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Document and Company Information - USD ($)	12 Months Ended
Document and Company Information - USD ($)	Dec. 31, 2009	Feb. 11, 2010	Jun. 30, 2009
Document and Company Information [Abstract]
Entity Registrant Name	M&T BANK CORP
Entity Central Index Key	0000036270
Document Type	10-K
Document Period End Date	Dec. 31, 2009
Amendment Flag	false
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			$ 3,984,009,945
Entity Common Stock, Shares Outstanding		118,680,444

Consolidated Balance Sheet - USD ($) $ in Thousands	Dec. 31, 2009	Dec. 31, 2008
Assets
Cash and due from banks	$ 1,226,223	$ 1,546,804
Interest-bearing deposits at banks	133,335	10,284
Federal funds sold	20,119	21,347
Agreements to resell securities	0	90,000
Trading account	386,984	617,821
Investment securities (includes pledged securities that can be sold or repledged of $1,797,701 in 2009; $1,870,097 in 2008)
Available for sale (cost: $6,997,009 in 2009; $7,656,635 in 2008)	6,704,378	6,850,193
Held to maturity (fair value: $416,483 in 2009; $394,752 in 2008)	567,607	485,838
Other (fair value: $508,624 in 2009; $583,176 in 2008)	508,624	583,176
Total investment securities	7,780,609	7,919,207
Loans and leases	52,306,457	49,359,737
Unearned discount	(369,771)	(359,274)
Allowance for credit losses	(878,022)	(787,904)
Loans and leases, net	51,058,664	48,212,559
Premises and equipment	435,845	388,855
Goodwill	3,524,625	3,192,128
Core deposit and other intangible assets	182,418	183,496
Accrued interest and other assets	4,131,577	3,633,256
Total assets	68,880,399	65,815,757
Liabilities
Noninterest-bearing deposits	13,794,636	8,856,114
NOW accounts	1,396,471	1,141,308
Savings deposits	23,676,798	19,488,918
Time deposits	7,531,495	9,046,937
Deposits at foreign office	1,050,438	4,047,986
Total deposits	47,449,838	42,581,263
Federal funds purchased and agreements to repurchase securities	2,211,692	970,529
Other short-term borrowings	230,890	2,039,206
Accrued interest and other liabilities	995,056	1,364,879
Long-term borrowings	10,240,016	12,075,149
Total liabilities	61,127,492	59,031,026
Stockholders' equity
Preferred stock, $1.00 par, 1,000,000 shares authorized, 778,000 shares issued and outstanding in 2009; 600,000 shares issued and outstanding in 2008 (liquidation preference $1,000 per share)	730,235	567,463
Common stock, $.50 par, 250,000,000 shares authorized, 120,396,611 shares issued in 2009 and 2008	60,198	60,198
Common stock issuable, 75,170 shares in 2009; 78,447 shares in 2008	4,342	4,617
Additional paid-in capital	2,442,947	2,897,907
Retained earnings	5,076,884	5,062,754
Accumulated other comprehensive income (loss), net	(335,997)	(736,881)
Treasury stock - common, at cost - 2,173,916 shares in 2009; 10,031,302 shares in 2008	(225,702)	(1,071,327)
Total stockholders' equity	7,752,907	6,784,731
Total liabilities and stockholders' equity	$ 68,880,399	$ 65,815,757

Consolidated Statement of Income - USD ($) $ in Thousands	12 Months Ended
Consolidated Statement of Income - USD ($) $ in Thousands	Dec. 31, 2009	Dec. 31, 2008	Dec. 31, 2007
Interest income
Loans and leases, including fees	$ 2,326,748	$ 2,825,587	$ 3,155,967
Deposits at banks	34	109	300
Federal funds sold	63	254	857
Agreements to resell securities	66	1,817	22,978
Trading account	534	1,469	744
Investment securities
Fully taxable	389,268	438,409	352,628
Exempt from federal taxes	8,484	9,946	11,339
Total interest income	2,725,197	3,277,591	3,544,813
Interest expense
NOW accounts	1,122	2,894	4,638
Savings deposits	112,550	248,083	250,313
Time deposits	206,220	330,389	496,378
Deposits at foreign office	2,391	84,483	207,990
Short-term borrowings	7,129	142,627	274,079
Long-term borrowings	340,037	529,319	461,178
Total interest expense	669,449	1,337,795	1,694,576
Net interest income	2,055,748	1,939,796	1,850,237
Provision for credit losses	604,000	412,000	192,000
Net interest income after provision for credit losses	1,451,748	1,527,796	1,658,237
Other income
Mortgage banking revenues	207,561	156,012	111,893
Service charges on deposit accounts	469,195	430,532	409,462
Trust income	128,568	156,149	152,636
Brokerage services income	57,611	64,186	59,533
Trading account and foreign exchange gains	23,125	17,630	30,271
Gain on bank investment securities	1,165	34,471	1,204
Total other-than-temporary ("OTTI") losses	(264,363)	(182,222)	(127,300)
Portion of OTTI losses recognized in other comprehensive income (before taxes)	126,066	0	0
Net OTTI losses recognized in earnings	(138,297)	(182,222)	(127,300)
Equity in earnings of Bayview Lending Group LLC	(25,898)	(37,453)	8,935
Other revenues from operations	325,076	299,674	286,355
Total other income	1,048,106	938,979	932,989
Other expense
Salaries and employee benefits	1,001,873	957,086	908,315
Equipment and net occupancy	211,391	188,845	169,050
Printing, postage and supplies	38,216	35,860	35,765
Amortization of core deposit and other intangible assets	64,255	66,646	66,486
FDIC assessments	96,519	6,689	4,203
Other costs of operations	568,309	471,870	443,870
Total other expense	1,980,563	1,726,996	1,627,689
Income before taxes	519,291	739,779	963,537
Income taxes	139,400	183,892	309,278
Net income	379,891	555,887	654,259
Net income available to common shareholders	$ 332,006	$ 555,096	$ 654,259
Net income per common share
Basic	$ 2.9	$ 5.04	$ 6.05
Diluted	$ 2.89	$ 5.01	$ 5.95

Consolidated Statement of Cash Flows - USD ($) $ in Thousands	12 Months Ended
	Dec. 31, 2009	Dec. 31, 2008	Dec. 31, 2007
Cash flows from operating activities
Net income	$ 379,891	$ 555,887	$ 654,259
Adjustments to reconcile net income to net cash provided by operating activities
Provision for credit losses	604,000	412,000	192,000
Depreciation and amortization of premises and equipment	64,398	53,422	48,742
Amortization of capitalized servicing rights	62,268	65,722	62,931
Amortization of core deposit and other intangible assets	64,255	66,646	66,486
Provision for deferred income taxes	82,501	(17,020)	(44,670)
Asset write-downs	171,225	190,079	139,779
Net gain on sales of assets	(88)	(24,961)	(5,495)
Net change in accrued interest receivable, payable	(38,920)	15,023	780
Net change in other accrued income and expense	(154,992)	(201,402)	(18,461)
Net change in loans originated for sale	(57,105)	471,543	305,138
Net change in trading account assets and liabilities	11,956	41,477	(66,732)
Net cash provided by operating activities	1,189,389	1,628,416	1,334,757
Proceeds from sales of investment securities
Available for sale	9,427	57,843	40,160
Other	137,577	115,207	19,361
Proceeds from maturities of investment securities
Available for sale	2,187,553	1,908,725	2,184,773
Held to maturity	125,466	92,343	46,781
Purchases of investment securities
Available for sale	(651,549)	(836,448)	(2,219,861)
Held to maturity	(37,453)	(198,418)	(39,588)
Other	(21,088)	(191,995)	(130,865)
Net (increase) decrease in agreements to resell securities	90,000	(90,000)	100,000
Net (increase) decrease in loans and leases	657,458	(2,873,642)	(4,074,220)
Other investments, net	(35,934)	(35,649)	(309,666)
Additions to capitalized servicing rights	(379)	(24,349)	(53,049)
Capital expenditures, net	(58,967)	(72,234)	(56,681)
Acquisitions, net of cash acquired
Banks and bank holding companies	202,993	0	(239,012)
Deposits and banking offices	0	0	(12,894)
Other, net	(103,409)	(115,142)	(37,906)
Net cash provided (used) by investing activities	2,501,695	(2,263,759)	(4,782,667)
Cash flows from financing activities
Net increase (decrease) in deposits	(528,964)	1,317,764	(1,036,502)
Net increase (decrease) in short-term borrowings	(745,251)	(2,811,736)	2,324,859
Proceeds from long-term borrowings	0	3,850,010	3,550,229
Payments on long-term borrowings	(2,390,182)	(2,216,978)	(528,515)
Purchases of treasury stock	0	0	(508,404)
Dividends paid - common	(325,706)	(308,501)	(281,900)
Dividends paid - preferred	(31,946)	0	0
Proceeds from issuance of preferred stock and warrants	0	600,000	0
Other, net	9,156	5,388	70,726
Net cash provided (used) by financing activities	(4,012,893)	435,947	3,590,493
Net increase (decrease) in cash and cash equivalents	(321,809)	(199,396)	142,583
Cash and cash equivalents at beginning of year	1,568,151	1,767,547	1,624,964
Cash and cash equivalents at end of year	1,246,342	1,568,151	1,767,547
Supplemental disclosure of cash flow information
Interest received during the year	2,748,880	3,374,219	3,545,094
Interest paid during the year	704,173	1,363,351	1,683,403
Income taxes paid (refunded) during the year	(19,549)	290,324	370,103
Securitization of residential mortgage loans allocated to
Available for sale investment securities	140,942	866,169	942,048
Capitalized servicing rights	788	8,455	7,873
Real estate acquired in settlement of loans	102,392	142,517	48,163
Investment securities available for sale transferred to held to maturity	0	298,108	0
Loans held for sale transferred to loans held for investment	0	0	870,759
Acquisitions, fair value of
Assets acquired (noncash)	6,581,433	0	3,744,853
Liabilities assumed	6,318,998	0	3,207,521
Preferred stock issued	155,779	0	0
Common stock issued	272,824	0	277,015
Common stock options	1,367	0	0
Common stock warrants	$ 6,467	$ 0	$ 0

Consolidated Statement of Changes in Stockholders Equity - USD ($) $ in Thousands	12 Months Ended
	Dec. 31, 2009	Dec. 31, 2008	Dec. 31, 2007
Statement [Line Items]
Begining Balance	$ 6,784,731	$ 6,485,256	$ 6,281,095
Comprehensive income:
Net income	379,891	555,887	654,259
Other comprehensive income, net of tax and reclassification adjustments:
Unrealized gains (losses) on investment securities	337,043	(497,262)	(34,095)
Defined benefit plans liability adjustment	57,284	(127,845)	(18,222)
Unrealized losses on cash flow hedges			(8,931)
Unrealized losses on terminated cash flow hedges	6,557	3,048
Comprehensive Income	780,775	(66,172)	593,011
Issuance of preferred stock and associated warrants		600,000
Acquisition of Provident Bankshares Corporation and Partners Trust Financial Group, Inc. in 2009 and 2007, respectively:
Preferred stock issued	155,779	0	0
Common stock issued	272,824	0	277,015
Common stock options	1,367	0	0
Common stock warrants	6,467	0	0
Purchases of treasury stock			(508,404)
Issuance of common stock to defined benefit pension plan	44,289
Preferred stock cash dividends	(31,946)
Repayment of management stock ownership program receivable	195	72
Stock option and purchase plans:
Compensation expense	53,505	49,627	51,429
Exercises	10,234	23,005	71,719
Directors' stock plan	1,251	1,347	1,341
Deferred compensation plans, net, including dividend equivalents	53	97	(50)
Common stock cash dividends - $2.80, $2.80 and $2.60 per share in 2009, 2008 and 2007, respectively	(326,617)	(308,501)	(281,900)
Ending Balance	7,752,907	6,784,731	6,485,256
Preferred stock
Statement [Line Items]
Begining Balance	567,463
Other comprehensive income, net of tax and reclassification adjustments:
Issuance of preferred stock and associated warrants		567,463
Acquisition of Provident Bankshares Corporation and Partners Trust Financial Group, Inc. in 2009 and 2007, respectively:
Preferred stock issued	155,779
Amortization of preferred stock discount	6,993
Stock option and purchase plans:
Ending Balance	730,235	567,463
Common stock
Statement [Line Items]
Begining Balance	60,198	60,198	60,198
Stock option and purchase plans:
Ending Balance	60,198	60,198	60,198
Common stock issuable
Statement [Line Items]
Begining Balance	4,617	4,776	5,060
Stock option and purchase plans:
Deferred compensation plans, net, including dividend equivalents	(275)	(159)	(284)
Ending Balance	4,342	4,617	4,776
Additional paid-in capital
Statement [Line Items]
Begining Balance	2,897,907	2,848,752	2,889,449
Other comprehensive income, net of tax and reclassification adjustments:
Issuance of preferred stock and associated warrants		32,537
Acquisition of Provident Bankshares Corporation and Partners Trust Financial Group, Inc. in 2009 and 2007, respectively:
Common stock issued	(348,080)		(54,628)
Common stock options	1,367
Common stock warrants	6,467
Issuance of common stock to defined benefit pension plan	(51,417)
Repayment of management stock ownership program receivable	195	72
Stock option and purchase plans:
Compensation expense	(21,773)	46,025	49,824
Exercises	(39,936)	(28,543)	(35,397)
Directors' stock plan	(1,280)	(450)	63
Deferred compensation plans, net, including dividend equivalents	(503)	(486)	(559)
Ending Balance	2,442,947	2,897,907	2,848,752
Retained earnings
Statement [Line Items]
Begining Balance	5,062,754	4,815,585	4,443,441
Comprehensive income:
Net income	379,891	555,887	654,259
Acquisition of Provident Bankshares Corporation and Partners Trust Financial Group, Inc. in 2009 and 2007, respectively:
Preferred stock cash dividends	(31,946)
Amortization of preferred stock discount	(6,993)
Stock option and purchase plans:
Deferred compensation plans, net, including dividend equivalents	(205)	(217)	(215)
Common stock cash dividends - $2.80, $2.80 and $2.60 per share in 2009, 2008 and 2007, respectively	(326,617)	(308,501)	(281,900)
Ending Balance	5,076,884	5,062,754	4,815,585
Accumulated other comprehensive income (loss), net
Statement [Line Items]
Begining Balance	(736,881)	(114,822)	(53,574)
Other comprehensive income, net of tax and reclassification adjustments:
Unrealized gains (losses) on investment securities	337,043	(497,262)	(34,095)
Defined benefit plans liability adjustment	57,284	(127,845)	(18,222)
Unrealized losses on cash flow hedges			(8,931)
Unrealized losses on terminated cash flow hedges	6,557	3,048
Stock option and purchase plans:
Ending Balance	(335,997)	(736,881)	(114,822)
Treasury stock
Statement [Line Items]
Begining Balance	(1,071,327)	(1,129,233)	(1,063,479)
Acquisition of Provident Bankshares Corporation and Partners Trust Financial Group, Inc. in 2009 and 2007, respectively:
Common stock issued	620,904		331,643
Purchases of treasury stock			(508,404)
Issuance of common stock to defined benefit pension plan	95,706
Stock option and purchase plans:
Compensation expense	75,278	3,602	1,605
Exercises	50,170	51,548	107,116
Directors' stock plan	2,531	1,797	1,278
Deferred compensation plans, net, including dividend equivalents	1,036	959	1,008
Ending Balance	$ (225,702)	$ (1,071,327)	$ (1,129,233)

Significant accounting policies

12 Months Ended

Dec. 31, 2009

Significant accounting policies [Abstract]

Significant accounting policies


1.	Significant accounting policies

M&T Bank Corporation (“M&T”) is a bank holding company headquartered in Buffalo, New York. Through subsidiaries, M&T provides individuals, corporations and other businesses, and institutions with commercial and retail banking services, including loans and deposits, trust, mortgage banking, asset management, insurance and other financial services. Banking activities are largely focused on consumers residing in New York State, Pennsylvania, Maryland, Virginia and the District of Columbia and on small and medium-size businesses based in those areas. Banking services are also provided in Delaware, West Virginia and New Jersey, while certain subsidiaries also conduct activities in other states.

