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M&T Bank Corporation Announces 2003 Results

BUFFALO, N.Y.—M&T Bank Corporation ("M&T")(NYSE: MTB) today reported its results of operations for 2003.

GAAP Results of Operations. Diluted earnings per share measured in accordance with generally accepted accounting principles ("GAAP") for 2003 were $4.95, up 4% from $4.78 in 2002. On the same basis, net income for 2003 totaled $574 million, 26% higher than the $457 million earned in 2002. GAAP-basis net income for 2003 expressed as a rate of return on average assets and average common stockholders' equity was 1.27% and 11.62%, respectively, compared with 1.43% and 15.09%, respectively, in 2002.

M&T's financial results for 2003 reflect the impact of operations obtained in the April 1, 2003 acquisition of Allfirst Financial Inc. ("Allfirst") and the related issuance by M&T of 26.7 million common shares on that date. Merger-related expenses in 2003 were $39 million, after applicable tax effect, or $.34 per diluted share. Such expenses represent costs for professional services, travel, and other expenses associated with the acquisition, the related integration of data processing and other operating systems and functions with those of M&T, and the commencement of M&T operations in market areas formerly served by Allfirst. There were no similar expenses in 2002.

GAAP-basis diluted earnings per share for the fourth quarter of 2003 rose 8% to $1.35 from $1.25 in the similar 2002 period. On the same basis, net income for the recently completed quarter totaled $167 million, 41% higher than $119 million in the final quarter of 2002. During the fourth quarter of 2003, M&T incurred merger-related expenses associated with the Allfirst acquisition totaling $2 million, after applicable tax effect, or $.01 per diluted share. M&T does not expect to incur any significant additional merger-related expenses relating to the Allfirst transaction. GAAP-basis net income for 2003's final quarter expressed as an annualized rate of return on average assets and average common stockholders' equity was 1.35% and 11.77%, respectively, compared with 1.42% and 15.00%, respectively, in the corresponding 2002 period.

Supplemental Reporting of Non-GAAP Results of Operations. Since 1998, M&T has consistently provided supplemental reporting of its results on a "net operating" or "tangible" basis, from which M&T excludes the after-tax effect of amortization of core deposit and other intangible assets (and the related goodwill, core deposit intangible and other intangible asset balances, net of applicable deferred tax amounts) and expenses associated with merging acquired operations into M&T, since such expenses are considered by management to be "nonoperating" in nature. Although "net operating income" as defined by M&T is not a GAAP measure, M&T's management believes that this information helps investors understand the effect of acquisition activity in reported results. Amortization of core deposit and other intangible assets, after tax effect, totaled $13 million ($.11 per diluted share) in the fourth quarter of 2003, compared with $7 million ($.07 per diluted share) in the year-earlier quarter. Similar amortization charges, after tax effect, for the years ended December 31, 2003 and 2002 were $48 million ($.41 per diluted share) and $32 million ($.34 per diluted share), respectively.

Diluted net operating earnings per share, which exclude the impact of amortization of core deposit and other intangible assets and the previously noted merger-related expenses, were $5.70 for 2003, up 11% from $5.12 in 2002. Net operating income for 2003 was $661 million, 35% above $489 million for 2002. Expressed as a rate of return on average tangible assets and average tangible stockholders' equity, net operating income was 1.55% and 28.49%, respectively, in 2003, compared with 1.59% and 26.71% in 2002.

For the final quarter of 2003, diluted net operating earnings per share were $1.47, up 11% from $1.32 in the comparable 2002 period. Net operating income for the fourth quarter of 2003 rose to $182 million, 44% higher than $126 million in the corresponding 2002 period. For the three-month period ended December 31, 2003, net operating income expressed as an annualized rate of return on average tangible assets and average tangible equity was 1.57% and 28.33%, respectively, compared with 1.56% and 25.54% in the year-earlier period.

Robert G. Wilmers, M&T's Chairman, President and Chief Executive Officer, commented, "The planning for and execution of the Allfirst merger was clearly M&T's most significant event in 2003. While the ultimate success of this merger will be measured over several years, we are very pleased with the results experienced to date, both financially and in the integration of Allfirst's operations with those of M&T."

