Provident Bankshares (PBKS) 8-K M&T Bank Corporation to Acquire

Acquisition of Provident Bankshares

December 19, 2008

Exhibit 99.2

2

Disclaimer

This

presentation

contains

forward

looking

statements

within

the

meaning

of

the

Private

Securities

Litigation

Reform

Act

giving

the

Company's

expectations

or

predictions

of

future

financial

or

business

performance

or

conditions.

Forward-looking

statements

are

typically

identified

by

words

such

as

"believe,"

"expect,"

"anticipate,"

"intend,"

"target,"

"estimate,"

"continue,"

"positions,"

"prospects"

or

"potential,"

by

future

conditional

verbs

such

as

"will,"

"would,"

"should,"

"could"

or

"may”,

or

by

variations

of

such

words

or

by

similar

expressions.

These

forward-looking

statements

are

subject

to

numerous

assumptions,

risks

and

uncertainties

which

change

over

time.

Forward-looking

statements

speak

only

as

of

the

date

they

are

made

and

we

assume

no

duty

to

update

forward-looking

statements.

In

addition

to

factors

previously

disclosed

in

our

SEC

reports

and

those

identified

elsewhere

in

this

presentation,

the

following

factors

among

others,

could

cause

actual

results

to

differ

materially

from

forward-looking

statements

or

historical

performance:

ability

to

obtain

regulatory

approvals

and

meet

other

closing

conditions

to

the

merger,

including

approval

by

Provident

shareholders,

on

the

expected

terms

and

schedule;

delay

in

closing

the

merger;

difficulties

and

delays

in

integrating

the

M&T

and

Provident

businesses

or

fully

realizing

cost

savings

and

other

benefits;

business

disruption

following

the

merger;

changes

in

asset

quality

and

credit

risk;

the

inability

to

sustain

revenue

and

earnings

growth;

changes

in

interest

rates

and

capital

markets;

inflation;

customer

acceptance

of

M&T

products

and

services;

customer

borrowing,

repayment,

investment

and

deposit

practices;

customer

disintermediation;

the

introduction,

withdrawal,

success

and

timing

of

business

initiatives;

competitive

conditions;

the

inability

to

realize

cost

savings

or

revenues

or

to

implement

integration

plans

and

other

consequences

associated

with

mergers,

acquisitions

and

divestitures;

economic

conditions;

and

the

impact,

extent

and

timing

of

technological

changes,

capital

management

activities,

and

other

actions

of

the

Federal

Reserve

Board

and

legislative

and

regulatory

actions

and

reforms.

Annualized,

pro

forma,

projected

and

estimated

numbers

are

used

for

illustrative

purpose

only,

are

not

forecasts

and

may

not

reflect

actual

results.

3

•

Transaction Highlights

•

Commitment to Communities and Employees

•

Leading Mid-Atlantic Franchise

•

Financial Highlights

•

Summary

4

•

Partnership between community-focused institutions

•

Strong cultural fit with common values

•

Shared commitment to customers, employees, and the communities that we serve

•

Combination establishes leading Mid-Atlantic commercial bank

•

Significant operating scale with greater branch density

•

Adding 143 branches to increase our Mid-Atlantic network to 319 branches

•

Complementary relationships with middle-market customers

•

#2 deposit

market share in Maryland with over $11 billion of deposits and 253

branches

•

Attractive market with favorable growth dynamics

•

Low-risk transaction

•

Experienced integrator with significant presence in Provident’s markets

•

~$650 million in loan and securities marks mitigate credit risk

•

Stable funding base reinforces M&T’s strong liquidity profile

•

Financially attractive combination

•

Estimated IRR in excess of 16%

•

Significant GAAP and operating EPS accretion by 2010

•

Enhances M&T’s best-in-class internal capital generation

•

In-market transaction with meaningful cost synergies

•

Commitment to maintain strong capital position

Transaction Highlights

5

Summary of Key Terms

Fixed at 0.171625 M&T shares per Provident share

-

Exchange ratio based on M&T’s closing price per share of $61.18 as of

December 16, 2008

Exchange Ratio:

Tax-free exchange

Transaction Structure:

Purchase Price:

$10.50 per Provident share

1

37% premium to Provident’s 20-day average share price

Transaction Value:

$401 million total

-

$352 million for Provident common equity

-

$49 million for Provident Series A convertible preferred equity

Consideration:

100% Stock

Due Diligence:

Completed comprehensive due diligence, including detailed

review of loan and securities portfolios

Conditions to Closing:

Approval by shareholders of Provident

Normal U.S. regulatory approvals

Other customary conditions

1.

