency ratio, or other expense (excluding amortization of goodwill and core deposit intangible) divided by the sum of taxable-equivalent net interest income and other income (excluding gains from sales of bank investment securities) was 50.6% during the recent quarter, 50.3% during the first quarter of 1999 and 49.7% in 1999’s final quarter.

Capital

      Stockholders’ equity at March 31, 2000 was $1.8 billion or 8.05% of total assets, compared with $1.7 billion or 8.22% of total assets a year earlier and $1.8 billion or 8.02% at December 31, 1999. Stockholders’ equity per share was $238.26 at March 31, 2000, up from $215.34 and $232.41 at March 31 and December 31, 1999, respectively. Excluding goodwill and core deposit intangible, net of applicable tax effect, tangible equity per share was $157.92 at March 31, 2000, compared with $148.95 a year earlier and $151.40 at December 31, 1999.

      Stockholders’ equity at March 31, 2000 reflected a loss of $23.9 million, or $3.11 per share, for the net after-tax impact of unrealized losses on investment securities classified as available for sale, compared with an unrealized gain of $620 thousand or $.08 per share at March 31, 1999 and an unrealized loss of $26.0 million or $3.37 per share at December 31, 1999. Such unrealized gains or losses are generally due to changes in interest rates and represent the difference, net of applicable income tax effect, between the estimated fair value and amortized cost of investment securities classified as available for sale. The market valuation of investment securities should be considered in the context of the entire balance sheet of the Company. With the exception of investment securities classified as available for sale, trading account assets and liabilities, and residential mortgage loans held for sale, the carrying values of financial instruments in the balance sheet are generally not adjusted for appreciation or depreciation in market value resulting from changes in interest rates.

      Federal regulators generally require banking institutions to maintain “core capital” and “total capital” ratios of at least 4% and 8%, respectively, of risk-adjusted total assets. In addition to the risk-based measures, Federal bank regulators have also implemented a minimum “leverage” ratio guideline of 3% of the quarterly average of total assets. Included in core capital was the $319 million carrying value of trust preferred securities. Total capital also included $130 million of subordinated notes issued by M&T Bank in prior years. The capital ratios of the Company and its

21

banking subsidiaries, M&T Bank and M&T Bank, N.A., as of March 31, 2000 are presented in the accompanying table.

REGULATORY CAPITAL RATIOS
March 31, 2000
	M&T			M&T			M&T
	(Consolidated)			Bank			Bank, N.A.
Core capital		8.25	%		8.16	%		10.27	%
Total capital		10.21	%		10.13	%		11.16	%
Leverage		7.04	%		7.03	%		6.26	%

      The rate of internal capital generation, or net income less dividends paid expressed as an annualized percentage of average total stockholders’ equity, was 13.01% during the first quarter of 2000, compared with 14.65% and 12.44% in the first and fourth quarters of 1999, respectively.

      In November 1999, M&T announced a plan to repurchase up to 190,465 common shares for reissuance upon the possible future exercise of outstanding stock options. Through March 31, 2000, M&T had repurchased 112,886 shares of common stock pursuant to such plan at an average cost of $418.22 per share.

Segment Information

      The Commercial Banking segment’s earnings rose 4% to $21.5 million in the initial quarter of 2000 from $20.7 million in the comparable 1999 quarter. The higher net income resulted largely from an increase of $4.6 million in net interest income, due to a 16% increase in average loans outstanding, offset, in part, by a $3.0 million increase in the provision for credit losses. Growth in most markets served by the Company, as well as the impact of loans obtained in the FNB acquisition, contributed to the higher loan balances.

      In the first quarter of 2000, the Commercial Real Estate segment contributed net income of $17.2 million, 20% higher than the $14.4 million earned in the year- earlier period. Higher net interest income of $4.6 million, the result of a 19% increase in average loan balances outstanding, was the major factor for the increase in net income.

