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M&T Bank Corporation Announces Financial Results for 2006

BUFFALO, N.Y., Jan 11, 2007 /PRNewswire-FirstCall via COMTEX News Network/ -- M&T Bank Corporation ("M&T")(NYSE: MTB) today reported its results of operations for 2006.

GAAP Results of Operations. Diluted earnings per share measured in accordance with generally accepted accounting principles ("GAAP") rose 10% to $7.37 in 2006 from $6.73 in 2005. On the same basis, net income in 2006 increased 7% to $839 million from $782 million in 2005. GAAP-basis net income for 2006 expressed as a rate of return on average assets and average common stockholders' equity was 1.50% and 13.89%, respectively, compared with 1.44% and 13.49%, respectively, in 2005.

GAAP-basis diluted earnings per share for 2006's fourth quarter of $1.88 were 6% higher than $1.78 in the year-earlier period. Net income for the recently completed quarter aggregated $213 million, up 4% from $205 million in the final quarter of 2005. Expressed as an annualized rate of return on average assets and average common stockholders' equity, GAAP-basis net income for the fourth quarter of 2006 was 1.50% and 13.55%, respectively, compared with 1.48% and 13.85%, respectively, in the corresponding period of 2005.

Reflecting on M&T's financial performance in 2006, Rene F. Jones, Executive Vice President and Chief Financial Officer, commented, "Despite a rather difficult interest rate environment, 2006 proved to be a successful year for M&T. We completed our infrastructure, smartspend and community bank projects, saw strong growth in our Mid-Atlantic franchise, expanded our branch network in upstate New York and had another year of double-digit growth in earnings per share."

Supplemental Reporting of Non-GAAP Results of Operations. Since 1998, M&T has consistently provided supplemental reporting of its results on a "net operating" or "tangible" basis, from which M&T excludes the after-tax effect of amortization of core deposit and other intangible assets (and the related goodwill, core deposit intangible and other intangible asset balances, net of applicable deferred tax amounts) and expenses associated with merging acquired operations into M&T, because such expenses are considered by management to be "nonoperating" in nature. Although "net operating income" as defined by M&T is not a GAAP measure, M&T's management believes that this information helps investors understand the effect of acquisition activity in reported results. Amortization of core deposit and other intangible assets, after tax effect, for the years ended December 31, 2006 and 2005 totaled $38 million ($.33 per diluted share) and $35 million ($.30 per diluted share), respectively. Similar amortization charges, after tax effect, were $11 million ($.10 per diluted share) in the fourth quarter of 2006, compared with $8 million ($.07 per diluted share) in the year-earlier quarter. For the year ended December 31, 2006, the after-tax effect of amortization of the core deposit intangible associated with the June 2006 acquisition by M&T Bank of 21 branch offices in Buffalo and Rochester, New York from Citibank, N.A. was $11 million or $.09 of diluted earnings per share. Acquisition and integration-related expenses related to the branch acquisition totaled $3 million, after tax effect, or $.03 of diluted earnings per share, during 2006. There were no similar expenses in 2006's fourth quarter or during 2005.

Diluted net operating earnings per share, which exclude the impact of amortization of core deposit and other intangible assets and merger-related expenses, rose 10% to $7.73 in 2006 from $7.03 in 2005. Net operating income for 2006 increased 8% to $881 million from $817 million in 2005. Net operating income in 2006 expressed as a rate of return on average tangible assets and average tangible stockholders' equity was 1.67% and 29.55%, respectively, compared with 1.60% and 29.06% in 2005.

For 2006's fourth quarter, diluted net operating earnings per share were $1.98, up 7% from $1.85 in the corresponding 2005 period. Net operating income for the final quarter of 2006 increased 6% to $225 million from $213 million in the year-earlier period. For the quarter ended December 31, 2006, net operating income expressed as an annualized rate of return on average tangible assets and average tangible equity was 1.67% and 28.71%, respectively, compared with 1.63% and 29.12% in the similar period of 2005.