The accounting and reporting policies of M&T and subsidiaries (“the Company”) conform to generally accepted accounting principles (“GAAP”) and to general practices within the banking industry. The preparation of financial statements in conformity with GAAP requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities and disclosure of contingent assets and liabilities at the date of the financial statements and the reported amounts of revenues and expenses during the reporting period. Actual results could differ from those estimates. Subsequent events have been evaluated for their potential impact in the financial statements through February 19, 2010, which is the date the financial statements were issued. The more significant accounting policies are as follows:

Consolidation

The consolidated financial statements include M&T and all of its subsidiaries. All significant intercompany accounts and transactions of consolidated subsidiaries have been eliminated in consolidation. The financial statements of M&T included in note 26 report investments in subsidiaries under the equity method. Information about some limited purpose entities that are affiliates of the Company but are not included in the consolidated financial statements appears in note 19.

Consolidated Statement of Cash Flows

For purposes of this statement, cash and due from banks and federal funds sold are considered cash and cash equivalents.

Securities purchased under agreements to resell and securities sold under agreements to repurchase

Securities purchased under agreements to resell and securities sold under agreements to repurchase are treated as collateralized financing transactions and are recorded at amounts equal to the cash or other consideration exchanged. It is generally the Company’s policy to take possession of collateral pledged to secure agreements to resell.

Trading account

Financial instruments used for trading purposes are stated at fair value. Realized gains and losses and unrealized changes in fair value of financial instruments utilized in trading activities are included in “trading account and foreign exchange gains” in the consolidated statement of income.

Investment securities

Investments in debt securities are classified as held to maturity and stated at amortized cost when management has the positive intent and ability to hold such securities to maturity. Investments in other debt securities and equity securities having readily determinable fair values are classified as available for sale and stated at estimated fair value. Amortization of premiums and accretion of discounts for investment securities available for sale and held to maturity are included in interest income. Except for investment securities for which the Company has entered into a related fair value hedge, unrealized gains or losses on investment securities available for sale are reflected in accumulated other comprehensive income (loss), net of applicable income taxes.

Other securities are stated at cost and include stock of the Federal Reserve Bank of New York and the Federal Home Loan Bank (“FHLB”) of New York.

The cost basis of individual securities is written down through a charge to earnings when declines in value below amortized cost are considered to be other than temporary. In cases where fair value is less than amortized cost and the Company intends to sell a debt security, it is more likely than not to be required to sell a debt security before recovery of its amortized cost basis, or the Company does not expect to recover the entire amortized cost basis of a debt security, an other-than-temporary impairment is considered to have occurred. If the Company intends to sell the debt security or more likely than not will be required to sell the security before recovery of its amortized cost basis, the other-than-temporary impairment is recognized in earnings equal to the entire difference between the debt security’s amortized cost basis and its fair value at the balance sheet date. If the Company does not expect to recover the entire amortized cost basis of the security, the Company does not intend to sell the security and it is not more likely than not that the Company will be required to sell the security before recovery of its amortized cost basis, the other-than-temporary impairment is separated into (a) the amount representing the credit loss and (b) the amount related to all other factors. The amount of the other-than-temporary impairment related to the credit loss is recognized in earnings while the amount related to other factors is recognized in other comprehensive income, net of applicable taxes. Subsequently, the Company accounts for the other-than-temporarily impaired debt security as if the security had been purchased on the measurement date of the other-than-temporary impairment at an amortized cost basis equal to the previous amortized cost basis less the other-than-temporary impairment recognized in earnings. The cost basis of individual equity securities is written down to estimated fair value through a charge to earnings when declines in value below cost are considered to be other than temporary. Realized gains and losses on the sales of investment securities are determined using the specific identification method.

Loans and leases

Interest income on loans is accrued on a level yield method. Loans are placed on nonaccrual status and previously accrued interest thereon is charged against income when principal or interest is delinquent 90 days, unless management determines that the loan status clearly warrants other treatment. Loan balances are charged off when it becomes evident that such balances are not fully collectible. For loans secured by residential real estate, the excess of the loan balances over the net realizable value of the property collateralizing the loan is charged-off when the loan becomes 150 days delinquent. Loan fees and certain direct loan origination costs are deferred and recognized as an interest yield adjustment over the life of the loan. Net deferred fees have been included in unearned discount as a reduction of loans outstanding. Commitments to sell real estate loans are utilized by the Company 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 recorded in the consolidated balance sheet includes changes in estimated fair market value during the hedge period, typically from the date of close through the sale date. Valuation adjustments made on these loans and commitments are included in “mortgage banking revenues.”

Except for consumer and residential mortgage loans that are considered smaller balance homogenous loans and are evaluated collectively, the Company considers a loan to be impaired for purposes of applying GAAP when, based on current information and events, it is probable that the Company will be unable to collect all amounts according to the contractual terms of the loan agreement or the loan is delinquent 90 days. Impaired loans are classified as either nonaccrual or as loans renegotiated at below market rates. Loans less than 90 days delinquent are deemed to have an insignificant delay in payment and are generally not considered impaired. Impairment of a loan is measured based on the present value of expected future cash flows discounted at the loan’s effective interest rate, the loan’s observable market price, or the fair value of collateral if the loan is collateral dependent. Interest received on impaired loans placed on nonaccrual status is applied to reduce the carrying value of the loan or, if principal is considered fully collectible, recognized as interest income.

Due to changes in GAAP for loans acquired in a business combination subsequent to December 31, 2008, 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. Because those loans are recorded at fair value, no carry over of an acquired entity’s previously established allowance for credit losses may be recorded. Subsequent decreases in the expected cash flows require the Company to evaluate the need for additions to the Company’s allowance for credit losses. Subsequent improvements in expected cash flows result in the recognition of additional interest income over the then remaining lives of the loans.

Residual value estimates for commercial leases are generally determined through internal or external reviews of the leased property. The Company reviews commercial lease residual values at least annually and recognizes residual value impairments deemed to be other than temporary.

Allowance for credit losses

The allowance for credit losses represents the amount which, in management’s judgment, will be adequate to absorb credit losses inherent in the loan and lease portfolio as of the balance sheet date. The adequacy of the allowance is determined by management’s evaluation of the loan and lease portfolio based on such factors as the differing economic risks associated with each loan category, the current financial condition of specific borrowers, the economic environment in which borrowers operate, the level of delinquent loans, the value of any collateral and, where applicable, the existence of any guarantees or indemnifications.

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 included in “other assets” in the consolidated balance sheet. Upon acquisition of assets taken in satisfaction of a defaulted loan, the excess of the remaining loan balance over the asset’s estimated fair value less costs to sell is charged off against the allowance for credit losses. Subsequent declines in value of the assets are recognized as “other expense” in the consolidated statement of income.

Premises and equipment

Premises and equipment are stated at cost less accumulated depreciation. Depreciation expense is computed principally using the straight-line method over the estimated useful lives of the assets.

Capitalized servicing rights

Capitalized servicing assets are included in “other assets” in the consolidated balance sheet. Separately recognized servicing assets are initially measured at fair value. The Company uses the amortization method to subsequently measure servicing assets. Under that method, capitalized servicing assets are charged to expense in proportion to and over the period of estimated net servicing income.

To estimate the fair value of servicing rights, the Company considers market prices for similar assets 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 exceeds estimated fair value. Impairment is recognized through a valuation allowance.

Sales and securitizations of financial assets

Transfers of financial assets for which the Company has surrendered control of the financial assets are accounted for as sales to the extent that consideration other than beneficial interests in the transferred assets is received in exchange. Interests in a sale or securitization of financial assets that continue to be held by the Company, other than servicing rights which are initially measured at fair value, are measured at the date of transfer by allocating the previous carrying amount between the assets transferred and the retained interests based on their relative estimated fair values. The fair values of retained debt securities are generally determined through reference to independent pricing information. The fair values of retained servicing rights and any other retained interests are determined based on the present value of expected future cash flows associated with those interests and by reference to market prices for similar assets.

Goodwill and core deposit and other intangible assets

Goodwill represents the excess of the cost of an acquired entity over the fair value of the identifiable net assets acquired. Similar to goodwill, other intangible assets, which include core deposit intangibles, also lack physical substance but, as required by GAAP, portions of the cost of an acquired entity have been assigned to such assets. The Company accounts for goodwill and other intangible assets in accordance with GAAP, which, in general, requires that goodwill not be amortized, but rather that it be tested for impairment at least annually at the reporting unit level, which is either at the same level or one level below an operating segment. Other acquired intangible assets with finite lives, such as core deposit intangibles, are required to be amortized over their estimated lives. Core deposit and other intangible assets are generally amortized using accelerated methods over estimated useful lives of five to ten years. The Company periodically assesses whether events or changes in circumstances indicate that the carrying amounts of core deposit and other intangible assets may be impaired.

Derivative financial instruments

The Company accounts for derivative financial instruments at fair value. If certain conditions are met, a derivative may be specifically designated as (a) a hedge of the exposure to changes in the fair value of a recognized asset or liability or an unrecognized firm commitment, (b) a hedge of the exposure to variable cash flows of a forecasted transaction or (c) a hedge of the foreign currency exposure of a net investment in a foreign operation, an unrecognized firm commitment, an available for sale security, or a foreign currency denominated forecasted transaction.

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. For such agreements, amounts receivable or payable are recognized as accrued under the terms of the agreement and the net differential is recorded as an adjustment to interest income or expense of the related asset or liability. Interest rate swap agreements may be designated as either fair value hedges or cash flow hedges. In a fair value hedge, the fair values of the interest rate swap agreements 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 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 Company utilizes commitments to sell real estate loans to hedge the exposure to changes in the fair value of real estate loans held for sale. Commitments to originate real estate loans to be held for sale and commitments to sell real estate loans are generally recorded in the consolidated balance sheet at estimated fair market value. Effective January 1, 2008, the Company adopted the provisions of Staff Accounting Bulletin (“SAB”) No. 109 for written loan commitments issued or modified after that date. SAB No. 109 reversed previous conclusions expressed by the SEC staff regarding written loan commitments that are accounted for at fair value through earnings. Specifically, the SEC staff now believes that the expected net future cash flows related to the associated servicing of the loan should be included in the fair value measurement of the derivative loan commitment. In accordance with SAB No. 105, “Application of Accounting Principles to Loan Commitments,” the Company had not included such amount in the value of commitments to originate real estate loans for sale in 2007.

Derivative instruments not related to mortgage banking activities, including financial futures commitments and interest rate swap agreements, that do not satisfy the hedge accounting requirements are recorded at fair value and are generally classified as trading account assets or liabilities with resultant changes in fair value being recognized in “trading account and foreign exchange gains” in the consolidated statement of income.

Stock-based compensation

Stock-based compensation expense is recognized over the vesting period of the stock-based grant based on the estimated grant date value of the stock-based compensation that is expected to vest, except that the recognition of compensation costs is accelerated for stock-based awards granted to retirement-eligible employees and employees who will become retirement-eligible prior to full vesting of the award because the Company’s incentive compensation plan allows for vesting at the time an employee retires. Information on the determination of the estimated value of stock-based awards used to calculate stock-based compensation expense is included in note 11.

Income taxes

Deferred tax assets and liabilities are recognized for the future tax effects attributable to differences between the financial statement value of existing assets and liabilities and their respective tax bases and carryforwards. Deferred tax assets and liabilities are measured using enacted tax rates and laws.

The Company evaluates uncertain tax positions using the two-step process required by GAAP. The first step requires a determination of whether it is more likely than not that a tax position will be sustained upon examination, including resolution of any related appeals or litigation processes, based on the technical merits of the position. Under the second step, a tax position that meets the more-likely-than-not recognition threshold is measured at the largest amount of benefit that is greater than fifty percent likely of being realized upon ultimate settlement. Information related to uncertain tax positions is provided in note 13.

Earnings per common share

Basic earnings per common share exclude dilution and are computed by dividing income available to common stockholders by the weighted-average number of common shares outstanding (exclusive of shares represented by the unvested portion of restricted stock and restricted stock unit grants) and common shares issuable under deferred compensation arrangements during the period. Diluted earnings per common share reflect shares represented by the unvested portion of restricted stock and restricted stock unit grants and the potential dilution that could occur if securities or other contracts to issue common stock were exercised or converted into common stock or resulted in the issuance of common stock that then shared in earnings. Proceeds assumed to have been received on such exercise or conversion are assumed to be used to purchase shares of M&T common stock at the average market price during the period, as required by the “treasury stock method” of accounting.

GAAP requires 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) shall be considered 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 that contain such rights and, accordingly, 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.

Treasury stock

Repurchases of shares of M&T common stock are recorded at cost as a reduction of stockholders’ equity. Reissuances of shares of treasury stock are recorded at average cost.

Acquisitions

12 Months Ended

Dec. 31, 2009

Acquisitions [Abstract]

Acquisitions


2.	Acquisitions

On August 28, 2009, M&T Bank, M&T’s principal banking subsidiary, entered into a purchase and assumption agreement with the Federal Deposit Insurance Corporation (“FDIC”) to assume all of the deposits and acquire certain assets of Bradford Bank (“Bradford”), Baltimore, Maryland. As part of the transaction, M&T Bank entered into a loss-share arrangement with the FDIC whereby M&T Bank will be reimbursed by the FDIC for most losses it incurs on the acquired loan portfolio. The transaction has been accounted for using the acquisition method of accounting and, accordingly, assets acquired and liabilities assumed were recorded at estimated fair value on the acquisition date. Assets acquired totaled approximately $469 million, including $302 million of loans, and liabilities assumed aggregated $440 million, including $361 million of deposits. In accordance with GAAP, M&T Bank recorded an after-tax gain on the transaction of $18 million ($29 million before taxes). There was no goodwill or other intangible assets recorded in connection with this transaction. The Bradford acquisition transaction did not have a material impact on the Company’s consolidated financial position or results of operations.

