View Filing Data

Document and Company Information - USD ($)	6 Months Ended
Document and Company Information - USD ($)	Jun. 30, 2009	Jul. 24, 2009	Jun. 30, 2008
Document And Company Information [Abstract]
Entity Registrant Name	M&T BANK CORPORATION
Entity Central Index Key	0000036270
Document Type	10-Q
Document Period End Date	Jun. 30, 2009
Amendment Flag	true
Amendment Description	Amended 10-Q
Current Fiscal Year End Date	--12-31
Entity Well-known Seasoned Issuer	Yes
Entity Voluntary Filers	No
Entity Current Reporting Status	Yes
Entity Filer Category	Large Accelerated Filer
Entity Public Float			$ 5,001,234,294
Entity Common Stock, Shares Outstanding		117,956,043

Consolidated Balance Sheet - USD ($) $ in Thousands	Jun. 30, 2009	Dec. 31, 2008
Assets
Cash and due from banks	$ 1,148,428	$ 1,546,804
Interest-bearing deposits at banks	59,950	10,284
Federal funds sold	2,300	21,347
Agreements to resell securities	0	90,000
Trading account	495,324	617,821
Investment securities (includes pledged securities that can be sold or repledged of 4,429,821 at June 30, 2009; $1,870,097 at December 31, 2008)
Available for sale (cost: $7,531,537 at June 30, 2009; $7,656,635 at December 31, 2008)	6,963,004	6,850,193
Held to maturity (fair value: $414,173 at June 30, 2009; $394,752 at December 31, 2008)	610,777	485,838
Other (fair value: $581,653 at June 30, 2009; $583,176 at December 31, 2008)	581,653	583,176
Total investment securities	8,155,434	7,919,207
Loans and leases	53,075,393	49,359,737
Unearned discount	(360,749)	(359,274)
Allowance for credit losses	(855,365)	(787,904)
Loans and leases, net	51,859,279	48,212,559
Premises and equipment	442,162	388,855
Goodwill	3,524,625	3,192,128
Core deposit and other intangible assets	216,072	183,496
Accrued interest and other assets	4,009,643	3,633,256
Total assets	69,913,217	65,815,757
Liabilities
Noninterest-bearing deposits	12,403,999	8,856,114
NOW accounts	1,162,023	1,141,308
Savings deposits	22,519,330	19,488,918
Time deposits	9,584,351	9,046,937
Deposits at foreign office	1,085,004	4,047,986
Total deposits	46,754,707	42,581,263
Federal funds purchased and agreements to repurchase securities	901,422	970,529
Other short-term borrowings	2,049,727	2,039,206
Accrued interest and other liabilities	1,238,959	1,364,879
Long-term borrowings	11,568,238	12,075,149
Total liabilities	62,513,053	59,031,026
Stockholders' equity
Preferred stock, par value $1.00, 1,000,000 shares authorized, 778,000 shares issued and oustanding at June 30, 2009; 600,000 shares issued and oustanding at December 31, 2008 (liquidation preference $1,000 per share)	725,472	567,463
Common stock, $.50 par, 250,000,000 shares authorized, 120,396,611 shares issued	60,198	60,198
Common stock issuable, 73,679 shares at June 30, 2009; 78,447 shares at December 31, 2008	4,244	4,617
Additional paid-in capital	2,448,851	2,897,907
Retained earnings	5,003,551	5,062,754
Accumulated other comprehensive income (loss), net	(580,756)	(736,881)
Treasury stock - common, at cost - 2,458,153 shares at June 30, 2009; 10,031,302 shares at December 31, 2008	(261,396)	(1,071,327)
Total stockholders' equity	7,400,164	6,784,731
Total liabilities and stockholders' equity	$ 69,913,217	$ 65,815,757

Consolidated Balance Sheet (Parenthetical)	Jun. 30, 2009	Jun. 30, 2009 USD ($) shares	Dec. 31, 2008	Dec. 31, 2008 USD ($) shares
Statement [Line Items]
Pledged securities that can be sold or repledged \| $		$ 4,429,821,000		$ 1,870,097,000
Investment securities, available for sale, cost \| $		7,531,537,000		7,656,635,000
Investment securities, held to maturity, fair value \| $		414,173,000		394,752,000
Investment securities, other, fair value \| $		581,653,000		583,176,000
Preferred stock, par value \| $		$ 1		$ 1
Preferred stock, shares authorized		1,000,000		1,000,000
Preferred stock, shares issued		778,000		600,000
Preferred stock, shares outstanding		778,000		600,000
Preferred stock, liquidation preference per share	pure 1,000		pure 1,000
Commmon stock, par value \| $		$ 0.5		$ 0.5
Commmon stock, shares authorized		250,000,000		250,000,000
Commmon stock, shares issued		120,396,611		120,396,611
Common stock issuable, shares		73,679		78,447
Treasury stock - common, shares		2,458,153		10,031,302

Consolidated Statement of Income - USD ($) shares in Thousands, $ in Thousands	3 Months Ended		6 Months Ended
	Jun. 30, 2009	Jun. 30, 2008	Jun. 30, 2009	Jun. 30, 2008
Interest income
Loans and leases, including fees	$ 574,234	$ 708,083	$ 1,128,563	$ 1,476,474
Deposits at banks	5	22	13	66
Federal funds sold	20	52	39	137
Agreements to resell securities	23	440	62	1,311
Trading account	194	143	315	402
Investment securities, fully taxable	101,133	105,809	199,600	216,854
Investment securities, exempt from federal taxes	1,814	3,025	3,343	6,492
Total interest income	677,423	817,574	1,331,935	1,701,736
Interest expense
NOW accounts	246	629	573	1,647
Savings deposits	26,362	60,317	68,284	126,939
Time deposits	55,697	79,467	116,026	186,110
Deposits at foreign office	576	22,075	1,557	60,448
Short-term borrowings	2,015	42,612	4,363	104,233
Long-term borrowings	90,960	125,842	191,758	256,877
Total interest expense	175,856	330,942	382,561	736,254
Net interest income	501,567	486,632	949,374	965,482
Provision for credit losses	147,000	100,000	305,000	160,000
Net interest income after provision for credit losses	354,567	386,632	644,374	805,482
Other income
Mortgage banking revenues	52,983	38,219	109,216	78,289
Service charges on deposit accounts	112,479	110,340	213,508	213,794
Trust income	32,442	40,426	67,322	80,730
Brokerage services income	13,493	17,211	28,886	32,684
Trading account and foreign exchange gains	7,543	6,636	8,978	11,349
Gain on bank investment securities	292	325	867	33,772
Total other-than-temporary impairment ("OTTI") losses	(75,697)	(5,746)	(138,505)	(5,746)
Portion of OTTI losses recognized in other comprehensive income (before taxes)	50,928	0	81,537	0
Net OTTI losses recognized in earnings	(24,769)	(5,746)	(56,968)	(5,746)
Equity in earnings of Bayview Lending Group LLC	(207)	(13,026)	(4,351)	(14,286)
Other revenues from operations	77,393	76,797	136,532	153,259
Total other income	271,649	271,182	503,990	583,845
Other expense
Salaries and employee benefits	249,952	236,127	499,344	487,998
Equipment and net occupancy	51,321	47,252	99,493	94,017
Printing, postage and supplies	11,554	9,120	20,649	19,016
Amortization of core deposit and other intangible assets	15,231	16,615	30,601	35,098
Deposit insurance	49,637	1,534	55,493	3,073
Other costs of operations	186,015	109,062	296,476	206,212
Total other expense	563,710	419,710	1,002,056	845,414
Income before taxes	62,506	238,104	146,308	543,913
Income taxes	11,318	77,839	30,899	181,452
Net income	51,188	160,265	115,409	362,461
Net income available to common shareholders	$ 40,516	$ 160,265	$ 95,105	$ 362,461
Net income per common share
Basic	$ 0.36	$ 1.45	$ 0.85	$ 3.29
Diluted	0.36	1.44	0.85	3.26
Cash dividends per common share	$ 0.7	$ 0.7	$ 1.4	$ 1.4
Average common shares outstanding
Basic	113,218	110,191	111,836	110,104
Diluted	113,521	111,227	111,988	111,097

Consolidated Statement of Cash Flows - USD ($) $ in Thousands	3 Months Ended		6 Months Ended
	Jun. 30, 2009	Jun. 30, 2008	Jun. 30, 2009	Jun. 30, 2008
Cash flows from operating activities
Net income	$ 51,188	$ 160,265	$ 115,409	$ 362,461
Adjustments to reconcile net income to net cash provided by operating activities
Provision for credit losses	147,000	100,000	305,000	160,000
Depreciation and amortization of premises and equipment			26,855	26,215
Amortization of capitalized servicing rights			31,498	32,723
Amortization of core deposit and other intangible assets	15,231	16,615	30,601	35,098
Provision for deferred income taxes			62,472	(14,312)
Asset write-downs			80,439	6,559
Net gain on sales of assets			(139)	(29,608)
Net change in accrued interest receivable, payable			10,408	7,808
Net change in other accrued income and expense			38,101	(46,326)
Net change in loans originated for sale			(241,186)	260,987
Net change in trading account assets and liabilities			(44,953)	42,718
Net cash provided by operating activities			414,505	844,323
Cash flows from investing activities
Proceeds from sales of available for sale investment securities			7,020	53,610
Proceeds from sales of other investment securities			42,522	38,689
Proceeds from maturities of available for sale investment securities			1,069,602	1,251,121
Proceeds from maturities of held to maturity investment securities			56,024	29,023
Purchases of available for sale investment securities			(33,621)	(667,060)
Purchases of held to maturity investment securities			(19,170)	(25,668)
Purchases of other investment securities			(2,886)	(137,684)
Net (increase) decrease in agreements to resell securities			90,000	(240,000)
Net (increase) decrease in loans and leases			110,264	(2,116,001)
Other investments, net			(14,179)	(4,925)
Additions to capitalized servicing rights			(298)	(15,744)
Capital expenditures, net			(17,655)	(24,196)
Acquisitions of banks and bank holding companies, net of cash acquired			144,009	0
Other, net			16,668	(43,791)
Net cash provided (used) by investing activities			1,448,300	(1,902,626)
Cash flows from financing activities
Net increase (decrease) in deposits			(881,060)	663,520
Net decrease in short-term borrowings			(235,111)	(2,060,092)
Proceeds from long-term borrowings			0	3,650,010
Payments on long-term borrowings			(1,001,334)	(1,175,977)
Dividends paid - common			(160,023)	(154,121)
Dividends paid - preferred			(11,833)	0
Other, net			9,133	5,919
Net cash provided (used) by financing activities			(2,280,228)	929,259
Net decrease in cash and cash equivalents			(417,423)	(129,044)
Cash and cash equivalents at beginning of period			1,568,151	1,767,547
Cash and cash equivalents at end of period	$ 1,150,728	$ 1,638,503	1,150,728	1,638,503
Supplemental disclosure of cash flow information
Interest received during the period			1,330,441	1,763,523
Interest paid during the period			351,744	775,474
Income taxes paid (refunded) during the period			(9,551)	186,313
Supplemental schedule of noncash investing and financing activities
Securitization of residential mortgage loans allocated to available for sale investment securities			140,942	541,196
Securitization of residential mortgage loans allocated to capitalized servicing rights			788	4,940
Real estate acquired in settlement of loans			51,143	40,314
Acquisitions, fair value of
Assets acquired (noncash)			6,171,252	0
Liabilities assumed			5,878,941	0
Preferred stock issued			155,779	0
Common stock issued			272,824	0
Common stock options			1,367	0
Common stock warrants			$ 6,467	$ 0