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

                                       Three months ended     Year ended
                                          December 31         December 31
                                        2003     2002       2003     2002
                                        ----     ----       ----     ----
                                       (in thousands, except per share)

    Diluted earnings per share      $   1.35     1.25       4.95     4.78
    Amortization of core deposit
     and other intangible assets(1)      .11      .07        .41      .34
    Merger-related expenses(1)           .01        -        .34        -
                                        ----     ----       ----     ----
    Diluted net operating earnings
     per share                      $   1.47     1.32       5.70     5.12
                                        ====     ====       ====     ====

    Net income                      $166,901  118,551    573,942  456,752
    Amortization of core deposit
     and other intangible assets(1)   13,059    7,209     47,826   32,491
    Merger-related expenses(1)         1,634        -     39,163        -
                                    --------  -------    -------  -------
    Net operating income            $181,594  125,760    660,931  489,243
                                    ========  =======    =======  =======

    (1) After any related tax effect

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

                                  Three months ended      Year ended
                                      December 31         December 31
                                      2003     2002       2003     2002
                                      ----     ----       ----     ----
                                                (in millions)

    Average assets                  $49,123   33,174     45,349   31,935
    Goodwill                         (2,904)  (1,098)    (2,456)  (1,098)
    Core deposit and other
      intangible assets                (251)    (124)      (233)    (143)
    Deferred taxes                        -       40          -       46
                                    -------   ------     ------   ------
    Average tangible assets         $45,968   31,992     42,660   30,740
                                    =======   ======     ======   ======

    Average equity                  $ 5,625    3,135      4,941    3,026
    Goodwill                         (2,904)  (1,098)    (2,456)  (1,098)
    Core deposit and other
      intangible assets                (251)    (124)      (233)    (143)
    Deferred taxes                       73       40         68       46
                                    -------    -----      -----    -----
    Average tangible equity         $ 2,543    1,953      2,320    1,831
                                    =======    =====      =====    =====

Accounting for Stock-Based Compensation. Effective January 1, 2003, M&T began expensing stock-based compensation in accordance with the fair value method of accounting described in Statement of Financial Accounting Standards ("SFAS") No. 123, "Accounting for Stock-Based Compensation," as amended. As a result, salaries and employee benefits expense in 2003 included $43 million of stock-based compensation, including $12 million in the recent quarter. After tax effect, stock-based compensation lowered 2003's net income by $32 million ($.27 per diluted share). Net income for the fourth quarter of 2003 was lowered by $8 million ($.07 per diluted share) as a result of stock-based compensation. Using the retroactive restatement method described in SFAS No. 148, which amended SFAS No. 123, salaries and employee benefits expense for 2002 was restated to include $41 million of stock-based compensation, resulting in a reduction of previously reported net income of $28 million, or $.29 per diluted share. Stock-based compensation expense reflected in M&T's results of operations for the fourth quarter of 2002 was $10 million (pre- tax), or $7 million and $.08 per diluted share after applicable income tax effect. Stock-based compensation expenses are reflected in both the GAAP and supplemental non-GAAP results of operations discussed herein.

Taxable-equivalent Net Interest Income. Growth in average loans outstanding resulted in a rise in taxable-equivalent net interest income of 28% to $1.62 billion in 2003 from $1.26 billion in 2002. Including the impact of the $10.3 billion of loans obtained in the April 1, 2003 acquisition of Allfirst, average loans outstanding increased 33% to $34.0 billion in 2003 from $25.5 billion in 2002. Net interest margin, or taxable-equivalent net interest income expressed as a percentage of average earning assets, declined to 4.09% in 2003 from 4.36% in the year-earlier period. The decrease in net interest margin was largely the result of the yields on earning assets and rates paid on interest-bearing liabilities obtained in the Allfirst acquisition.

During the fourth quarter of 2003, taxable-equivalent net interest income was $425 million, average loans outstanding totaled $36.4 billion and the annualized net interest margin was 3.96%. In 2002's final quarter, which did not include any Allfirst-related amounts, taxable-equivalent net interest income was $325 million, average loans outstanding were $25.9 billion, and the net interest margin was 4.28%. Average loan balances in 2003 and 2002 reflect fourth quarter transactions in each year in which M&T converted residential real estate loans of $1.3 billion and $1.1 billion, respectively, into mortgage-backed securities.