      Net income contributed by the Discretionary Portfolio segment in the recent quarter totaled $8.4 million, compared with $8.8 million in the first quarter of 1999. A $1.5 million decrease in trading account and foreign exchange gains, partially offset by a $.7 million increase in tax-exempt income earned from bank owned life insurance, contributed to the decline.

      The Residential Mortgage Banking segment had net income of $1.9 million in the first quarter of 2000, a decrease of 73% from $7.0 million in the comparable 1999 quarter. A $12.8 million decrease in revenue resulting largely from the impact of generally higher interest rates on loan origination volume and related revenues was the leading factor contributing to the reduced net income in this segment. The decline in revenues was, in part, mitigated by a $4.3 million reduction in operating expenses associated with origination and servicing activities.

      Retail Banking earned $33.1 million in 2000’s initial quarter, up 35% from $24.5 million in the year-earlier period. Higher net interest income of $18.2 million, the result of a higher net interest margin and a 9% increase in average deposit balances, and increased service charges on deposit accounts of $4.0 million, reflecting third quarter 1999 rate increases, were the leading factors contributing to the increase. The 1999 FNB and Chase branch acquisitions contributed to the higher deposit balances.

22

Recently Issued Accounting Standards Not Yet Adopted

      In June 1998, the Financial Accounting Standards Board (“FASB”) issued Statement of Financial Accounting Standards (“SFAS”) No. 133, “Accounting for Derivative Instruments and Hedging Activities.” SFAS No. 133 establishes accounting and reporting standards for derivative instruments, including certain derivative instruments embedded in other contracts, and for hedging activities. It requires that an entity recognize all derivatives as either assets or liabilities in the balance sheet and measure those instruments at fair value. If certain conditions are met, a derivative may be specifically designated as (a) a hedge of the exposure to changes in the fair value of a recognized asset or liability or an unrecognized firm commitment, (b) a hedge of the exposure to variable cash flows of a forecasted transaction, or (c) a hedge of the foreign currency exposure of a net investment in a foreign operation, an unrecognized firm commitment, an available for sale security, or a foreign currency denominated forecasted transaction.

      Pursuant to SFAS No. 133, the accounting for changes in the fair value of a derivative will depend on the intended use of the derivative and the resulting designation. An entity that elects to apply hedge accounting will be required to establish at the inception of the hedge the method it will use for assessing the effectiveness of the hedging derivative and the measurement approach for determining the ineffective aspect of the hedge. Those methods must be consistent with the entity’s approach to managing risk.

      SFAS No. 133 was to be effective for all fiscal quarters of fiscal years beginning after June 15, 1999. In June 1999, the FASB amended SFAS No. 133 deferring the effective date by one year. Initial application of SFAS No. 133 must be as of the beginning of an entity’s fiscal quarter; on that date, hedging relationships must be designated anew and documented pursuant to the provisions of the statement. Early application of all of the provisions of SFAS No. 133 is encouraged, but is permitted only as of the beginning of any fiscal quarter that began after issuance of the statement. SFAS No. 133 may not be applied retroactively to financial statements of prior periods.

      In 1998, the FASB organized the Derivatives Implementation Group (“DIG”) to assist with the interpretation of SFAS No. 133 and to address implementation issues. In March 2000, the FASB proposed amendments of SFAS No. 133 for, among other things, certain interpretations resulting from the DIG process. It is anticipated that the DIG will continue to review additional implementation issues as they arise.

      The Company expects to adopt SFAS No. 133 as of January 1, 2001. The Company anticipates that adoption of SFAS No. 133 could increase the volatility of reported earnings and stockholders’ equity and could also result in the modification of certain data processing systems and hedging practices. The impact of adopting SFAS No. 133 will be dependent on the nature and intended purpose of derivative instruments held as of January 1, 2001 and, accordingly, the financial statement impact of such adoption cannot be estimated at this time.

Forward-Looking Statements

      Management’s Discussion and Analysis of Financial Condition and Results of Operations and other sections of this quarterly report contain forward-looking statements that are based on current expectations, estimates and projections about the Company’s business, management’s beliefs and assumptions made by management. These statements are not guarantees of future performance and involve certain risks, uncertainties and assumptions (“Future Factors”) which are difficult to predict. Therefore, actual outcomes and results may differ materially from what is expressed or forecasted in such forward-looking statements. The Company undertakes no obligation to update publicly any forward-looking statements, whether as a result of new information, future events or otherwise.

