This summary highlights selected information from this proxy statement/prospectus. It may not contain all the information that is important to you. We urge you to read carefully this entire document and the other documents we refer you to for a more complete understanding of the merger between M&T and Provident. In addition, we incorporate by reference into this proxy statement/prospectus important business and financial information about M&T and Provident. You may obtain the information incorporated by reference into this proxy statement/prospectus without charge by following the instructions in the section entitled “Where You Can Find More Information” on Page 66. Each item in this summary includes a page reference directing you to a more complete description of that item. Unless otherwise indicated in this proxy statement/prospectus or the context otherwise requires, all references in the proxy statement/prospectus to “M&T,” “we,” “our” or “us” refer to M&T Bank Corporation. All references to “the Company” or to “Provident” refer to Provident Bankshares Corporation.

 

The Parties to the Merger (Page 54)

 

M&T Bank Corporation

One M&T Plaza

Buffalo, New York 14203

(716) 842-5445

 

M&T is a New York business corporation which is registered as a bank holding company under the Bank Holding Company Act of 1956, as amended, and under Article III-A of the New York Banking Law. M&T was incorporated in November 1969. As of September 30, 2008, M&T and its subsidiaries had consolidated total assets of $65.2 billion, deposits of $42.5 billion and stockholders’ equity of $6.4 billion. M&T had 12,124 full-time and 1,405 part-time employees as of September 30, 2008.

 

First Empire State Holding Company

One M&T Plaza

Buffalo, New York 14203

(716) 842-5445

 

First Empire State Holding Company, which we refer to herein as Merger Sub, is a Maryland corporation and a newly formed wholly owned subsidiary of M&T. Merger Sub was formed in connection with and for the purposes of the merger by M&T.

 

Provident Bankshares Corporation

114 East Lexington Street

Baltimore, Maryland 21202

 

Provident is a Maryland corporation which is registered as a bank holding company under the Bank Holding Company Act, as amended, and parent of Provident Bank of Maryland, a Maryland chartered stock commercial bank. As of September 30, 2008, Provident and its subsidiaries had consolidated total assets of $6.4 billion, deposits of $4.6 billion and stockholders’ equity of $0.54 billion. Provident had 1,592 full-time and 177 part-time employees as of September 30, 2008.

 

We Propose a Merger of Provident and Merger Sub (Page 18)

 

We propose that Provident merge with and into Merger Sub, a wholly owned direct subsidiary of M&T, with Merger Sub as the surviving corporation. Upon completion of the merger, the separate existence of Provident will terminate and Provident common stock will no longer be publicly traded. Immediately following the merger, Provident’s wholly owned direct bank subsidiary, Provident Bank of Maryland, will merge with and into one of M&T’s wholly owned bank subsidiaries. We currently expect to complete these mergers in the second quarter of 2009.

In the Merger, Provident Common Stockholders Will Have a Right to Receive 0.171625 of a Share of M&T Common Stock per Share of Provident Common Stock (Page 18)

 

Under the terms of the merger agreement, Provident common stockholders will have the right to receive 0.171625 of a share of M&T common stock for each share of Provident common stock held immediately prior to the merger. M&T will not issue any fractional shares of M&T common stock in the merger. Provident common stockholders who would otherwise be entitled to a fractional share of M&T common stock will instead receive an amount in cash, rounded to the nearest cent and without interest, equal to the product of (i) the fraction of a share to which such holder would otherwise have been entitled and (ii) the average of the daily high and low per share sales prices of M&T common stock on the NYSE for the last trading day immediately prior to the closing date of the merger.

 

What Holders of Provident Stock Options and Restricted Stock Will Receive (Page 40)

 

Under the terms of the merger agreement, upon completion of the merger, the outstanding and unexercised stock options to acquire Provident common stock will fully vest and be converted into stock options to acquire M&T common stock adjusted to reflect the exchange ratio applicable to Provident common stock generally as follows:

 

 

With respect to Provident restricted shares, under the terms of the merger agreement, immediately prior to the completion of the merger, the outstanding Provident restricted shares will fully vest, and, upon completion of the merger, the outstanding Provident restricted shares will be converted into unrestricted shares of M&T common stock adjusted to reflect the exchange ratio applicable to Provident common stock generally as follows:

 

 