Provision for Credit Losses/Asset Quality. The provision for credit losses was $131 million in 2003, up from $122 million in 2002. Net charge- offs of loans during the recent year totaled $97 million, or .28% of average loans outstanding, compared with $108 million or .42% of average loans in 2002. The provision for credit losses was $28 million and $33 million during the final quarter of 2003 and 2002, respectively. Net charge-offs were $32 million in the fourth quarter of 2003, or an annualized .35% of average loans outstanding, compared with $31 million or .48% during 2002's final quarter. Net charge-offs of loans acquired from Allfirst during 2003 were not significant.

Loans classified as nonperforming totaled $240 million, or .67% of total loans at December 31, 2003, compared with $215 million or .84% a year earlier. Loans past due 90 days or more and accruing interest were $155 million at the recent year-end, little changed from $154 million a year earlier. Included in the past due but accruing amounts were loans guaranteed by government-related entities of $125 million and $129 million at December 31, 2003 and 2002, respectively. Nonperforming loans and loans past due 90 days or more and accruing interest at December 31, 2003 included loans obtained in the Allfirst acquisition of $67 million and $17 million, respectively. Assets taken in foreclosure of defaulted loans were $20 million at December 31, 2003, compared with $17 million at December 31, 2002.

Allowance for Credit Losses. The allowance for credit losses totaled $614 million, or 1.72% of total loans, at December 31, 2003, compared with $436 million, or 1.70%, a year earlier. On the April 1, 2003 acquisition date, Allfirst had an allowance for credit losses of $146 million, or 1.43% of Allfirst's loans then outstanding. Immediately following the April 1 merger, the combined balance sheet of M&T and Allfirst included an allowance for credit losses of $591 million that was equal to 1.62% of the $36.5 billion of then outstanding loans. The ratio of M&T's allowance for credit losses to nonperforming loans was 256% and 203% at December 31, 2003 and 2002, respectively.

Noninterest Income and Expense. Noninterest income in 2003 grew to $831 million, 62% higher than $512 million in 2002. Approximately $279 million of the increase was attributable to revenues related to operations in market areas associated with the former Allfirst franchise. Higher mortgage banking revenues and service charges on deposit accounts also contributed to the improvement. As a result of Allfirst-related revenues, noninterest income of $234 million in the fourth quarter of 2003 was up 69% from $138 million in the corresponding quarter of 2002.

Noninterest expense in 2003 totaled $1.45 billion, 51% higher than $962 million in 2002. Included in such amounts are expenses considered to be "nonoperating" in nature, consisting of the previously noted amortization of core deposit and other intangible assets of $78 million in 2003 and $51 million in 2002, and merger-related expenses of $60 million in 2003. There were no merger-related expenses in 2002. Exclusive of these nonoperating expenses, noninterest operating expenses were $1.31 billion in 2003, compared with $910 million in 2002. The increase in operating expenses was largely related to operations formerly associated with Allfirst. Partially offsetting these higher expenses were lower charges for impairment of capitalized residential mortgage servicing rights. Such charges totaled $2 million in 2003 and $32 million in 2002. The impairment charges resulted from changes in the estimated fair value of capitalized mortgage servicing rights that reflect the impact of changing interest rates on the expected rate of residential mortgage loan prepayments. Capitalized residential mortgage servicing rights, net of an impairment valuation allowance, are included in "other assets" in M&T's consolidated balance sheet and totaled $129 million and $103 million at December 31, 2003 and 2002, respectively. Residential mortgage loans serviced for others totaled approximately $13 billion at December 31, 2003 and 2002.

Noninterest expense in the fourth quarter of 2003 totaled $378 million, compared with $251 million in the year-earlier quarter. Included in such amounts were amortization of core deposit and other intangible assets of $21 million in 2003 and $12 million in 2002, and merger-related expenses of $3 million in 2003. Exclusive of these nonoperating expenses, noninterest operating expenses were $354 million in the recently completely quarter, compared with $239 million in the final quarter of 2002. The increase in operating expenses was largely related to operations formerly related to Allfirst. Changes in the estimated fair value of capitalized mortgage servicing rights also affected M&T's expenses in the fourth quarters of 2003 and 2002. Those expenses in the fourth quarter of 2003 reflect a $4 million reduction in total expenses resulting from a partial reversal of the valuation allowance for possible impairment of capitalized residential mortgage servicing rights, while a $13 million increase in the valuation allowance in 2002's fourth quarter added to total expenses.