Consolidated Statement of Changes in Stockholders Equity - USD ($) $ in Thousands	3 Months Ended		6 Months Ended
	Jun. 30, 2009	Jun. 30, 2008	Jun. 30, 2009	Jun. 30, 2008
Statement [Line Items]
Beginning Balance			$ 6,784,731	$ 6,485,256
Comprehensive income:
Net income	$ 51,188	$ 160,265	115,409	362,461
Other comprehensive income, net of tax and reclassification adjustments:
Unrealized gains (losses) on investment securities			149,398	(212,309)
Defined benefit plans liability adjustment			735	(699)
Unrealized gains (losses) on cash flow hedges				(5,087)
Unrealized gains (losses) on terminated cash flow hedges			5,992
Comprehensive Income			271,534	144,366
Repayment of management stock ownership program receivable				72
Acquisition of Provident Bankshares Corporation, preferred stock issued			155,779	0
Acquisition of Provident Bankshares Corporation, common stock issued			272,824
Acquisition of Provident Bankshares Corporation, common stock options			1,367	0
Acquisition of Provident Bankshares Corporation, common stock warrants			6,467	0
Issuance of common stock to defined benefit pension plan			44,289
Preferred stock cash dividends			(11,833)
Compensation expense of stock option and purchase plans			32,591	28,893
Exercises of stock option and purchase plans			2,114	13,828
Directors' stock plan			695	696
Deferred compensation plans, net, including dividend equivalents			54	66
Common stock cash dividends - $1.40 per share			(160,448)	(154,121)
Ending Balance	7,400,164	6,519,056	7,400,164	6,519,056
Common Stock Issuable
Statement [Line Items]
Beginning Balance			4,617	4,776
Other comprehensive income, net of tax and reclassification adjustments:
Deferred compensation plans, net, including dividend equivalents			(373)	(182)
Ending Balance	4,244	4,594	4,244	4,594
Common stock
Statement [Line Items]
Beginning Balance			60,198	60,198
Other comprehensive income, net of tax and reclassification adjustments:
Ending Balance	60,198	60,198	60,198	60,198
Preferred stock
Statement [Line Items]
Beginning Balance			567,463
Other comprehensive income, net of tax and reclassification adjustments:
Acquisition of Provident Bankshares Corporation, preferred stock issued			155,779
Amortization of preferred stock discount			2,230
Ending Balance	725,472		725,472
Additional paid-in capital
Statement [Line Items]
Beginning Balance			2,897,907	2,848,752
Other comprehensive income, net of tax and reclassification adjustments:
Repayment of management stock ownership program receivable				72
Acquisition of Provident Bankshares Corporation, common stock issued			(348,080)
Acquisition of Provident Bankshares Corporation, common stock options			1,367
Acquisition of Provident Bankshares Corporation, common stock warrants			6,467
Issuance of common stock to defined benefit pension plan			(51,417)
Compensation expense of stock option and purchase plans			(42,014)	24,949
Exercises of stock option and purchase plans			(14,097)	(19,518)
Directors' stock plan			(785)	(223)
Deferred compensation plans, net, including dividend equivalents			(497)	(383)
Ending Balance	2,448,851	2,853,649	2,448,851	2,853,649
Treasury stock
Statement [Line Items]
Beginning Balance			(1,071,327)	(1,129,233)
Other comprehensive income, net of tax and reclassification adjustments:
Acquisition of Provident Bankshares Corporation, common stock issued			620,904
Issuance of common stock to defined benefit pension plan			95,706
Compensation expense of stock option and purchase plans			74,605	3,944
Exercises of stock option and purchase plans			16,211	33,346
Directors' stock plan			1,480	919
Deferred compensation plans, net, including dividend equivalents			1,025	739
Ending Balance	(261,396)	(1,090,285)	(261,396)	(1,090,285)
Retained earnings
Statement [Line Items]
Beginning Balance			5,062,754	4,815,585
Comprehensive income:
Net income			115,409	362,461
Other comprehensive income, net of tax and reclassification adjustments:
Preferred stock cash dividends			(11,833)
Amortization of preferred stock discount			(2,230)
Deferred compensation plans, net, including dividend equivalents			(101)	(108)
Common stock cash dividends - $1.40 per share			(160,448)	(154,121)
Ending Balance	5,003,551	5,023,817	5,003,551	5,023,817
Accumulated other comprehensive income (loss), net
Statement [Line Items]
Beginning Balance			(736,881)	(114,822)
Other comprehensive income, net of tax and reclassification adjustments:
Unrealized gains (losses) on investment securities			149,398	(212,309)
Defined benefit plans liability adjustment			735	(699)
Unrealized gains (losses) on cash flow hedges				(5,087)
Unrealized gains (losses) on terminated cash flow hedges			5,992
Ending Balance	$ (580,756)	$ (332,917)	$ (580,756)	$ (332,917)

Consolidated Statement of Changes in Stockholders Equity (Parenthetical) - $ / shares	6 Months Ended
	Jun. 30, 2009	Jun. 30, 2008
Statement [Line Items]
Common stock per share dividend amount	$ 1.4	$ 1.4
Retained earnings
Statement [Line Items]
Common stock per share dividend amount	$ 1.4	$ 1.4

Consolidated Summary of Changes In Allowance For Credit Losses - USD ($) $ in Thousands	6 Months Ended
	Jun. 30, 2009	Jun. 30, 2008
Statement [Line Items]
Beginning balance	$ 787,904	$ 759,439
Provision for credit losses	305,000	160,000
Allowance related to loans sold or securitized	0	(327)
Net charge-offs
Charge-offs	(259,019)	(165,404)
Recoveries	21,480	20,368
Total net charge-offs	(237,539)	(145,036)
Ending balance	$ 855,365	$ 774,076

Significant accounting policies	6 Months Ended
Significant accounting policies	Jun. 30, 2009
Significant accounting policies [Abstract]
Significant accounting policies	1. Significant accounting policies The consolidated financial statements of M&T Bank Corporation (“M&T”) and subsidiaries (“the Company”) were compiled in accordance with generally accepted accounting principles (“GAAP”) using the accounting policies set forth in note 1 of Notes to Financial Statements included in the 2008 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. Subsequent events have been evaluated for their potential impact on the financial statements through August 4, 2009, which is the date the financial statements were issued.

Acquisitions

6 Months Ended

Jun. 30, 2009

Acquisitions [Abstract]

Acquisitions

2. Acquisitions

On May 23, 2009, M&T acquired all of the outstanding common stock of Provident Bankshares Corporation (“Provident”), a bank holding company based in Baltimore, Maryland, in a stock-for-stock transaction. Provident Bank, Provident’s banking subsidiary, was merged into M&T Bank, M&T’s principal banking subsidiary, on that date. The results of operations acquired in the Provident transaction have been included in the Company’s financial results since May 23, 2009. Provident common shareholders received .171625 shares of M&T common stock in exchange for each share of Provident common stock, resulting in M&T issuing a total of 5,838,308 common shares with an acquisition date fair value of $273 million. In addition, based on the merger agreement, outstanding and unexercised options to purchase Provident common stock were converted into options to purchase the common stock of M&T. Those options had an estimated fair value of $1 million. In total, the purchase price was approximately $274 million based on the fair value on the acquisition date of M&T common stock exchanged and the options to purchase M&T common stock. Holders of Provident’s preferred stock were issued shares of new Series B and Series C Preferred Stock of M&T having substantially identical terms. That preferred stock and warrants to purchase common stock associated with the Series C Preferred Stock added $162 million to M&T’s stockholders’ equity.

The transaction has been accounted for using the acquisition method of accounting and, accordingly, assets acquired, liabilities assumed and consideration exchanged were recorded at estimated fair value on the acquisition date. Assets acquired totaled $6.3 billion, including $4.0 billion of loans and leases (including approximately $1.7 billion of commercial real estate loans, $1.4 billion of consumer loans, $700 million of commercial loans and leases and $300 million of residential real estate loans) and $1.0 billion of investment securities. Liabilities assumed were $5.9 billion, including $5.1 billion of deposits. The transaction added $436 million to M&T’s stockholders’ equity, including $280 million of common equity and $156 million of preferred equity. In connection with the acquisition, the Company recorded $332 million of goodwill and $63 million of core deposit intangible. The core deposit intangible is being amortized over seven years using an accelerated method. The acquisition of Provident expands the Company’s presence in the Mid-Atlantic area, gives the Company the second largest deposit share in Maryland, and tripled the Company’s presence in Virginia.

In many cases, determining the fair value of the acquired assets and assumed liabilities required the Company to estimate cash flows expected to result from those assets and liabilities and to discount those cash flows at appropriate rates of interest. The most significant of these determinations related to the fair valuation of acquired loans. For such loans, the excess of cash flows expected at acquisition over the estimated fair value is recognized as interest income over the remaining lives of the loans. The difference between contractually required payments at acquisition and the cash flows expected to be collected at acquisition reflects the impact of estimated credit losses and other factors, such as prepayments. In accordance with GAAP, there was no carry over of Provident’s previously established allowance for credit losses. Subsequent decreases in the expected cash flows will require the Company to evaluate the need for additions to the Company’s allowance for credit losses. Subsequent improvements in expected cash flows will result in the recognition of additional interest income over the then remaining lives of the loans.

In conjunction with the Provident acquisition, the acquired loan portfolio was accounted for at fair value as follows:


	May 23, 2009
	(in thousands)
Contractually required principal and interest at acquisition	$	5,465,167
Contractual cash flows not expected to be collected		(832,115	)

Expected cash flows at acquisition		4,633,052
Interest component of expected cash flows		(595,685	)

Basis in acquired loans at acquisition — estimated fair value	$	4,037,367

Interest income on acquired loans for the period from date of acquisition to June 30, 2009 was approximately $19 million. The outstanding principal balance and the carrying amount of these loans that is included in the consolidated balance sheet at June 30, 2009 is as follows:


	(in thousands)
Outstanding principal balance	$	4,269,847
Carrying amount		3,996,718

Receivables (including loans and investment securities) obtained in the acquisition of Provident for which there is specific evidence of credit deterioration and for which it was probable that the Company would be unable to collect all contractually required principal and interest payments represent less than .25% of the Company’s assets and, accordingly, are not considered material.

In connection with the acquisition of Provident, goodwill of $332 million was calculated after recording all other acquired assets and liabilities at estimated fair value. In management’s opinion, that goodwill represents the inherent long-term value expected from the business opportunities and synergies created from combining Provident with the Company.

The consideration paid for Provident’s common equity and the amounts of acquired identifiable assets and liabilities and preferred equity assumed as of the acquisition date is as follows:


	(in thousands)
Purchase price:
Value of:
Common shares issued (5,838,308 shares)	$	272,824
Stock options		1,367
Fractional common shares paid in cash		117

Total purchase price		274,308


Identifiable assets:
Cash and due from banks		144,126
Investment securities		1,039,350
Loans and leases		4,037,367
Core deposit intangible		63,177
Other assets		698,860

Total		5,982,880


Liabilities and equity:
Deposits		5,060,546
Short-term borrowings		176,515
Long-term borrowings		580,740
Other liabilities		61,022

Total liabilities		5,878,823
Preferred stock and common stock warrants		162,246

Total		6,041,069


Net liabilities and preferred equity assumed		58,189


Goodwill resulting from acquisition	$	332,497

None of the goodwill recognized will be deductible for income tax purposes. Changes in goodwill in the Company’s consolidated balance sheet from December 31, 2008 to June 30, 2009 were attributable to the acquisition of Provident. As described in note 12, the Company does not allocate goodwill to its reportable segments when compiling the assets associated with those segments. The Company does, however, allocate goodwill to segments for purposes of periodically testing goodwill for impairment. That allocation of goodwill has not yet been completed.

