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<SEC-DOCUMENT>0000950133-00-004894.txt : 20001218
<SEC-HEADER>0000950133-00-004894.hdr.sgml : 20001218
ACCESSION NUMBER:		0000950133-00-004894
CONFORMED SUBMISSION TYPE:	8-K/A
PUBLIC DOCUMENT COUNT:		3
CONFORMED PERIOD OF REPORT:	20001006
ITEM INFORMATION:		
FILED AS OF DATE:		20001215

FILER:

	COMPANY DATA:	
		COMPANY CONFORMED NAME:			M&T BANK CORP
		CENTRAL INDEX KEY:			0000036270
		STANDARD INDUSTRIAL CLASSIFICATION:	STATE COMMERCIAL BANKS [6022]
		IRS NUMBER:				160968385
		STATE OF INCORPORATION:			NY
		FISCAL YEAR END:			1231

	FILING VALUES:
		FORM TYPE:		8-K/A
		SEC ACT:		
		SEC FILE NUMBER:	001-09861
		FILM NUMBER:		790325

	BUSINESS ADDRESS:	
		STREET 1:		C/O CORPORATE REPORTING
		STREET 2:		ONE M&T PLAZA 5TH FLOOR
		CITY:			BUFFALO
		STATE:			NY
		ZIP:			14203
		BUSINESS PHONE:		7168425445

	MAIL ADDRESS:	
		STREET 1:		C/O CORPORAE REPORTING
		STREET 2:		ONE M&T PLAZA 5TH FLR
		CITY:			BUFFALO
		STATE:			NY
		ZIP:			14203

	FORMER COMPANY:	
		FORMER CONFORMED NAME:	FIRST EMPIRE STATE CORP
		DATE OF NAME CHANGE:	19920703
</SEC-HEADER>
<DOCUMENT>
<TYPE>8-K/A
<SEQUENCE>1
<FILENAME>w43561e8-ka.txt
<DESCRIPTION>CURRENT REPORT
<TEXT>

<PAGE>   1
                                                                         DRAFT



                      SECURITIES AND EXCHANGE COMMISSION

                           Washington, D. C. 20549



                                  FORM 8-K/A



                                CURRENT REPORT



                     Pursuant to Section 13 or 15 (d) of
                     the Securities Exchange Act of 1934

Date of Report (Date of earliest event reported):             October 6, 2000



                             M&T BANK CORPORATION
            (Exact name of registrant as specified in its charter)



                                   New York
                (State or other jurisdiction of incorporation)

<TABLE>
<S>                                                 <C>
         001-9861                                                 16-0968385
(Commission File Number)                             (I.R.S. Employer Identification No.)

One M&T Plaza, Buffalo, New York                                    14203
  (Address of principal executive offices)                        (Zip Code)

Registrant's telephone number, including area code:             (716) 842-5445
</TABLE>


                               (NOT APPLICABLE)
        (Former name or former address, if changed since last report)


<PAGE>   2


      M&T Bank Corporation ("M&T") hereby amends Item 7 of its Current Report
on Form 8-K, dated October 6, 2000, filed on October 20, 2000 (the "Report"),
as set forth below. The purpose of that Report was to disclose, pursuant to
Item 2, M&T's acquisition of Keystone Financial, Inc. ("Keystone"). As
permitted by Sections (a)(4) and (b)(2) of Item 7, the Report omitted the pro
forma financial information required by Item 7(b). The purpose of this
amendment is to file such pro forma information.

      Item 7.  Financial Statements and Exhibits.

      (a)    Keystone's audited consolidated financial statements as of
December 31, 1999 and 1998 and for each of the years ended December 31, 1999,
1998 and 1997, included in Keystone's Annual Report on Form 10-K for the year
ended December 31, 1999, are hereby incorporated by reference, together with
the report of Ernst & Young LLP, independent auditors, on such financial
statements.*

      In addition, Keystone's unaudited consolidated financial statements as
of June 30, 2000 and 1999 and for the three months and six months ended June
30, 2000 and 1999, included in Keystone's Quarterly Report on Form 10-Q for
the quarterly period ended June 30, 2000, are hereby incorporated by
reference.*