The Merger Is Intended to Be Tax-Free to Provident Common Stockholders as to the Shares of M&T Common Stock They Receive (Page 50)

 

The merger is intended to be treated as a reorganization within the meaning of Section 368(a) of the Internal Revenue Code of 1986, as amended, and it is a condition to the respective obligations of M&T and Provident to complete the merger that each of M&T and Provident receives a legal opinion to that effect. Accordingly, the merger generally will be tax-free to a Provident common stockholder for United States federal income tax purposes as to the shares of M&T common stock he or she receives in the merger, except for any gain or loss that may result from the receipt of cash instead of fractional shares of M&T common stock that the Provident common stockholder would otherwise be entitled to receive.

The United States federal income tax consequences described above may not apply to all holders of Provident common stock. Your tax consequences will depend on your individual situation. Accordingly, we strongly urge you to consult your tax advisor for a full understanding of the particular tax consequences of the merger to you.

 

Comparative Market Prices of Securities (Page 52)

 

M&T common stock and Provident common stock are listed on the New York Stock Exchange (the “NYSE”) and the NASDAQ Global Select Market (“NASDAQ”), respectively, under the symbols “MTB” and “PBKS,” respectively. The following table presents the closing prices of M&T common stock and Provident common stock on December 16, 2008, the trading day on which the exchange ratio of 0.171625 was calculated, and on [ • ], 2009, the last practicable date before our printing of this proxy statement/prospectus. The table also presents the implied value of the merger consideration proposed for each share of Provident common stock on those dates, as determined by multiplying the closing price of M&T common stock on those dates by the exchange ratio of 0.171625 provided for in the merger agreement, and assuming no adjustment.

 

 

For each share of your Provident common stock, you will receive 0.171625 of a share of M&T common stock. The market prices of both M&T common stock and Provident common stock will fluctuate prior to the merger. You should obtain current stock price quotations for M&T common stock and Provident common stock. You can get these quotations from a newspaper, on the Internet or by calling your broker.

 

Dividends; Coordination of Dividends (Page 36)

 

Before the merger, Provident will coordinate with M&T regarding dividend declarations and the related record dates and payment dates so that Provident common stockholders will not receive two or more dividends, or fail to receive at least one dividend, for any single quarter.

 

The payment, timing and amount of dividends by M&T or Provident on their common stock in the future, either before or after the merger is completed, are subject to the determination of the respective M&T and Provident Boards of Directors and depend on cash requirements, the financial condition and earnings of M&T and Provident, legal and regulatory considerations and other factors.

 

The Merger Will Be Accounted for as a “Business Combination” (Page 50)

 

The merger will be treated as a “business combination” using the acquisition method of accounting with M&T treated as the acquirer under generally accepted accounting principles, or GAAP.

 

Special Meeting of Provident Common Stockholders (Page 16)

 

Provident plans to hold its special meeting of common stockholders on [ • ], 2009, at [10:00] a.m., local time, at 250 Calvert Street, Baltimore, Maryland. At the special meeting you will be asked to approve the merger agreement and the transactions contemplated thereby, to adjourn or postpone the special meeting, if necessary, to solicit additional proxies in favor of the merger agreement, and to transact such other business as may properly come before the special meeting and any adjournments or postponements thereof.

 

You can vote at the Provident special meeting of common stockholders if you owned Provident common stock at the close of business on [ • ], 2009. As of that date, there were approximately [ • ] shares of Provident common stock outstanding and entitled to vote, approximately [ • ] of which, or [ • ]%, were owned beneficially or of record by directors and officers of Provident. You can cast one vote for each share of Provident common stock that you owned on that date.

Sandler O’Neill & Partners, L.P. Has Provided an Opinion to Provident’s Board of Directors Regarding the Merger Consideration (Page 23)

 

Sandler O’Neill & Partners, L.P. delivered its opinion to Provident’s Board of Directors that, as of December 18, 2008 and based upon and subject to the factors and assumptions set forth therein, the exchange ratio of 0.171625 of a share of M&T common stock for each share of Provident common stock held immediately prior to the merger is fair to the holders of Provident’s common stock from a financial point of view.