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 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 Provident 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 expanded the Company’s presence in the Mid-Atlantic area, gave 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 those 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 December 31, 2009 was approximately $105 million. The outstanding principal balance and the carrying amount of these loans that is included in the consolidated balance sheet at December 31, 2009 is as follows:


	(In thousands)

Outstanding principal balance	$	3,875,415
Carrying amount		3,644,110

Receivables (including loans and investment securities) obtained in the acquisition of Provident for which there was 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.

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 was 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

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. None of the goodwill recognized is deductible for income tax purposes. Changes in goodwill in the Company’s consolidated balance sheet from December 31, 2008 to December 31, 2009 were attributable to the acquisition of Provident. As described in note 22, 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 to the Company’s segments is provided in note 8.

The following table discloses the impact of Provident (excluding the impact of merger-related expenses noted below) since the acquisition on May 23, 2009 through the end 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 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 $38 million in 2008 or the impact of other-than-temporary impairment losses recognized by Provident of $87 million in 2009 and $121 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 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 that follow.


	Actual Since		Pro Forma
	Acquisition		Year Ended
	Through		December 31,
	December 31, 2009		2009		2008
	(In thousands)

Total revenues	$	194,578	$	3,823,763	$	4,533,161
Net income		32,686		292,862		510,897

On November 30, 2007, M&T completed the acquisition of Partners Trust Financial Group, Inc. (“Partners Trust”), a bank holding company headquartered in Utica, New York. Partners Trust operated 33 branch offices in upstate New York at the date of acquisition. The results of operations acquired in the Partners Trust transaction have been included in the Company’s financial results since November 30, 2007. After application of the election, allocation and proration procedures contained in the merger agreement with Partners Trust, M&T paid $282 million in cash and issued 3,096,861 shares of M&T common stock in exchange for Partners Trust shares and stock options outstanding at the time of acquisition. The purchase price was approximately $559 million based on the cash paid to Partners Trust shareholders, the fair value of M&T common stock exchanged, and the cash paid to holders of Partners Trust stock options. The acquisition of Partners Trust expanded the Company’s presence in upstate New York, making the Company the deposit market share leader in the Utica-Rome and Binghamton markets, while strengthening its lead position in Syracuse.

Assets acquired from Partners Trust on November 30, 2007 totaled $3.5 billion, including $2.2 billion of loans and leases (largely residential real estate and consumer loans), liabilities assumed aggregated $3.0 billion, including $2.2 billion of deposits (largely savings, money-market and time deposits), and $277 million was added to stockholders’ equity. In connection with the acquisition, the Company recorded approximately $283 million of goodwill and $50 million of core deposit intangible. The core deposit intangible is being amortized over seven years using an accelerated method.

As a condition of the approval of the Partners Trust acquisition by regulators, M&T Bank was required to divest three branch offices in Binghamton, New York. The three branches were sold on March 15, 2008, including loans of $13 million and deposits of $65 million. No gain or loss was recognized on that transaction.

Pro forma information for the year ended December 31, 2007 as if Partners Trust had been acquired on January 1, 2007 is not presented since such pro forma results were not materially different from the Company’s actual results.

On December 7, 2007, M&T Bank acquired 13 branch offices in the Mid-Atlantic area from First Horizon Bank in a cash transaction. The offices had approximately $214 million of loans, $216 million of deposits and $80 million of trust and investment assets under management on the transaction date.

The Company incurred merger-related expenses related to systems conversions and other costs of integrating and conforming acquired operations with and into the Company of approximately $89 million ($54 million net of applicable income taxes) during 2009, $4 million ($2 million net of applicable income taxes) during 2008 and $15 million ($9 million net of applicable income taxes) during 2007. Those expenses consisted largely of 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 contractual arrangements for various services; initial marketing and promotion expenses designed to introduce M&T Bank to its new customers; severance (for former Provident employees) and incentive compensation costs; travel costs; and printing, postage, supplies and other costs of commencing operations in new markets and offices. As of December 31, 2009, the remaining unpaid portion of merger-related expenses was $20 million.

A summary of merger-related expenses associated with acquisitions included in the consolidated statement of income for the years ended December 31, 2009, 2008 and 2007 follows:


	2009		2008		2007
	(In thousands)

Salaries and employee benefits	$	10,030	$	62	$	1,333
Equipment and net occupancy		2,975		49		238
Printing, postage and supplies		3,677		367		1,474
Other costs of operations		72,475		3,069		11,842

	$	89,157	$	3,547	$	14,887

Investment securities

12 Months Ended

Dec. 31, 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)

December 31, 2009
Investment securities available for sale:
U.S. Treasury and federal agencies	$	102,755	$	1,988	$	57	$	104,686
Obligations of states and political subdivisions		61,468		1,583		128		62,923
Mortgage-backed securities:
Government issued or guaranteed		3,777,642		131,407		6,767		3,902,282
Privately issued residential		2,438,353		9,630		383,079		2,064,904
Privately issued commercial		33,133		—		7,967		25,166
Collateralized debt obligations		103,159		23,389		11,202		115,346
Other debt securities		309,514		16,851		58,164		268,201
Equity securities		170,985		5,590		15,705		160,870

		6,997,009		190,438		483,069		6,704,378

Investment securities held to maturity:
Obligations of states and political subdivisions		203,825		1,419		1,550		203,694
Privately issued mortgage-backed securities		352,195		—		150,993		201,202
Other debt securities		11,587		—		—		11,587

		567,607		1,419		152,543		416,483

Other securities		508,624		—		—		508,624

Total	$	8,073,240	$	191,857	$	635,612	$	7,629,485

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 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

No investment in securities of a single non-U.S. Government or government agency issuer exceeded ten percent of stockholders’ equity at December 31, 2009.

As of December 31, 2009, the latest available investment ratings of all privately issued mortgage-backed securities, collateralized debt obligations and other debt securities were:


			Amortized		Estimated
Rating	Number		Cost		Fair Value
			(In thousands)

A or better		159	$	1,618,068	$	1,428,428
BBB		54		418,679		382,946
BB		36		243,793		212,511
B or less		173		939,366		633,712
Not rated		35		28,035		28,809

		457	$	3,247,941	$	2,686,406

The amortized cost and estimated fair value of collateralized mortgage obligations included in mortgage-backed securities were as follows:


	December 31
	2009		2008
	(In thousands)

Collateralized mortgage obligations:
Amortized cost	$	3,108,673	$	4,092,980
Estimated fair value		2,584,067		3,216,814

Gross realized gains on investment securities were $1,629,000 in 2009, $34,730,000 in 2008 and $1,585,000 in 2007. Gross realized losses on investment securities were $464,000 in 2009, $259,000 in 2008 and $381,000 in 2007. Effective January 1, 2009, the Company adopted new GAAP related to the recognition and presentation of other-than-temporary impairments of investment securities. In accordance with GAAP, the Company recognized $138 million of pre-tax other-than-temporary impairment losses in 2009 related primarily to $230 million of 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 $8 million of the impairment charges recognized in 2009 related to collateralized debt obligations backed by trust preferred securities issued by financial institutions. The other-than-temporary impairment losses recognized were net of $126 million of unrealized losses classified in accumulated other comprehensive income for the same securities for the year-ended December 31, 2009. 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. The effect of the adoption of the new accounting requirements 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. During 2008, the Company recognized $182 million of other-than-temporary impairment losses, mainly attributable to a $153 million impairment charge recognized on its preferred stock holdings of The Federal National Mortgage Association (“Fannie Mae”) and The Federal Home Loan Mortgage Corporation (“Freddie Mac”) with a cost basis of $162 million following the placement of those government-sponsored entities into conservatorship on September 7, 2008. Other-than-temporary charges of $18 million and $11 million were also recognized during 2008 on $20 million of privately issued mortgage-backed securities and $12 million of securities backed by trust preferred securities issued by financial institutions, respectively. During 2007, the Company recognized a $127 million other-than-temporary impairment charge related to collateralized debt obligations that were supported by sub-prime mortgage-backed securities that had an amortized cost basis of $132 million. Changes in credit losses during 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 January 1, 2009	$	155,967
Additions for credit losses not previously recognized		138,297
Reductions for increases in cash flows		(1,393	)
Reductions for realized losses		(8,358	)

Estimated credit losses as of December 31, 2009	$	284,513

At December 31, 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	$	41,181	$	41,785
Due after one year through five years		91,276		93,496
Due after five years through ten years		42,152		43,595
Due after ten years		402,287		372,280

		576,896		551,156
Mortgage-backed securities available for sale		6,249,128		5,992,352

	$	6,826,024	$	6,543,508

Debt securities held to maturity:
Due in one year or less	$	36,655	$	36,912
Due after one year through five years		6,570		6,883
Due after five years through ten years		116,153		115,908
Due after ten years		56,034		55,578

		215,412		215,281
Mortgage-backed securities held to maturity		352,195		201,202

	$	567,607	$	416,483

A summary of investment securities that as of December 31, 2009 and 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)

December 31, 2009
U.S. Treasury and federal agencies	$	6,265	$	(53	)	$	572	$	(4	)
Obligations of states and political subdivisions		145,572		(1,575	)		4,204		(103	)
Mortgage-backed securities:
Government issued or guaranteed		685,319		(6,460	)		19,379		(307	)
Privately issued residential		98,312		(2,871	)		1,705,222		(531,201	)
Privately issued commercial		—		—			25,166		(7,967	)
Collateralized debt obligations		13,046		(10,218	)		3,598		(984	)
Other debt securities		5,786		(174	)		138,705		(57,990	)
Equity securities		7,449		(1,728	)		23,159		(13,977	)

Total	$	961,749	$	(23,079	)	$	1,920,005	$	(612,533	)

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 879 individual investment securities with aggregate gross unrealized losses of $635,612,000 at December 31, 2009. Approximately $542 million of the unrealized losses pertain to privately issued mortgage-backed securities with a cost basis of $2.4 billion. The Company also had $69 million of unrealized losses on trust preferred securities issued by financial institutions, securities backed by trust preferred securities issued by financial institutions and other entities, and other debt securities having a cost basis of $230 million. Based on a review of each of the remaining securities in the investment securities portfolio at December 31, 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 December 31, 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 December 31, 2009, the Company has not identified events or changes in circumstances which may have a significant adverse effect on the fair value of the $509 million of cost method investment securities.

At December 31, 2009, investment securities with a carrying value of $4,823,703,000, including $4,064,840,000 of investment securities available for sale, were pledged to secure demand notes issued to the U.S. Treasury, borrowings from various FHLBs, repurchase agreements, governmental deposits and interest rate swap agreements.

Investment securities pledged by the Company to secure obligations whereby the secured party is permitted by contract or custom to sell or repledge such collateral totaled $1,797,701,000 at December 31, 2009. The pledged securities included securities of the U.S. Treasury and federal agencies and mortgage-backed securities.

Loans and leases

12 Months Ended

Dec. 31, 2009

Loans and leases [Abstract]

Loans and leases


4.	Loans and leases

Total gross loans and leases outstanding were comprised of the following:


	December 31
	2009		2008
	(In thousands)

Loans
Commercial, financial, agricultural, etc.	$	11,913,437	$	12,848,070
Real estate:
Residential		5,401,932		4,675,065
Commercial		16,345,601		14,548,938
Construction		4,726,570		4,568,368
Consumer		12,041,617		11,004,275

Total loans		50,429,157		47,644,716

Leases
Commercial		1,877,300		1,715,021

Total loans and leases	$	52,306,457	$	49,359,737

One-to-four family residential mortgage loans held for sale were $530 million at December 31, 2009 and $352 million at December 31, 2008. Commercial mortgage loans held for sale were $123 million at December 31, 2009 and $156 million at December 31, 2008.

As of December 31, 2009, approximately $16 million of one-to-four family residential mortgage loans serviced for others had been sold with credit recourse. As of December 31, 2009, approximately $1.3 billion of commercial mortgage loan balances serviced for others had been sold with recourse in conjunction with the Company’s participation in the Fannie Mae Delegated Underwriting and Servicing (“DUS”) program. At December 31, 2009 the Company estimated that the recourse obligations described above were not material to the Company’s consolidated financial position. There have been no material losses incurred as a result of those credit recourse arrangements.

Nonaccrual loans totaled $1,331,702,000 at December 31, 2009 and $755,397,000 at December 31, 2008. Renegotiated loans (loans which had been renegotiated at below-market interest rates or for which other concessions were granted, but are accruing interest) were $212,548,000 and $91,575,000 at December 31, 2009 and 2008, respectively. During 2009 and 2008, to assist borrowers the Company modified the terms of select residential real estate loans consisting largely of loans in the Company’s portfolio of Alt-A loans. At December 31, 2009, outstanding balances of those modified loans totaled approximately $292 million. Of that total, $108 million were included in nonaccrual loans at December 31, 2009. The remaining $184 million of such modified loans have demonstrated payment capability consistent with the modified terms and accordingly, were classified as renegotiated loans and were accruing interest at the 2009 year-end. If nonaccrual and renegotiated loans had been accruing interest at their originally contracted terms, interest income on such loans would have amounted to $99,618,000 in 2009 and $61,666,000 in 2008. The actual amounts included in interest income during 2009 and 2008 on such loans were $43,920,000 and $36,747,000, respectively.

The recorded investment in loans considered impaired for purposes of applying GAAP was $1,311,616,000 and $616,743,000 at December 31, 2009 and 2008, respectively. The recorded investment in loans considered impaired for which there was a related valuation allowance for impairment included in the allowance for credit losses and the amount of such impairment allowance were $1,077,626,000 and $244,137,000, respectively, at December 31, 2009 and $501,873,000 and $123,674,000, respectively, at December 31, 2008. The recorded investment in loans considered impaired for which there was no related valuation allowance for impairment was $233,990,000 and $114,870,000 at December 31, 2009 and 2008, respectively. The average recorded investment in impaired loans during 2009, 2008 and 2007 was $986,164,000, $371,298,000 and $195,597,000, respectively. Interest income recognized on impaired loans totaled $10,224,000, $7,222,000 and $7,368,000 for the years ended December 31, 2009, 2008 and 2007, respectively.

Borrowings by directors and certain officers of M&T and its banking subsidiaries, and by associates of such persons, exclusive of loans aggregating less than $120,000 amounted to $106,845,000 and $154,128,000 at December 31, 2009 and 2008, respectively. During 2009, new borrowings by such persons amounted to $13,038,000 (including any borrowings of new directors or officers that were outstanding at the time of their election) and repayments and other reductions (including reductions resulting from retirements) were $60,321,000.

At December 31, 2009, approximately $4.3 billion of commercial mortgage loans and $2.4 billion of one-to-four family residential mortgage loans were pledged to secure outstanding borrowings from the FHLB of New York.