      (b)    An unaudited Pro Forma Condensed Combined Balance Sheet of M&T as
of June 30, 2000 and unaudited Pro Forma Condensed Combined Statements of Income
of M&T for the six months ended June 30, 2000 and for the year ended December
31, 1999 are filed herewith as Exhibit 99.5. The unaudited Pro Forma Condensed
Combined Balance Sheet assumes that the merger of Keystone with and into Olympia
Financial Corp., a wholly owned subsidiary of M&T (the "Merger") was consummated
on June 30, 2000. Certain amounts in Keystone's historical balance sheet as
shown have been reclassified to conform to M&T's presentation. The unaudited Pro
Forma Condensed Combined Statements of Income assume that the Merger was
consummated on January 1, 1999 and reflect the consolidation of the results of
operations of M&T and Keystone for the six months ended June 30, 2000 and for
the year ended December 31, 1999. The cash portion of the consideration for the
Merger is assumed to have been funded by the issuance of subordinated
debentures. As a result of the Merger, M&T expects to achieve substantial
benefits, primarily in the area of operating cost savings. Assuming that all
cost savings measures are implemented (which are expected to require a 12-month
phase-in period), M&T estimates annual pre-tax operating cost savings of
approximately $43 million. M&T's management estimates that savings achieved
during the first 12 months following the Merger would represent approximately
one-half of the fully phased-in savings. Management also estimates that
operating cost savings that may be realized during the first 12 months following
the Merger will be largely offset by various one-time expenses associated with
systems conversions and other costs of integrating and conforming the acquired
operations with M&T. The unaudited Pro Forma earnings do not reflect any direct
costs or potential savings which are expected to result from the Merger and are
not indicative of the results of future operations. No assurances can be given
with respect to the ultimate level of cost savings to be realized or one-time
expenses to be incurred.

- ----------------------
      *Previously filed with or incorporated by reference into the initial
filing of the Report on October 20, 2000


                                     -2-
<PAGE>   3


      The unaudited Pro Forma condensed financial information is not
necessarily indicative of the future financial position or future results of
operations of M&T or of the financial position or the results of operations of
M&T that would actually have occurred had the Merger been in effect as of the
date or for the period presented. In addition, this includes forward-looking
statements that are not guarantees of future performances and involve certain
risks, uncertainties and assumptions ("Future Factors"). Therefore, actual
outcomes and results may differ materially from what is expressed or
forecasted in such forward-looking statements. Future Factors include:
expected cost savings from the Merger that cannot be fully realized or that
cannot be realized within the expected time frame; revenues following the
Merger that are lower than expected; significant increases in competitive
pressure among depository institutions; greater than expected costs or
difficulties related to the integration of the business of M&T and Keystone;
general economic conditions, either nationally or in the markets in which M&T
will be doing business, that are less favorable than expected; and legislative
or regulatory requirements or changes that adversely affect the business in
which M&T is engaged. Future Factors also include changes in interest rates,
spreads on earning assets and interest-bearing liabilities, and interest rate
sensitivity; credit losses; sources of liquidity; legislation affecting the
financial services industry as a whole, and M&T individually; 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; and financial resources in
the amounts, at the times and on the terms required to support M&T's future
businesses. These are representative of the Future Factors that could affect
the outcome of the forward-looking statements. M&T's forward-looking
statements speak only as of the date on which such statements are made. By
making any forward-looking statements, M&T assumes no duty to update them to
reflect new, changing or unanticipated events or circumstances.

<TABLE>
<CAPTION>
               Exhibit No.
<S>           <C>          <C>
                      2     Agreement and Plan of Reorganization dated as of
                            May 16, 2000 by and among M&T, Olympia and
                            Keystone (including the Agreement and Plan of
                            Merger as Annex A thereto).  Incorporated by
                            reference to Exhibit No. 2 to M&T Current Report
                            on Form 8-K dated May 16, 2000 of M&T (File No.
                            001-9861).*

                      23    Consent of Ernst & Young LLP, independent auditors
                            to Keystone Financial, Inc.  Filed herewith.

                      99.1  Press Release, dated October 9, 2000, announcing
                            consummation of the Merger.  Filed herewith.*

                      99.2  Press Release, dated October 5, 2000, announcing
                            completion of offering of $500 million of 8%
                            Subordinated Notes due 2010 by M&T Bank. Filed
                            herewith.*

</TABLE>
                                     -3-
<PAGE>   4

<TABLE>
<S>                 <C>    <C>

                      99.3  Keystone's 1999 audited Financial Statements,
                            together with the Report of the Independent
                            Auditors thereon. Incorporated by reference to
                            Keystone's Annual Report on Form 10-K for the year
                            ended December 31, 1999 (File No. 000-11460).*

                      99.4  Keystone's June 30, 2000 unaudited financial
                            statements. Incorporated by reference to
                            Keystone's Quarterly Report on Form 10-Q for the
                            quarterly period ended June 30, 2000 (File No.
                            000-11460).*

                      99.5  Unaudited Pro Forma Condensed Combined Balance
                            Sheet of M&T as of June 30, 2000 and unaudited Pro
                            Forma Condensed Combined Statements of Income for
                            the six months ended June 30, 2000 and for the
                            year ended December 31, 1999. Filed herewith.
</TABLE>

- ------------------------
      *Previously filed with or incorporated by reference into the initial
filing of the Report on October 20, 2000.

SIGNATURES

      Pursuant to the requirements of the Securities Exchange Act of 1934, the
registrant has duly caused this report to be signed on its behalf by the
undersigned hereunto duly authorized.