 

The full text of the written opinion of Sandler O’Neill, dated December 18, 2008, which sets forth assumptions made, procedures followed, matters considered and limitations on the review undertaken in connection with the opinion, is attached as Annex B. Sandler O’Neill provided its opinion for the information and assistance of Provident’s Board of Directors in connection with its consideration of the merger. The Sandler O’Neill opinion is not a recommendation as to how any holder of Provident’s common stock should vote with respect to the merger or any other matter. Pursuant to an engagement letter between Provident and Sandler O’Neill, Provident has agreed to pay Sandler O’Neill a transaction fee. For further information, please see the discussion under the caption “The Merger — Opinion of Provident’s Financial Advisor,” commencing on Page 23.

 

Provident’s Board of Directors Unanimously Recommends That Provident Stockholders Vote “FOR” Approval of the Merger Agreement and the Transactions Contemplated Thereby, Including the Merger (Page 21)

 

Provident’s Board of Directors has unanimously declared advisable the merger agreement and the transactions contemplated thereby, including the merger, and recommends that Provident common stockholders vote “FOR” approval of the merger agreement and the transactions contemplated thereby, including the merger, and “FOR” the approval of the adjournment or postponement of the special meeting, if necessary, to solicit additional proxies in favor of the merger agreement and the transactions contemplated thereby, including the merger.

 

For more information concerning the background of the merger, the recommendation of Provident’s Board of Directors and the reasons for the merger and the recommendation, please see the discussions under “The Merger — Background of the Merger” and “The Merger — Reasons for the Merger; Recommendation of Provident’s Board of Directors,” commencing on Page 18 and Page 21, respectively.

 

Provident’s Directors and Executive Officers May Have Interests in the Merger that Differ from Your Interests (Page 37)

 

In considering the information contained in this proxy statement/prospectus, you should be aware that Provident’s executive officers and directors have financial interests in the merger that may be different from, or in addition to, the interests of Provident stockholders. These additional interests of Provident’s executive officers and directors may create potential conflicts of interest and cause these persons to view the proposed transaction differently than you may view it as a stockholder.

 

Provident’s Board of Directors was aware of these interests and took them into account in its decision to declare advisable the merger agreement and the transactions contemplated thereby, including the merger. For information concerning these interests, please see the discussion under the caption “The Merger — Interests of Provident’s Directors and Executive Officers in the Merger,” commencing on Page 37.

 

Provident Stockholders Do Not Have Dissenters’ Rights in the Merger (Page 34)

 

Under Maryland law, stockholders of a Maryland corporation are not entitled to exercise dissenters’ rights with respect to a merger if shares of the corporation are listed on a national securities exchange on the record date for determining stockholders entitled to vote on the merger or if the stockholders are not entitled to vote on the merger. Because Provident common stock is quoted on NASDAQ (and is expected to continue to be so quoted through the record date for the special meeting and completion of the merger), Provident common stockholders do not have the right to exercise dissenters’ rights with respect to the merger. Because holders of Provident preferred stock are not entitled to vote on the merger, holders of Provident preferred stock do not have the right to exercise dissenters’ rights. If the merger agreement and the transactions contemplated thereby are approved and the merger is

completed, common stockholders who voted against the approval of the merger agreement and the transactions contemplated thereby will be treated the same as common stockholders who voted for the approval of the merger agreement and the transactions contemplated thereby and their shares will automatically be converted into the right to receive the merger consideration.

 

For further information as to the special meeting and the proxy solicited by Provident’s Board of Directors for purposes of the special meeting, please see the discussion under the caption “Questions and Answers about the Merger and Special Meeting” and “The Merger — Interests of Provident’s Directors and Executive Officers in the Merger,” commencing on Pages iii and 37, respectively.

 

M&T and Provident Have Agreed When and How Provident Can Consider Third-Party Acquisition Proposals (Page 45)

 