The efficiency ratio, or noninterest operating expenses divided by the sum of taxable-equivalent net interest income and noninterest income (exclusive of gains and losses from sales of bank investment securities), measures the relationship of operating expenses to revenues. M&T's efficiency ratio was 53.6% in 2003, compared with 51.3% in 2002. During 2003's fourth quarter, M&T's efficiency ratio was 53.9%, compared with 51.7% in the year-earlier quarter. The higher ratios in 2003 reflect the impact of the acquired Allfirst operations that are now a part of M&T.

Balance Sheet. M&T's total assets rose 50% to $49.8 billion at December 31, 2003 from $33.2 billion a year earlier. Loans and leases, net of unearned discount, were $35.8 billion at the 2003 year-end, up 39% from $25.7 billion at December 31, 2002. Deposits increased to $33.1 billion at December 31, 2003 from $21.7 billion at the end of 2002. Total assets, loans and deposits obtained in the Allfirst transaction were $16 billion, $10 billion and $11 billion, respectively. Total stockholders' equity was $5.7 billion at December 31, 2003, representing 11.47% of total assets, compared with $3.2 billion or 9.66% a year earlier. Common stockholders' equity per share was $47.55 and $34.82 at December 31, 2003 and 2002, respectively. Tangible equity per common share was $21.97 at December 31, 2003, compared with $22.04 at December 31, 2002. In the calculation of tangible equity per common share, stockholders' equity is reduced by the carrying values of goodwill and core deposit and other intangible assets, net of applicable deferred tax balances, which aggregated $3.1 billion and $1.2 billion at December 31, 2003 and 2002, respectively.

Looking forward to 2004, Michael P. Pinto, M&T's Executive Vice President and Chief Financial Officer, noted, "We expect that the economy and the overall business environment in 2004 will present many challenges for regional banks and other financial institutions. M&T will, of course, not be immune to these challenges. Subject to the impact of actual events and circumstances that may occur throughout this year, our present estimate of GAAP-basis diluted earnings per share for 2004 is in the range of $5.90 to $6.10."

Conference Call. Investors will have an opportunity to listen to M&T's conference call to discuss fourth quarter and full year financial results at 10:00 a.m. Eastern Time today, January 12, 2004. Those wishing to participate in the call may dial 877-780-2276. International participants, using any applicable international calling codes, may dial 973-582-2700. The conference call will be webcast live on M&T's website at http://ir.mandtbank.com/conference.cfm. A replay of the call will be available until January 13, 2004 by calling 877-519-4471, code 4399838 and 973-341-3080 for international participants. The event will also be archived and available by 1:00 p.m. today on M&T's website at http://ir.mandtbank.com/conference.cfm.

Forward-Looking Statements. This news release contains forward-looking statements that are based on current expectations, estimates and projections about M&T's business, management's beliefs and assumptions made by management. These statements are not guarantees of future performance and involve certain risks, uncertainties and assumptions ("Future Factors") which are difficult to predict. Therefore, actual outcomes and results may differ materially from what is expressed or forecasted in such forward-looking statements.

Future Factors include changes in interest rates, spreads on earning assets and interest-bearing liabilities, and interest rate sensitivity; credit losses; sources of liquidity; common shares outstanding; common stock price volatility; fair value of and number of stock options to be issued in future periods; legislation affecting the financial services industry as a whole, and M&T and its subsidiaries individually or collectively; regulatory supervision and oversight, including required capital levels; increasing price and product/service competition by competitors, including new entrants; rapid technological developments and changes; the ability to continue to introduce competitive new products and services on a timely, cost-effective basis; the mix of products/services; containing costs and expenses; governmental and public policy changes, including environmental regulations; protection and validity of intellectual property rights; reliance on large customers; technological, implementation and cost/financial risks in large, multi-year contracts; the outcome of pending and future litigation and governmental proceedings; continued availability of financing; financial resources in the amounts, at the times and on the terms required to support M&T and its subsidiaries' future businesses; and material differences in the actual financial results of merger and acquisition activities compared with M&T's expectations, including the full realization of anticipated cost savings and revenue enhancements.