The Company’s loan and lease portfolio includes commercial lease financing receivables consisting of direct financing and leveraged leases for machinery and equipment, railroad equipment, commercial trucks and trailers, and aircraft. A summary of lease financing receivables follows:


	December 31
	2009			2008
	(In thousands)

Commercial leases:
Direct financings:
Lease payments receivable	$	1,406,238		$	1,171,391
Estimated residual value of leased assets		99,968			102,712
Unearned income		(224,768	)		(194,328	)

Investment in direct financings		1,281,438			1,079,775
Leveraged leases:
Lease payments receivable		185,679			229,311
Estimated residual value of leased assets		185,415			211,607
Unearned income		(74,131	)		(91,498	)

Investment in leveraged leases		296,963			349,420

Total investment in leases	$	1,578,401		$	1,429,195

Deferred taxes payable arising from leveraged leases	$	212,910		$	235,359

Included within the estimated residual value of leased assets at December 31, 2009 and 2008 were $56 million and $64 million, respectively, in residual value associated with direct financing leases that are guaranteed by the lessees. The Company is indemnified from loss by Allied Irish Banks, p.l.c. (“AIB”) on a portion of leveraged leases obtained in the acquisition of a former subsidiary of AIB on April 1, 2003 (see note 24). Amounts in the leveraged lease section of the table subject to such indemnification included lease payments receivable of $7 million and $8 million as of December 31, 2009 and 2008, respectively, estimated residual value of leased assets of $31 million at each of those dates and unearned income of $6 million and $7 million as of December 31, 2009 and 2008, respectively.

At December 31, 2009, the minimum future lease payments to be received from lease financings were as follows:


	Total
	(In thousands)

Year ending December 31:
2010	$	378,067
2011		304,092
2012		245,969
2013		146,598
2014		90,050
Later years		427,141

	$	1,591,917

Capitalized servicing assets

12 Months Ended

Dec. 31, 2009

Capitalized servicing assets [Abstract]

Capitalized servicing assets


7.	Capitalized servicing assets

Changes in capitalized servicing assets were as follows:


										Small-Balance
	Residential Mortgage Loans									Commercial Mortgage Loans
For Year Ended December 31,	2009			2008			2007			2009			2008			2007
	(In thousands)

Beginning balance	$	106,979		$	118,763		$	127,025		$	58,044		$	56,956		$	35,767
Originations		31,034			17,765			12,145			—			—			—
Purchases		972			3,322			15,000			—			20,974			35,795
Assumed in loan securitizations (note 19)		788			8,455			7,873			—			—			—
Amortization		(38,618	)		(41,326	)		(43,280	)		(17,793	)		(19,886	)		(14,606	)

		101,155			106,979			118,763			40,251			58,044			56,956
Valuation allowance		(50	)		(22,000	)		(6,000	)		—			—			—

Ending balance, net	$	101,105		$	84,979		$	112,763		$	40,251		$	58,044		$	56,956


	Commercial Mortgage Loans									Total
For Year Ended December 31,	2009			2008			2007			2009			2008			2007
							(In thousands)

Beginning balance	$	26,336		$	20,240		$	20,721		$	191,359		$	195,959		$	183,513
Originations		12,417			10,606			4,564			43,451			28,371			16,709
Purchases		—			—			—			972			24,296			50,795
Assumed in loan securitizations (note 19)		—			—			—			788			8,455			7,873
Amortization		(5,857	)		(4,510	)		(5,045	)		(62,268	)		(65,722	)		(62,931	)

		32,896			26,336			20,240			174,302			191,359			195,959
Valuation allowance		—			—			—			(50	)		(22,000	)		(6,000	)

Ending balance, net	$	32,896		$	26,336		$	20,240		$	174,252		$	169,359		$	189,959

Residential mortgage loans serviced for others were $15.9 billion, $15.4 billion and $14.5 billion at December 31, 2009, 2008 and 2007, respectively. Small-balance commercial mortgage loans serviced for others were $5.5 billion, $5.9 billion and $4.9 billion at December 31, 2009, 2008 and 2007, respectively. Commercial mortgage loans serviced for others were $7.1 billion, $6.4 billion and $5.3 billion at December 31, 2009, 2008 and 2007, respectively.

During 2009 and 2007, $21,950,000 and $4,050,000, respectively, of the valuation allowance for capitalized residential mortgage loan servicing assets was reversed because of increases in the market value of certain strata of servicing assets relative to the amortized cost basis of the servicing assets in such strata. During 2008, a provision for impairment of $16,000,000 was added to the valuation allowance for capitalized residential mortgage loan servicing assets because the carrying value of certain strata of capitalized servicing assets exceeded estimated fair value. The estimated fair value of capitalized residential mortgage loan servicing assets was approximately $158 million at December 31, 2009 and $103 million at December 31, 2008. The fair value of capitalized residential mortgage loan servicing assets was estimated using weighted-average discount rates of 13.3% and 13.0% at December 31, 2009 and 2008, respectively, and contemporaneous prepayment assumptions that vary by loan type. At December 31, 2009 and 2008, the discount rate represented a weighted-average option-adjusted spread (“OAS”) of 775 basis points (hundredths of one percent) and 832 basis points, respectively, over market implied forward London Interbank Offered Rates. The estimated fair value of capitalized small-balance commercial mortgage loan servicing assets was approximately $64 million at December 31, 2009 and $74 million at December 31, 2008. The fair value of capitalized small-balance commercial loan servicing assets was estimated using weighted-average discount rates of 20.3% and 20.2% at December 31, 2009 and 2008, respectively, and contemporaneous prepayment assumptions that vary by loan type. At December 31, 2009 and 2008, the discount rate represented a weighted-average OAS of 1,779 basis points and 1,774 basis points, respectively, over market implied forward London Interbank Offered Rates. The estimated fair value of capitalized residential and small-balance commercial mortgage loan servicing rights may vary significantly in subsequent periods due to changing interest rates and the effect thereof on prepayment speeds. The estimated fair value of capitalized commercial mortgage loan servicing assets was approximately $39 million and $31 million at December 31, 2009 and 2008, respectively. An 18% discount rate was used to estimate the fair value of capitalized commercial mortgage loan servicing rights at December 31, 2009 and 2008 with no prepayment assumptions because, in general, the servicing agreements allow the Company to share in customer loan prepayment fees and thereby recover the remaining carrying value of the capitalized servicing rights associated with such loan. The Company’s ability to realize the carrying value of capitalized commercial mortgage servicing rights is more dependent on the borrowers’ abilities to repay the underlying loans than on prepayments or changes in interest rates.

The key economic assumptions used to determine the fair value of capitalized servicing rights at December 31, 2009 and the sensitivity of such value to changes in those assumptions are summarized in the table that follows. Those calculated sensitivities are hypothetical and actual changes in the fair value of capitalized servicing rights may differ significantly from the amounts presented herein. The effect of a variation in a particular assumption on the fair value of the servicing rights is calculated without changing any other assumption. In reality, changes in one factor may result in changes in another which may magnify or counteract the sensitivities. The changes in assumptions are presumed to be instantaneous.


				Small-Balance
	Residential			Commercial			Commercial

Weighted-average prepayment speeds		14.67	%		7.87	%
Impact on fair value of 10% adverse change	$	(8,306,000	)	$	(2,460,000	)
Impact on fair value of 20% adverse change		(15,786,000	)		(4,709,000	)
Weighted-average OAS		7.75	%		17.79	%
Impact on fair value of 10% adverse change	$	(2,786,000	)	$	(2,179,000	)
Impact on fair value of 20% adverse change		(5,452,000	)		(4,202,000	)
Weighted-average discount rate								18.00	%
Impact on fair value of 10% adverse change							$	(1,682,000	)
Impact on fair value of 20% adverse change								(3,245,000	)

Borrowings

12 Months Ended

Dec. 31, 2009

Borrowings [Abstract]

Borrowings


9.	Borrowings

The amounts and interest rates of short-term borrowings were as follows:


	Federal Funds
	Purchased
	and			Other
	Repurchase			Short-term
	Agreements			Borrowings			Total
	(Dollars in thousands)

At December 31, 2009
Amount outstanding	$	2,211,692		$	230,890		$	2,442,582
Weighted-average interest rate		0.04	%		0.66	%		0.10	%
For the year ended December 31, 2009
Highest amount at a month-end	$	2,491,573		$	2,049,727
Daily-average amount outstanding		1,885,464			1,025,601		$	2,911,065
Weighted-average interest rate		0.15	%		0.42	%		0.24	%
At December 31, 2008
Amount outstanding	$	970,529		$	2,039,206		$	3,009,735
Weighted-average interest rate		0.10	%		0.36	%		0.27	%
For the year ended December 31, 2008
Highest amount at a month-end	$	5,291,846		$	2,039,206
Daily-average amount outstanding		4,652,388			1,433,734		$	6,086,122
Weighted-average interest rate		2.15	%		2.97	%		2.34	%
At December 31, 2007
Amount outstanding	$	4,351,313		$	1,470,584		$	5,821,897
Weighted-average interest rate		3.12	%		4.65	%		3.50	%
For the year ended December 31, 2007
Highest amount at a month-end	$	4,351,313		$	1,470,584
Daily-average amount outstanding		4,745,137			640,694		$	5,385,831
Weighted-average interest rate		5.06	%		5.31	%		5.09	%

In general, federal funds purchased and short-term repurchase agreements outstanding at December 31, 2009 matured on the next business day following year-end. Other short-term borrowings at December 31, 2009 included $152 million of borrowings from the FHLB of Atlanta that mature within one year. There were $1.0 billion of similar borrowings from the FHLB of New York at December 31, 2008. Other short-term borrowings at December 31, 2008 also included $1.0 billion of secured borrowings from the Federal Reserve Bank of New York through their Term Auction Facility. The remaining borrowings included in other short-term borrowings had original maturities of one year or less and included borrowings from the U.S. Treasury and others.

At December 31, 2009, the Company had lines of credit under formal agreements as follows:


					M&T
	M&T		M&T Bank		Bank, N.A.
			(In thousands)

Outstanding borrowings	$	—	$	5,370,917	$	—
Unused		30,000		8,040,605		112,787

M&T has a revolving credit agreement with an unaffiliated commercial bank whereby M&T may borrow up to $30 million at its discretion through December 3, 2010. At December 31, 2009, M&T Bank had borrowing facilities available with the FHLBs whereby M&T Bank could borrow up to approximately $6.5 billion. Additionally, M&T Bank and M&T Bank, National Association (“M&T Bank, N.A.”), a wholly owned subsidiary of M&T, had available lines of credit with the Federal Reserve Bank of New York totaling approximately $7.0 billion at December 31, 2009. M&T Bank and M&T Bank, N.A. are required to pledge loans and investment securities as collateral for these borrowing facilities.

Long-term borrowings were as follows:


	December 31,
	2009		2008
	(In thousands)

Subordinated notes of M&T Bank:
8% due 2010	$	140,854	$	143,492
3.85% due 2013, variable rate commenced in 2008		400,000		400,000
6.625% due 2017		404,428		440,569
9.5% due 2018		50,000		—
5.585% due 2020, variable rate commencing 2015		366,883		361,529
5.629% due 2021, variable rate commencing 2016		545,194		590,723
Subordinated notes of M&T:
6.875% due 2009		—		100,560
Senior notes of M&T — 5.375% due 2012		299,950		299,929
Advances from FHLB:
Variable rates		4,405,925		6,000,000
Fixed rates		818,562		1,007,584
Agreements to repurchase securities		1,625,001		1,625,001
Junior subordinated debentures associated with preferred capital securities:
Fixed rates:
M&T Capital Trust I — 8.234%, due 2027		154,640		154,640
M&T Capital Trust II — 8.277%, due 2027		103,093		103,093
M&T Capital Trust III — 9.25%, due 2027		67,409		67,734
BSB Capital Trust I — 8.125%, due 2028		15,496		16,927
Provident Trust I — 8.29%, due 2028		24,061		—
Southern Financial Statutory Trust I — 10.60%, due 2030		6,439		—
M&T Capital Trust IV — 8.50%, due 2068		350,010		350,010
Variable rates:
First Maryland Capital I — due 2027		142,487		144,750
First Maryland Capital II — due 2027		143,312		142,649
Allfirst Asset Trust — due 2029		95,477		102,108
BSB Capital Trust III — due 2033		15,464		15,464
Provident Trust III — due 2033		50,430		—
Southern Financial Capital Trust III — due 2033		7,513		—
Other		7,388		8,387

	$	10,240,016	$	12,075,149

The subordinated notes of M&T Bank are unsecured and are subordinate to the claims of depositors and other creditors of M&T Bank. The subordinated notes of M&T Bank due 2013 had a fixed rate of interest of 3.85% through March 2008 and bear a floating rate of interest thereafter until maturity in April 2013, at a rate equal to the three-month London Interbank Offered Rate (“LIBOR”) plus 1.50%. The subordinated notes of M&T were unsecured and subordinate to the general creditors of M&T.

Long-term variable rate advances from the FHLB had contractual interest rates that ranged from 0% to 3.53% at December 31, 2009 and from 1.04% to 4.65% at December 31, 2008. The weighted-average contractual interest rates were 0.35% at December 31, 2009 and 2.62% at December 31, 2008. Long-term fixed-rate advances from the FHLB had contractual interest rates ranging from 3.24% to 7.32%. The weighted-average contractual interest rates payable were 4.89% at December 31, 2009 and 5.13% at December 31, 2008. Advances from the FHLB mature at various dates through 2035 and are secured by residential real estate loans, commercial real estate loans and investment securities.

Long-term agreements to repurchase securities had contractual interest rates that ranged from 3.91% to 5.14%. The weighted-average contractual interest rates were 4.21% at each of December 31, 2009 and 2008. The agreements outstanding at December 31, 2009 reflect various repurchase dates through 2017, however, the contractual maturities of the underlying investment securities extend beyond such repurchase dates.

The fixed and floating rate junior subordinated deferrable interest debentures (“Junior Subordinated Debentures”) are held by various trusts and 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. The variable rate Junior Subordinated Debentures pay interest quarterly at rates that are indexed to the three-month LIBOR. Those rates ranged from 1.13% to 3.63% at December 31, 2009 and from 4.04% to 8.17% at December 31, 2008. The weighted-average variable rates payable on those Junior Subordinated Debentures were 1.70% and 5.05% at December 31, 2009 and 2008, respectively.

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.

Long-term borrowings at December 31, 2009 mature as follows:


	(In thousands)

Year ending December 31:
2010	$	2,539,820
2011		1,791,689
2012		1,560,194
2013		392,436
2014		7,113
Later years		3,948,764

	$	10,240,016

Stock-based compensation plans

12 Months Ended

Dec. 31, 2009

Stock-based compensation plans [Abstract]

Stock-based compensation plans


11.	Stock-based compensation plans

Stock-based compensation expense was $54 million in 2009, $50 million in 2008 and $51 million in 2007. The Company recognized $17 million, $11 million and $12 million in 2009, 2008 and 2007, respectively, of income tax benefits related to stock-based compensation.

The Company’s equity incentive compensation plan allows for the issuance of various forms of stock-based compensation, including stock options, restricted stock, restricted stock units and performance-based awards. Through December 31, 2009, only stock-based compensation awards, including stock options, restricted stock and restricted stock units, that vest with the passage of time as service is provided have been issued. At December 31, 2009 and 2008, respectively, there were 6,134,264 and 3,108,342 shares available for future grant under the Company’s equity incentive compensation plan.