Reconciliation of GAAP and Non-GAAP Results of Operations. A reconciliation of diluted earnings per share and net income with diluted net operating earnings per share and net operating income follows:


                                    Three months ended      Year ended
                                        December 31         December 31
                                       2006     2005       2006     2005
                                       ----     ----       ----     ----
                                     (in thousands, except per share)

    Diluted earnings per share      $   1.88     1.78       7.37     6.73
    Amortization of core deposit
     and other intangible assets(1)      .10      .07        .33      .30
    Merger-related expenses (1)            -        -        .03        -
                                     -------  -------    -------  -------
    Diluted net operating earnings
     per share                      $   1.98     1.85       7.73     7.03
                                     =======  =======    =======  =======

    Net income                      $213,329  204,985    839,189  782,183
    Amortization of core deposit
     and other intangible assets(1)   11,404    7,753     38,418   34,682
    Merger-related expenses (1)            -        -      3,048        -
                                     -------  -------    -------  -------
    Net operating income            $224,733  212,738    880,655  816,865
                                     =======  =======    =======  =======
    (1) After any related tax effect



Reconciliation of Total Assets and Equity to Tangible Assets and Equity. A reconciliation of average assets and equity with average tangible assets and average tangible equity follows:

                                    Three months ended      Year ended
                                       December 31         December 31
                                      2006     2005       2006     2005
                                      ----     ----       ----     ----
                                                (in millions)

    Average assets                  $56,575   54,835     55,839   54,135
    Goodwill                         (2,909)  (2,904)    (2,908)  (2,904)
    Core deposit and other
      intangible assets                (261)    (115)      (191)    (135)
    Deferred taxes                       32       44         38       52
                                     ------   ------     ------   ------
    Average tangible assets         $53,437   51,860     52,778   51,148
                                     ======   ======     ======   ======

    Average equity                  $ 6,244    5,873      6,041    5,798
    Goodwill                         (2,909)  (2,904)    (2,908)  (2,904)
    Core deposit and other
      intangible assets                (261)    (115)      (191)    (135)
    Deferred taxes                       32       44         38       52
                                     ------   ------     ------   ------
    Average tangible equity         $ 3,106    2,898      2,980    2,811
                                     ======   ======     ======   ======


Taxable-equivalent Net Interest Income. Taxable-equivalent net interest income was $1.84 billion in 2006, up 1% from $1.81 billion in 2005. Average loans and leases outstanding rose 5% to $41.4 billion in 2006 from $39.5 billion in 2005. Such growth was attributable to higher average outstanding balances in commercial loans, commercial real estate loans and residential real estate loans, offset in part, by a decline in average consumer loans outstanding. The decrease in consumer loan balances resulted from lower automobile loans and leases, reflecting M&T's decision to allow such loan balances to decline rather than matching interest rates offered by competitors. Partially offsetting the positive impact of loan growth was a narrowing of M&T's net interest margin, or taxable-equivalent net interest income expressed as a percentage of average earning assets, to 3.70% in 2006 from 3.77% in 2005.

During the fourth quarter of 2006, taxable-equivalent net interest income was $472 million, 4% higher than $454 million in the corresponding 2005 quarter. Average loans outstanding and annualized net interest margin in the final quarter of 2006 were $42.5 billion and 3.73%, respectively, compared with $40.4 billion and 3.69% in the year-earlier period. M&T's net interest margin in the recent quarter was improved from 3.68% in the immediately preceding quarter and 3.66% in 2006's second quarter.

Provision for Credit Losses/Asset Quality. The provision for credit losses totaled $80 million in 2006, down from $88 million in 2005. Net loan charge-offs in 2006 totaled $68 million, or .16% of average loans outstanding, compared with $77 million or .19% of average loans in 2005. The provision for credit losses was $28 million during the final three months of 2006, compared with $23 million in the similar 2005 period. Net charge-offs of loans were $24 million in the fourth quarter of 2006, representing an annualized .23% of average loans outstanding, compared with $23 million or .22% during the year- earlier quarter.