      Future Factors include changes in interest rates, spreads on earning

23

assets and interest-bearing liabilities, and interest rate sensitivity; credit losses; sources of liquidity; legislation affecting the financial services industry as a whole, and the Company individually, regulatory supervision and oversight, including required capital levels; increasing price and product/service competition by competitors, including new entrants; rapid technological developments and changes; the ability to continue to introduce competitive new products and services on a timely, cost-effective basis; the mix of products/services; containing costs and expenses; governmental and public policy changes, including environmental regulations; protection and validity of intellectual property rights; reliance on large customers; technological, implementation and cost/financial risks in large, multi-year contracts; the outcome of pending and future litigation and governmental proceedings; continued availability of financing; and financial resources in the amounts, at the times and on the terms required to support the Company’s future businesses. These are representative of the Future Factors that could affect the outcome of the forward-looking statements. In addition, such statements could be affected by general industry and market conditions and growth rates, general economic conditions, including interest rate and currency exchange rate fluctuations, and other Future Factors.

24

M&T BANK CORPORATION AND SUBSIDIARIES

QUARTERLY TRENDS

		2000			1999 Quarters
		First quarter			Fourth			Third			Second			First
Earnings and dividends
Amounts in thousands, except per share
Interest income (taxable-equivalent basis)		$	401,064			391,792			375,021			361,158			358,370
Interest expense			203,731			192,766			179,961			171,269			175,238
Net interest income			197,333			199,026			195,060			189,889			183,132
Less: provision for credit losses			9,000			14,000			13,500			8,500			8,500
Other income			71,998			70,354			72,499			66,806			72,716
Less: other expense			150,597			149,047			144,898			145,547			139,466
Income before income taxes			109,734			106,333			109,161			102,648			107,882
Applicable income taxes			39,293			38,132			39,633			35,772			39,151
Taxable-equivalent adjustment			2,206			2,083			1,964			1,838			1,825
Net income		$	68,235			66,118			67,564			65,038			66,906
Per common share data
	Basic earnings	$	8.85			8.48			8.57			8.35			8.65
	Diluted earnings		8.61			8.20			8.29			8.00			8.34
	Cash dividends	$	1.25			1.25			1.25			1.00			1.00
Average common shares outstanding
	Basic		7,711			7,795			7,880			7,793			7,731
	Diluted		7,922			8,058			8,147			8,132			8,023
Performance ratios, annualized
Return on
	Average assets		1.22	%		1.18	%		1.27	%		1.27	%		1.34	%
	Average common stockholders’ equity		15.14	%		14.58	%		14.97	%		15.23	%		16.56	%
Net interest margin on average earning assets (taxable-equivalent basis)			3.94	%		3.99	%		4.03	%		4.09	%		3.98	%
Nonperforming assets to total assets, at end of quarter			.46	%		.51	%		.58	%		.56	%		.62	%
Efficiency ratio (a)			55.92	%		55.33	%		53.62	%		55.72	%		54.56	%
Cash (tangible) operating results (2) Net income (in thousands)		$	79,844			78,443			79,714			76,511			76,333
Diluted net income per common share			10.08			9.73			9.78			9.41			9.51
Annualized return on Average tangible assets			1.47	%		1.45	%		1.54	%		1.53	%		1.57	%
	Average tangible common stockholders’ equity		26.95	%		26.67	%		26.43	%		26.13	%		27.66	%
Efficiency ratio (a)			50.57	%		49.71	%		48.91	%		51.36	%		50.31	%
Balance sheet data
Dollars in millions, except per share
Average balances
	Total assets	$	22,438			22,147			21,183			20,579			20,298
	Earning assets		20,147			19,806			19,184			18,636			18,664
	Investment securities		1,977			1,974			2,048			2,064			2,497
	Loans and leases, net of unearned discount		17,501			17,147			16,678			16,056			15,761
	Deposits		15,257			15,472			14,821			14,578			14,497
	Stockholders’ equity		1,813			1,800			1,791			1,713			1,638
At end of quarter
	Total assets	$	22,762			22,409			21,759			21,205			20,285
	Earning assets		20,389			19,964			19,467			19,050			18,382
	Investment securities		2,079			1,901			1,953			2,078			2,088
	Loans and leases, net of unearned discount		17,703			17,407			16,984			16,513			15,813
	Deposits		15,151			15,374			15,417			14,909			14,476
	Stockholders’ equity		1,832			1,797			1,817			1,773			1,667
	Equity per common share		238.26			232.41			230.51			224.81			215.34
	Tangible equity per common share		157.92			151.40			149.37			149.14			148.95
Market price per common share
	High	$	458	1/8		512			575			582	1/2		518	3/4
	Low		357			406			412	1/2		462	1/2		464
	Closing		446	1/2		414	1/4		459			550			479