Merger-related expenses associated with the acquisition of Provident were $66 million and $69 million during the three- and six-month periods ended June 30, 2009, respectively. Such expenses were for professional services and other temporary help fees associated with the conversion of systems and/or integration of operations; costs related to branch and office consolidations; costs related to termination of existing Provident contractual arrangements for various services; initial marketing and promotion expenses designed to introduce M&T Bank to Provident’s customers; severance and incentive compensation costs; travel costs; and printing, supplies and other costs of commencing operations in new markets and offices. The Company expects to incur additional merger-related expenses, although such costs are expected to be substantially less than the amount incurred in the first six months of 2009. As of June 30, 2009, the remaining unpaid portion of merger-related expenses was $33 million.

A summary of merger-related expenses included in the consolidated statement of income follows:


	Three months ended		Six months ended
	June 30, 2009		June 30, 2009
	(in thousands)
Salaries and employee benefits	$	8,768		8,779
Equipment and net occupancy		581		585
Printing, postage and supplies		2,514		2,815
Other costs of operations		54,594		56,704

	$	66,457		68,883

The following table discloses the impact of Provident (excluding the impact of merger-related expenses) since the acquisition on May 23, 2009 through the end of the second quarter of 2009. The table also presents certain pro forma information for 2009 as if Provident had been acquired on January 1, 2009 and for 2008 as if Provident had been acquired on January 1, 2008. These results combine the historical results of Provident into the Company’s consolidated statement of income and, while certain adjustments were made for the estimated impact of certain fair valuation adjustments and other acquisition-related activity, they are not necessarily indicative of what would have occurred had the acquisition taken place on the indicated dates. In particular, no adjustments have been made to eliminate the amount of Provident’s provision for credit losses of $42 million in 2009 and $10 million in 2008 or the impact of other-than-temporary impairment losses recognized by Provident of $87 million in 2009 and $63 million in 2008 that would not have been necessary had the acquired loans and investment securities been recorded at fair value as of the beginning of each year. Furthermore, expenses related to systems conversions and other costs of integration of $69 million are included in the 2009 periods in which such costs were incurred. Additionally, the Company expects to achieve further operating cost savings and other business synergies as a result of the acquisition which are not reflected in the pro forma amounts presented below.


	Actual since		Pro forma
	acquisition		Six months ended
	through		June 30,
	June 30, 2009		2009		2008
	(in thousands)
Total revenues	$	33,923		1,884,980		2,451,489
Net income		3,562		31,320		353,349

Investment securities

6 Months Ended

Jun. 30, 2009

Investment securities [Abstract]

Investment securities

3. Investment securities

The amortized cost and estimated fair value of investment securities were as follows:


			Gross		Gross
	Amortized		unrealized		unrealized		Estimated
	cost		gains		losses		fair value
			(in thousands)
June 30, 2009
Investment securities available for sale:
U.S. Treasury and federal agencies	$	212,113		2,778		58	$	214,833
Obligations of states and political subdivisions		64,297		1,631		189		65,739
Mortgage-backed securities:
Government issued or guaranteed		3,755,001		115,858		3,394		3,867,465
Privately issued residential		2,811,913		1,797		571,952		2,241,758
Privately issued commercial		37,124		—		14,106		23,018
Collateralized debt obligations		114,707		8,092		10,427		112,372
Other debt securities		296,835		5,442		88,889		213,388
Equity securities		239,547		3,866		18,982		224,431

		7,531,537		139,464		707,997		6,963,004

Investment securities held to maturity:
Obligations of states and political subdivisions		215,401		1,332		3,142		213,591
Privately issued residential mortgage-backed securities		383,962		—		194,794		189,168
Other debt securities		11,414		—		—		11,414

		610,777		1,332		197,936		414,173

Other securities		581,653		—		—		581,653

Total	$	8,723,967		140,796		905,933	$	7,958,830


December 31, 2008
Investment securities available for sale:
U.S. Treasury and federal agencies	$	290,893		6,203		383	$	296,713
Obligations of states and political subdivisions		70,425		1,641		303		71,763
Mortgage-backed securities:
Government issued or guaranteed		3,525,196		93,578		5,994		3,612,780
Privately issued residential		3,104,209		484		778,139		2,326,554
Privately issued commercial		49,231		—		8,185		41,046
Collateralized debt obligations		18,088		—		15,592		2,496
Other debt securities		245,685		18		77,601		168,102
Equity securities		352,908		581		22,750		330,739

		7,656,635		102,505		908,947		6,850,193

Investment securities held to maturity:
Obligations of states and political subdivisions		63,822		1,715		71		65,466
Privately issued residential mortgage-backed securities		411,847		—		92,730		319,117
Other debt securities		10,169		—		—		10,169

		485,838		1,715		92,801		394,752

Other securities		583,176		—		—		583,176

Total	$	8,725,649		104,220		1,001,748	$	7,828,121

Gross realized gains and losses from sales of investment securities were not significant during the three- and six-month periods ended June 30, 2009 and 2008. Effective January 1, 2009, the Company adopted FSP FAS 115-2 and FAS 124-2 “Recognition and Presentation of Other-Than-Temporary Impairments” (“FSP 115-2”). In accordance with FSP 115-2, the Company recognized $25 million and $57 million of pre-tax other-than-temporary impairment losses during the three and six months ended June 30, 2009, respectively, related primarily to certain privately issued residential mortgage-backed securities. The impairment charges were recognized in light of deterioration of housing values in the residential real estate market and a rise in delinquencies and charge-offs of underlying mortgage loans collateralizing those securities. Approximately $3 million of impairment charges recognized in the second quarter of 2009 related to two securities backed by trust preferred securities issued by financial institutions. The other-than-temporary impairment losses recognized were net of $51 million and $82 million of unrealized losses classified in accumulated other comprehensive income for the same securities for the three and six months ended June 30, 2009, respectively. The other-than-temporary impairment losses represent management’s estimate of credit losses inherent in the securities considering projected cash flows using assumptions of delinquency rates, loss severities, and other estimates of future collateral performance. Other-than-temporary impairment losses on investment securities of $6 million were recognized by the Company for the three and six months ended June 30, 2008. The effect of the adoption of FSP 115-2 on debt securities previously reported as other-than-temporarily impaired was not material and, therefore, the Company did not record a transition adjustment as of January 1, 2009. Changes in credit losses during the three and six months ended June 30, 2009 associated with debt securities for which other-than-temporary impairment losses have been previously recognized in earnings follows:


	Debt securities
	(in thousands)

Estimated credit losses as of March 31, 2009	$	187,618
Additions for credit losses not previously recognized		24,769
Reductions for increases in cash flows		(399	)
Reductions for realized losses		(6,070	)

Estimated credit losses as of June 30, 2009	$	205,918


Estimated credit losses as of January 1, 2009	$	155,967
Additions for credit losses not previously recognized		56,968
Reductions for increases in cash flows		(947	)
Reductions for realized losses		(6,070	)

Estimated credit losses as of June 30, 2009	$	205,918

At June 30, 2009, the amortized cost and estimated fair value of debt securities by contractual maturity were as follows:


	Amortized		Estimated
	cost		fair value
	(in thousands)
Debt securities available for sale:
Due in one year or less	$	172,131		173,365
Due after one year through five years		67,468		69,510
Due after five years through ten years		35,466		36,361
Due after ten years		412,887		327,096

		687,952		606,332
Mortgage-backed securities available for sale		6,604,038		6,132,241

	$	7,291,990		6,738,573


Debt securities held to maturity:
Due in one year or less	$	45,673		46,038
Due after one year through five years		7,499		7,797
Due after five years through ten years		97,999		96,943
Due after ten years		75,644		74,227

		226,815		225,005
Mortgage-backed securities held to maturity		383,962		189,168

	$	610,777		414,173

A summary of investment securities that as of June 30, 2009 and December 31, 2008 had been in a continuous unrealized loss position for less than twelve months and those that had been in a continuous unrealized loss position for twelve months or longer follows:


	Less than 12 months					12 months or more
			Unrealized					Unrealized
	Fair value		losses			Fair value		losses
	(in thousands)
June 30, 2009
U.S. Treasury and federal agencies	$	7,866		(58	)		—		—
Obligations of states and political subdivisions		157,972		(3,110	)		5,942		(221	)
Mortgage-backed securities:
Government issued or guaranteed		534,525		(2,711	)		49,608		(683	)
Privately issued residential		361,683		(198,656	)		2,007,735		(568,090	)
Privately issued commercial		—		—			23,018		(14,106	)
Collateralized debt obligations		12,641		(1,992	)		6,286		(8,435	)
Other debt securities		30,337		(3,568	)		126,184		(85,321	)
Equity securities		24,795		(18,955	)		11		(27	)

Total	$	1,129,819		(229,050	)		2,218,784		(676,883	)


December 31, 2008
U.S. Treasury and federal agencies	$	6,660		(383	)		—		—
Obligations of states and political subdivisions		26,456		(315	)		2,182		(59	)
Mortgage-backed securities:
Government issued or guaranteed		392,780		(4,962	)		175,943		(1,032	)
Privately issued residential		2,173,593		(629,321	)		460,355		(241,548	)
Privately issued commercial		—		—			41,046		(8,185	)
Collateralized debt obligations		—		(2,221	)		1,520		(13,397	)
Other debt securities		102,882		(15,563	)		60,902		(62,012	)
Equity securities		37,905		(22,720	)		9		(30	)

Total	$	2,740,276		(675,485	)		741,957		(326,263	)

The Company owned 1,060 individual investment securities with aggregate gross unrealized losses of $906 million at June 30, 2009. Approximately $767 million of the unrealized losses pertain to privately issued residential mortgage-backed securities with a cost basis of $3.1 billion. The Company also had $95 million of unrealized losses on trust preferred securities issued by financial institutions and securities backed by trust preferred securities issued by financial institutions and other entities having a cost basis of $264 million. Based on a review of each of the securities in the investment securities portfolio at June 30, 2009, with the exception of the aforementioned securities for which other-than-temporary impairment losses were recognized, the Company concluded that it expected to recover the amortized cost basis of its investment. As of June 30, 2009, the Company does not intend to sell nor is it anticipated that it would be required to sell any of its impaired investment securities. At June 30, 2009, the Company has not identified events or changes in circumstances which may have a significant adverse effect on the fair value of the $582 million of cost method investment securities.