Stock option awards

Stock options issued generally vest over four years and are exercisable over terms not exceeding ten years and one day. The Company used an option pricing model to estimate the grant date present value of stock options granted. The weighted-average estimated grant date value per option was $5.74 in 2009, $15.85 in 2008 and $28.59 in 2007. The values were calculated using the following weighted-average assumptions: an option term of 6.5 years (representing the estimated period between grant date and exercise date based on historical data); a risk-free interest rate of 2.76% in 2009, 3.21% in 2008 and 4.79% in 2007 (representing the yield on a U.S. Treasury security with a remaining term equal to the expected option term); expected volatility of 29% in 2009, and 21% in each of 2008 and 2007 (based on historical volatility of M&T’s common stock price); and estimated dividend yields of 7.20% in 2009, 3.07% in 2008 and 1.98% in 2007 (representing the approximate annualized cash dividend rate paid with respect to a share of common stock at or near the grant date). Based on historical data and projected employee turnover rates, the Company reduced the estimated value of stock options for purposes of recognizing stock-based compensation expense by 7% to reflect the probability of forfeiture prior to vesting. Aggregate fair value of options expected to vest that were granted in 2009, 2008 and 2007 were $340,000, $46 million and $48 million, respectively.

A summary of stock option activity follows:


	Stock			Weighted-Average				Aggregate
	Options			Exercise		Life		Intrinsic Value
	Outstanding			Price		(In Years)		(In Thousands)

Outstanding at January 1, 2009		13,029,399		$	90.42
Granted		59,253			38.91
Acquired		626,433			131.96
Exercised		(592,500	)		42.55
Cancelled		(119,873	)		102.60
Expired		(822,695	)		91.41

Outstanding at December 31, 2009		12,180,017		$	94.45		5.2	$	6,711

Exercisable at December 31, 2009		8,045,676		$	91.37		4.0	$	5,035

For 2009, 2008 and 2007, M&T received $15 million, $25 million and $66 million, respectively, in cash and realized tax benefits from the exercise of stock options of $3 million, $4 million and $17 million, respectively. The intrinsic value of stock options exercised during those periods was $6 million, $13 million and $55 million, respectively. As of December 31, 2009, there was $15 million of total unrecognized compensation cost related to non-vested stock options. That cost is expected to be recognized over a weighted-average period of 1.2 years. The total grant date fair value of stock options vested during 2009, 2008 and 2007 was $37 million, $36 million and $39 million, respectively. Upon the exercise of stock options, the Company generally issues shares from treasury stock to the extent available, but may also issue new shares.

Restricted stock awards

Restricted stock awards are comprised of restricted stock and restricted stock units. Restricted stock awards vest over four years. Unrecognized compensation expense associated with restricted stock was $17 million as of December 31, 2009 and is expected to be recognized over a weighted-average period of 1.7 years. The Company generally will issue restricted shares from treasury stock to the extent available, but may also issue new shares. During 2009 and 2008, the number of shares of restricted stock issued was 709,415 and 37,747, respectively, with a weighted-average grant date fair value of $27,932,000 and $3,446,000, respectively. Unrecognized compensation expense associated with restricted stock units was $6 million as of December 31, 2009 and is expected to be recognized over a weighted-average period of 1.4 years. During 2009, the number of restricted stock units issued was 578,131 with a weighted-average grant date fair value of $22,663,000.

A summary of restricted stock and restricted stock unit activity follows:


	Restricted			Weighted-		Restricted			Weighted-
	Stock Units			Average		Stock			Average
	Outstanding			Grant Price		Outstanding			Grant Price

Unvested at January 1, 2009		—		$	—		45,704		$	98.97
Granted		578,131			39.20		709,415			39.37
Vested		(10,895	)		38.91		(6,133	)		103.98
Cancelled		(787	)		38.91		(15,299	)		40.28

Unvested at December 31, 2009		566,449		$	39.21		733,687		$	42.52

Stock purchase plan

The stock purchase plan provides eligible employees of the Company with the right to purchase shares of M&T common stock through accumulated payroll deductions. Shares of M&T common stock will be issued at the end of an option period, typically one year or six months. In connection with the employee stock purchase plan, 1,000,000 shares of M&T common stock were authorized for issuance, of which 398,481 shares have been issued. There were 3,149 shares issued in 2009, 2,377 shares were issued in 2008 and no shares were issued in 2007. For 2009 and 2008, respectively, M&T received $100,000 and $173,000 in cash for shares purchased through the employee stock purchase plan.

The Company used an option pricing model to estimate the grant date present value of purchase rights under the stock purchase plan. The estimated weighted-average grant date value per right was $16.39 in 2009, $12.79 in 2008 and $15.04 in 2007. Such values were calculated using the following weighted-average assumptions: a term of six months to one year (representing the period between grant date and exercise date); a risk-free interest rate of 0.45% in 2009, 2.05% in 2008 and 4.39% in 2007 (representing the yield on a U.S. Treasury security with a like term); expected volatility of 69% in 2009, 34% in 2008 and 20% in 2007 (based on historical volatility of M&T’s common stock price); and an estimated dividend yield of 4.77% in 2009, 3.84% in 2008 and 2.63% in 2007 (representing the approximate annualized cash dividend rate paid with respect to a share of common stock at or near the grant date).

Deferred bonus plan

The Company provides a deferred bonus plan pursuant to which eligible employees may elect to defer all or a portion of their current annual incentive compensation awards and allocate such awards to several investment options, including M&T common stock. Participants could elect the timing of distributions from the plan. Such distributions are payable in cash with the exception of balances allocated to M&T common stock which are distributable in the form of M&T common stock. Shares of M&T common stock distributable pursuant to the terms of the deferred bonus plan were 54,386 and 54,782 at December 31, 2009 and 2008, respectively. The obligation to issue shares is included in “common stock issuable” in the consolidated balance sheet. Through December 31, 2009, 111,885 shares have been issued in connection with the deferred bonus plan.

Directors’ stock plan

The Company maintains a compensation plan for non-employee members of the Company’s boards of directors and directors advisory councils that allows such members to receive all or a portion of their compensation in shares of M&T common stock. Through December 31, 2009, 134,176 shares had been issued in connection with the directors’ stock plan.

Through an acquisition, the Company assumed an obligation to issue shares of M&T common stock related to a deferred directors compensation plan. Shares of common stock issuable under such plan were 20,784 and 23,665 at December 31, 2009 and 2008, respectively. The obligation to issue shares is included in “common stock issuable” in the consolidated balance sheet.

Management stock ownership program

Through an acquisition, M&T obtained loans that are secured by M&T common stock purchased by former executives of the acquired entity. At December 31, 2009 and 2008, the loan amounts owed M&T were less than the fair value of the financed stock purchased and totaled approximately $4 million. Such loans are classified as a reduction of “additional paid-in capital” in the consolidated balance sheet. The amounts are due to M&T no later than October 5, 2010.

Pension plans and other postretirement benefits

12 Months Ended

Dec. 31, 2009

Pension plans and other postretirement benefits [Abstract]

Pension plans and other postretirement benefits


12.	Pension plans and other postretirement benefits

The Company provides pension (defined benefit and defined contribution plans) and other postretirement benefits (including defined benefit health care and life insurance plans) to qualified retired employees. The Company uses a December 31 measurement date for all of its plans.

Net periodic pension expense for defined benefit plans consisted of the following:


	Year Ended December 31
	2009			2008			2007
	(In thousands)

Service cost	$	19,483		$	19,409		$	21,138
Interest cost on benefit obligation		46,107			42,544			38,120
Expected return on plan assets		(46,976	)		(46,092	)		(40,152	)
Amortization of prior service cost		(6,559	)		(6,559	)		(6,559	)
Recognized net actuarial loss		8,292			3,942			5,993

Net periodic pension expense	$	20,347		$	13,244		$	18,540

Net other postretirement benefits expense for defined benefit plans consisted of the following:


	Year Ended December 31
	2009			2008		2007
	(In thousands)

Service cost	$	353		$	559	$	596
Interest cost on benefit obligation		3,302			4,033		3,811
Amortization of prior service cost		243			275		170
Recognized net actuarial loss		(19	)		42		359

Net other postretirement benefits expense	$	3,879		$	4,909	$	4,936

Data relating to the funding position of the defined benefit plans were as follows:


							Other
	Pension Benefits						Postretirement Benefits
	2009			2008			2009			2008
	(In thousands)

Change in benefit obligation:
Benefit obligation at beginning of year	$	750,913		$	740,464		$	62,950		$	71,150
Service cost		19,483			19,409			353			559
Interest cost		46,107			42,544			3,302			4,033
Plan participants’ contributions		—			—			3,138			2,639
Actuarial (gain) loss		26,694			(12,483	)		(5,209	)		(5,342	)
Settlements/curtailments		(7,232	)		—			—			—
Business combinations		58,239			—			343			—
Medicare Part D reimbursement		—			—			870			114
Benefits paid		(37,082	)		(39,021	)		(9,172	)		(10,203	)

Benefit obligation at end of year		857,122			750,913			56,575			62,950

Change in plan assets:
Fair value of plan assets at beginning of year		550,671			625,581			—			—
Actual return on plan assets		158,945			(179,523	)		—			—
Employer contributions		48,528			143,634			5,164			7,450
Business combinations		51,657			—			—			—
Plan participants’ contributions		—			—			3,138			2,639
Medicare Part D reimbursement		—			—			870			114
Settlements		(5,839	)		—			—			—
Benefits and other payments		(37,082	)		(39,021	)		(9,172	)		(10,203	)

Fair value of plan assets at end of year		766,880			550,671			—			—

Funded status	$	(90,242	)	$	(200,242	)	$	(56,575	)	$	(62,950	)

Assets and liabilities recognized in the consolidated balance sheet were:
Net prepaid asset	$	6,266		$	—		$	—		$	—
Accrued liabilities		(96,508	)		(200,242	)		(56,575	)		(62,950	)

Amounts recognized in accumulated other comprehensive income (“AOCI”) were:
Net loss (gain)	$	239,219		$	334,169		$	(3,663	)	$	1,527
Net prior service cost		(43,131	)		(49,690	)		243			485

Pre-tax adjustment to AOCI		196,088			284,479			(3,420	)		2,012
Taxes		(76,950	)		(111,373	)		1,328			(788	)

Net adjustment to AOCI	$	119,138		$	173,106		$	(2,092	)	$	1,224

The Company has an unfunded supplemental pension plan for certain key executives. The projected benefit obligation and accumulated benefit obligation included in the preceding data related to such plan were $63,705,000 and $63,640,000, respectively, as of December 31, 2009 and $48,096,000 and $47,977,000, respectively, as of December 31, 2008. Included in the amounts for 2009 was approximately $15 million assumed in the Provident acquisition.

The accumulated benefit obligation for all defined benefit pension plans was $843,279,000 and $740,825,000 at December 31, 2009 and 2008, respectively. As of December 31, 2009, the accumulated benefit obligation for those defined benefit pension plans in which the ABO exceeded plan assets totaled $797,101,000 (including $63,640,000 related to the unfunded supplemental pension plan). As of December 31, 2008, all defined benefit pension plans had accumulated benefit obligations (including $47,977,000 related to the unfunded supplemental pension plan) in excess of plan assets.

GAAP requires an employer to recognize in its balance sheet as an asset or liability the overfunded or underfunded status of a defined benefit postretirement plan, measured as the difference between the fair value of plan assets and the benefit obligation. For a pension plan, the benefit obligation is the projected benefit obligation; for any other postretirement benefit plan, such as a retiree health care plan, the benefit obligation is the accumulated postretirement benefit obligation. Gains or losses and prior service costs or credits that arise during the period, but are not included as components of net periodic benefit expense, are recognized as a component of other comprehensive income. As indicated in the preceding table, as of December 31, 2009 the Company recorded a minimum liability adjustment of $192,668,000 ($196,088,000 related to pension plans and $(3,420,000) related to other postretirement benefits) with a corresponding reduction of stockholders’ equity, net of applicable deferred taxes, of $117,046,000. Of the $196,088,000 related to pension plans, $9,907,000 was related to unfunded nonqualified defined benefit plans. In aggregate, the benefit plans incurred gains during 2009 that resulted from actual experience differing from the plan assumptions utilized and from changes in actuarial assumptions. The main factor contributing to those gains was a positive return on assets in the qualified defined benefit pension plans of approximately $159 million as compared with an expected gain of approximately $47 million. As a result, the Company decreased its minimum liability adjustment from that which was recorded at December 31, 2008 by $93,823,000 with a corresponding increase to stockholders’ equity that, net of applicable deferred taxes, was $57,284,000. The table below reflects the changes in plan assets and benefit obligations recognized in other comprehensive income related to the Company’s postretirement benefit plans.


				Other
				Postretirement
	Pension Plans			Benefit Plans			Total
	(In thousands)

2009
Net loss (gain)	$	(85,265	)	$	(5,209	)	$	(90,474	)
Amortization of prior service (cost) credit		6,559			(242	)		6,317
Amortization of (loss) gain		(9,685	)		19			(9,666	)

Total recognized in other comprehensive income, pre-tax	$	(88,391	)	$	(5,432	)	$	(93,823	)

2008
Net loss (gain)	$	213,239		$	(5,378	)	$	207,861
Amortization of prior service (cost) credit		6,559			(275	)		6,284
Amortization of (loss) gain		(3,942	)		(42	)		(3,984	)

Total recognized in other comprehensive income, pre-tax	$	215,856		$	(5,695	)	$	210,161

The following table reflects the amortization of amounts in accumulated other comprehensive income expected to be recognized as components of net periodic benefit expense during 2010:


				Other
				Postretirement
	Pension Plans			Benefit Plans
	(In thousands)

Amortization of net prior service cost (credit)	$	(6,644	)	$	156
Amortization of net loss (gain)		13,158			(25	)

The Company also provides a qualified defined contribution pension plan to eligible employees who were not participants in the defined benefit pension plan as of December 31, 2005 and to other employees who have elected to participate in the defined contribution plan. The Company makes contributions to the defined contribution plan each year in an amount that is based on an individual participant’s total compensation (generally defined as total wages, incentive compensation, commissions and bonuses) and years of service. Participants do not contribute to the defined contribution pension plan. Pension expense recorded in 2009, 2008 and 2007 associated with the defined contribution pension plan was approximately $11 million, $10 million and $8 million, respectively.

Assumptions

The assumed weighted-average rates used to determine benefit obligations at December 31 were:


							Other
	Pension						Postretirement
	Benefits						Benefits
	2009			2008			2009			2008

Discount rate		5.75	%		6.00	%		5.75	%		6.00	%
Rate of increase in future compensation levels		4.50	%		4.60	%		—			—

The assumed weighted-average rates used to determine net benefit expense for the years ended December 31 were:


										Other
	Pension Benefits									Postretirement Benefits
	2009			2008			2007			2009			2008			2007

Discount rate		6.00	%		6.00	%		5.75	%		6.00	%		6.00	%		5.75	%
Long-term rate of return on plan assets		6.50	%		7.50	%		8.00	%		—			—			—
Rate of increase in future compensation levels		4.60	%		4.60	%		4.70	%		—			—			—

On December 1, 2007, pension and other benefit obligations were assumed as a result of the acquisition of Partners Trust. Initial liabilities and net costs were determined using a 6.00% discount rate and other assumptions as noted above. Partners Trust had previously frozen all pension benefit accruals and participation in its plan. On May 23, 2009, pension and other obligations were assumed as a result of the acquisition of Provident. Initial liabilities and net costs were determined using a 7.00% discount rate and 4.50% expected return on assets. All future benefit accruals related to the former Provident qualified pension plan were frozen.