Based

on

fixed

exchange

ratio

using

M&T’s

closing

price

per

share

of

$61.18

as

of

December

16,

2008,

the

date

on

which

the

exchange

ratio

was

determined.

6

Summary of Key Terms (cont’d.)

Second quarter of 2009

Expected Closing:

M&T to establish Baltimore-Washington Area Director’s

Advisory Council with participation from

Provident’s

Board

Advisory Council:

Cost Savings:

45% of Provident’s annual operating expenses

Run-rate fully realized by late 2010

Merger-Related Charges:

$99 million

Revenue Synergies:

None assumed

Asset Marks:

Loans: $383 million (pre-tax)

Securities: $264 million (pre-tax)

Board Representation:

Gary

Geisel, Provident’s Chairman and CEO, to join

M&T Board of Directors

7

23.9%

3.7%

Tangible Core Deposit Premium

3

2.5x

0.7x

Price to Book Value

2

2.7x

1.4x

Price to Tangible Book Value

2

Comparable

1

Transactions Average

MTB/PBKS

Multiples

1.

Source : SNL Financial.  Comparable Mid-Atlantic bank acquisitions with asset size between $3 billion and $10

billion since 2003 (nine deals total).

2.

Book value assumes conversion of Provident’s Series A preferred equity of $51 million.

3.

15.5% net of marks.

Attractive Valuation

8

•

Transaction Highlights

•

Commitment to Communities and Employees

•

Leading Mid-Atlantic Franchise

•

Financial Highlights

•

Summary

9

•

Established in 1882 by John Marshall, who started a savings system for

sailors at a mission on Light Street in Baltimore. Provident Bankshares

Corporation is the largest bank headquartered in Maryland today.

•

For more than 120 years, we have done relationship banking the

Provident Way:

•

Integrity

•

Caring

•

Excellence

•

Partnership

•

Results Driven

The Provident Way

Gary Geisel, Chairman and CEO, Provident Bankshares Corp.

10

Choosing a Partner

•

When

we

started

looking

for

an

alternative,

we

wanted

someone

who

would

keep

the

legacy

of

the

Provident

Way

alive.

•

Fortunately, we did not have to look very far. 

•

M&T

Bank

has

similar

roots

as

Provident

–

both

began

in

the

1800s. 

And

like

Provident,

M&T

has

developed

a

successful

regional

banking

franchise

serving

numerous

area

communities.

•

But most importantly, M&T shares the same values as Provident.

Gary Geisel, Chairman and CEO, Provident Bankshares Corp.

11

A “Valuable”

Match

•

We are pleased to join a company that shares our long-standing

focus, culture and values.

•

We are combining two institutions that share a common commitment

to the customers, employees, shareholders, and communities we

serve.

Gary Geisel, Chairman and CEO, Provident Bankshares Corp.

12

Commitment to Customers

•

Merger enhances M&T’s already strong Mid-Atlantic presence.

•

Offers Provident customers an expanded array of products / services

•

Access to a more extensive network of branches and ATMs

•

Builds upon M&T’s continuing investment in the Mid-Atlantic.

•

In the last year, M&T has added:

•

3 new branches (in addition to 13 First Horizon branches)

•

23 new ATMs

•

800 new employees, mostly customer facing

•

Post-merger M&T/Provident will have:

•

Largest branch network in the Baltimore-Washington area

•

319 branches (253 in Maryland, 57 in Virginia and 9 in DC)

•

743 ATMs (599 in Maryland, 132 in Virginia and 12 in DC)

Michael Pinto, Chairman and CEO, M&T Bank’s Mid-Atlantic Division.

13

Commitment to Employees

•

M&T offers Provident employees long-term career potential with a stable

and successful company

•

Will offer comparable positions to Provident’s customer facing employees

•

No jobs will be discontinued until after the merger is completed

•

Displaced employees will receive preferential consideration for some 200

open jobs in M&T’s Mid-Atlantic organization

•

Employees unable to find a suitable position at M&T will receive

displacement benefits under Provident’s existing program

Michael Pinto, Chairman and CEO, M&T Bank’s Mid-Atlantic Division.

14

Commitment to the Community

•

M&T’s operating philosophy includes the belief that the well-being of the

bank and the well-being of the community are inseparable

•

M&T’s expanded presence in the Mid-Atlantic means an expanded

commitment to our Mid-Atlantic communities

•

Donated $25 million to Mid-Atlantic non-profits since 2003

•

M&T has been among the Top 10 on

BusinessWeek’s

list of most

generous companies for two straight years

•

M&T will continue Provident’s charitable contribution program

•

Thousands of M&T’s employees volunteer for hundreds of non-profits

•

M&T has earned the highest CRA score (“Outstanding”) for 25 straight

years

Michael Pinto, Chairman and CEO, M&T Bank’s Mid-Atlantic Division.