These are representative of the Future Factors that could affect the outcome of the forward-looking statements. In addition, such statements could be affected by general industry and market conditions and growth rates, general economic and political conditions, including interest rate and currency exchange rate fluctuations, and other Future Factors.

    CONTACT:  Michael S. Piemonte
              (716) 842-5138


    M&T BANK CORPORATION
    Financial Highlights
                            Three months ended           Year ended
    Amounts in thousands,      December 31               December 31
                             ---------------          -----------------
     except per share         2003     2002  Change    2003       2002  Change
                             ------   ------ ------   ------     ------ ------

    Performance

    Net income             $166,901   118,551   41%   $573,942   456,752   26%

    Per common share:
      Basic earnings          $1.39      1.29    8%      $5.08      4.94    3%
      Diluted earnings         1.35      1.25    8        4.95      4.78    4
      Cash dividends          $ .30       .30    -       $1.20      1.05   14

    Common shares
     outstanding:
      Average - diluted (1) 123,328    94,950   30%    115,932    95,522   21%
      Period end (2)        120,231    92,155   30     120,231    92,155   30

    Return on (annualized):
      Average total assets     1.35%     1.42%            1.27%     1.43%
      Average common
       stockholders' equity   11.77%    15.00%           11.62%    15.09%

    Taxable-equivalent net
     interest income       $425,500   325,157   31% $1,615,068 1,261,634   28%

    Yield on average
     earning assets            5.16%     6.08%            5.42%     6.42%
    Cost of interest-bearing
     liabilities               1.48%     2.09%            1.61%     2.39%
    Net interest spread        3.68%     3.99%            3.81%     4.03%
    Contribution of
     interest-free funds        .28%      .29%             .28%      .33%
    Net interest margin        3.96%     4.28%            4.09%     4.36%

    Net charge-offs to
     average total
      net loans (annualized)    .35%      .48%             .28%      .42%

    Net operating results (3)

    Net operating income   $181,594   125,760   44%   $660,931   489,243   35%
    Diluted net operating
     earnings per common
     share                     1.47      1.32   11        5.70      5.12   11
    Return on (annualized):
      Average tangible
       assets                  1.57%     1.56%            1.55%     1.59%
      Average tangible
       common equity          28.33%    25.54%           28.49%    26.71%
    Efficiency ratio          53.93%    51.65%           53.59%    51.30%



                              At December 31   Change
                             ----------------  ------
    Loan quality               2003     2002
                             -------  -------

    Nonaccrual loans       $232,983   207,038   13%
    Renegotiated loans        7,309     8,252  -11
                           --------   -------
      Total nonperforming
       loans               $240,292   215,290   12%
                           ========   =======

    Accruing loans past
     due 90 days or more   $154,759   153,803    1%

    Nonperforming loans to
     total net loans            .67%      .84%
    Allowance for credit
     losses to total net
     loans                     1.72%     1.70%

     (1)  Includes common stock equivalents.
     (2)  Includes common stock issuable under deferred compensation plans.
     (3)  Excludes merger-related expenses and amortization and balances
          related to goodwill and core deposit and other intangible assets
          which, except in the calculation of the efficiency ratio, are net of
          applicable income tax effects. A reconciliation of net income and
          net operating income appears on page 4.


    M&T BANK CORPORATION
    Condensed Consolidated Statement of Income

                         Three months ended            Year ended
                            December 31                December 31
                         ------------------            -----------
    Dollars in thousands   2003     2002   Change    2003       2002    Change
                           ----     ----   ------    ----       ----    ------
    Interest income      $550,473  458,216    20% $2,126,565  1,842,099    15%
    Interest expense      129,173  136,358    -5     527,810    594,514   -11
                          -------  -------         ---------  ---------
    Net interest income   421,300  321,858    31   1,598,755  1,247,585    28

    Provision for credit
     losses                28,000   33,000   -15     131,000    122,000     7
                          -------  -------         ---------  ---------
    Net interest income
     after provision for
     credit losses        393,300  288,858    36   1,467,755  1,125,585    30