The expected long-term rate of return assumption as of each measurement date was developed through analysis of historical market returns, current market conditions, anticipated future asset allocations, the funds’ past experience, and expectations on potential future market returns. The expected rate of return assumption represents a long-term average view of the performance of the plan assets, a return that may or may not be achieved during any one calendar year.

For measurement of other postretirement benefits, a 7.5% annual rate of increase in the per capita cost of covered health care benefits was assumed for 2010. The rate was assumed to decrease gradually to 6% over 3 years and gradually to 5% over 30 years. Assumed health care cost trend rates have a significant effect on the amounts reported for health care plans. A one-percentage point change in assumed health care cost trend rates would have had the following effects:


	+1%		-1%
	(In thousands)

Increase (decrease) in:
Service and interest cost	$	155	$	(138	)
Accumulated postretirement benefit obligation		2,864		(2,559	)

Plan Assets

The Company’s policy is to invest the pension plan assets in a prudent manner for the purpose of providing benefit payments to participants and mitigating reasonable expenses of administration. The Company’s investment strategy is designed to provide a total return that, over the long-term, places a strong emphasis on the preservation of capital. The strategy attempts to maximize investment returns on assets at a level of risk deemed appropriate by the Company while complying with applicable regulations and laws. The investment strategy utilizes asset allocation as a principal determinant for establishing an appropriate risk profile. The target allocations for plan assets are generally 55 to 70 percent equity securities, 25 to 40 percent debt securities, and 3 to 10 percent money-market funds or other short-term investments. Equity securities include investments in large-cap and mid-cap companies located in the United States, equity mutual funds with international investments, and, to a lesser extent, direct investments in foreign-based companies. Debt securities include corporate bonds of companies from diversified industries, mortgage-backed securities guaranteed by government agencies, U.S. Treasury securities, and mutual funds that invest in debt securities. Returns on invested assets are periodically compared with target market indices for each asset type to aid management in evaluating such returns. Furthermore, management regularly reviews the investment policy and may, if deemed appropriate, make changes to the target allocations noted above.

The fair values of the Company’s pension plan assets at December 31, 2009, by asset category, are as follows:


	Fair Value Measurement of Plan Assets At December 31, 2009
			Quoted Prices
			in Active		Significant		Significant
			Markets		Observable		Unobservable
			for Identical Assets		Inputs		Inputs
	Total		(Level 1)		(Level 2)		(Level 3)
	(In thousands)

Asset category:
Money market funds	$	27,560		27,560		—		—
Equity securities:
M&T		82,136		82,136		—		—
Domestic(a)		162,401		162,401		—		—
International		8,021		8,021		—		—
Mutual funds:
Domestic		40,195		40,195		—		—
International		130,767		130,767		—		—

		423,520		423,520		—		—

Debt securities:
Corporate(b)		194,515		—		194,515		—
Government		50,054		—		50,054		—
International		5,440		—		5,440		—
Mutual funds:
Domestic(c)		38,833		38,833		—		—
International		23,320		23,320		—		—

		312,162		62,153		250,009		—

Total(d)	$	763,242		513,233		250,009		—


(a)		This category is comprised of equities of companies primarily within the mid-cap and large-cap sector of the U.S. economy and range across diverse industries.

(b)		This category represents investment grade bonds of U.S. issuers from diverse industries.

(c)		Approximately 30% of the mutual funds are invested in investment grade bonds of U.S. issuers and 70% in high-yielding bonds. The holdings within the funds are spread across diverse industries.

(d)		Excludes dividends and interest receivable totaling $3,638,000.

Pension plan assets included common stock of M&T with a fair value of $82,136,000 (10.7% of total plan assets) at December 31, 2009 and $18,826,000 (3% of total plan assets) at December 31, 2008. No other investment in securities of a non-U.S. Government or government agency issuer exceeded ten percent of plan assets at December 31, 2009. Pension plan assets also included American Depositary Shares of AIB (“AIB ADSs”) with a fair value of $495,000 and $661,000 at December 31, 2009 and 2008, respectively (see note 24).

The Company makes contributions to its funded qualified defined benefit pension plans as required by government regulation or as deemed appropriate by management after considering factors such as the fair value of plan assets, expected returns on such assets, and the present value of benefit obligations of the plans. Subject to the impact of actual events and circumstances that may occur in 2010, the Company may make contributions to the qualified defined benefit pension plans in 2010, but the amount of any such contribution has not yet been determined. No minimum contribution is required in 2010 under government regulations for the qualified defined benefit pension plans. The Company’s contributions to the qualified defined benefit pension plans totaled $44 million in the form of common stock of M&T in 2009 and $140 million in cash in 2008. The Company regularly funds the payment of benefit obligations for the supplemental defined benefit pension and postretirement benefit plans because such plans do not hold assets for investment. Payments made by the Company for supplemental pension benefits were $4,239,000 and $3,634,000 in 2009 and 2008, respectively. Payments made by the Company for postretirement benefits were $5,164,000 and $7,450,000 in 2009 and 2008, respectively. Payments for supplemental pension and other postretirement benefits for 2010 are not expected to differ from those made in 2009 by an amount that will be material to the Company’s consolidated financial position.

Estimated benefits expected to be paid in future years related to the Company’s defined benefit pension and other postretirement benefits plans are as follows:


			Other
	Pension		Postretirement
	Benefits		Benefits
	(In thousands)

Year ending December 31:
2010	$	40,169	$	6,380
2011		43,008		6,234
2012		45,477		6,098
2013		46,710		5,977
2014		51,733		5,845
2015 through 2019		300,798		26,760

The Company has a retirement savings plan (“RSP”) that is a defined contribution plan in which eligible employees of the Company may defer up to 50% of qualified compensation via contributions to the plan. The Company makes an employer matching contribution in an amount equal to 75% of an employee’s contribution, up to 4.5% of the employee’s qualified compensation. Employees’ accounts, including employee contributions, employer matching contributions and accumulated earnings thereon, are at all times fully vested and nonforfeitable. Employee benefits expense resulting from the Company’s contributions to the RSP totaled $23,719,000, $23,311,000 and $21,749,000 in 2009, 2008 and 2007, respectively.

Income taxes

12 Months Ended

Dec. 31, 2009

Income taxes [Abstract]

Income taxes


13.	Income taxes

The components of income tax expense (benefit) were as follows:


	Year Ended December 31
	2009		2008			2007
	(In thousands)

Current
Federal	$	52,792	$	231,426		$	321,604
State and city		4,107		(30,514	)		32,344

Total current		56,899		200,912			353,948

Deferred
Federal		67,372		(10,095	)		(40,707	)
State and city		15,129		(6,925	)		(3,963	)

Total deferred		82,501		(17,020	)		(44,670	)

Total income taxes applicable to pre-tax income	$	139,400	$	183,892		$	309,278

Total current income taxes for 2009 reflect a $10 million reversal of taxes accrued in earlier periods for previously uncertain tax positions in various jurisdictions because the applicable income tax returns are no longer subject to further examination by taxing authorities. Total current income taxes for 2008 reflect the resolution of previously uncertain tax positions related to the Company’s activities in various jurisdictions during the years 1999-2007 that allowed the Company to reduce previously accrued income taxes by $40 million.

The Company files a consolidated federal income tax return reflecting taxable income earned by all subsidiaries. In prior years, applicable federal tax law allowed certain financial institutions the option of deducting as bad debt expense for tax purposes amounts in excess of actual losses. In accordance with GAAP, such financial institutions were not required to provide deferred income taxes on such excess. Recapture of the excess tax bad debt reserve established under the previously allowed method will result in taxable income if M&T Bank fails to maintain bank status as defined in the Internal Revenue Code or charges are made to the reserve for other than bad debt losses. At December 31, 2009, M&T Bank’s tax bad debt reserve for which no federal income taxes have been provided was $79,121,000. No actions are planned that would cause this reserve to become wholly or partially taxable.

Income taxes attributable to gains or losses on bank investment securities were benefits of $53,824,000, $57,859,000 and $49,308,000 in 2009, 2008 and 2007, respectively. No alternative minimum tax expense was recognized in 2009, 2008 or 2007.

Total income taxes differed from the amount computed by applying the statutory federal income tax rate to pre-tax income as follows:


	Year Ended December 31
	2009			2008			2007
	(In thousands)

Income taxes at statutory rate	$	181,752		$	258,923		$	337,238
Increase (decrease) in taxes:
Tax-exempt income		(31,071	)		(31,668	)		(30,149	)
State and city income taxes, net of federal income tax effect		12,503			(24,335	)		18,448
Low income housing credits		(20,749	)		(21,170	)		(19,092	)
Other		(3,035	)		2,142			2,833

	$	139,400		$	183,892		$	309,278

Deferred tax assets (liabilities) were comprised of the following at December 31:


	2009			2008			2007
	(In thousands)

Losses on loans and other assets	$	642,427		$	389,177		$	333,705
Postretirement and other employee benefits		46,316			43,874			46,619
Incentive compensation plans		27,835			28,489			31,730
Interest on loans		35,772			38,835			32,587
Retirement benefits		14,305			62,185			28,912
Stock-based compensation		69,881			58,837			52,841
Unrealized investment losses		140,821			331,616			12,836
Depreciation and amortization		6,274			10,141			7,163
Capitalized servicing rights		—			3,243			—
Other		40,281			28,478			38,249

Gross deferred tax assets		1,023,912			994,875			584,642

Leasing transactions		(306,799	)		(316,444	)		(313,812	)
Capitalized servicing rights		(8,412	)		—			(7,133	)
Interest on subordinated note exchange		(15,051	)		(16,264	)		(17,118	)
Other		(32,617	)		(9,691	)		(10,791	)

Gross deferred tax liabilities		(362,879	)		(342,399	)		(348,854	)

Net deferred tax asset	$	661,033		$	652,476		$	235,788

The Company believes that it is more likely than not that the deferred tax assets will be realized through taxable earnings or alternative tax strategies.

The income tax credits shown in the statement of income of M&T in note 26 arise principally from operating losses before dividends from subsidiaries.

A reconciliation of the beginning and ending amount of unrecognized tax benefits follows:


	Federal,						Unrecognized
	State and			Accrued			Income Tax
	Local Tax			Interest			Benefits
	(In thousands)

Gross unrecognized tax benefits at January 1, 2007	$	96,979		$	14,287		$	111,266
Increases in unrecognized tax benefits as a result of tax positions taken during 2007		17,760			—			17,760
Increases in unrecognized tax benefits as a result of tax positions taken during prior years		—			10,571			10,571
Elimination of unrecognized tax benefits as a result of the conclusion of litigation with a taxing authority		(1,885	)		(634	)		(2,519	)
Unrecognized tax benefits acquired in a business combination		7,190			2,144			9,334

Gross unrecognized tax benefits at December 31, 2007		120,044			26,368			146,412
Increases in unrecognized tax benefits as a result of tax positions taken during 2008		2,405			—			2,405
Increases in unrecognized tax benefits as a result of tax positions taken during prior years		—			15,837			15,837
Decreases in unrecognized tax benefits as a result of tax positions taken during prior years		(52,399	)		(15,533	)		(67,932	)
Decreases in unrecognized tax benefits as a result of settlements with taxing authorities		(31,763	)		(9,116	)		(40,879	)

Gross unrecognized tax benefits at December 31, 2008		38,287			17,556			55,843
Increases in unrecognized tax benefits as a result of tax positions taken during 2009		400			—			400
Increases in unrecognized tax benefits as a result of tax positions taken during prior years		—			3,675			3,675
Decreases in unrecognized tax benefits because applicable returns are no longer subject to examination		(9,902	)		(1,392	)		(11,294	)
Decreases in unrecognized tax benefits as a result of settlements with taxing authorities		(825	)		(331	)		(1,156	)
Unrecognized tax benefits acquired in a business combination		337			—			337

Gross unrecognized tax benefits at December 31, 2009	$	28,297		$	19,508			47,805

Less: Federal, state and local income tax benefits								(16,267	)

Net unrecognized tax benefits at December 31, 2009 that, if recognized, would impact the effective income tax rate							$	31,538

The Company’s policy is to recognize interest and penalties, if any, related to unrecognized tax benefits in income taxes in the consolidated statement of income. The balance of accrued interest at December 31, 2009 is included in the table above. The Company’s federal, state and local income tax returns are routinely subject to examinations from various governmental taxing authorities. Such examinations may result in challenges to the tax return treatment applied by the Company to specific transactions. Management believes that the assumptions and judgment used to record tax-related assets or liabilities have been appropriate. Should determinations rendered by tax authorities ultimately indicate that management’s assumptions were inappropriate, the result and adjustments required could have a material effect on the Company’s results of operations. Under statute, the Company’s federal income tax returns for the years 2006-2008 could be adjusted by the Internal Revenue Service (“IRS”), although examinations for those tax years have been concluded. The Company is appealing the sole issue raised by the IRS in its examination of 2007 and would anticipate that any settlement or resolution within the next twelve months would not materially impact the effective tax rate. The Company also files income tax returns in over forty state and local jurisdictions. Substantially all material state and local matters have been concluded for years through 2001. Some tax returns for years after 2001 are presently under examination. It is not reasonably possible to estimate when any of those examinations will be completed or if others will be commenced.

Derivative financial instruments

12 Months Ended

Dec. 31, 2009

Derivative financial instruments [Abstract]

Derivative financial instruments


18.	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 December 31, 2009.

The net effect of interest rate swap agreements was to increase net interest income by $38 million and $16 million in 2009 and 2008, respectively, and to decrease net interest income in 2007 by $3 million. The average notional amounts of interest rate swap agreements impacting net interest income that were entered into for interest rate risk management purposes was $1.08 billion in 2009, $1.27 billion in 2008 and $1.41 billion in 2007.

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:


	Notional		Average		Weighted-Average Rate						Estimated Fair
	Amount		Maturity		Fixed			Variable			Value Gain
	(In thousands)		(In years)								(In thousands)

December 31, 2009
Fair value hedges:
Fixed rate time deposits(a)	$	25,000		3.7		5.30	%		0.34	%	$	503
Fixed rate long-term borrowings(a)		1,037,241		6.5		6.33			2.12			53,983

	$	1,062,241		6.4		6.30	%		2.07	%	$	54,486

December 31, 2008
Fair value hedges:
Fixed rate time deposits(a)	$	70,000		6.1		5.14	%		2.04	%	$	2,300
Fixed rate long-term borrowings(a)		1,037,241		7.5		6.33			4.28			143,811

	$	1,107,241		7.4		6.25	%		4.14	%	$	146,111


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

In response to changes in its interest rate risk profile, during 2008 the Company terminated interest rate swap agreements with a notional amount of $1.5 billion that had originally been entered into as cash flow hedges of variable rate long-term borrowings. The Company recognized a $37 million loss as a result of the termination. Amounts pertaining to these interest rate swap agreements that were reclassified from accumulated other comprehensive income to increase interest expense were $11 million and $26 million for 2009 and 2008, respectively.