Loans classified as nonperforming totaled $224 million, or .52% of total loans at December 31, 2006, compared with $156 million or .39% a year earlier. That increase was largely due to the addition of four relationships with automobile dealers totaling approximately $41 million of loans outstanding at December 31, 2006. Continued slowing of domestic automobile sales has resulted in a difficult operating environment for certain automobile dealers, leading to deteriorating financial results. Also contributing to the higher nonperforming loan balance at December 31, 2006 was a $10 million commercial loan added to that category in the fourth quarter of 2006 that was subsequently paid off in early January 2007. Loans past due 90 days or more and accruing interest totaled $111 million at the recent year-end, compared with $129 million at December 31, 2005. Included in these past due, but accruing loans at December 31, 2006 and 2005 were $77 million and $106 million, respectively, of loans guaranteed by government-related entities. Assets taken in foreclosure of defaulted loans totaled $12 million at December 31, 2006 and $9 million at December 31, 2005.

Allowance for Credit Losses. The allowance for credit losses was $650 million, or 1.51% of total loans, at December 31, 2006, compared with $638 million, or 1.58%, a year earlier. The decline in the allowance as a percentage of total loans from 2005's year-end to December 31, 2006 reflects a change in portfolio mix resulting from higher balances of residential real estate loans and lower balances of consumer loans. In general, M&T experiences significantly lower charge-offs on residential real estate loans than on consumer loans. The ratio of M&T's allowance for credit losses to nonperforming loans was 290% and 408% at December 31, 2006 and 2005, respectively.

Noninterest Income and Expense. Noninterest income rose 10% to $1.05 billion in 2006, from $950 million in 2005. Higher mortgage banking revenues, service charges on deposit accounts, trust income, brokerage services income, and other revenues contributed to that improvement. Included in noninterest income in 2006 was a $13 million third quarter gain resulting from the accelerated recognition of a purchase accounting premium related to the call of a $200 million Federal Home Loan Bank of Atlanta ("FHLB") borrowing assumed in a previous acquisition. Losses from bank investment securities in 2005 included a $29 million non-cash, other-than-temporary impairment charge in the third quarter related to preferred stock issuances of the Federal National Mortgage Association and the Federal Home Loan Mortgage Corporation. Noninterest income of $256 million in the fourth quarter of 2006 was up 3% from $249 million in the similar 2005 quarter, due in part to higher trust and brokerage services activities, service charges on deposit accounts and revenues from bank owned life insurance, partially offset by a decline in mortgage banking revenues.

Noninterest expense in 2006 totaled $1.55 billion, a 4% increase from $1.49 billion in 2005. Included in such amounts are expenses considered to be "nonoperating" in nature, consisting of amortization of core deposit and other intangible assets of $63 million in 2006 and $57 million in 2005 and merger- related expenses of $5 million in 2006. Exclusive of these nonoperating expenses, noninterest operating expenses were $1.48 billion in 2006 and $1.43 billion in 2005. Included in 2006's operating expenses was an $18 million tax-deductible contribution made in that year's third quarter to The M&T Charitable Foundation, a tax-exempt private charitable foundation. Excluding the impact of the charitable contribution, operating expenses in 2006 increased $37 million, or 3% from 2005. The most significant contributor to the increase in noninterest expense was a higher level of salaries expense in 2006, reflecting the impact of merit pay increases, an increase in the number of full-time equivalent employees and increased stock-based compensation costs.

Noninterest expense in the final quarter of 2006 totaled $384 million, compared with $369 million in the year-earlier quarter. Included in such amounts were amortization of core deposit and other intangible assets of $19 million in 2006 and $13 million in 2005. Exclusive of these nonoperating expenses, noninterest operating expenses were $365 million in the recent quarter, compared with $356 million in 2005's fourth quarter. Higher costs for salaries and a $1 million increase to the valuation allowance for the impairment of capitalized residential mortgage servicing rights in 2006's fourth quarter, compared with a partial reversal of a portion of such valuation allowance of $6 million in the year-earlier quarter, were the leading contributors to the rise in noninterest expense.

The efficiency ratio, or noninterest operating expenses divided by the sum of taxable-equivalent net interest income and noninterest income (exclusive of gains and losses from bank investment securities), measures the relationship of operating expenses to revenues. M&T's efficiency ratio was 51.5% in 2006, compared with 51.2% in 2005. During 2006's fourth quarter, M&T's efficiency ratio was 50.2%, compared with 50.7% in the year-earlier quarter.