    Other income
      Mortgage banking
       revenues            31,944   34,879    -8     149,105    116,408    28
      Service charges
       on deposit
       accounts            89,591   44,123   103     309,749    167,531    85
      Trust income         34,467   14,475   138     114,620     60,030    91
      Brokerage
       services income     13,455    9,209    46      51,184     43,261    18
      Trading account
       and foreign
       exchange gains       4,993    1,144   336      15,989      2,860   459
      Gain (loss) on
       sales of bank
       investment
       securities           1,946       51     -       2,487       (608)    -
      Other revenues
       from operations     57,361   34,297    67     187,961    122,449    54
                          -------  -------         ---------  ---------
         Total other
          income          233,757  138,178    69     831,095    511,931    62

    Other expense
      Salaries and
       employee
       benefits           196,651  124,447    58     740,324    496,990    49
      Equipment and net
       occupancy           47,126   26,818    76     170,623    107,822    58
      Printing, postage
       and supplies         9,954    6,486    53      36,985     25,378    46
      Amortization of
       core deposit and
       other intangible
       assets              21,345   11,788    81      78,152     51,484    52
      Other costs of
       operations         103,279   81,550    27     422,096    279,937    51
                          -------  -------         ---------  ---------
           Total other
            expense       378,355  251,089    51   1,448,180    961,611    51

    Income before income
     taxes                248,702  175,947    41     850,670    675,905    26

    Applicable income
     taxes                 81,801   57,396    43     276,728    219,153    26
                          -------  -------         ---------  ---------

    Net income           $166,901  118,551    41% $  573,942    456,752    26%
                          =======  =======         =========  =========


    Summary of merger-
     related expenses
     included above:
      Salaries and
       employee
       benefits            $  426     -              $ 8,542      -
      Equipment and net
       occupancy              472     -                2,126      -
      Printing, postage
       and supplies           241     -                3,216      -
      Other costs of
       operations           1,394     -               46,503      -
                           ------  -------         ---------  ----------
        Total
         merger-
         related
         expenses          $2,533     -              $60,387      -
                           ======  =======         =========  ==========


    M&T BANK CORPORATION
    Condensed Consolidated Balance Sheet

                                                   December 31
                                             -----------------------
    Dollars in thousands                       2003           2002     Change
                                             ---------      --------  --------

    ASSETS

    Cash and due from banks                $ 1,877,494       963,772      95%

    Money-market assets                        250,315       379,843     -34

    Investment securities                    7,259,150     3,955,150      84

    Loans and leases, net of unearned
     discount                               35,772,435    25,727,784      39
      Less: allowance for credit losses        614,058       436,472      41
                                            ----------    ----------

      Net loans and leases                  35,158,377    25,291,312      39

    Goodwill                                 2,904,081     1,097,553     165

    Core deposit and other intangible
     assets                                    240,830       118,790     103

    Other assets                             2,135,834     1,394,761      53
                                            ----------     ---------

      Total assets                         $49,826,081    33,201,181      50%
                                           ===========    ==========

    LIABILITIES AND STOCKHOLDERS' EQUITY

    Noninterest-bearing deposits at U.S.
     offices                               $ 8,411,296     4,072,085     107%

    Other deposits at U.S. offices          22,494,197    16,432,122      37

    Deposits at foreign office               2,209,451     1,160,716      90
                                            ----------    ----------
      Total deposits                        33,114,944    21,664,923      53

    Short-term borrowings                    4,442,246     3,429,414      30

    Accrued interest and other
     liabilities                             1,016,256       400,991     153

    Long-term borrowings                     5,535,425     4,497,374      23
                                            ----------    ----------

      Total liabilities                     44,108,871    29,992,702      47

    Stockholders' equity (1)                 5,717,210     3,208,479      78
                                            ----------    ----------

      Total liabilities and stockholders'
       equity                              $49,826,081    33,201,181      50%
                                            ==========    ==========

    (1)  Reflects accumulated other comprehensive income, net of applicable
         income taxes, of $25.7 million at December 31, 2003 and $54.8 million
         at December 31, 2002.