Borrowings	6 Months Ended
Borrowings	Jun. 30, 2009
Borrowings [Abstract]
Borrowings	4. Borrowings The Company had $1.2 billion of fixed and floating rate junior subordinated deferrable interest debentures (“Junior Subordinated Debentures”) outstanding at June 30, 2009 which are held by various trusts that were issued in connection with the issuance by those trusts of preferred capital securities (“Capital Securities”) and common securities (“Common Securities”). The proceeds from the issuances of the Capital Securities and the Common Securities were used by the trusts to purchase the Junior Subordinated Debentures. The Common Securities of each of those trusts are wholly owned by M&T and 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. Under the Federal Reserve Board’s current risk-based capital guidelines, the Capital Securities are includable in M&T’s Tier 1 capital. As a result of the acquisition of Provident, M&T assumed $133 million of Junior Subordinated Debentures that mature at various dates from 2028 to 2033. Holders of the Capital Securities receive preferential cumulative cash distributions unless M&T exercises its right to extend the payment of interest on the Junior Subordinated Debentures as allowed by the terms of each such debenture, in which case payment of distributions on the respective Capital Securities will be deferred for comparable periods. During an extended interest period, M&T may not pay dividends or distributions on, or repurchase, redeem or acquire any shares of its capital stock. In the event of an extended interest period exceeding twenty quarterly periods for $350 million of Junior Subordinated Debentures due January 31, 2068, M&T must fund the payment of accrued and unpaid interest through an alternative payment mechanism, which requires M&T to issue common stock, non-cumulative perpetual preferred stock or warrants to purchase common stock until M&T has raised an amount of eligible proceeds at least equal to the aggregate amount of accrued and unpaid deferred interest on the Junior Subordinated Debentures due January 31, 2068. In general, the agreements governing the Capital Securities, in the aggregate, provide a full, irrevocable and unconditional guarantee by M&T 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. The Capital Securities will remain outstanding until the Junior Subordinated Debentures are repaid at maturity, are redeemed prior to maturity or are distributed in liquidation to the Trusts. The Capital Securities are mandatorily redeemable in whole, but not in part, upon repayment at the stated maturity dates (ranging from 2027 to 2068) of the Junior Subordinated Debentures or the earlier redemption of the Junior Subordinated Debentures in whole upon the occurrence of one or more events set forth in the indentures relating to the Capital Securities, and in whole or in part at any time after an optional redemption prior to contractual maturity contemporaneously with the optional redemption of the related Junior Subordinated Debentures in whole or in part, subject to possible regulatory approval. In connection with the issuance of 8.50% Enhanced Trust Preferred Securities associated with $350 million of Junior Subordinated Debentures maturing in 2068, M&T entered into a replacement capital covenant that provides that neither M&T nor any of its subsidiaries will repay, redeem or purchase any of the Junior Subordinated Debentures due January 31, 2068 or the 8.50% Enhanced Trust Preferred Securities prior to January 31, 2048, with certain limited exceptions, except to the extent that, during the 180 days prior to the date of that repayment, redemption or purchase, M&T and its subsidiaries have received proceeds from the sale of qualifying securities that (i) have equity-like characteristics that are the same as, or more equity-like than, the applicable characteristics of the 8.50% Enhanced Trust Preferred Securities or the Junior Subordinated Debentures due January 31, 2068, as applicable, at the time of repayment, redemption or purchase, and (ii) M&T has obtained the prior approval of the Federal Reserve Board, if required. On June 30, 2009, M&T retired $12 million of Junior Subordinated Debentures for which Provident had been the owner of the related Capital Securities. Including the unamortized portions of purchase accounting adjustments to reflect estimated fair value at the acquisition dates of the Common Securities of various trusts and reflecting the noted cancellation of Junior Subordinated Debentures on June 30, 2009, the Junior Subordinated Debentures associated with Capital Securities had financial statement carrying values of $1.2 billion and $1.1 billion as of June 30, 2009 and December 31, 2008, respectively.

Stockholders equity

6 Months Ended

Jun. 30, 2009

Stockholders' equity [Abstract]

Stockholders' equity

5. Stockholders’ equity

M&T is authorized to issue 1,000,000 shares of preferred stock with a $1.00 par value per share. Preferred shares outstanding rank senior to common shares both as to dividends and liquidation preference, but have no general voting rights.

Issued and outstanding preferred stock of M&T is presented below:

Carrying

issued and

value

outstanding

June 30, 2009

December 31, 2008

(dollars in thousands)

Series A (a)

Fixed Rate Cumulative Perpetual Preferred Stock, Series A, $1,000 liquidation preference per share, 600,000 shares authorized

600,000

569,693

567,463

Series B (b)

Series B Mandatory Convertible Non-cumulative Preferred Stock, $1,000 liquidation preference per share, 26,500 shares authorized

26,500

—

Series C (a)(c)

Fixed Rate Cumulative Perpetual Preferred Stock, Series C, $1,000 liquidation preference per share, 151,500 shares authorized

151,500

129,279

—


(a)		Shares were issued as part of the Troubled Asset Relief Program — Capital Purchase Program of the U.S. Department of Treasury (“U.S. Treasury”). Cash proceeds were allocated between the preferred stock and a ten-year warrant to purchase M&T common stock (Series A — 1,218,522 shares, Series C — 407,542 shares). Dividends, if declared, will accrue and be paid quarterly at a rate of 5% per year for the first five years following the original 2008 issuance dates and thereafter at a rate of 9% per year.

(b)		Shares were assumed in the Provident acquisition and a new Series B Preferred Stock was designated. In the aggregate, the shares of Series B Preferred Stock will automatically convert into 433,148 shares of M&T common stock on April 1, 2011, but shareholders may elect to convert their preferred shares at any time prior to that date. Series B Preferred Shares pay dividends, if declared, at a rate of 10% per year, payable quarterly in arrears.

(c)		Shares were assumed in the Provident acquisition and a new Series C Preferred Stock was designated.

Pension plans and other postretirement benefits

6 Months Ended

Jun. 30, 2009

Pension plans and other postretirement benefits [Abstract]

Pension plans and other postretirement benefits

6. Pension plans and other postretirement benefits

The Company provides defined benefit pension and other postretirement benefits (including health care and life insurance benefits) to qualified retired employees. Net periodic defined benefit cost for defined benefit plans consisted of the following:


							Other
	Pension						postretirement
	benefits						benefits
	Three months ended June 30
	2009			2008			2009			2008
	(in thousands)
Service cost	$	4,738			4,362			27			115
Interest cost on projected benefit obligation		11,264			10,508			747			941
Expected return on plan assets		(11,576	)		(11,933	)		—			—
Amortization of prior service cost		(1,629	)		(1,639	)		46			96
Amortization of net actuarial loss		2,499			751			(10	)		(21	)

Net periodic benefit cost	$	5,296			2,049			810			1,131


							Other
	Pension						postretirement
	benefits						benefits
	Six months ended June 30
	2009			2008			2009			2008
	(in thousands)
Service cost	$	9,613			9,705			177			279
Interest cost on projected benefit obligation		22,279			21,272			1,647			2,017
Expected return on plan assets		(23,051	)		(23,047	)		—			—
Amortization of prior service cost		(3,279	)		(3,279	)		121			138
Amortization of net actuarial loss		4,849			1,971			(10	)		21

Net periodic benefit cost	$	10,411			6,622			1,935			2,455

Expense incurred in connection with the Company’s defined contribution pension and retirement savings plans totaled $8,330,000 and $7,990,000 for the three months ended June 30, 2009 and 2008, respectively, and $19,105,000 and $18,317,000 for the six months ended June 30, 2009 and 2008, respectively. The Company is not required to make any minimum contributions to the qualified defined benefit pension plan in 2009, however, during the second quarter of 2009 the Company elected to contribute to that plan 900,000 shares of common stock of M&T having a fair value of $44 million.

Earnings per common share

6 Months Ended

Jun. 30, 2009

Earnings per common share [Abstract]

Earnings per common share

7. Earnings per common share

The computations of basic earnings per share follow:


	Three months ended					Six months ended
	June 30					June 30
	2009			2008		2009			2008
	(in thousands, except per share)
Income available to common stockholders

Net income	$	51,188			160,265		115,409			362,461
Less: Preferred stock dividends		(8,468	)		—		(15,968	)		—
Amortization of preferred stock discount		(1,756	)		—		(3,155	)		—
Income attributable to unvested stock-based compensation awards		(448	)		—		(1,181	)		—


Net income available to common stockholders	$	40,516			160,265		95,105			362,461

Weighted-average shares outstanding:

Common shares outstanding (including common stock issuable) and unvested stock-based compensation awards		114,485			110,191		112,900			110,104
Less: Unvested stock-based compensation awards		(1,267	)		—		(1,064	)		—


Weighted-average shares outstanding		113,218			110,191		111,836			110,104

Basic earnings per share	$	.36			1.45		.85			3.29

The computations of diluted earnings per share follow:


	Three months ended					Six months ended
	June 30					June 30
	2009			2008		2009			2008
	(in thousands, except per share)
Net income available to common stockholders	$	40,516			160,265		95,105			362,461

Adjusted weighted-average shares outstanding:

Common and unvested stock-based compensation awards		114,485			110,191		112,900			110,104
Less: Unvested stock-based compensation awards		(1,267	)		—		(1,064	)		—
Plus: Incremental shares from assumed conversion of stock-based compensation awards and convertible preferred stock		303			1,036		152			993


Adjusted weighted-average shares outstanding		113,521			111,227		111,988			111,097

Diluted earnings per share	$	.36			1.44		.85			3.26

In June 2008, the Financial Accounting Standards Board (“FASB”) specified that, for financial statements issued for fiscal years beginning after December 15, 2008 and interim periods within those years, unvested share-based payment awards that contain nonforfeitable rights to dividends or dividend equivalents (whether paid or unpaid) are participating securities and shall be included in the computation of earnings per common share pursuant to the two-class method. In 2009, the Company issued stock-based compensation awards in the form of restricted stock and restricted stock units, which, according to the FASB, are considered participating securities. Beginning in 2009, the Company’s earnings per common share are calculated using the two-class method. The effects of the application of the two-class method to previously reported earnings per common share amounts were immaterial.

Stock-based compensation awards and warrants to purchase common stock of M&T representing approximately 15.0 million and 9.1 million common shares during the three-month periods ended June 30, 2009 and 2008, respectively, and 15.0 million and 8.9 million common shares during the six-month periods ended June 30, 2009 and 2008, respectively, were not included in the computations of diluted earnings per common share because the effect on those periods would have been antidilutive.

Comprehensive income

6 Months Ended

Jun. 30, 2009

Comprehensive income [Abstract]

Comprehensive income

8. Comprehensive income

The following table displays the components of other comprehensive income (loss):


	Six months ended June 30, 2009
	Before-tax			Income
	amount			taxes			Net
	(in thousands)
Unrealized gains(losses) on investment securities:

Available for sale (“AFS”) investment securities with OTTI:

Securities with OTTI charges during the period	$	(138,505	)		54,250			(84,255	)
Less: OTTI charges recognized in net income		(56,968	)		22,292			(34,676	)

Net unrealized losses on investment securities with OTTI		(81,537	)		31,958			(49,579	)


AFS investment securities - all other:

Unrealized holding gains during period		180,862			(70,508	)		110,354
Less: reclassification adjustment for losses realized in net income		(79	)		32			(47	)
Less: securities with OTTI charges during the period		(138,505	)		54,250			(84,255	)

		319,446			(124,790	)		194,656
Amortization of unrealized holding losses to income during period on investment securities previously transferred from AFS to held to maturity		5,933			(1,612	)		4,321


Net unrealized gains on investment securities		243,842			(94,444	)		149,398

Cash flow hedges:
Reclassification of losses on terminated cash flow hedges to income		9,830			(3,838	)		5,992

Defined benefit plans liability adjustment		1,681			(946	)		735

	$	255,353			(99,228	)		156,125


	Six months ended June 30, 2008
	Before-tax			Income
	amount			taxes			Net
	(in thousands)
Unrealized losses on AFS investment securities:
Unrealized holding losses during period	$	(302,903	)		107,664			(195,239	)
Less: reclassification adjustment for gains realized in net income		28,026			(10,956	)		17,070

		(330,929	)		118,620			(212,309	)

Cash flow hedges:
Unrealized losses on terminated cash flow hedges		(20,225	)		7,887			(12,338	)
Reclassification of losses on terminated cash flow hedges to income		11,892			(4,641	)		7,251

		(8,333	)		3,246			(5,087	)

Defined benefit plans liability adjustment		(1,149	)		450			(699	)


	$	(340,411	)		122,316			(218,095	)

Accumulated other comprehensive income (loss), net consisted of unrealized gains (losses) as follows:


							Cash			Defined
	Investment securities						flow			benefit
	With OTTI			All other			hedges			plans			Total
	(in thousands)
Balance — January 1, 2009	$	—			(556,668	)		(5,883	)		(174,330	)		(736,881	)

Net gain (loss) during period		(49,579	)		198,977			5,992			735			156,125


Balance — June 30, 2009	$	(49,579	)		(357,691	)		109			(173,595	)		(580,756	)


Balance — January 1, 2008				$	(59,406	)		(8,931	)		(46,485	)		(114,822	)

Net gain (loss) during period					(212,309	)		(5,087	)		(699	)		(218,095	)


Balance — June 30, 2008				$	(271,715	)		(14,018	)		(47,184	)		(332,917	)

Derivative financial instruments

6 Months Ended

Jun. 30, 2009

Derivative financial instruments [Abstract]

Derivative financial instruments

9. Derivative financial instruments

As part of managing interest rate risk, the Company enters into interest rate swap agreements to modify the repricing characteristics of certain portions of the Company’s portfolios of earning assets and interest-bearing liabilities. The Company designates interest rate swap agreements utilized in the management of interest rate risk as either fair value hedges or cash flow hedges. Interest rate swap agreements are generally entered into with counterparties that meet established credit standards and most contain master netting and collateral provisions protecting the at-risk party. Based on adherence to the Company’s credit standards and the presence of the netting and collateral provisions, the Company believes that the credit risk inherent in these contracts is not significant as of June 30, 2009.