Balance Sheet. M&T had total assets of $57.1 billion at December 31, 2006, up from $55.1 billion a year earlier. Loans and leases, net of unearned discount, totaled $42.9 billion at the 2006 year-end, up 6% from $40.3 billion at December 31, 2005. Deposits were $39.9 billion at December 31, 2006, compared with $37.1 billion at the end of 2005. Total stockholders' equity was $6.3 billion at December 31, 2006, representing 11.01% of total assets, compared with $5.9 billion or 10.66% a year earlier. Common stockholders' equity per share was $56.94 at December 31, 2006, compared with $52.39 a year earlier. Tangible equity per common share was $28.57 and $25.91 at December 31, 2006 and 2005, respectively. In the calculation of tangible equity per common share, stockholders' equity is reduced by the carrying values of goodwill and core deposit and other intangible assets, net of applicable deferred tax balances, which aggregated $3.1 billion and $3.0 billion at December 31, 2006 and 2005, respectively.

In November 2005, M&T announced that it had been authorized by its Board of Directors to purchase up to 5,000,000 shares of its common stock. Pursuant to such plan, during the three-month and twelve-month periods ended December 31, 2006, M&T repurchased 622,300 shares and 3,259,000 shares, respectively, at an average cost per share of $120.46 and $114.72. Through December 31, 2006, M&T had repurchased 3,303,700 shares of its common stock pursuant to the repurchase plan at an average cost of $114.66 per share.

Conference Call. Investors will have an opportunity to listen to M&T's conference call to discuss fourth quarter and full year financial results today at 10:00 a.m. Eastern Time. Domestic callers wishing to participate in the call may dial 877-780-2276. International participants, using any applicable international calling codes, may dial 973-582-2700. Callers should reference M&T Bank Corporation or conference ID #8278151. The conference call will also be webcast live on M&T's website at http://ir.mandtbank.com/conference.cfm. A replay of the call will be available until Friday, January 12, 2007 by calling 877-519-4471, or 973-341-3080 for international participants, and by making reference to ID #8278151. The event will be archived and available by 3:00 p.m. today on M&T's website at http://ir.mandtbank.com/conference.cfm.

Forward-Looking Statements. This news release contains forward-looking statements that are based on current expectations, estimates and projections about M&T'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.

Future Factors include changes in interest rates, spreads on earning assets and interest-bearing liabilities, and interest rate sensitivity; prepayment speeds, loan originations and credit losses; sources of liquidity; common shares outstanding; common stock price volatility; fair value of and number of stock-based compensation awards to be issued in future periods; legislation affecting the financial services industry as a whole, and M&T and its subsidiaries individually or collectively; regulatory supervision and oversight, including monetary policy and required capital levels; changes in accounting policies or procedures as may be required by the Financial Accounting Standards Board or other regulatory agencies; 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; 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; financial resources in the amounts, at the times and on the terms required to support M&T and its subsidiaries' future businesses; and material differences in the actual financial results of merger and acquisition activities compared with M&T's initial expectations, including the full realization of anticipated cost savings and revenue enhancements.

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 and political conditions, either nationally or in the states in which M&T and its subsidiaries do business, including interest rate and currency exchange rate fluctuations, changes and trends in the securities markets, and other Future Factors.



    M&T BANK CORPORATION
    Financial Highlights
                          Three months ended             Year ended
    Amounts in thousands,    December 31                December 31
     except per share     ------------------         -----------------
                            2006      2005   Change    2006       2005  Change
                          --------   ------- ------  --------    -----  ------
    Performance
    -----------

    Net income            $213,329   204,985   4%  $  839,189    782,183   7%

    Per common share:
     Basic earnings       $   1.93      1.82   6%  $     7.55       6.88  10%
     Diluted earnings         1.88      1.78   6         7.37       6.73  10
     Cash dividends       $    .60       .45  33   $     2.25       1.75  29


    Common shares
     outstanding:
      Average -
       diluted (1)         113,468   115,147  -1%     113,918    116,232  -2%
      Period end (2)       110,308   112,160  -2      110,308    112,160  -2

    Return on
     (annualized):
      Average total
       assets                 1.50%     1.48%            1.50%      1.44%
      Average common
       stockholders'
       equity                13.55%    13.85%           13.89%     13.49%