M&T and Provident have agreed that Provident will not solicit or encourage proposals from third parties regarding certain acquisitions of Provident, its shares, or its businesses, or engage in related discussions, negotiations or agreements. However, prior to approval of the merger agreement by Provident’s common stockholders, Provident may (1) provide information in response to a request from a person who makes an unsolicited acquisition proposal, subject to such person entering into a confidentiality agreement that is no less favorable to Provident than its confidentiality agreement with M&T; (2) engage or participate in discussions or negotiations with a person who makes such an unsolicited acquisition proposal; or (3) change its recommendation in favor of the merger (but not terminate the merger agreement), if (A) prior to taking any such action, Provident’s Board of Directors determines, in good faith, after consultation with its outside legal advisors, that such action is required in order for Provident’s Board of Directors to comply with its fiduciary duties, (B) prior to providing information or engaging or participating in discussions or negotiations, Provident’s Board of Directors determines, in good faith, after consultation with its financial advisors, that the acquisition proposal either constitutes a superior proposal compared to the transactions contemplated in the merger agreement or is reasonably likely to result in a superior proposal, and (C) prior to changing its recommendation, Provident’s Board of Directors determines, in good faith, after consultation with its financial advisors and outside legal advisors, that the acquisition proposal is a superior proposal, and Provident provides M&T notice that Provident’s Board of Directors intends to or may change its recommendation and provides an opportunity for M&T to make an improved proposal. Unless the merger agreement is terminated before the Provident special meeting, Provident is required to submit the merger agreement to its stockholders even if Provident’s Board of Directors has withdrawn, modified or qualified its recommendation, consistent with the terms of the merger agreement.

 

Merger Requires the Approval of Holders of Two-Thirds of Votes Entitled to Be Cast (Page 17)

 

The merger agreement and the transactions contemplated thereby must be approved by the holders of two-thirds of all the votes entitled to be cast on the matter by Provident stockholders. Holders of Provident preferred stock are not entitled to and are not being requested to vote at the Provident special meeting. Provident’s Board of Directors has fixed the close of business on [ • ], 2009 as the record date for determining the Provident common stockholders entitled to receive notice of and to vote at the special meeting. As of that date, Provident directors and executive officers and their affiliates beneficially owned approximately [ • ], or [ • ]%, of the shares entitled to vote at the Provident special meeting.

 

Provident is calling a special meeting of the common stockholders to consider and vote on the proposal to approve the merger agreement and the transactions contemplated thereby, including the merger.

 

Conditions That Must Be Satisfied or Waived for the Merger to Occur (Page 48)

 

Currently, we expect to complete the merger in the second quarter of 2009. As more fully described in this proxy statement/prospectus and in the merger agreement, the completion of the merger depends on a number of conditions being satisfied or, where legally permissible, waived. These conditions include, among others:

 

 

 

We cannot be certain when, or if, the conditions to the merger will be satisfied or waived, or that the merger will be completed.

 

Termination of the Merger Agreement (Page 49)

 

The merger agreement can be terminated at any time prior to completion by mutual consent, if authorized by each of the M&T and Provident Boards of Directors, or by either party in the following circumstances:

 

 

In addition, M&T may terminate the merger agreement if Provident’s Board of Directors (1) submits the merger agreement to stockholders without a recommendation for approval, otherwise withdraws or modifies (or publicly discloses its intention to withdraw or modify) its recommendation in any manner adverse to M&T or (2) approves, recommends, or otherwise declares advisable or proposes to or publicly discloses its intention to approve, recommend or declare advisable an acquisition proposal other than the merger. M&T may also terminate the merger agreement if Provident fails to substantially comply with its obligations with respect to acquisition proposals or obtaining the approval of Provident common stockholders.

 

Effect of Termination.  If the merger agreement is terminated, it will become void, and there will be no liability on the part of M&T or Provident, except that (1) both M&T and Provident will remain liable for any willful breach of the merger agreement and (2) designated provisions of the merger agreement, including the payment of fees and expenses and the confidential treatment of information, will survive the termination.

Termination Fee (Page 49)

 

Provident will pay M&T a $15.8 million termination fee if:

 

 

Regulatory Approvals Required for the Merger (Page 34)

 

Each of M&T and Provident has agreed to use its reasonable best efforts to obtain all regulatory approvals required to complete the transactions contemplated by the merger agreement, including the merger and the bank merger. These approvals include approval from the Board of Governors of the Federal Reserve System, the New York State Banking Department and the Commissioner of Financial Regulation in the Department of Labor, Licensing, and Regulation of the State of Maryland, among others. M&T and Provident have completed, or will complete, the filing of applications and notifications to obtain the required regulatory approvals. Although we do not know of any reason why we cannot obtain these regulatory approvals in a timely manner, we cannot be certain when or if we will obtain them.