The net effect of interest rate swap agreements was to increase net interest income by $10 million and $5 million for the three months ended June 30, 2009 and 2008, respectively, and $17 million and $6 million for the six months ended June 30, 2009 and 2008, respectively. Information about interest rate swap agreements entered into for interest rate risk management purposes summarized by type of financial instrument the swap agreements were intended to hedge follows:


					Weighted-
	Notional		Average		average rate
	amount		maturity		Fixed			Variable
	(in thousands)		(in years)
June 30, 2009
Fair value hedges:
Fixed rate time deposits (a)	$	25,000		4.2		5.30	%		0.58	%
Fixed rate long-term borrowings (a)		1,037,241		7.0		6.33			2.59

	$	1,062,241		6.9		6.30	%		2.54	%


December 31, 2008
Fair value hedges:
Fixed rate time deposits (a)	$	70,000		6.1		5.14	%		2.04	%
Fixed rate long-term borrowings (a)		1,037,241		7.5		6.33			4.28

	$	1,107,241		7.4		6.25	%		4.14	%


(a)		Under the terms of these agreements, the Company receives settlement amounts at a fixed rate and pays at a variable rate.

The Company utilizes commitments to sell residential and commercial real estate loans to hedge the exposure to changes in the fair value of real estate loans held for sale. Such commitments have generally been designated as fair value hedges. The Company also utilizes commitments to sell real estate loans to offset the exposure to changes in fair value of certain commitments to originate real estate loans for sale.

For derivatives designated and qualifying as fair value hedges, the fair values of the derivatives and changes in the fair values of the hedged items are recorded in the Company’s consolidated balance sheet with the corresponding gain or loss recognized in current earnings. The difference between changes in the fair values of the interest rate swap agreements and the hedged items represents hedge ineffectiveness and is recorded in “other revenues from operations” in the consolidated statement of income. In a cash flow hedge, the effective portion of the derivative’s unrealized gain or loss is initially recorded as a component of other comprehensive income and subsequently reclassified into earnings when the forecasted transaction affects earnings. The ineffective portion of the unrealized gain or loss is reported in “other revenues from operations” immediately. The amount of hedge ineffectiveness recognized in the three- and six-month periods ended June 30, 2009 and 2008 was not material to the Company’s results of operations.

Derivative financial instruments used for trading purposes included interest rate contracts, foreign exchange and other option contracts, foreign exchange forward and spot contracts, and financial futures. Interest rate contracts entered into for trading purposes had notional values of $14.9 billion and $14.6 billion at June 30, 2009 and December 31, 2008, respectively. The notional amounts of foreign currency and other option and futures contracts entered into for trading purposes aggregated $681 million and $713 million at June 30, 2009 and December 31, 2008, respectively.

Information about the fair values of derivative instruments in the Company’s consolidated balance sheet and consolidated statement of income follows:


	Asset derivatives				Liability derivatives
	Fair value				Fair value
	June 30,		December 31,		June 30,		December 31,
	2009		2008		2009		2008
	(in thousands)
Derivatives designated and qualifying as hedging instruments
Fair value hedges:
Interest rate swap agreements (a)	$	63,618		146,111	$	—		—
Commitments to sell real estate loans (a)		7,359		1,128		1,817		13,604

		70,977		147,239		1,817		13,604
Derivatives not designated and qualifying as hedging instruments
Mortgage-related commitments to originate real estate loans for sale (a)		10,633		11,132		957		2,988
Commitments to sell real estate loans (a)		9,060		5,875		4,468		8,876
Trading:
Interest rate contracts (b)		359,969		513,230		329,671		481,671
Foreign exchange and other option and futures contracts (b)		24,128		38,885		23,958		39,408

		403,790		569,122		359,054		532,943


Total derivatives	$	474,767		716,361	$	360,871		546,547


(a)		Asset derivatives are reported in other assets and liability derivatives are reported in other liabilities.

(b)		Asset derivatives are reported in trading account assets and liability derivatives are reported in other liabilities.


	Amount of unrealized gain (loss) recognized
	Three months ended					Three months ended
	June 30, 2009					June 30, 2008
	Derivative			Hedged item		Derivative			Hedged item
	(in thousands)
Derivatives in fair value hedging relationships

Interest rate swap agreements:
Fixed rate time deposits (a)	$	(942	)		938		(1,896	)		1,876
Fixed rate long-term borrowings (a)		(60,402	)		57,164		(47,681	)		47,140


Total	$	(61,344	)		58,102		(49,577	)		49,016


Derivatives not designated as hedging instruments

Trading:
Interest rate contracts (b)	$	(1,186	)				1,414
Foreign exchange and other option and futures contracts (b)		56					696


Total	$	(1,130	)				2,110


	Amount of unrealized gain (loss) recognized
	Six months ended					Six months ended
	June 30, 2009					June 30, 2008
	Derivative			Hedged item		Derivative			Hedged item
	(in thousands)
Derivatives in fair value hedging relationships

Interest rate swap agreements:
Fixed rate time deposits (a)	$	(1,394	)		1,387		(1,425	)		1,409
Fixed rate long-term borrowings (a)		(81,717	)		76,825		(23,670	)		23,055


Total	$	(83,111	)		78,212		(25,095	)		24,464


Derivatives not designated as hedging instruments

Trading:
Interest rate contracts (b)	$	(1,357	)				3,869
Foreign exchange and other option and futures contracts (b)		932					776


Total	$	(425	)				4,645


(a)		Reported as other revenues from operations.

(b)		Reported as trading account and foreign exchange gains.

In addition, the Company also has commitments to sell and commitments to originate residential and commercial real estate loans, which are considered derivatives. The Company designates certain of the commitments to sell real estate loans as fair value hedges of real estate loans held for sale. Changes in unrealized gains and losses are included in mortgage banking revenues and, in general, are realized in subsequent periods as the related loans are sold and commitments satisfied. For the three months ended June 30, 2009, net unrealized pre-tax gains of $26,546,000 related to commitments to sell real estate loans, net unrealized pre-tax losses of $12,361,000 related to commitments to originate real estate loans and net unrealized pre-tax losses of $13,367,000 related to hedged real estate loans held for sale were recognized in the consolidated statement of income. For the three months ended June 30, 2008, net unrealized pre-tax gains of $10,553,000 related to commitments to sell real estate loans, net unrealized pre-tax losses of $4,009,000 related to commitments to originate real estate loans and net unrealized pre-tax losses of $11,592,000 related to hedged real estate loans held for sale were recognized in the consolidated statement of income. For the six months ended June 30, 2009, net unrealized pre-tax gains of $25,611,000 related to commitments to sell real estate loans, net unrealized pre-tax gains of $1,410,000 related to commitments to originate real estate loans and net unrealized pre-tax losses of $11,610,000 related to hedged real estate loans held for sale were recognized in the consolidated statement of income. For the six months ended June 30, 2008, net unrealized pre-tax gains of $6,925,000 related to commitments to sell real estate loans, net unrealized pre-tax gains of $882,000 related to commitments to originate real estate loans and net unrealized pre-tax losses of $7,654,000 related to hedged real estate loans held for sale were recognized in the consolidated statement of income.

The aggregate fair value of derivative financial instruments in a net liability position at June 30, 2009 for which the Company was required to post collateral was $257 million. The fair value of collateral posted for such instruments was $251 million.

Fair value measurements

6 Months Ended

Jun. 30, 2009

Fair value measurements [Abstract]

Fair value measurements

10. Fair value measurements

Pursuant to GAAP, fair value is defined as the price that would be received to sell an asset or paid to transfer a liability in an orderly transaction between market participants at the measurement date. A three-level hierarchy exists in GAAP for fair value measurements based upon the inputs to the valuation of an asset or liability.

	•		Level 1 — Valuation is based on quoted prices in active markets for identical assets and liabilities.

	•		Level 2 — Valuation is determined from quoted prices for similar assets or liabilities in active markets, quoted prices for identical or similar instruments in markets that are not active or by model-based techniques in which all significant inputs are observable in the market.

	•		Level 3 — Valuation is derived from model-based and other techniques in which at least one significant input is unobservable and which may be based on the Company’s own estimates about the assumptions that market participants would use to value the asset or liability.

When available, the Company attempts to use quoted market prices in active markets to determine fair value and classifies such items as Level 1 or Level 2. If quoted market prices in active markets are not available, fair value is often determined using model-based techniques incorporating various assumptions including interest rates, prepayment speeds and credit losses. Assets and liabilities valued using model-based techniques are classified as either Level 2 or Level 3, depending on the lowest level classification of an input that is considered significant to the overall valuation. The following is a description of the valuation methodologies used for the Company’s assets and liabilities that are measured on a recurring basis at estimated fair value.

Trading account assets and liabilities

Trading account assets and liabilities consist primarily of interest rate swap agreements and foreign exchange contracts with customers who require such services with offsetting trading positions with third parties to minimize the Company’s risk with respect to such transactions. The Company generally determines the fair value of its derivative trading account assets and liabilities using externally developed pricing models based on market observable inputs and therefore classifies such valuations as Level 2. Prices for certain foreign exchange contracts are more observable and therefore have been classified as Level 1. Mutual funds held in connection with deferred compensation arrangements have also been classified as Level 1 valuations. Valuations of investments in municipal and other bonds can generally be obtained through reference to quoted prices in less active markets for the same or similar securities or through model-based techniques in which all significant inputs are observable and, therefore, such valuations have been classified as Level 2.

Investment securities available for sale

The majority of the Company’s available-for-sale investment securities have been valued by reference to prices for similar securities or through model-based techniques in which all significant inputs are observable and, therefore, such valuations have been classified as Level 2. Certain investments in mutual funds and equity securities are actively traded and therefore have been classified as Level 1 valuations.

Due to the severe disruption in the credit markets during the second half of 2008 and continuing into 2009, trading activity in privately issued mortgage-backed securities was very limited. The markets for such securities were generally characterized by a sharp reduction of non-agency mortgage-backed securities issuances, a significant reduction in trading volumes and extremely wide bid-ask spreads, all driven by the lack of market participants. Although estimated prices were generally obtained for such securities, the Company was significantly restricted in the level of market observable assumptions used in the valuation of its privately issued mortgage-backed securities portfolio. Specifically, market assumptions regarding credit adjusted cash flows and liquidity influences on discount rates were difficult to observe at the individual bond level. Because of the inactivity in the markets and the lack of observable valuation inputs, the Company has classified the valuation of privately issued mortgage-backed securities as Level 3.