    Taxable-equivalent
     net interest income  $471,841   454,161   4%  $1,837,208  1,811,654   1%

    Yield on average
     earning assets           6.92%     6.16%            6.71%      5.83%
    Cost of interest-
     bearing liabilities      3.83%     2.98%            3.61%      2.51%
    Net interest spread       3.09%     3.18%            3.10%      3.32%
    Contribution of
     interest-free funds       .64%      .51%             .60%       .45%
    Net interest margin       3.73%     3.69%            3.70%      3.77%

    Net charge-offs to
     average total net
     loans (annualized)        .23%      .22%             .16%       .19%

    Net operating
     results (3)
    -------------

    Net operating income  $224,733   212,738   6%  $  880,655    816,865   8%
    Diluted net operating
     earnings per common
     share                    1.98      1.85   7         7.73       7.03  10
    Return on
     (annualized):
     Average tangible
      assets                  1.67%     1.63%            1.67%      1.60%
     Average tangible
      common equity          28.71%    29.12%           29.55%     29.06%
    Efficiency ratio         50.22%    50.69%           51.51%     51.20%


                             At December 31
                           ------------------
    Loan quality            2006       2005  Change
    ------------           -------   ------- ------

    Nonaccrual loans      $209,272   141,067  48%

    Renegotiated loans      14,956    15,384  -3
                           -------   -------
      Total nonperforming
       loans              $224,228   156,451  43%
                           =======   =======
    Accruing loans past
     due 90 days or more  $111,307   129,403 -14%

    Nonperforming loans
     to total net loans        .52%      .39%

    Allowance for credit
     losses to total net
     loans                    1.51%     1.58%

    -------------------------------------------------------------------------
    (1)  Includes common stock equivalents.
    (2)  Includes common stock issuable under deferred compensation plans.
    (3)  Excludes amortization and balances related to goodwill and core
         deposit and other intangible assets and merger-related expenses
         which, except in the calculation of the efficiency ratio, are net of
         applicable income tax effects.  A reconciliation of net income and
         net operating income is included herein.



    M&T BANK CORPORATION
    Condensed Consolidated Statement of Income

                            Three months ended           Year ended
                               December 31              December 31
                             ----------------        --------------------
    Dollars in thousands      2006     2005   Change    2006      2005  Change
                             -------  ------- ------ ---------  --------- ----
    Interest income         $871,074  753,101  16%  $3,314,093  2,788,694  19%
    Interest expense         404,356  303,493  33    1,496,552    994,351  51
                             -------  -------        ---------  ---------
    Net interest income      466,718  449,608   4    1,817,541  1,794,343   1

    Provision for credit
     losses                   28,000   23,000  22       80,000     88,000  -9
                             -------  -------        ---------  ---------
    Net interest income
     after provision for
     credit losses           438,718  426,608   3    1,737,541  1,706,343   2

    Other income
      Mortgage banking
       revenues               30,299   36,069 -16      143,181    136,114   5
      Service charges on
       deposit accounts       96,211   93,718   3      380,950    369,918   3
      Trust income            37,004   34,663   7      140,781    134,679   5
      Brokerage services
       income                 16,296   13,527  20       60,295     55,572   8
      Trading account and
       foreign exchange
       gains                   7,005    5,705  23       24,761     22,857   8
      Gain (loss) on bank
       investment securities   1,139     (384)  -        2,566    (28,133)  -
      Other revenues from
       operations             68,463   65,306   5      293,318    258,711  13
                             -------  -------        ---------  ---------
        Total other income   256,417  248,604   3    1,045,852    949,718  10


    Other expense
      Salaries and
       employee benefits     213,129  203,317   5      873,353    822,239   6
      Equipment and net
       occupancy              41,164   44,042  -7      168,776    173,689  -3
      Printing, postage
       and supplies            9,023    7,817  15       33,956     33,743   1
      Amortization of core
       deposit and other
       intangible assets      18,687   12,703  47       63,008     56,805  11
      Other costs of
       operations            101,807  101,235   1      412,658    398,666   4
                             -------  -------        ---------  ---------
        Total other expense  383,810  369,114   4    1,551,751  1,485,142   4