(a)	Excludes impact of nonrecurring merger-related expenses and net securities transactions.
(b)	Excludes amortization and balances related to goodwill and core deposit intangible and nonrecurring merger-related expenses which, except in the calculation of the efficiency ratio, are net of applicable income tax effects.

25

M&T BANK CORPORATION AND SUBSIDIARIES

AVERAGE BALANCE SHEETS AND ANNUALIZED TAXABLE-EQUIVALENT RATES

			2000 First quarter								1999 Fourth quarter								1999 Third quarter
			Average					Average			Average					Average			Average					Average
Average balance in millions; interest in thousands			balance			Interest		rate			balance			Interest		rate			balance			Interest		rate
Assets Earning assets Loans and leases, net of unearned discount*
	Commercial, financial, etc.		$	3,741		$	78,717		8.46	%		3,566			72,871		8.11	%		3,374			68,452		8.05	%
	Real estate — commercial			6,592			138,395		8.40			6,298			134,006		8.51			6,039			126,867		8.40
	Real estate — consumer			4,062			75,862		7.47			4,170			78,131		7.50			4,224			78,905		7.47
	Consumer			3,106			66,549		8.62			3,113			65,927		8.40			3,041			62,626		8.17
		Total loans and leases, net		17,501			359,523		8.26			17,147			350,935		8.12			16,678			336,850		8.01
Money-market assets
	Interest-bearing deposits at banks			1			10		3.34			1			7		3.15			2			25		3.93
	Federal funds sold and agreements to resell securities			655			9,588		5.88			672			9,555		5.63			430			5,732		5.29
	Trading account			13			127		4.00			12			192		6.32			26			374		5.77
		Total money-market assets		669			9,725		5.84			685			9,754		5.64			458			6,131		5.31
Investment securities**
	U.S. Treasury and federal agencies			778			11,565		5.98			788			11,413		5.74			880			12,800		5.77
	Obligations of states and political subdivisions			82			1,318		6.41			78			1,247		6.31			76			1,176		6.20
	Other			1,117			18,933		6.82			1,108			18,443		6.61			1,092			18,064		6.56
		Total investment securities		1,977			31,816		6.47			1,974			31,103		6.25			2,048			32,040		6.21
		Total earning assets		20,147			401,064		8.01			19,806			391,792		7.85			19,184			375,021		7.76
Allowance for credit losses				(318	)							(316	)							(316	)
Cash and due from banks				482								538								438
Other assets				2,127								2,119								1,877
		Total assets	$	22,438								22,147								21,183
Liabilities and stockholders’ equity Interest-bearing liabilities Interest-bearing deposits
	NOW accounts		$	432			1,308		1.22			417			1,223		1.16			368			1,055		1.14
	Savings deposits			5,331			31,723		2.39			5,481			33,256		2.41			5,244			30,708		2.32
	Time deposits			7,155			98,248		5.52			7,206			96,860		5.33			7,000			90,955		5.15
	Deposits at foreign office			226			3,046		5.41			245			3,110		5.05			227			2,720		4.75
		Total interest-bearing deposits		13,144			134,325		4.11			13,349			134,449		4.00			12,839			125,438		3.88
Short-term borrowings				2,752			39,759		5.81			2,155			29,522		5.44			2,058			26,886		5.18
Long-term borrowings				1,775			29,647		6.72			1,775			28,795		6.44			1,806			27,637		6.07
		Total interest-bearing liabilities		17,671			203,731		4.64			17,279			192,766		4.43			16,703			179,961		4.27
Noninterest-bearing deposits				2,113								2,123								1,982
Other liabilities				841								945								707
		Total liabilities		20,625								20,347								19,392
Stockholders’ equity				1,813								1,800								1,791
		Total liabilities and stockholders’ equity	$	22,438								22,147								21,183
Net interest spread									3.37								3.42								3.49
Contribution of interest-free funds									57								.57								.54
Net interest income/margin on earning assets						$	197,333		3.94	%					199,026		3.99	%					195,060		4.03	%