The notional amount of interest rate swap agreements entered into for risk management purposes that were outstanding at December 31, 2009 mature as follows:


	(In thousands)

Year ending December 31:
2010	$	147,241
2011		—
2012		—
2013		—
2014		—
Later years		915,000

	$	1,062,241

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.

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 $13.9 billion and $14.6 billion at December 31, 2009 and 2008, respectively. The notional amounts of foreign currency and other option and futures contracts entered into for trading purposes aggregated $608 million and $713 million at December 31, 2009 and 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
	December 31				December 31
	2009		2008		2009		2008
	(In thousands)

Derivatives designated and qualifying as hedging instruments
Fair value hedges:
Interest rate swap agreements(a)	$	54,486	$	146,111	$	—	$	—
Commitments to sell real estate loans(a)		6,009		1,128		171		13,604

		60,495		147,239		171		13,604
Derivatives not designated and qualifying as hedging instruments
Mortgage-related commitments to originate real estate loans for sale(a)		4,428		11,132		4,508		2,988
Commitments to sell real estate loans(a)		13,293		5,875		1,360		8,876
Trading:
Interest rate contracts(b)		317,651		513,230		290,104		481,671
Foreign exchange and other option and futures contracts(b)		11,908		38,885		12,094		39,408

		347,280		569,122		308,066		532,943

Total derivatives	$	407,775	$	716,361	$	308,237	$	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
	Year Ended					Year Ended						Year Ended
	December 31, 2009					December 31, 2008						December 31, 2007
	Derivative			Hedged Item		Derivative			Hedged Item			Derivative		Hedged Item
	(In thousands)

Derivatives in fair value hedging relationships
Interest rate swap agreements:
Fixed rate time deposits(a)	$	(1,797	)		1,789		883			(895	)		3,797		(3,724	)
Fixed rate long-term borrowings(a)		(91,093	)		85,679		127,563			(121,898	)		26,660		(26,537	)

Total	$	(92,890	)		87,468		128,446			(122,793	)		30,457		(30,261	)

Derivatives not designated as hedging instruments
Trading:
Interest rate contracts(b)	$	(3,622	)				6,529						9,046
Foreign exchange and other option and futures contracts(b)		337					(1,209	)					208

Total	$	(3,285	)				5,320						9,254


(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. The Company also utilizes commitments to sell real estate loans to offset the exposure to changes in the fair value of certain commitments to originate real estate loans for sale. As a result of these activities, net unrealized pre-tax gains related to hedged loans held for sale, commitments to originate loans for sale and commitments to sell loans were approximately $20 million and $9 million at December 31, 2009 and 2008, respectively. 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.

The aggregate fair value of derivative financial instruments in a net liability position at December 31, 2009 for which the Company was required to post collateral was $225 million. The fair value of collateral posted for such instruments was $221 million.

The Company’s credit exposure with respect to the estimated fair value as of December 31, 2009 of interest rate swap agreements used for managing interest rate risk has been substantially mitigated through master netting arrangements with trading account interest rate contracts with the same counterparties as well as counterparty postings of $35 million of collateral with the Company.

Variable interest entities and asset securitizations

12 Months Ended

Dec. 31, 2009

Variable interest entities and asset securitizations [Abstract]

Variable interest entities and asset securitizations


19.	Variable interest entities and asset securitizations

Variable interest entities

Variable interest entities in which the Company holds a significant variable interest are described below.

M&T has a variable interest in a trust that holds AIB ADSs for the purpose of satisfying options to purchase such shares for certain employees. The trust purchased the AIB ADSs with the proceeds of a loan from an entity subsequently acquired by M&T. Proceeds from option exercises and any dividends and other earnings on the trust assets are used to repay the loan plus interest. Option holders have no preferential right with respect to the trust assets and the trust assets are subject to the claims of M&T’s creditors. The trust has been included in the Company’s consolidated financial statements. As a result, included in investment securities available for sale were 591,813 AIB ADSs with a carrying value of approximately $2 million at December 31, 2009 and $3 million at December 31, 2008. Outstanding options granted to employees who have continued service with M&T totaled 189,450 and 304,210 at December 31, 2009 and 2008, respectively. All outstanding options were fully vested and exercisable at both December 31, 2009 and 2008. The options expire at various dates through June 2012. The AIB ADSs are included in available for sale investment securities and have a fair value of $2 million and an amortized cost of $13 million at December 31, 2009.

As described in note 9, M&T has issued junior subordinated debentures payable to various trusts that have issued Capital Securities. M&T owns the common securities of those trust entities. The Company is not considered to be the primary beneficiary of those entities and, accordingly, the trusts are not included in the Company’s consolidated financial statements. At December 31, 2009 and 2008, the Company included the Junior Subordinated Debentures as “long-term borrowings” in its consolidated balance sheet. The Company has recognized $34 million in other assets for its “investment” in the common securities of the trusts that will be concomitantly repaid to M&T by the respective trust from the proceeds of M&T’s repayment of the junior subordinated debentures associated with preferred capital securities described in note 9.

The Company has invested as a limited partner in various real estate partnerships that collectively had total assets of approximately $1.0 billion and $593 million at December 31, 2009 and 2008, respectively. Those partnerships generally construct or acquire properties for which the investing partners are eligible to receive certain federal income tax credits in accordance with government guidelines. Such investments may also provide tax deductible losses to the partners. The partnership investments also assist the Company in achieving its community reinvestment initiatives. As a limited partner, there is no recourse to the Company by creditors of the partnerships. However, the tax credits that result from the Company’s investments in such partnerships are generally subject to recapture should a partnership fail to comply with the respective government regulations. The Company’s maximum exposure to loss of its investments in such partnerships was $246 million, including $89 million of unfunded commitments, at December 31, 2009 and $188 million, including $64 million of unfunded commitments, at December 31, 2008. Management currently estimates that no material losses are probable as a result of the Company’s involvement with such entities. In accordance with the accounting provisions for variable interest entities, the partnership entities are not included in the Company’s consolidated financial statements.

Securitizations

In 2009, 2008 and 2007, the Company securitized approximately $141 million, $875 million and $948 million, respectively, of one-to-four family residential mortgage loans in guaranteed mortgage securitizations with Fannie Mae. The Company recognized no gain or loss on the transactions as it retained all of the resulting securities. Such securities were classified as investment securities available for sale. The Company expects no material credit-related losses on the retained securities as a result of the guarantees by Fannie Mae.

In 2002 and 2003, the Company transferred approximately $1.9 billion of one-to-four family residential mortgage loans to qualified special purpose trusts in non-recourse securitization transactions. In exchange for the loans, the Company received cash, no more than 88% of the resulting securities, and the servicing rights to the loans. All of the retained securities were classified as investment securities available for sale. The qualified special purpose trusts are not included in the Company’s consolidated financial statements, however, coincident with the Company’s adoption of newly required consolidation rules such trusts will be included in the Company’s consolidated financial statements beginning January 1, 2010. Because the transactions were non-recourse, the Company’s maximum exposure to loss as a result of its association with the trusts is limited to realizing the carrying value of the retained securities and servicing rights. The combined outstanding principal amount of mortgage-backed securities issued by the qualified special purpose trusts was $433 million at December 31, 2009 and $540 million at December 31, 2008. The principal amount of such securities held by the Company was $369 million and $460 million at December 31, 2009 and 2008, respectively. At December 31, 2009 and 2008, loans of the trusts that were 30 or more days delinquent totaled $17 million and $15 million, respectively. Credit losses, net of recoveries, for the trusts in 2009 and 2008 were insignificant. There were no significant repurchases of delinquent or foreclosed loans from the trusts by the Company in 2009 or 2008. The Company has not provided financial or other support to the trusts during 2009 or 2008 that was not contractually required. Certain cash flows between the Company and the trusts were as follows:


	Year Ended December 31
	2009		2008
	(In thousands)

Principal and interest payments on retained securities	$	115,830	$	109,779
Servicing fees received		1,312		1,571

A summary of the fair values of retained subordinated interests resulting from the Company’s residential mortgage loan securitization activities follows. Although the estimated fair values of the retained subordinated interests were obtained from independent pricing sources, the Company has modeled the sensitivity of such fair values to changes in certain assumptions as summarized in the table below. These calculated sensitivities are hypothetical and actual changes in the fair value may differ significantly from the amounts presented herein. The effect of a variation in a particular assumption on the fair values is calculated without changing any other assumption. In reality, changes in one factor may result in changes in another which may magnify or counteract the sensitivities. The changes in assumptions are presumed to be instantaneous. The hypothetical effect of adverse changes on the Company’s retained capitalized servicing assets at December 31, 2009 is included in note 7.


			Weighted-			Weighted-			Annual
			Average			Average			Expected
	Fair		Prepayment			Discount			Credit
	Value		Speed			Rate			Defaults
	(Dollars in thousands)

Retained subordinated interests:
As of securitization date	$	91,705		23.81	%		7.68	%		0.09	%
As of December 31, 2009		30,875		10.44	%		13.86	%		0.11	%

Impact on fair value of 10% adverse change			$	(324	)	$	(1,327	)	$	(47	)
Impact on fair value of 20% adverse change				(659	)		(2,547	)		(99	)

The subordinated retained securities do not have pro rata participation in loan principal prepayments for the first seven years of each securitization. The assumed weighted-average discount rate is 815 basis points higher than the weighted-average coupon of the underlying mortgage loans at December 31, 2009.

Fair value measurements

12 Months Ended

Dec. 31, 2009

Fair value measurements [Abstract]

Fair value measurements


20.	Fair value measurements

GAAP permits an entity to choose to measure eligible financial instruments and other items at fair value. The Company has not made any fair value elections as of December 31, 2009.

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 its privately issued mortgage-backed securities as Level 3.

In April 2009, the Financial Accounting Standards Board (“FASB”) issued new accounting rules that 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. Therefore, 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 December 31, 2009. However, the Company could not readily ascertain that the basis of such valuations could be ascribed to orderly and observable trades in the market for privately issued residential mortgage-backed securities. As a result, the Company also performed internal modeling to estimate the cash flows and fair value of 148 of its privately issued residential mortgage-backed securities with an amortized cost basis of $1.9 billion at December 31, 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 148 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 37% with a 63% average weighting placed on the values provided by the independent sources. The Company concluded its estimate of fair value for the $1.9 billion of privately issued residential mortgage-backed securities to approximate $1.6 billion, which implies a weighted-average market yield based on reasonably likely cash flows of 10.25%. Other valuations of privately issued mortgage-backed securities, including those resulting from two non-recourse securitization transactions executed by the Company in 2002 and 2003, were determined by reference to independent pricing sources without adjustment.

Included in CDOs 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 December 31, 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 December 31, 2009, the total amortized cost and fair value of securities backed by trust preferred securities issued by financial institutions and other entities was $103 million and $115 million, respectively. 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 December 31, 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 measured at estimated fair value on a recurring basis:


	Fair Value
	Measurements at
	December 31,
	2009		Level 1		Level 2		Level 3
	(In thousands)

Trading account assets	$	386,984		40,836		346,148		—
Investment securities available for sale:
U.S. Treasury and federal agencies		104,686		—		104,686		—
Obligations of states and political subdivisions		62,923		—		62,923		—
Mortgage-backed securities:
Government issued or guaranteed		3,902,282		—		3,902,282		—
Privately issued residential		2,064,904		—		—		2,064,904
Privately issued commercial		25,166		—		—		25,166
Collateralized debt obligations		115,346		—		—		115,346
Other debt securities		268,201		—		267,781		420
Equity securities		160,870		145,817		15,053		—

		6,704,378		145,817		4,352,725		2,205,836

Real estate loans held for sale		652,761		—		652,761		—
Other assets(a)		78,216		—		73,788		4,428

Total assets	$	7,822,339		186,653		5,425,422		2,210,264

Trading account liabilities	$	302,198		5,577		296,621		—
Other liabilities(a)		6,039		—		1,531		4,508

Total liabilities	$	308,237		5,577		298,152		4,508


	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 year ended December 31, 2009 were as follows:


																		Changes in
																		Unrealized Gains
			Total Gains (Losses)															(Losses) Included
			Realized/Unrealized															in Earnings Related
						Included in												to Assets Still
	Balance-					Other			Purchases, Sales,			Transfer in			Balance-			Held at
	January 1,		Included			Comprehensive			Issuances &			and/or out of			December 31,			December 31,
	2009		in Earnings			Income			Settlements			Level 3			2009			2009
	(In thousands)

Investment securities available for sale:
U.S. Treasury and federal agencies	$	5,532		—			—			—			(5,532	)		—			—
Obligations of states and political subdivisions		38		—			224			(9	)		(253	)		—			—
Government issued or guaranteed mortgage-backed securities		84,544		—			—			—			(84,544	)		—			—
Privately issued residential mortgage-backed securities		2,326,554		(128,374	)(a)		421,150			(554,426	)		—			2,064,904			(128,374	)(a)
Privately issued commercial mortgage-backed securities		41,046		—			(6,853	)		(9,027	)		—			25,166			—
Collateralized debt obligations		2,496		(9,568	)(a)		19,770			102,648			—			115,346			(9,923	)(a)
Other debt securities		—		—			145			725			(450	)		420			—
Equity securities		2,302		—			2			(12	)		(2,292	)		—			—

		2,462,512		(137,942	)		434,438			(460,101	)		(93,071	)		2,205,836			(138,297	)
Other assets and other liabilities		8,266		34,400	(b)		—			—			(42,746	)		(80	)		2,465	(b)

The changes in Level 3 assets and liabilities measured at estimated fair value on a recurring basis during the year ended December 31, 2008 were as follows:


																	Changes in
																	Unrealized Gains
			Total Gains (Losses)														(Losses) Included
			Realized/Unrealized														in Earnings Related
						Included in											to Assets Still
	Balance-					Other			Purchases, Sales,			Transfer in			Balance-		Held at
	January 1,		Included			Comprehensive			Issuances &			and/or out of			December 31,		December 31,
	2008		in Earnings			Income			Settlements			Level 3			2008		2008
	(In thousands)

Investment securities available for sale:
U.S. Treasury and federal agencies	$	5,696		—			364			(528	)		—			5,532		—
Obligations of states and political subdivisions		50		—			(5	)		(7	)		—			38		—
Government issued or guaranteed mortgage- backed securities		118,992		—			878			(6,390	)		(28,936	)		84,544		—
Privately issued residential and commercial mortgage-backed securities		1,159,644		(12,483	)(a)		(408,211	)		(236,669	)		1,865,319			2,367,600		(12,483	)(a)
Collateralized debt obligations		27,115		(11,413	)(a)		(13,232	)		—			26			2,496		(11,413	)(a)
Equity securities		2,324		—			(9	)		(13	)		—			2,302		—

		1,313,821		(23,896	)		(420,215	)		(243,607	)		1,836,409			2,462,512		(23,896	)
Other assets and other liabilities		2,654		31,356	(b)		—			—			(25,744	)		8,266		8,266	(b)


(a)		Reported as an other-than-temporary impairment loss in the consolidated statement of income or as gain (loss) on bank investment securities.