    Income before income
     taxes                   311,325  306,098   2    1,231,642  1,170,919   5

    Applicable income taxes   97,996  101,113  -3      392,453    388,736   1
                             -------  -------        ---------  ---------
    Net income              $213,329  204,985   4%  $  839,189    782,183   7%
                             =======  =======        =========  =========


    M&T BANK CORPORATION
    Condensed Consolidated Balance Sheet

                                                  December 31
                                            -----------------------
    Dollars in thousands                       2006         2005     Change
                                            ----------    ---------  ------
    ASSETS

    Cash and due from banks                $ 1,605,506    1,479,239      9%

    Interest-bearing deposits at banks           6,639        8,408    -21

    Federal funds sold and agreements
     to resell securities                      119,458       11,220    965

    Trading account assets                     136,752      191,617    -29

    Investment securities                    7,251,598    8,400,164    -14

    Loans and leases, net of unearned
     discount                               42,947,297   40,330,645      6
      Less: allowance for credit losses        649,948      637,663      2
                                            ----------   ----------
      Net loans and leases                  42,297,349   39,692,982      7

    Goodwill                                 2,908,849    2,904,081      -

    Core deposit and other intangible
     assets                                    250,233      108,260    131

    Other assets                             2,488,521    2,350,435      6
                                            ----------    ---------
      Total assets                         $57,064,905   55,146,406      3%
                                            ==========   ==========

    LIABILITIES AND STOCKHOLDERS' EQUITY

    Noninterest-bearing deposits at U.S.
     offices                               $ 7,879,977    8,141,928     -3%

    Other deposits at U.S. offices          26,600,858   26,148,714      2

    Deposits at foreign office               5,429,668    2,809,532     93
                                            ----------    ---------
      Total deposits                        39,910,503   37,100,174      8

    Short-term borrowings                    3,094,214    5,152,872    -40

    Accrued interest and other liabilities     888,352      819,980      8

    Long-term borrowings                     6,890,741    6,196,994     11
                                            ----------    ---------
      Total liabilities                     50,783,810   49,270,020      3

    Stockholders' equity (1)                 6,281,095    5,876,386      7
                                            ----------    ---------
      Total liabilities and stockholders'
       equity                              $57,064,905   55,146,406      3%
                                            ==========   ==========

    -----------------------------------------------------------------------
    (1)  Reflects accumulated other comprehensive loss, net of applicable
         income tax effect, of $53.6 million at December 31, 2006 and
         $97.9 million at December 31, 2005.



    M&T BANK CORPORATION
    Condensed Consolidated Average Balance Sheet
    and Annualized Taxable-equivalent Rates

                                            Three months ended
                                                December 31
                                     -------------------------------
    Dollars in millions                    2006             2005
                                     --------------   -------------- Change in
                                     Balance   Rate   Balance   Rate   balance
    ASSETS                           -------   ----   -------   ----   -------

    Interest-bearing deposits at
     banks                          $    11    2.45%      10    2.14%    8%

    Federal funds sold and
     agreements to resell
     securities                         125    7.42       19    4.29   541

    Trading account assets               69    1.98       99    2.57   -30

    Investment securities             7,556    4.88    8,302    4.48    -9

    Loans and leases, net of
     unearned discount
      Commercial, financial, etc     11,523    7.32   10,738    6.25     7
      Real estate - commercial       15,492    7.53   14,419    6.92     7
      Real estate - consumer          5,537    6.54    4,674    6.04    18
      Consumer                        9,922    7.42   10,572    6.53    -6
                                     ------           ------
        Total loans and
         leases, net                 42,474    7.29   40,403    6.51     5
                                     ------           ------
      Total earning assets           50,235    6.92   48,833    6.16     3

    Goodwill                          2,909            2,904             -

    Core deposit and other
     intangible assets                  261              115           127

    Other assets                      3,170            2,983             6
                                     ------           ------
      Total assets                  $56,575           54,835             3%
                                     ======           ======