15

•

Transaction Highlights

•

Commitment to Communities and Employees

•

Leading Mid-Atlantic Franchise

•

Financial Highlights

•

Summary

16

Franchise Comparison 

As of 9/30/2008

M&T

Provident

Assets

$65.2 B

$6.4 B

Loans

48.7 B

4.3 B

Domestic Deposits

36.7 B

4.6 B

Branches

686

143

Employees

13,636

1,660

M&T Mid-

Atlantic¹

ATMs

1,638

198

$6.2 B

6.1 B

6.5 B

177

545

1.

Includes M&T’s Greater Baltimore, Greater Washington, DC, and Chesapeake regions.

2.

Current Count.

3,892

2

2

17

Market Leadership in Mid-Atlantic

Source: SNL.

M&T

Provident

Maryland -

Deposits ($ millions)

RankInstitution

Deposits

Market

Share (%)

Branches (#)

1

Bank of America

18,536

19.2

195

Pro Forma M&T Bank

11,233

11.6

253

2

PNC

9,565

9.9

203

3

Capital One

8,221

8.5

141

4

Wells Fargo

7,464

7.7

82

5

M&T Bank

7,418

7.7

153

6

SunTrust

6,589

6.8

136

7

BB&T

6,245

6.5

129

8

Provident

Bankshares

3,815

4.0

100

9

Sandy Spring Bancorp

2,161

2.2

38

10

Susquehanna Bancshares

1,943

2.0

45

Deposit Market Share Rank

MTB

Provident

Pro Forma

Baltimore MSA

2

5

2

Washington DC MSA

10

14

8

Maryland

5

8

2

Virginia

54

30

18

Branch & ATM Totals

MTB

Provident

Pro Forma

Mid-Atlantic Branches

177

142

319

Mid-Atlantic ATMs

545

198

743

18

Provident Sustains M&T’s Growth Momentum

•

M&T has increased its Mid-Atlantic market and product penetration

•

Strategy includes both organic growth and targeted acquisitions

•

Investments in products, distribution, and people have supported

M&T’s

momentum within Provident’s footprint

•

Annual net income growth of 12% for Mid-Atlantic region vs. 9% for other M&T

regions since 2004

•

Annual loan growth of 12% for Mid-Atlantic region vs. 6% for other M&T regions

since 2004

•

Provident complements M&T’s ongoing expansion in the region

•

Expands retail distribution and further enhances density

•

Provident’s commercial relationships enhance M&T’s leading position in middle-

market lending

•

Provident sales / service personnel available for M&T’s existing expansion plans

19

•

Transaction Highlights

•

Commitment to Communities and Employees

•

Leading Mid-Atlantic Franchise

•

Financial Highlights

•

Summary

20

Comprehensive Loan Diligence Review

Provident Loan Composition –

9/30/08

Total Loans: $4.3 billion

Residential

Construction

12%

Commercial

Real Estate

23%

C & I

23%

Home Equity

27%

Marine and

Other

Consumer

9%

Residential

Mortgage

6%

•

M&T

completed

an

extensive

review

of

Provident’s

loan

portfolio

•

Reviewed underwriting standards

•

Analyzed loan-level portfolio data

•

Examined broad cross-section of loan

files and documentation

•

Interviewed key personnel

•

Site visits to selected residential

development properties

•

Modeled estimated credit losses under

stress scenarios

•

Leveraged M&T’s extensive operating

experience in Provident’s markets to

refine analysis

Diligence Review Process

21

Estimated Lifetime Loan Credit Losses

($ in millions)

9/30/08

Lifetime Credit Losses

Loan Category

Balance

%

$

Residential Construction

$529

34%

$182

Commercial Real Estate

990

3%

31

Commercial & Industrial

971

6%

56

Home Equity

1,135

5%

53

Marine and Other Consumer

382

12%

46

Residential Mortgage

257

6%

15

Total

$4,264

9%

$383

22

Pooled

TRUPs CDOs

36%

Corporate /

Sovereign

6%

Non-Agency

MBS

8%

FHLB Stock

2%

Municipal

Securities

9%

Treasury and

Agency MBS

39%

Comprehensive Securities Diligence Review

Provident Securities Composition –

9/30/08

•

Pooled

trust

preferred

CDOs

(“TRUPs

CDOs”)

were

a

primary

diligence

focus

•

Conducted credit analysis of over 1,000

individual banks collateralizing CDOs

•

Incorporated credit analysis in modeling cash

flows for each security

•

M&T

valued

TRUPs

CDOs

at

19.5%

of

par

–

Implied 15.9% average discount rate

–

Discount to Provident’s 9/30/08 fair value

estimate

–

$240 million write-down from amortized

book value net of unrealized losses

•

On

average,

greater

than

12%

of

the

financial

institutions

collateralizing

the

pooled

TRUPs

CDOs

would

need

to

default/defer

within

the

next

five

years

to

result

in

an

economic

loss

relative

to modeled value

Pooled Trust Preferred CDOs

$s in millions

Par Value

Mark

Pooled TRUPs CDOs

589

$         

(240)