(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 in accordance with GAAP.

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 $901 million at December 31, 2009 ($547 million and $354 million of which were classified as Level 2 and Level 3, respectively) and $420 million at December 31, 2008 ($238 million and $182 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 at December 31, 2009 were decreases of $343 million for the year ended December 31, 2009 and on loans held by the Company at December 31, 2008 were decreases of $166 million for the year ended December 31, 2008.

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. The determination of fair value of capitalized servicing rights is described in note 1 and is considered a Level 3 valuation. At December 31, 2009, no stratum of capitalized servicing rights had a carrying value equal to its fair value. Changes in the fair value-based valuation allowance for capitalized servicing rights recognized for the year ended December 31, 2009 reflected increases in fair value of $22 million. At December 31, 2008, $50 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 year ended December 31, 2008 were a decrease of $16 million.

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 $43 million at December 31, 2009. Changes in fair value for those foreclosed assets held by the Company at December 31, 2009 were $24 million for the year ended December 31, 2009.

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 follows.

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


	December 31, 2009						December 31, 2008
	Carrying			Calculated			Carrying			Calculated
	Amount			Estimate			Amount			Estimate
	(In thousands)

Financial assets:
Cash and cash equivalents	$	1,246,342		$	1,246,342		$	1,568,151		$	1,568,151
Interest-bearing deposits at banks		133,335			133,335			10,284			10,284
Trading account assets		386,984			386,984			617,821			617,821
Agreements to resell securities		—			—			90,000			90,000
Investment securities		7,780,609			7,629,485			7,919,207			7,828,121
Loans and leases:
Commercial loans and leases		13,479,447			13,090,206			14,261,882			14,137,805
Commercial real estate loans		20,949,931			20,426,273			18,837,665			18,210,209
Residential real estate loans		5,463,463			5,058,763			4,904,424			4,249,137
Consumer loans		12,043,845			11,575,525			10,996,492			10,849,635
Allowance for credit losses		(878,022	)		—			(787,904	)		—

Loans and leases, net		51,058,664			50,150,767			48,212,559			47,446,786
Accrued interest receivable		214,692			214,692			222,073			222,073
Financial liabilities:
Noninterest-bearing deposits	$	(13,794,636	)	$	(13,794,636	)	$	(8,856,114	)	$	(8,856,114	)
Savings deposits and NOW accounts		(25,073,269	)		(25,073,269	)		(20,630,226	)		(20,630,226	)
Time deposits		(7,531,495	)		(7,592,214	)		(9,046,937	)		(9,108,821	)
Deposits at foreign office		(1,050,438	)		(1,050,438	)		(4,047,986	)		(4,047,986	)
Short-term borrowings		(2,442,582	)		(2,442,582	)		(3,009,735	)		(3,009,735	)
Long-term borrowings		(10,240,016	)		(9,822,153	)		(12,075,149	)		(11,104,337	)
Accrued interest payable		(94,838	)		(94,838	)		(142,456	)		(142,456	)
Trading account liabilities		(302,198	)		(302,198	)		(521,079	)		(521,079	)
Other financial instruments:
Commitments to originate real estate loans for sale	$	(80	)	$	(80	)	$	8,144		$	8,144
Commitments to sell real estate loans		17,771			17,771			(15,477	)		(15,477	)
Other credit-related commitments		(55,954	)		(55,954	)		(51,361	)		(51,361	)
Interest rate swap agreements used for interest rate risk management		54,486			54,486			146,111			146,111

The following assumptions, methods and 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 year 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 year end 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.

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 21, 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

12 Months Ended

Dec. 31, 2009

Commitments and contingencies [Abstract]

Commitments and contingencies


21.	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.


	December 31
	2009		2008
	(In thousands)

Commitments to extend credit
Home equity lines of credit	$	6,482,987	$	5,972,541
Commercial real estate loans to be sold		180,498		252,559
Other commercial real estate and construction		1,360,805		2,238,464
Residential real estate loans to be sold		631,090		870,578
Other residential real estate		127,788		211,705
Commercial and other		7,155,188		6,666,988
Standby letters of credit		3,828,586		3,886,396
Commercial letters of credit		66,377		45,503
Financial guarantees and indemnification contracts		1,633,549		1,546,873
Commitments to sell real estate loans		1,239,001		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 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 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 Fannie Mae DUS program. The Company’s maximum credit risk for recourse associated with loans sold under this program totaled approximately $1.3 billion and $1.2 billion at December 31, 2009 and 2008, respectively.

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 occupies certain banking offices and uses certain equipment under noncancellable operating lease agreements expiring at various dates over the next 30 years. Minimum lease payments under noncancellable operating leases are summarized in the following table:


	(In thousands)

Year ending December 31:
2010	$	77,768
2011		74,460
2012		65,181
2013		51,206
2014		42,588
Later years		152,326

	$	463,529

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 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 $97 million at December 31, 2009. Assets of subsidiaries providing reinsurance that are available to satisfy claims totaled approximately $72 million at December 31, 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. Management believes that any reinsurance losses that may be payable by the Company will not be material to the Company’s consolidated financial position.

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

12 Months Ended

Dec. 31, 2009

Segment information [Abstract]

Segment information


22.	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 has been compiled utilizing the accounting policies described in note 1 with certain exceptions. The more significant of these exceptions are described herein. The Company allocates interest income or interest expense using a methodology that charges users of funds (assets) interest expense and credits providers of funds (liabilities) with income based on the maturity, prepayment and/or repricing characteristics of the assets and liabilities. The net effect of this allocation is recorded in the “All Other” category. A provision for credit losses is allocated to segments in an amount based largely on actual net charge-offs incurred by the segment during the period plus or minus an amount necessary to adjust the segment’s allowance for credit losses due to changes in loan balances. In contrast, the level of the consolidated provision for credit losses is determined using the methodologies described in note 1 to assess the overall adequacy of the allowance for credit losses. Indirect fixed and variable expenses incurred by certain centralized support areas are allocated to segments based on actual usage (for example, volume measurements) and other criteria. Certain types of administrative expenses and bankwide expense accruals (including amortization of core deposit and other intangible assets associated with acquisitions of financial institutions) are generally not allocated to segments. Income taxes are allocated to segments based on the Company’s marginal statutory tax rate adjusted for any tax-exempt income or non-deductible expenses. Equity is allocated to the segments based on regulatory capital requirements and in proportion to an assessment of the inherent risks associated with the business of the segment (including interest, credit and operating risk).

The management accounting policies and processes utilized in compiling segment financial information are highly subjective and, unlike financial accounting, are not based on authoritative guidance similar to generally accepted accounting principles. As a result, reported segment results are not necessarily comparable with similar information reported by other financial institutions. Furthermore, changes in management structure or allocation methodologies and procedures may result in changes in reported segment financial data. Information about the Company’s segments is presented in the accompanying table. Income statement amounts are in thousands of dollars. Balance sheet amounts are in millions of dollars.


	For the Years Ended December 31, 2009, 2008 and 2007
	Business Banking						Commercial Banking						Commercial Real Estate						Discretionary Portfolio
	2009		2008		2007		2009		2008		2007		2009		2008		2007		2009			2008			2007

Net interest income(a)	$	321,208	$	288,519	$	289,992	$	531,592	$	433,238	$	382,062	$	346,513	$	287,727	$	256,299	$	137,507		$	144,856		$	89,837
Noninterest income		89,043		86,293		79,454		192,979		197,515		169,157		65,224		63,288		49,496		(100,507	)		(140,063	)		(88,531	)

		410,251		374,812		369,446		724,571		630,753		551,219		411,737		351,015		305,795		37,000			4,793			1,306
Provision for credit losses		41,923		33,529		18,580		107,871		77,104		12,190		84,614		15,507		4,150		83,139			68,766			27,507
Amortization of core deposit and other intangible assets		—		—		—		—		—		—		—		—		—		—			—			—
Depreciation and other amortization		857		757		569		628		559		492		5,934		4,588		5,154		5,506			5,342			2,940
Other noninterest expense		158,042		137,780		126,130		210,180		191,785		170,113		103,124		89,151		74,479		27,070			45,892			14,545

Income (loss) before taxes		209,429		202,746		224,167		405,892		361,305		368,424		218,065		241,769		222,012		(78,715	)		(115,207	)		(43,686	)
Income tax expense (benefit)		85,387		82,686		91,437		166,459		148,136		150,976		62,711		77,478		73,769		(50,692	)		(67,142	)		(36,890	)

Net income (loss)	$	124,042	$	120,060	$	132,730	$	239,433	$	213,169	$	217,448	$	155,354	$	164,291	$	148,243	$	(28,023	)	$	(48,065	)	$	(6,796	)

Average total assets (in millions)	$	4,869	$	4,452	$	4,179	$	15,399	$	14,981	$	12,989	$	12,842	$	11,394	$	9,550	$	13,763		$	14,179		$	12,953

Capital expenditures (in millions)	$	1	$	2	$	2	$	—	$	1	$	1	$	1	$	—	$	—	$	—		$	—		$	—


	Residential Mortgage Banking								Retail Banking						All Other									Total
	2009			2008			2007		2009		2008		2007		2009			2008			2007			2009		2008		2007

Net interest income(a)	$	78,865		$	66,051		$	81,157	$	878,520	$	830,022	$	849,051	$	(238,457	)	$	(110,617	)	$	(98,161	)	$	2,055,748	$	1,939,796	$	1,850,237
Noninterest income		226,659			171,774			146,682		372,821		343,666		348,324		201,887			216,506			228,407			1,048,106		938,979		932,989

		305,524			237,825			227,839		1,251,341		1,173,688		1,197,375		(36,570	)		105,889			130,246			3,103,854		2,878,775		2,783,226
Provision for credit losses		97,816			104,995			5,302		130,509		98,586		60,306		58,128			13,513			63,965			604,000		412,000		192,000
Amortization of core deposit and other intangible assets		—			—			—		—		—		—		64,255			66,646			66,486			64,255		66,646		66,486
Depreciation and other amortization		51,552			56,666			55,960		31,299		28,523		26,438		30,890			22,709			20,120			126,666		119,144		111,673
Other noninterest expense		185,829			164,102			150,591		689,314		624,834		576,904		416,083			287,662			336,768			1,789,642		1,541,206		1,449,530

Income (loss) before taxes		(29,673	)		(87,938	)		15,986		400,219		421,745		533,727		(605,926	)		(284,641	)		(357,093	)		519,291		739,779		963,537
Income tax expense (benefit)		(16,629	)		(39,758	)		2,593		162,957		171,740		217,681		(270,793	)		(189,248	)		(190,288	)		139,400		183,892		309,278

Net income (loss)	$	(13,044	)	$	(48,180	)	$	13,393	$	237,262	$	250,005	$	316,046	$	(335,133	)	$	(95,393	)	$	(166,805	)	$	379,891	$	555,887	$	654,259

Average total assets (in millions)	$	2,552		$	2,660		$	2,874	$	12,024	$	11,356	$	10,360	$	6,023		$	6,110		$	5,640		$	67,472	$	65,132	$	58,545

Capital expenditures (in millions)	$	—		$	—		$	—	$	39	$	38	$	30	$	18		$	31		$	24		$	59	$	72	$	57


(a)		Net interest income is the difference between actual taxable-equivalent interest earned on assets and interest paid on liabilities by a segment and a funding charge (credit) based on the Company’s internal funds transfer pricing methodology. Segments are charged a cost to fund any assets (e.g. loans) and are paid a funding credit for any funds provided (e.g. deposits). The taxable-equivalent adjustment aggregated $21,829,000 in 2009, $21,861,000 in 2008 and $20,833,000 in 2007 and is eliminated in “All Other” net interest income and income tax expense (benefit).

The Business Banking segment provides deposit, lending, cash management and other financial services to small businesses and professionals through the Company’s banking office network and several other delivery channels, including business banking centers, telephone banking, Internet banking and automated teller machines. The Commercial Banking segment provides a wide range of credit products and banking services to middle-market and large commercial customers, mainly within the markets the Company serves. Among the services provided by this segment are commercial lending and leasing, letters of credit, deposit products and cash management services. The Commercial Real Estate segment provides credit services which are secured by various types of multifamily residential and commercial real estate and deposit services to its customers. Activities of this segment include the origination, sales and servicing of commercial real estate loans. The Discretionary Portfolio segment includes securities, residential mortgage loans and other assets; short-term and long-term borrowed funds; brokered certificates of deposit and interest rate swap agreements related thereto; and offshore branch deposits. This segment also provides foreign exchange services to customers. The Residential Mortgage Banking segment originates and services residential mortgage loans for consumers and sells substantially all of those loans in the secondary market to investors or to the Discretionary Portfolio segment. The segment periodically purchases servicing rights to loans that have been originated by other entities. This segment also originated loans to developers of residential real estate properties. Residential mortgage loans held for sale are included in the Residential Mortgage Banking segment. The Retail Banking segment offers a variety of services to consumers through several delivery channels that include banking offices, automated teller machines, telephone banking and Internet banking. The “All Other” category includes other operating activities of the Company that are not directly attributable to the reported segments; the difference between the provision for credit losses and the calculated provision allocated to the reportable segments; goodwill and core deposit and other intangible assets resulting from acquisitions of financial institutions; merger-related expenses resulting from acquisitions; the net impact of the Company’s internal funds transfer pricing methodology; eliminations of transactions between reportable segments; certain nonrecurring transactions; the residual effects of unallocated support systems and general and administrative expenses; and the impact of interest rate risk management strategies. The amount of intersegment activity eliminated in arriving at consolidated totals was included in the “All Other” category as follows:


	Year Ended December 31
	2009			2008			2007
	(In thousands)

Revenues	$	(47,114	)	$	(42,738	)	$	(49,800	)
Expenses		(19,164	)		(19,198	)		(14,119	)
Income taxes (benefit)		(11,373	)		(9,578	)		(14,519	)
Net income (loss)		(16,577	)		(13,962	)		(21,162	)

The Company conducts substantially all of its operations in the United States. There are no transactions with a single customer that in the aggregate result in revenues that exceed ten percent of consolidated total revenues.

Consolidated Balance Sheet (Parenthetical) - USD ($)	Dec. 31, 2009	Dec. 31, 2008
Assets
Pledged securities that can be sold or repledged	$ 1,797,701,000	$ 1,870,097,000
Investment securities, available for sale, cost	6,997,009,000	7,656,635,000
Investment securities, held to maturity, fair value	416,483,000	394,752,000
Investment securities, other fair value	508,624,000	583,176,000
Stockholders' equity
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	$ 1,000	$ 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	75,170	78,447
Treasury stock - common, shares	2,173,916	10,031,302