In April 2009, the FASB issued FASB Staff Position No. 157-4, “Determining Fair Value When the Volume and Level of Activity for the Asset or Liability Have Significantly Decreased and Identifying Transactions That Are Not Orderly” (“FSP 157-4”). FSP 157-4 provided guidance for estimating fair value when the volume and level of trading activity for an asset or liability have significantly decreased. The Company has concluded that there has been a significant decline in the volume and level of activity in the market for privately issued mortgage-backed securities. As a result, the Company supplemented its determination of fair value for many of its privately issued mortgage-backed securities by obtaining pricing indications from two independent sources at June 30, 2009. The Company further ascertained that many of the recently observable trades in the market for privately issued residential mortgage-backed securities could not be determined to be orderly. As a result, the Company also performed internal modeling to estimate the cash flows and fair value of 149 of its privately issued residential mortgage-backed securities with an amortized cost basis of $2.2 billion at June 30, 2009. The Company’s internal modeling techniques included discounting estimated bond-specific cash flows using assumptions about cash flows associated with loans underlying each of the bonds, including estimates about the timing and amount of credit losses and prepayments. In estimating those cash flows, the Company used conservative assumptions as to future delinquency, defaults and loss rates, including assumptions for further home price depreciation. Differences between internal model valuations and external pricing indications were generally considered to be reflective of the lack of liquidity in the market for privately issued mortgage-backed securities given the conservative nature of the cash flow modeling performed in the Company’s assessment of value. To determine the point within the range of potential values that was most representative of fair value under current market conditions for each of the 149 bonds, the Company computed values based on judgmentally applied weightings of the internal model valuations and the indications obtained from the average of the two independent pricing sources. Weightings applied to internal model valuations generally ranged from zero to 40% depending on bond structure and collateral type, with prices for bonds in non-senior tranches generally receiving lower weightings on the internal model results and senior bonds receiving a higher model weighting. Weighted-average reliance on internal model pricing for the bonds modeled was 36% with a 64% average weighting placed on the values provided by the independent sources. The Company concluded its estimate of fair value for the $2.2 billion of privately issued residential mortgage-backed securities to approximate $1.7 billion, which implies a weighted-average market yield based on reasonably likely cash flows of 12%. Other valuations of privately issued residential mortgage-backed securities with an amortized cost basis of $613 million and fair value of $543 million, primarily comprised of retained securities from two non-recourse securitization transactions executed by the Company in 2002 and 2003, and other privately issued commercial mortgage-backed securities with an amortized cost basis of $37 million and a fair value of $23 million were determined by reference to independent pricing sources without adjustment.

Included in other debt securities are securities backed by trust preferred securities issued by financial institutions and other entities. Given the severe disruption in the credit markets and lack of observable trade information, the Company could not obtain pricing indications for many of these securities from its two primary independent pricing sources. The Company, therefore, performed internal modeling to estimate the cash flows and fair value of its portfolio of securities backed by trust preferred securities at June 30, 2009. The modeling techniques included discounting estimated cash flows using bond-specific assumptions about defaults, deferrals and prepayments of the trust preferred securities underlying each bond. The estimation of cash flows included conservative assumptions as to the future collateral defaults and the related loss severities. The resulting cash flows were then discounted by reference to market yields observed in the single-name trust preferred securities market. At June 30, 2009, both the total amortized cost and fair value of securities backed by trust preferred securities issued by financial institutions and other entities was $112 million. Privately issued mortgage-backed securities and securities backed by trust preferred securities issued by financial institutions and other entities constituted substantially all of the available for sale investment securities classified as Level 3 valuations as of June 30, 2009.

Real estate loans held for sale

The Company utilizes commitments to sell real estate loans to hedge the exposure to changes in fair value of real estate loans held for sale. The carrying value of hedged real estate loans held for sale includes changes in estimated fair value during the hedge period. Typically, the Company attempts to hedge real estate loans held for sale from the date of close through the sale date. The fair value of hedged real estate loans held for sale is generally calculated by reference to quoted prices in secondary markets for commitments to sell real estate loans with similar characteristics and, as such, have been classified as a Level 2 valuation.

Commitments to originate real estate loans for sale and commitments to sell real estate loans

The Company enters into various commitments to originate real estate loans for sale and commitments to sell real estate loans. Such commitments are considered to be derivative financial instruments and, therefore, are carried at estimated fair value on the consolidated balance sheet. The estimated fair values of such commitments were generally calculated by reference to quoted prices in secondary markets for commitments to sell real estate loans to certain government-sponsored entities and other parties. The fair valuations of commitments to sell real estate loans generally result in a Level 2 classification. The estimated fair value of commitments to originate real estate loans for sale are adjusted to reflect the Company’s anticipated commitment expirations. Estimated commitment expirations are considered a significant unobservable input, which results in a Level 3 classification. The Company includes the expected net future cash flows related to the associated servicing of the loan in the fair value measurement of a derivative loan commitment. The estimated value ascribed to the expected net future servicing cash flows is also considered a significant unobservable input contributing to the Level 3 classification of commitments to originate real estate loans for sale.

Interest rate swap agreements used for interest rate risk management

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. The Company generally determines the fair value of its interest rate swap agreements using externally developed pricing models based on market observable inputs and therefore classifies such valuations as Level 2. The Company has considered counterparty credit risk in the valuation of its interest rate swap assets and has considered its own credit risk in the valuation of its interest rate swap liabilities.

The following tables present assets and liabilities at June 30, 2009 and December 31, 2008 measured at estimated fair value on a recurring basis:


	Fair value
	measurements at
	June 30,
	2009		Level 1		Level 2		Level 3
	(in thousands)
Trading account assets	$	495,324		41,869		453,455		—
Investment securities available for sale:
U.S. Treasury and federal agencies		214,833		—		214,833		—
Obligations of states and political subdivisions		65,739		—		53,536		12,203
Mortgage-backed securities:
Government issued or guaranteed		3,867,465		—		3,867,465		—
Privately issued residential		2,241,758		—		—		2,241,758
Privately issued commercial		23,018		—		—		23,018
Collateralized debt obligations		112,372		—		—		112,372
Other debt securities		213,388		—		212,623		765
Equity securities		224,431		197,351		24,751		2,329

		6,963,004		197,351		4,373,208		2,392,445

Real estate loans held for sale		800,995		—		800,995		—
Other assets(a)		90,700		—		80,067		10,633

Total assets	$	8,350,023		239,220		5,707,725		2,403,078


Trading account liabilities	$	353,629		10,886		342,743		—
Other liabilities(a)		7,242		—		6,285		957

Total liabilities	$	360,871		10,886		349,028		957


	Fair value
	measurements at
	December 31,
	2008		Level 1		Level 2		Level 3
	(in thousands)
Trading account assets	$	617,821		46,142		571,679		—
Investment securities available for sale:
U.S. Treasury and federal agencies		296,713		—		291,181		5,532
Obligations of states and political subdivisions		71,763		—		71,725		38
Mortgage-backed securities:
Government issued or guaranteed		3,612,780		—		3,528,236		84,544
Privately issued residential		2,326,554		—		—		2,326,554
Privately issued commercial		41,046		—		—		41,046
Collateralized debt obligations		2,496		—		—		2,496
Other debt securities		168,102		—		168,102		—
Equity securities		330,739		297,231		31,206		2,302

		6,850,193		297,231		4,090,450		2,462,512
Real estate loans held for sale		507,971		—		507,971		—
Other assets(a)		164,433		—		153,179		11,254

Total assets	$	8,140,418		343,373		5,323,279		2,473,766


Trading account liabilities	$	521,079		14,193		506,886		—
Other liabilities(a)		25,468		—		22,480		2,988

Total liabilities	$	546,547		14,193		529,366		2,988


(a)		Comprised predominantly of interest rate swap agreements used for interest rate risk management (Level 2), commitments to sell real estate loans (Level 2) and commitments to originate real estate loans to be held for sale (Level 3).

The changes in Level 3 assets and liabilities measured at estimated fair value on a recurring basis during the three months ended June 30, 2009 were as follows:


																	Changes in
																	unrealized
																	gains (losses)
																	included in
			Total gains (losses)														earnings
			realized/unrealized														related to
						Included in			Purchases,			Transfer					assets still
	Balance-					other			sales,			in and/or			Balance-		held at
	March 31,		Included			comprehensive			issuances &			out of			June 30,		June 30,
	2009		in earnings			income			settlements			Level 3			2009		2009
Investment securities available for sale:
U.S. Treasury and federal agencies	$	—		—			—			—			—			—		—
Obligations of states and political subdivisions		12,182		—			21			—			—			12,203		—
Government issued or guaranteed mortgage- backed securities		—		—			—			—			—			—		—
Privately issued residential mortgage- backed securities		2,349,403		(22,269	)(a)		37,622			(122,998	)		—			2,241,758		(22,269	)(a)
Privately issued commercial mortgage- backed securities		32,215		—			(5,739	)		(3,458	)		—			23,018		—
Collateralized debt obligations		2,421		(2,101	)(a)		13,787			98,265			—			112,372		(2,101	)(a)
Other debt securities		—		—			40			725			—			765		—
Equity securities		2,343		—			1			(15	)		—			2,329		—

		2,398,564		(24,370	)		45,732			(27,481	)		—			2,392,445		(24,370	)
Other assets and other liabilities		22,037		(7,768	)(b)		—			—			(4,593	)		9,676		7,946	(b)

The changes in Level 3 assets and liabilities measured at estimated fair value on a recurring basis during the three months ended June 30, 2008 were as follows:


																	Changes in
																	unrealized
																	gains
																	(losses)
																	included in
			Total gains (losses)														earnings
			realized/unrealized									Transfer					related to
						Included in			Purchases,			in					assets still
	Balance-					other			sales,			and/or			Balance-		held at
	March 31,		Included			comprehensive			issuances &			out of			June 30,		June 30,
	2008		in earnings			income			settlements			Level 3			2008		2008
Investment securities available for sale:
U.S. Treasury and federal agencies	$	5,688		—			(152	)		(169	)		—			5,367		—
Obligations of states and political subdivisions		48		—			(1	)		—			—			47		—
Government issued or guaranteed mortgage- backed securities		90,096		—			(1,092	)		67			—			89,071		—
Privately issued residential and commercial mortgage- backed securities		1,055,017		—			(21,587	)		(52,193	)		(85,219	)		896,018		—
Collateralized debt obligations		19,630		—			(5,148	)		—			—			14,482		—
Other debt securities		—		—			—			—			—			—		—
Equity securities		2,322		—			(1	)		8			—			2,329		—

		1,172,801		—			(27,981	)		(52,287	)		(85,219	)		1,007,314		—

Other assets and other liabilities		8,128		2,242	(b)		—			—			(6,251	)		4,119		3,596	(b)


(a)		Reported as an other-than-temporary impairment loss in the consolidated statement of income.

(b)		Reported as mortgage banking revenues in the consolidated statement of income and includes the fair value of commitment issuances and expirations.