*	Includes nonaccrual loans.
**	Includes available for sale securities at amortized cost.
	(continued)

26

M&T BANK CORPORATION AND SUBSIDIARIES

AVERAGE BALANCE SHEETS AND ANNUALIZED TAXABLE-EQUIVALENT RATES (continued)

			1999 Second quarter								1999 First quarter
			Average					Average			Average					Average
Average balance in millions; interest in thousands			balance			Interest		rate			balance			Interest		rate
Assets
Earning assets
Loans and leases, net of unearned discount*
	Commercial, financial, etc.		$	3,201		$	62,928		7.88	%		3,179			64,028		8.17	%
	Real estate — commercial			5,752			121,250		8.43			5,533			115,125		8.32
	Real estate — consumer			4,176			77,120		7.39			4,158			76,357		7.34
	Consumer			2,927			61,114		8.37			2,891			60,003		8.42
		Total loans and leases, net		16,056			322,412		8.05			15,761			315,513		8.12
Money-market assets
	Interest-bearing deposits at banks			5			49		4.08			1			7		2.68
	Federal funds sold and agreements to resell securities			430			5,381		5.02			331			3,823		4.68
	Trading account			81			1,398		6.89			74			1,256		6.91
		Total money-market assets		516			6,828		5.30			406			5,086		5.08
Investment securities**
	U.S. Treasury and federal agencies			902			13,063		5.81			1,112			15,832		5.77
	Obligations of states and political subdivisions			71			1,121		6.30			72			1,116		6.30
	Other			1,091			17,734		6.52			1,313			20,823		6.43
		Total investment securities		2,064			31,918		6.20			2,497			37,771		6.13
		Total earning assets		18,636			361,158		7.77			18,664			358,370		7.79
Allowance for credit losses				(310	)							(308	)
Cash and due from banks				439								442
Other assets				1,814								1,500
		Total assets	$	20,579								20,298
Liabilities and stockholders’ equity
Interest-bearing liabilities
Interest-bearing deposits
	NOW accounts		$	370			1,125		1.22			399			1,280		1.30
	Savings deposits			5,038			29,114		2.32			4,881			28,810		2.39
	Time deposits			7,041			89,182		5.08			7,049			90,892		5.23
	Deposits at foreign office			243			2,757		4.56			303			3,429		4.59
		Total interest-bearing deposits		12,692			122,178		3.86			12,632			124,411		3.99
Short-term borrowings				1,876			22,768		4.87			2,138			25,735		4.88
Long-term borrowings				1,763			26,323		5.99			1,647			25,092		6.18
		Total interest-bearing liabilities		16,331			171,269		4.21			16,417			175,238		4.33
Noninterest-bearing deposits				1,886								1,865
Other liabilities				649								378
		Total liabilities		18,866								18,660
Stockholders’ equity				1,713								1,638
		Total liabilities and stockholders’ equity	$	20,579								20,298
Net interest spread									3.56								3.46
Contribution of interest-free funds									.53								.52
Net interest income/margin on earning assets						$	189,889		4.09	%					183,132		3.98	%

*  Includes nonaccrual loans.