$     

Corporate / Sovereign

101

(20)

Non-Agency MBS

126

(10)

Agency MBS and Other

819

6

Total Securities

1,636

$      

(264)

$     

23

Pro Forma Financial Impact

•

Accretive to both M&T’s GAAP and operating EPS in 2010

•

Annual operating EPS accretion of 4% -

6%

•

IRR in excess of 16%

•

M&T maintains capital in excess of well-capitalized regulatory minimums

M&T

M&T

Standalone

Pro Forma

9/30/08

at closing ¹

Tier 1 Capital / Risk-Weighted Assets

7.9%

8.7%

Total Capital / Risk-Weighted Assets

12.0%

12.4%

1.

Transaction closing estimated 2nd

quarter, 2009. Pro forma for M&T issuance of $600 million of preferred under TARP program.

Tangible Common Equity Ratio

4.9%

4.4%

24

•

Transaction Highlights

•

Commitment to Communities and Employees

•

Leading Mid-Atlantic Franchise

•

Financial Highlights

•

Summary

25

Summary

•

Shared commitment to our customers and employees

•

Complementary community-focused business models

•

Enhanced scale in desirable Mid-Atlantic region

•

Sound franchise with “de-risked”

earnings

•

Comprehensive asset diligence completed

•

Attractive transaction economics

26

Appendix

27

Median Household Income for 2008

$67,211

$61,817

$63,682

$82,846

$54,749

$30,000

$40,000

$50,000

$60,000

$70,000

$80,000

$90,000

Maryland

Virginia

Baltimore

MSA

Washington

DC MSA

National

Average

Attractive Market Demographics

Source: SNL Financial & US Dept. of Labor

Unemployment Rate

2%

3%

4%

5%

6%

7%

Washington, DC

Baltimore, MD

US Average

$14,277

$12,569

$9,423

$8,339

1

3

14

$0

$2,000

$4,000

$6,000

$8,000

$10,000

$12,000

$14,000

$16,000

Virginia

Maryland

Pennsylvania

U.S. Average

StateRank

Fed Government Spending Per Capita -

2007

•

Federal government presence mitigates

regional impact of national recession

•

Baltimore / Washington unemployment

rate remains well below national average

•

High-income markets with household

earnings well above national average

28

Improved Efficiency with Growth Opportunities

•

In-market

transaction

offers

significant

cost

savings

opportunities

in

technology,

corporate

overhead,

and

facilities

consolidation

•

M&T continues to invest within its Mid-Atlantic footprint

•

Focus on increasing market and product penetration by investing in people,

distribution, and business lines

•

12 new branches opened since 2006 and 13 branches acquired

•

More de novo branches planned for 2009 & beyond

•

Expanded Commercial banking offices to accommodate growth

•

Increased sales staff by 55% since 2004

•

New opportunities for Provident employees in combined organization

•

M&T hired nearly 800 new employees in Mid-Atlantic this year

•

200 open positions currently available

•

De novo branches planned for the footprint will need to be staffed

29

•

No revenue enhancements assumed, although M&T has a long-standing

track record of improving performance and revenue

•

Identified potential revenue growth opportunities include:

•

Leverage increased scale and market presence in Maryland to drive Business

Banking and Middle Market growth

•

Enhanced deposit gathering capabilities through improved market presence in

Maryland and DC

•

Leverage footprint expansion in Virginia to attract new households

•

Expanded branch network and product offerings provides opportunity to

cross-sell more products and services

Potential Revenue Enhancements

30

Time Deposits

33%

Savings Deposits

17%

Demand

Deposits/NOW

32%

MM Deposits

18%

Stable, Low-Cost Funding Base

Total Deposits:¹

$3.4B

3.75%

1.49%

2.35%

3.21%

1.13%

1.38%

2.06%

2.64%

1.19%

1.68%

2.56%

0.95%

0.5%

1.0%

1.5%

2.0%

2.5%

3.0%

3.5%

4.0%

2004

2005

2006

2007

Cost of Deposits

PBKS

Regional Peers

Mid-Cap Peers

Source:

SNL

Financial

and

company

filings. 