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

                                            Three months ended
                                                December 31
                                        ---------------------------
    Dollars in millions                     2003          2002
                                        -------------  ------------ Change in
                                         Balance Rate  Balance Rate  balance
                                        -------- ----  ------- ----  -------

    ASSETS

    Money-market assets                  $    99  1.00%    509  1.47%  -81%

    Investment securities                  6,212  3.98   3,745  5.23    66

    Loans and leases, net of unearned
     discount
      Commercial, financial, etc           9,202  4.00   5,273  4.83    75
      Real estate - commercial            12,344  5.86   9,650  6.76    28
      Real estate - consumer               3,758  6.06   3,638  6.70     3
      Consumer                            11,057  5.79   7,303  6.63    51
                                          ------         -----
         Total loans and leases, net      36,361  5.37  25,864  6.29    41
                                          ------        ------

      Total earning assets                42,672  5.16  30,118  6.08    42

    Goodwill                               2,904         1,098         165

    Core deposit and other intangible
     assets                                  251           124         101

    Other assets                           3,296         1,834          80
                                         --------      --------

      Total assets                       $49,123        33,174          48%
                                         ========      ========

    LIABILITIES AND STOCKHOLDERS' EQUITY

    Interest-bearing deposits
      NOW accounts                       $ 1,160   .33     794   .45    46%
      Savings deposits                    14,674   .70   9,355  1.08    57
      Time deposits                        6,440  2.29   6,673  2.75    -3
      Deposits at foreign office           2,378   .96     934  1.43   154
                                          ------        ------
         Total interest-bearing deposits  24,652  1.12  17,756  1.70    39
                                          ------        ------

    Short-term borrowings                  4,162  1.02   3,651  1.50    14
    Long-term borrowings                   5,922  3.27   4,486  4.11    32
                                          ------        ------

    Total interest-bearing liabilities    34,736  1.48  25,893  2.09    34

    Noninterest-bearing deposits           7,705         3,752         105

    Other liabilities.                     1,057           394         168
                                          ------        ------

      Total liabilities                   43,498        30,039          45

    Stockholders' equity                   5,625         3,135          79
                                          ------        ------

      Total liabilities and stockholders'
       equity                            $49,123        33,174          48%
                                         ========      ========

    Net interest spread                           3.68          3.99
    Contribution of interest-free funds            .28           .29
    Net interest margin                           3.96%         4.28%


                                                Year ended
                                                December 31
                                          ---------------------
    Dollars in millions                     2003          2002
                                          ------------  ------------ Change in
                                          Balance Rate  Balance Rate  balance
                                          ------- ----  ------- ----  -------
    ASSETS

    Money-market assets                  $   216  1.24%    291  1.64%  -26%

    Investment securities                  5,344  4.40   3,123  5.63    71

    Loans and leases, net of unearned
     discount
      Commercial, financial, etc           8,523  4.21   5,146  5.09    66
      Real estate - commercial            11,573  6.10   9,498  6.96    22
      Real estate - consumer               3,777  6.15   4,087  6.98    -8
      Consumer                            10,098  6.02   6,776  6.89    49
                                          ------        ------
         Total loans and leases, net      33,971  5.61  25,507  6.57    33
                                          ------        ------

      Total earning assets                39,531  5.42  28,921  6.42    37

    Goodwill                               2,456         1,098         124

    Core deposit and other intangible
     assets                                  233           143          62

    Other assets                           3,129         1,773          77
                                         -------        ------

      Total assets                       $45,349        31,935          42%
                                         =======        ======


    LIABILITIES AND STOCKHOLDERS' EQUITY

    Interest-bearing deposits
      NOW accounts                       $ 1,021   .35     761   .51    34%
      Savings deposits                    13,278   .77   8,899  1.21    49
      Time deposits                        6,638  2.41   7,398  3.20   -10
      Deposits at foreign office           1,445  1.04     569  1.49   154
                                          ------        ------
         Total interest-bearing deposits  22,382  1.25  17,627  2.02    27
                                          ------        ------

    Short-term borrowings                  4,331  1.13   3,125  1.69    39
    Long-term borrowings                   6,018  3.29   4,162  4.45    45
                                          ------        ------
    Total interest-bearing liabilities    32,731  1.61  24,914  2.39    31

    Noninterest-bearing deposits           6,801         3,618          88
    Other liabilities                        876           377         132
                                          ------        ------

      Total liabilities                   40,408        28,909          40

    Stockholders' equity                   4,941         3,026          63
                                         -------        ------

      Total liabilities and stockholders'
       equity                            $45,349        31,935          42%
                                         =======        ======

    Net interest spread                           3.81          4.03
    Contribution of interest-free funds            .28           .33
    Net interest margin                           4.09%         4.36%

 

Michael S. Piemonte of M&T Bank Corporation, +1-716-842-5138
http://www..com

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