The changes in Level 3 assets and liabilities measured at estimated fair value on a recurring basis during the six months ended June 30, 2009 were as follows:


																	Changes in
																	unrealized
																	gains (losses)
																	included in
			Total gains (losses)														earnings
			realized/unrealized														related to
						Included in			Purchases,			Transfer					assets still
	Balance-					other			sales,			in and/or			Balance-		held at
	December 31,		Included			comprehensive			issuances &			out of			June 30,		June 30,
	2008		in earnings			income			settlements			Level 3			2009		2009
Investment securities available for sale:
U.S. Treasury and federal agencies	$	5,532		—			—			—			(5,532	)		—		—
Obligations of states and political subdivisions		38		—			22			—			12,143			12,203		—
Government issued or guaranteed mortgage- backed securities		84,544		—			—			—			(84,544	)		—		—
Privately issued residential mortgage-backed securities		2,326,554		(54,468	)(a)		215,127			(245,455	)		—			2,241,758		(54,468	)(a)
Privately issued commercial mortgage-backed securities		41,046		—			(9,001	)		(9,027	)		—			23,018		—
Collateralized debt obligations		2,496		(1,553	)(a)		13,712			97,717			—			112,372		(1,553	)(a)
Other debt securities		—		—			40			725			—			765
Equity securities		2,302		—			1			26			—			2,329		—

		2,462,512		(56,021	)		219,901			(156,014	)		(77,933	)		2,392,445		(56,021	)
Other assets and other liabilities		8,266		19,490	(b)		—			—			(18,080	)		9,676		12,046	(b)

The changes in Level 3 assets and liabilities measured at estimated fair value on a recurring basis during the six months ended June 30, 2008 were as follows:


																	Changes in
																	unrealized
																	gains
																	(losses)
																	included in
			Total gains (losses)														earnings
			realized/unrealized														related to
						Included in			Purchases,			Transfer					assets still
	Balance-					other			sales,			in and/or			Balance-		held at
	January 1,		Included			comprehensive			issuances &			out of			June 30,		June 30,
	2008		in earnings			income			settlements			Level 3			2008		2008
Investment securities available for sale:
U.S. Treasury and federal agencies	$	5,696		—			(20	)		(309	)		—			5,367		—
Obligations of states and political subdivisions		50		—			(3	)		—			—			47		—
Government issued or guaranteed mortgage- backed securities		118,992		—			806			(1,791	)		(28,936	)		89,071		—
Privately issued residential and commercial mortgage- backed securities		1,159,644		—			(77,638	)		(100,769	)		(85,219	)		896,018		—
Collateralized debt obligations		27,115		—			(12,633	)		—			—			14,482		—
Other debt securities		—		—			—			—			—			—		—
Equity securities		2,324		—			(4	)		9			—			2,329		—

		1,313,821		—			(89,492	)		(102,860	)		(114,155	)		1,007,314		—

Other assets and other liabilities		2,654		14,962	(b)		—			—			(13,497	)		4,119		4,119	(b)


(a)		Reported as an other-than-temporary impairment loss in the consolidated statement of income.

(b)		Reported as mortgage banking revenues in the consolidated statement of income and includes the fair value of commitment issuances and expirations.

The Company is required, on a nonrecurring basis, to adjust the carrying value of certain assets or provide valuation allowances related to certain assets using fair value measurements.

Loans

Loans are generally not recorded at fair value on a recurring basis. Periodically, the Company records nonrecurring adjustments to the carrying value of loans based on fair value measurements for partial charge-offs of the uncollectible portions of those loans. Nonrecurring adjustments also include certain impairment amounts for collateral-dependent loans when establishing the allowance for credit losses. Such amounts are generally based on the fair value of the underlying collateral supporting the loan and, as a result, the carrying value of the loan less the calculated valuation amount does not necessarily represent the fair value of the loan. Real estate collateral is typically valued using appraisals or other indications of value based on recent comparable sales of similar properties or assumptions generally observable in the marketplace and the related nonrecurring fair value measurement adjustments have generally been classified as Level 2, unless significant adjustments have been made to the valuation that are not readily observable by market participants. Estimates of fair value used for other collateral supporting commercial loans generally are based on assumptions not observable in the marketplace and therefore such valuations have been classified as Level 3. Loans subject to nonrecurring fair value measurement were $632 million at June 30, 2009, ($303 million and $329 million of which were classified as Level 2 and Level 3, respectively) and $288 million at June 30, 2008 ($214 million and $74 million of which were classified as Level 2 and Level 3, respectively). Changes in fair value recognized for partial charge-offs of loans and loan impairment reserves on loans held by the Company on June 30, 2009 were decreases of $157 million and $238 million for the three and six months ended June 30, 2009, respectively, and on loans held by the Company on June 30, 2008 were decreases of $71 million and $88 million for the three months and six months ended June 30, 2008, respectively.

Capitalized servicing rights

Capitalized servicing rights are initially measured at fair value in the Company’s consolidated balance sheet. The Company utilizes the amortization method to subsequently measure its capitalized servicing assets. In accordance with GAAP, the Company must record impairment charges, on a nonrecurring basis, when the carrying value of certain strata exceed their estimated fair value. To estimate the fair value of servicing rights, the Company considers market prices for similar assets, if available, and the present value of expected future cash flows associated with the servicing rights calculated using assumptions that market participants would use in estimating future servicing income and expense. Such assumptions include estimates of the cost of servicing loans, loan default rates, an appropriate discount rate, and prepayment speeds. For purposes of evaluating and measuring impairment of capitalized servicing rights, the Company stratifies such assets based on the predominant risk characteristics of the underlying financial instruments that are expected to have the most impact on projected prepayments, cost of servicing and other factors affecting future cash flows associated with the servicing rights. Such factors may include financial asset or loan type, note rate and term. The amount of impairment recognized is the amount by which the carrying value of the capitalized servicing rights for a stratum exceed estimated fair value. Impairment is recognized through a valuation allowance. The determination of fair value of capitalized servicing rights is considered a Level 3 valuation. At June 30, 2009, $30 million of capitalized servicing rights had a carrying value equal to their fair value. Changes in fair value of capitalized servicing rights recognized for the three and six months ended June 30, 2009 were increases of $13 million and $18 million, respectively. At June 30, 2008, $20 million of capitalized servicing rights had a carrying value equal to their fair value. Changes in fair value of capitalized servicing rights recognized for the three and six months ended June 30, 2008 were increases of $9 million and $5 million, respectively.

Assets taken in foreclosure of defaulted loans

Assets taken in foreclosure of defaulted loans are primarily comprised of commercial and residential real property and are generally measured at the lower of cost or fair value less costs to sell. The fair value of the real property is generally determined using appraisals or other indications of value based on recent comparable sales of similar properties or assumptions generally observable in the marketplace, and the related nonrecurring fair value measurement adjustments have generally been classified as Level 2. Assets taken in foreclosure of defaulted loans subject to nonrecurring fair value measurement were $21 million at June 30, 2009. Changes in fair value recognized for those foreclosed assets held by the Company at June 30, 2009 were $21 million and $22 million for the three and six months ended June 30, 2009, respectively.

Disclosures of fair value of financial instruments

With the exception of marketable securities, certain off-balance sheet financial instruments and one-to-four family residential mortgage loans originated for sale, the Company’s financial instruments are not readily marketable and market prices do not exist. The Company, in attempting to comply with the provisions of GAAP that require disclosures of fair value of financial instruments, has not attempted to market its financial instruments to potential buyers, if any exist. Since negotiated prices in illiquid markets depend greatly upon the then present motivations of the buyer and seller, it is reasonable to assume that actual sales prices could vary widely from any estimate of fair value made without the benefit of negotiations. Additionally, changes in market interest rates can dramatically impact the value of financial instruments in a short period of time. Additional information about the assumptions and calculations utilized is presented below.

The carrying amounts and estimated fair value for financial instrument assets (liabilities) are presented in the following table:


	June 30, 2009						December 31, 2008
	Carrying			Calculated			Carrying			Calculated
	Amount			Estimate			Amount			Estimate
	(In thousands)
Financial assets:
Cash and cash equivalents	$	1,150,728		$	1,150,728		$	1,568,151		$	1,568,151
Interest-bearing deposits at banks		59,950			59,950			10,284			10,284
Trading account assets		495,324			495,324			617,821			617,821
Agreements to resell securities		—			—			90,000			90,000
Investment securities		8,155,434			7,958,830			7,919,207			7,828,121
Loans and leases:
Commercial loans and leases		14,180,609			13,744,572			14,261,882			14,137,805
Commercial real estate loans		20,787,198			20,098,344			18,837,665			18,210,209
Residential real estate loans		5,471,775			4,838,466			4,904,424			4,249,137
Consumer loans		12,275,062			11,936,555			10,996,492			10,849,635
Allowance for credit losses		(855,365	)		—			(787,904	)		—

Loans and leases, net		51,859,279			50,617,937			48,212,559			47,446,786
Accrued interest receivable		219,164			219,164			222,073			222,073

Financial liabilities:
Noninterest-bearing deposits	$	(12,403,999	)	$	(12,403,999	)	$	(8,856,114	)	$	(8,856,114	)
Savings deposits and NOW accounts		(23,681,353	)		(23,681,353	)		(20,630,226	)		(20,630,226	)
Time deposits		(9,584,351	)		(9,666,248	)		(9,046,937	)		(9,108,821	)
Deposits at foreign office		(1,085,004	)		(1,085,004	)		(4,047,986	)		(4,047,986	)
Short-term borrowings		(2,951,149	)		(2,951,149	)		(3,009,735	)		(3,009,735	)
Long-term borrowings		(11,568,238	)		(10,714,115	)		(12,075,149	)		(11,104,337	)
Accrued interest payable		(148,270	)		(148,270	)		(142,456	)		(142,456	)
Trading account liabilities		(353,629	)		(353,629	)		(521,079	)		(521,079	)

Other financial instruments:
Commitments to originate real estate loans for sale	$	9,676		$	9,676		$	8,144		$	8,144
Commitments to sell real estate loans		10,134			10,134			(15,477	)		(15,477	)
Other credit-related commitments		(51,030	)		(51,030	)		(51,361	)		(51,361	)
Interest rate swap agreements used for interest rate risk management		63,618			63,618			146,111			146,111

The following assumptions and methods or calculations were used in determining the estimated fair value of financial instruments not measured at fair value in the consolidated balance sheet.

Cash and cash equivalents, interest-bearing deposits at banks, short-term borrowings, accrued interest receivable and accrued interest payable

Due to the nature of cash and cash equivalents and the near maturity of interest-bearing deposits at banks, short-term borrowings, accrued interest receivable and accrued interest payable, the Company estimated that the carrying amount of such instruments approximated estimated fair value.

Agreements to resell securities

The amounts assigned to agreements to resell securities were based on discounted calculations of projected cash flows.

Investment securities

Estimated fair values of investments in readily marketable securities were generally based on quoted market prices. Investment securities that were not readily marketable were assigned amounts based on estimates provided by outside parties or modeling techniques that relied upon discounted calculations of projected cash flows or, in the case of other investment securities, which include capital stock of the Federal Reserve Bank of New York and the Federal Home Loan Bank of New York, at an amount equal to the carrying amount.

Loans and leases

In general, discount rates used to calculate values for loan products were based on the Company’s pricing at the respective period end and included appropriate adjustments for expected credit losses. A higher discount rate was assumed with respect to estimated cash flows associated with nonaccrual loans. Projected loan cash flows were adjusted for estimated credit losses. However, such estimates made by the Company may not be indicative of assumptions and adjustments that a purchaser of the Company’s loans and leases would seek.

Deposits

Pursuant to GAAP, the estimated fair value ascribed to noninterest-bearing deposits, savings deposits and NOW accounts must be established at carrying value because of the customers’ ability to withdraw funds immediately. Time deposit accounts are required to be revalued based upon prevailing market interest rates for similar maturity instruments. As a result, amounts assigned to time deposits were based on discounted cash flow calculations using prevailing market interest rates based on the Company’s pricing at the respective date for deposits with comparable remaining terms to maturity.