Regional

Peers

include:

FULT,

NPBC,

SASR,

SNBC,

SUSQ,

UBSI

and

VCBI.

Mid-Cap

Peers

include:

HBAN,

FHN,

ASBC,

TCB,

CNB,

CYN,

CBSH,

BOKF,

BOH,

CFR

and

VLY.

1.

Excludes

brokered

CDs.

Provident Average Customer Deposits

Composition –

Q3 2008

•

22% of deposits are commercial

•

12% annualized deposit growth since

2003

•

Deposit funding cost consistently

below peer group

31

Loan Portfolio

Residential Construction

•

96%

of

developments

in-footprint

•

Single-family

residential

focus

with

no

large

condominium

projects

•

Limited

exposure

to

outer-ring

suburbs

–

Stronger

demand

and

home

price

performance

in

core

urban

areas

Home Equity

•

Primarily in-footprint

–

< 1% in troubled markets of FL, CA, NV, AZ

•

85% branch-originated

•

Average LTV of 70% and FICO of 745

Commercial Real Estate

•

In-footprint

portfolio

•

Commercial

real

estate

vacancy

rate

of

11%

-

14%

(below

national

average)

•

Minimal

hospitality

/

retail

exposure

•

Conservative underwriting

–

75%-80% LTV (65% on land acquisition)

Marine Loans

•

Low average LTV 73% for marine loans

•

Seasoned loans; 68% documented vessels

•

Lending

focus

within

core

markets

mitigates

credit

risk

32

Additional Information:

In

connection

with

the

proposed

merger,

M&T

Bank

Corporation

(“M&T”)

will

file

with

the

U.S.

Securities

and

Exchange

Commission

(the

“SEC”)

a

Registration

Statement

on

Form

S-4

that

will

include

a

Proxy

Statement

of

Provident

Bankshares

Corporation

(“Provident”)

and

a

Prospectus

of

M&T,

as

well

as

other

relevant

documents

concerning

the

proposed

transaction.

INVESTORS

ARE

URGED

TO

READ

THE

REGISTRATION

STATEMENT

AND

THE

PROXY

STATEMENT/PROSPECTUS

REGARDING

THE

MERGER

WHEN

IT

BECOMES

AVAILABLE

AND

ANY

OTHER

RELEVANT

DOCUMENTS

FILED

WITH

THE

SEC,

AS

WELL

AS

ANY

AMENDMENTS

OR

SUPPLEMENTS

TO

THOSE

DOCUMENTS,

BECAUSE

THEY

WILL

CONTAIN

IMPORTANT

INFORMATION. 

Investors

will

be

able

to

obtain

a

free

copy

of

the

Proxy

Statement/Prospectus,

as

well

as

other

filings

containing

information

about

M&T

and

Provident

at

the

SEC’s

Internet

site

(http://www.sec.gov).

You

will

also

be

able

to

obtain

these

documents,

free

of

charge,

at

http://www.mtb.com

under

the

tab

“About

Us”

and

then

under

the

heading

“Investor

Relations”

and

then

under

“SEC

Filings.”

Copies

of

the

Proxy

Statement/Prospectus

and

the

SEC

filings

that

will

be

incorporated

by

reference

in

the

Proxy

Statement/Prospectus

can

also

be

obtained,

free

of

charge,

by

directing

a

request

to

Investor

Relations,

One

M&T

Plaza,

Buffalo,

New

York

14203,

(716)

842-5138.

M&T

and

Provident

and

their

respective

directors

and

executive

officers

may

be

deemed

to

be

participants

in

the

solicitation

of

proxies

from

the

stockholders

of

Provident

in

connection

with

the

proposed

merger. 

Information

about

the

directors

and

executive

officers

of

M&T

is

set

forth

in

the

proxy

statement

for

M&T’s

2008

annual

meeting

of

stockholders,

as

filed

with

the

SEC

on

a

Schedule

14A

on

March

6,

2008. 

Information

about

the

directors

and

executive

officers

of

Provident

is

set

forth

in

the

proxy

statement

for

Provident’s

2008

annual

meeting

of

stockholders,

as

filed

with

the

SEC

on

a

Schedule

14A

on

March

12,

2008.

Additional

information

regarding

the

interests

of

those

persons

and

other

persons

who

may

be

deemed

participants

in

the

transaction

may

be

obtained

by

reading

the

Proxy

Statement/Prospectus

regarding

the

proposed

merger

when

it

becomes

available.

You

may

obtain

free

copies

of

this

document

as

described

in

the

preceding

paragraph.