 

The Rights of Provident Common Stockholders Following the Merger Will Be Different (Page 58)

 

The rights of M&T common stockholders are governed by New York law and by M&T’s restated certificate of incorporation, as amended, and amended and restated by-laws. The rights of Provident common stockholders are governed by Maryland law, and by Provident’s articles of incorporation, as amended, and amended and restated by-laws. Upon the completion of the merger, the rights of Provident common stockholders will be governed by New York law, M&T’s restated certificate of incorporation, as amended, and amended and restated by-laws.

 

The following table sets forth certain historical, pro forma and pro forma per equivalent share financial information for M&T and Provident. The historical information is based on historical financial information and related notes that M&T and Provident have presented in their prior filings with the SEC. You should read the financial information provided in the following table together with this historical financial information and related notes. The historical financial information is also incorporated into this proxy statement/prospectus by reference. See “Where You Can Find More Information” on Page 66 for a description of where you can find this historical information. See also “Recent Developments” on Page 55. The pro forma and pro forma per equivalent share information give effect to the merger as if the merger had been effective on the date presented in the case of the book value data, and as if the merger had been effective as of January 1, 2007 of the indicated period in the case of the earnings per share and the cash dividends data. The pro forma data in the table assumes that the merger is accounted for using the “business combination” acquisition method of accounting treating M&T as the acquirer and is derived from, and should be read in conjunction with, the historical consolidated financial statements and related notes of M&T and Provident, which are incorporated in this document by reference. The pro forma financial adjustments record the assets and liabilities of Provident at their estimated fair values and are subject to adjustment as additional information becomes available and as additional analyses are performed. The pro forma information, while helpful in illustrating the financial characteristics of the combined company under one set of assumptions, does not reflect the impact of factors that may result as a consequence of the merger or consider any potential impacts of current market conditions or the merger on revenues, expense efficiencies, asset dispositions, and share repurchases, among other factors, nor the impact of possible business model changes. As a result, the pro forma results are not necessarily indicative of what would have occurred had the acquisition taken place on the assumed dates, nor do they represent an attempt to predict or suggest future results.

 

SELECTED CONSOLIDATED HISTORICAL FINANCIAL DATA OF M&T

 

The following table summarizes financial results achieved by M&T for the periods and at the dates indicated and should be read in conjunction with M&T’s consolidated financial statements and the notes to the consolidated financial statements contained in reports that M&T has previously filed with the SEC. Historical financial information for M&T can be found in its Quarterly Report on Form 10-Q for the quarter ended September 30, 2008 and its Annual Report on Form 10-K for the year ended December 31, 2007. See “Where You Can Find More Information” on Page 66 for instructions on how to obtain the information that has been incorporated by reference. See also “Recent Developments” on Page 55. Financial amounts as of and for the nine months ended September 30, 2008 and 2007 are unaudited (and are not necessarily indicative of the results of operations for the full year or any other interim period), but management of M&T believes that such amounts reflect all adjustments (consisting only of normal recurring adjustments) necessary for a fair presentation of its results of operations and financial position as of the dates and for the periods indicated. You should not assume the results of operations for past periods and for the nine months ended September 30, 2008 and 2007 indicate results for any future period.

 

SELECTED CONSOLIDATED HISTORICAL FINANCIAL DATA OF PROVIDENT

 

The following table summarizes financial results achieved by Provident for the periods and at the dates indicated and should be read in conjunction with Provident’s consolidated financial statements and the notes to the consolidated financial statements contained in reports that Provident has previously filed with the SEC. Historical financial information for Provident can be found in its Quarterly Report on Form 10-Q for the quarter ended September 30, 2008 and its Annual Report on Form 10-K for the year ended December 31, 2007. See “Where You Can Find More Information” on Page 66 for instructions on how to obtain the information that has been incorporated by reference. Financial amounts as of and for the nine months ended September 30, 2008 and 2007 are unaudited (and are not necessarily indicative of the results of operations for the full year or any other interim period), but management of Provident believes that such amounts reflect all adjustments (consisting only of normal recurring adjustments) necessary for a fair presentation of its results of operations and financial position as of the dates and for the periods indicated. You should not assume the results of operations for past periods and for the nine months ended September 30, 2008 and 2007 indicate results for any future period.