The Company believes that deposit accounts have a value greater than that prescribed by GAAP. The Company feels, however, that the value associated with these deposits is greatly influenced by characteristics of the buyer, such as the ability to reduce the costs of servicing the deposits and deposit attrition which often occurs following an acquisition. Accordingly, estimating the fair value of deposits with any degree of certainty is not practical.

Long-term borrowings

The amounts assigned to long-term borrowings were based on quoted market prices, when available, or were based on discounted cash flow calculations using prevailing market interest rates for borrowings of similar terms and credit risk.

Commitments to originate real estate loans for sale and commitments to sell real estate loans

Interest rate swap agreements used for interest rate risk management

The estimated fair value of interest rate swap agreements used for interest rate risk management represents the amount the Company would have expected to receive or pay to terminate such agreements.

Other commitments and contingencies

As described in note 11, in the normal course of business, various commitments and contingent liabilities are outstanding, such as loan commitments, credit guarantees and letters of credit. The Company’s pricing of such financial instruments is based largely on credit quality and relationship, probability of funding and other requirements. Loan commitments often have fixed expiration dates and contain termination and other clauses which provide for relief from funding in the event of significant deterioration in the credit quality of the customer. The rates and terms of the Company’s loan commitments, credit guarantees and letters of credit are competitive with other financial institutions operating in markets served by the Company. The Company believes that the carrying amounts, which are included in other liabilities, are reasonable estimates of the fair value of these financial instruments.

The Company does not believe that the estimated information presented herein is representative of the earnings power or value of the Company. The preceding analysis, which is inherently limited in depicting fair value, also does not consider any value associated with existing customer relationships nor the ability of the Company to create value through loan origination, deposit gathering or fee generating activities.

Many of the estimates presented herein are based upon the use of highly subjective information and assumptions and, accordingly, the results may not be precise. Management believes that fair value estimates may not be comparable between financial institutions due to the wide range of permitted valuation techniques and numerous estimates which must be made. Furthermore, because the disclosed fair value amounts were estimated as of the balance sheet date, the amounts actually realized or paid upon maturity or settlement of the various financial instruments could be significantly different.

Commitments and contingencies

6 Months Ended

Jun. 30, 2009

Commitments and contingencies [Abstract]

Commitments and contingencies

11. Commitments and contingencies

In the normal course of business, various commitments and contingent liabilities are outstanding. The following table presents the Company’s significant commitments. Certain of these commitments are not included in the Company’s consolidated balance sheet.


	June 30,		December 31,
	2009		2008
	(in thousands)
Commitments to extend credit
Home equity lines of credit	$	6,636,329		5,972,541
Commercial real estate loans to be sold		75,115		252,559
Other commercial real estate and construction		2,150,497		2,238,464
Residential real estate loans to be sold		909,547		870,578
Other residential real estate		235,663		211,705
Commercial and other		7,244,702		6,666,988

Standby letters of credit		3,872,298		3,886,396

Commercial letters of credit		50,729		45,503

Financial guarantees and indemnification contracts		1,589,212		1,546,873

Commitments to sell real estate loans		1,409,254		1,306,041

Commitments to extend credit are agreements to lend to customers, generally having fixed expiration dates or other termination clauses that may require payment of a fee. Standby and commercial letters of credit are conditional commitments issued to guarantee the performance of a customer to a third party. Standby letters of credit generally are contingent upon the failure of the customer to perform according to the terms of the underlying contract with the third party, whereas commercial letters of credit are issued to facilitate commerce and typically result in the commitment being funded when the underlying transaction is consummated between the customer and a third party. The credit risk associated with commitments to extend credit and standby and commercial letters of credit is essentially the same as that involved with extending loans to customers and is subject to normal credit policies. Collateral may be obtained based on management’s assessment of the customer’s creditworthiness.

Financial guarantees and indemnification contracts are oftentimes similar to standby letters of credit and may include mandatory purchase agreements issued to ensure that customer obligations are fulfilled, recourse obligations associated with sold loans, and other guarantees of customer performance or compliance with designated rules and regulations. Included in financial guarantees and indemnification contracts are loan principal amounts sold with recourse in conjunction with the Company’s involvement in the Federal National Mortgage Association Delegated Underwriting and Servicing program. The Company’s maximum credit risk for recourse associated with loans sold under this program totaled approximately $1.2 billion at each of June 30, 2009 and December 31, 2008.

Since many loan commitments, standby letters of credit, and guarantees and indemnification contracts expire without being funded in whole or in part, the contract amounts are not necessarily indicative of future cash flows.

The Company utilizes commitments to sell real estate loans to hedge exposure to changes in the fair value of real estate loans held for sale. Such commitments are considered derivatives and along with commitments to originate real estate loans to be held for sale are generally recorded in the consolidated balance sheet at estimated fair market value.

The Company has an agreement with the Baltimore Ravens of the National Football League whereby the Company obtained the naming rights to a football stadium in Baltimore, Maryland. Under the agreement, the Company is obligated to pay $5 million per year through 2013 and $6 million per year from 2014 through 2017.

The Company also has commitments under long-term operating leases.

The Company reinsures credit life and accident and health insurance purchased by consumer loan customers. The Company also enters into reinsurance contracts with third party insurance companies who insure against the risk of a mortgage borrower’s payment default in connection with certain mortgage loans originated by the Company. When providing reinsurance coverage, the Company receives a premium in exchange for accepting a portion of the insurer’s risk of loss. The outstanding loan principal balances reinsured by the Company were approximately $102 million at June 30, 2009. Assets of subsidiaries providing reinsurance that are available to satisfy claims totaled approximately $69 million at June 30, 2009. The amounts noted above are not necessarily indicative of losses which may ultimately be incurred. Such losses are expected to be substantially less because most loans are repaid by borrowers in accordance with the original loan terms.

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 arising out of litigation pending against M&T or its subsidiaries will be material to the Company’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 the Company’s consolidated results of operations in any future reporting period.

Segment information

6 Months Ended

Jun. 30, 2009

Segment information [Abstract]

Segment information

12. Segment information

Reportable segments have been determined based upon the Company’s internal profitability reporting system, which is organized by strategic business unit. 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 Business Banking, 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 22 to the Company’s consolidated financial statements as of and for the year ended December 31, 2008. 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 GAAP. As a result, the financial information of the reported segments is not necessarily comparable with similar information reported by other financial institutions. As also described in note 22 to the Company’s 2008 consolidated financial statements, neither goodwill nor core deposit and other intangible assets (and the amortization charges associated with such assets) resulting from acquisitions of financial institutions have been allocated to the Company’s reportable segments, but are included in the “All Other” category. The Company does, however, assign such intangible assets to business units for purposes of testing for impairment.

Information about the Company’s segments is presented in the following table:


	Three months ended June 30
	2009									2008
				Inter-			Net					Inter-			Net
	Total			segment			income			Total		segment			income
	revenues(a)			revenues			(loss)			revenues(a)		revenues			(loss)
	(in thousands)
Business Banking	$	103,132			—			30,699			91,995		3			29,547

Commercial Banking		186,558			—			70,003			153,566		165			53,516

Commercial Real Estate		100,847			33			23,457			88,273		203			42,646

Discretionary Portfolio		16,433			(3,693	)		(3,279	)		28,792		(4,170	)		5,324

Residential Mortgage Banking		80,016			15,002			(10,877	)		64,021		12,953			(10,420	)

Retail Banking		313,025			2,509			54,184			292,175		3,355			62,927

All Other		(26,795	)		(13,851	)		(112,999	)		38,992		(12,509	)		(23,275	)


Total	$	773,216			—			51,188			757,814		—			160,265


	Six months ended June 30
	2009									2008
				Inter-			Net					Inter-			Net
	Total			segment			income			Total		segment			income
	revenues(a)			revenues			(loss)			revenues(a)		revenues			(loss)
	(in thousands)
Business Banking	$	196,767			—			60,811			187,244		3			62,330

Commercial Banking		351,685			—			127,157			316,150		250			120,325

Commercial Real Estate		189,811			39			66,440			174,551		411			85,455

Discretionary Portfolio		27,731			(6,777	)		(8,368	)		72,267		(8,499	)		21,301

Residential Mortgage Banking	160,027				26,871			(5,377	)		131,439		26,284			(5,361	)

Retail Banking		597,677			5,164			106,547			595,043		6,322			138,397

All Other		(70,334	)		(25,297	)		(231,801	)		72,633		(24,771	)		(59,986	)


Total	$	1,453,364			—			115,409			1,549,327		—			362,461


	Average total assets
	Six months ended				Year ended
	June 30				December 31
	2009		2008		2008
	(in millions)
Business Banking	$	4,686		4,415		4,452

Commercial Banking		15,414		14,692		14,981

Commercial Real Estate		12,135		11,230		11,394

Discretionary Portfolio		13,506		14,725		14,179

Residential Mortgage Banking		2,801		2,743		2,660

Retail Banking		11,484		11,459		11,356

All Other		5,855		6,035		6,110


Total	$	65,881		65,299		65,132


(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 owed by a segment and a funding charge (credit) based on the Company’s internal funds transfer and allocation methodology. Segments are charged a cost to fund any assets (e.g. loans) and are paid a funding credit for any funds provided (e.g. deposits). The taxable-equivalent adjustment aggregated $5,214,000 and $5,851,000 for the three-month periods ended June 30, 2009 and 2008, respectively, and $10,147,000 and $11,634,000 for the six-month periods ended June 30, 2009 and 2008, 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.

Relationship with Bayview Lending Group LLC and Bayview Financial Holdings, L.P.	6 Months Ended
	Jun. 30, 2009
Relationship with Bayview Lending Group LLC and Bayview Financial Holdings, L.P. [Abstract]
Relationship with Bayview Lending Group LLC and Bayview Financial Holdings, L.P.	13. Relationship with Bayview Lending Group LLC and Bayview Financial Holdings, L.P. In 2007 M&T invested $300 million to acquire a 20% minority interest in Bayview Lending Group LLC (“BLG”), a privately-held company that, together with its affiliates, specializes in originating, securitizing and servicing small balance commercial real estate loans. M&T recognizes income from BLG using the equity method of accounting. Bayview Financial Holdings, L.P. (together with its affiliates, “Bayview Financial”), a privately-held specialty mortgage finance company, is BLG’s majority investor. In addition to their common investment in BLG, the Company and Bayview Financial conduct other business activities with each other. The Company has purchased loan servicing rights for small balance commercial mortgage loans from BLG and Bayview Financial having outstanding principal balances of $5.8 billion and $5.9 billion at June 30, 2009 and December 31, 2008, respectively. Amounts recorded as capitalized servicing assets for such loans totaled $49 million at June 30, 2009 and $58 million at December 31, 2008. In addition, capitalized servicing rights at June 30, 2009 and December 31, 2008 also included $22 million and $28 million, respectively, for servicing rights that were purchased from Bayview Financial related to residential mortgage loans with outstanding principal balances of $4.3 billion at June 30, 2009 and $4.6 billion at December 31, 2008. Revenues from servicing residential and small balance commercial mortgage loans purchased from BLG and Bayview Financial were $13 million in each of the three-month periods ended June 30, 2009 and 2008, respectively, and $26 million and $27 million for the six months ended June 30, 2009 and 2008, respectively. M&T Bank provided $50 million and $71 million of credit facilities to Bayview Financial at June 30, 2009 and December 31, 2008, respectively, of which $39 million and $57 million were outstanding at June 30, 2009 and December 31, 2008, respectively. Finally, at June 30, 2009 and December 31, 2008, the Company held $23 million and $32 million, respectively, of collateralized mortgage obligations in its available-for-sale investment securities portfolio that were securitized by Bayview Financial. In addition, the Company held $384 million and $412 million of similar investment securities in its held-to-maturity portfolio at June 30, 2009 and December 31, 2008, respectively.