**  Includes available for sale securities at amortized cost.

27

Item 3. Quantitative and Qualitative Disclosures About Market Risk

      Incorporated by reference to the discussion contained under the caption “Taxable-equivalent Net Interest Income” in Part I, Item 2, “Management’s Discussion and Analysis of Financial Condition and Results of Operations.”

PART II. OTHER INFORMATION

Item 1. Legal Proceedings.

      M&T and its subsidiaries are subject in the normal course of business to various pending and threatened legal proceedings in which claims for monetary damages are asserted. Management, after consultation with legal counsel, does not anticipate that the aggregate ultimate liability, if any, arising out of litigation pending against M&T or its subsidiaries will be material to M&T’s consolidated financial position, but at the present time is not in a position to determine whether such litigation will have a material adverse effect on M&T’s consolidated results of operations in any future reporting period.

Item 2. Changes in Securities and Use of Proceeds.
      (Not applicable.)

Item 3. Defaults Upon Senior Securities.
      (Not applicable.)

Item 4. Submission of Matters to a Vote of Security Holders.

      The 2000 Annual Meeting of Stockholders of M&T was held on April 18, 2000. At the 2000 Annual Meeting, stockholders elected twenty-one (21) directors, all of whom were then serving as directors of M&T, for terms of one (1) year and until their successors are elected and qualified. The following table reflects the tabulation of the votes with respect to each director who was elected at the 2000 Annual Meeting.

	Number of Votes
Nominee	For		Withheld
William F. Allyn		6,650,098		28,126
Brent D. Baird		6,649,900		28,324
John H. Benisch		6,650,093		28,131
Robert J. Bennett		6,649,038		29,186
C. Angela Bontempo		6,647,790		30,434
Robert T. Brady		6,298,881		379,343
Patrick J. Callan		6,650,057		28,167
R. Carlos Carballada		6,649,804		28,420
Michael J. Falcone		6,649,977		28,247
Richard E. Garman		6,646,805		31,419
James V. Glynn		6,649,974		28,250
Patrick W.E. Hodgson		6,649,929		28,295
Samuel T. Hubbard, Jr.		6,648,585		29,639
Reginald B. Newman, II		6,648,849		29,375
Peter J. O’Donnell, Jr.		6,646,699		31,525
Jorge G. Pereira		6,646,710		31,514
Robert E. Sadler, Jr.		6,650,244		27,980
John L. Vensel		6,650,141		28,083
Herbert L. Washington		6,649,239		28,985
Christine B. Whitman		6,647,378		30,846
Robert G. Wilmers		6,649,790		28,434

Item 5. Other Information.
      (None.)

28

Item 6. Exhibits and Reports on Form 8-K.

      (a) The following exhibits are filed as a part of this report:

Exhibit
No.
10.10	M&T Bank Corporation Directors' Stock Plan, as amended and restated. Filed herewith.
27.1	Financial Data Schedule. Filed herewith.

      (b) Reports on Form 8-K. The following Current Report on Form 8-K was filed with the Securities and Exchange Commission:

      On March 1, 2000, a Current Report on Form 8-K dated March 1, 2000 was filed to announce the consummation of M&T Bank’s acquisition of Matthews, Bartlett & Dedecker, Inc. (“MBD”), a property and casualty insurance agency based in Buffalo, New York. MBD operates as a subsidiary of M&T Bank.

29

SIGNATURES

      Pursuant to the requirements of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned thereunto duly authorized.

	M&T BANK CORPORATION
Date: April 28, 2000	By: /s/ Michael P. Pinto       _______________________
	Michael P. Pinto       Executive Vice President       and Chief Financial Officer

30

EXHIBIT INDEX

Exhibit
No.
10.10	M&T Bank Corporation Directors’ Stock Plan, as amended and restated. Filed herewith.
27.1	Financial Data Schedule. Filed herewith.

31