    LIABILITIES AND
     STOCKHOLDERS' EQUITY

    Interest-bearing deposits
      NOW accounts                  $   461     .92      421     .67    10%
      Savings deposits               14,549    1.60   14,498    1.12     -
      Time deposits                  12,086    4.66   11,018    3.69    10
      Deposits at foreign office      3,777    5.20    3,227    3.95    17
                                     ------           ------
        Total interest-bearing
         deposits                    30,873    3.23   29,164    2.40     6
                                     ------           ------
    Short-term borrowings             4,794    5.31    4,625    4.03     4
    Long-term borrowings              6,174    5.73    6,606    4.81    -7
                                     ------           ------
      Total interest-bearing
       liabilities                   41,841    3.83   40,395    2.98     4

    Noninterest-bearing deposits      7,631            7,842            -3

    Other liabilities                   859              725            19
                                     ------           ------
      Total liabilities              50,331           48,962             3

    Stockholders' equity              6,244            5,873             6
                                     ------           ------
      Total liabilities and
       stockholders' equity         $56,575           54,835             3%
                                     ======           ======

    Net interest spread                        3.09             3.18
    Contribution of
     interest-free funds                        .64              .51
    Net interest margin                        3.73%            3.69%


    M&T BANK CORPORATION
    Condensed Consolidated Average Balance Sheet
    and Annualized Taxable-equivalent Rates

                                                 Year ended
                                                 December 31
                                     --------------------------------
    Dollars in millions                     2006             2005
                                     --------------    ------------- Change in
                                     Balance   Rate    Balance  Rate  balance
                                     -------   ----    -------  ----  -------
    ASSETS

    Interest-bearing deposits
     at banks                       $     12    3.01%      10    1.64%   20%

    Federal funds sold and
     agreements to resell
     securities                          81    6.91       23    3.55   256


    Trading account assets               90    2.71       80    1.92    12

    Investment securities             8,036    4.80    8,476    4.40    -5

    Loans and leases, net of
     unearned discount
      Commercial, financial, etc     11,319    7.09   10,455    5.64     8
      Real estate - commercial       15,096    7.32   14,341    6.56     5
      Real estate - consumer          5,015    6.38    3,925    6.00    28
      Consumer                       10,003    7.12   10,808    6.15    -7
                                     ------           ------
        Total loans and leases,
         net                         41,433    7.09   39,529    6.15     5
                                     ------           ------
      Total earning assets           49,652    6.71   48,118    5.83     3

    Goodwill                          2,908            2,904             -

    Core deposit and other
     intangible assets                  191              135            41

    Other assets                      3,088            2,978             4
                                     ------           ------
      Total assets                  $55,839           54,135             3%
                                     ======           ======

    LIABILITIES AND
     STOCKHOLDERS' EQUITY

    Interest-bearing deposits
      NOW accounts                  $   435     .79      400     .55     9%
      Savings deposits               14,401    1.40   14,889     .94    -3
      Time deposits                  12,420    4.44    9,158    3.22    36
      Deposits at foreign office      3,610    4.94    3,819    3.15    -5
                                     ------           ------
        Total interest-bearing
         deposits                    30,866    3.03   28,266    1.97     9
                                     ------           ------
    Short-term borrowings             4,530    5.03    4,890    3.23    -7
    Long-term borrowings              6,013    5.55    6,411    4.37    -6
                                     ------           ------
    Total interest-bearing
     liabilities                     41,409    3.61   39,567    2.51     5

    Noninterest-bearing deposits      7,555            8,050            -6

    Other liabilities                   834              720            16
                                     ------           ------
      Total liabilities              49,798           48,337             3

    Stockholders' equity              6,041            5,798             4
                                     ------           ------
      Total liabilities and
       stockholders' equity         $55,839           54,135             3%
                                     ======           ======
    Net interest spread                        3.10             3.32
    Contribution of
     interest-free funds                        .60              .45
    Net interest margin                        3.70%            3.77%


    INVESTOR CONTACT: Donald J. MacLeod
                      (716) 842-5462

    MEDIA CONTACT:    C. Michael Zabel
                      (716) 842-2311

SOURCE M&T Bank Corporation

Investor Contact - Donald J. MacLeod, +1-716-842-5462; Media Contact - C. Michael
Zabel, +1-716-842-2311
http://www.mandtbank.com

Copyright (C) 2007 PR Newswire. All rights reserved

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