                                       M&T BANK CORPORATION


Date:  December 15, 2000               By:  ______________________
                                               Michael P. Pinto
                                               Executive Vice President
                                                  and Chief Financial Officer
                                     -4-

<PAGE>   5






                                CURRENT REPORT

                      Pursuant to Section 13 or 15(d) of
                     the Securities Exchange Act of 1934


Report Dated October 6, 2000                 Commission File Number:  001-9861


                             M&T BANK CORPORATION
            (Exact name of registrant as specified in its charter)








                                   EXHIBITS


                                     -5-


<PAGE>   6
                                                                         DRAFT
                                                                         -----

EXHIBIT INDEX

<TABLE>
<CAPTION>
Exhibit No.
<S>         <C>
        2    Agreement and Plan of Reorganization dated as of May 16, 2000 by
             and among M&T, Olympia and Keystone (including the Agreement and
             Plan of Merger as Annex A thereto). Incorporated by reference to
             Exhibit No. 2 to M&T Current Report on Form 8-K dated May 16,
             2000 of M&T (File No. 001-9861).*

        23   Consent of Ernst & Young LLP, independent auditors to Keystone
             Financial, Inc.  Filed herewith.

        99.1 Press Release, dated October 9, 2000, announcing consummation of
             the Merger.  Filed herewith.*

        99.2 Press Release, dated October 5, 2000, announcing completion of
             offering of $500 million of 8% Subordinated Notes due 2010 by M&T
             Bank. Filed herewith.*

        99.3 Keystone's 1999 audited Financial Statements, together with the
             Report of the Independent Auditors thereon. Incorporated by
             reference to Keystone's Annual Report on Form 10-K for the year
             ended December 31, 1999 (File No. 000-11460).*

        99.4 Keystone's June 30, 2000 unaudited financial statements.
             Incorporated by reference to Keystone's Quarterly Report on Form
             10-Q for the quarterly period ended June 30, 2000 (File No.
             000-11460).*

        99.5 Unaudited Pro Forma Condensed Combined Balance Sheet of M&T as of
             June 30, 2000 and unaudited Pro Forma Condensed Combined
             Statement of Income for the six months ended June 30, 2000 and
             for the year ended December 31, 1999. Filed herewith.
</TABLE>
- ----------------------
        *Previously filed with or incorporated by reference into the initial
filing of Report on October 20, 2000





</TEXT>
</DOCUMENT>
<DOCUMENT>
<TYPE>EX-23
<SEQUENCE>2
<FILENAME>w43561ex23.txt
<DESCRIPTION>CONSENT OF ERNST & YOUNG LLP
<TEXT>

<PAGE>   1
                                                                     EXHIBIT 23



                         Consent of Independent Auditors


We consent to the reference to our firm under Item 7, Financial Statements and
Exhibits and to the use of our report dated January 28, 2000, with respect to
the consolidated financial statements of Keystone Financial, Inc. (KFI) and
subsidiaries incorporated by reference in its Annual Report (Form 10-K) for the
year ended December 31, 1999, incorporated by reference in this Form 8-K/A of
M&T Bank Corporation (M&T) regarding the business combination of KFI and M&T.



                                                           Ernst & Young


Pittsburgh, Pennsylvania
December 15, 2000

</TEXT>
</DOCUMENT>
<DOCUMENT>
<TYPE>EX-99.5
<SEQUENCE>3
<FILENAME>w43561ex99-5.txt
<DESCRIPTION>UNAUDITED PRO FORMA FINANCIAL INFORMATION
<TEXT>

<PAGE>   1
                                                                    Exhibit 99.5


                             M&T BANK CORPORATION

                  PRO FORMA CONDENSED COMBINED BALANCE SHEET

                            (DOLLARS IN THOUSANDS)
                                 (UNAUDITED)

       The following unaudited pro forma condensed combined balance sheet gives
effect to the acquisition by M&T Bank Corporation ("M&T") of Keystone Financial,
Inc. and subsidiaries ("Keystone") using the purchase method of accounting
assuming the acquisition was consummated on June 30, 2000. Keystone was acquired
by M&T on October 6, 2000.


<TABLE>
<CAPTION>

                                                                    June 30, 2000
                                                   ---------------------------------------------------------------------------------
                                                                                     Pro forma
                                                         M&T          Keystone      adjustments                       Pro forma
                                                   ------------------------------------------------                -----------------
<S>                                             <C>                     <C>             <C>                       <C>
       ASSETS
Cash and due from banks                           $         545,423        199,906                                $         745,329
Money-market assets                                         100,744         89,539                                          190,283
Investment securities                                     2,865,259      1,666,136        (12,389)     (2)                4,519,006
Loans and leases                                         17,110,535      4,809,658        (20,999)     (3)               21,899,194
       Unearned discount                                  (161,585)       (35,499)                                        (197,084)
       Allowance for credit losses                        (320,165)       (61,604)                                        (381,769)
                                                   ------------------------------------------------                -----------------
       Loans and leases, net                             16,628,785      4,712,555        (20,999)                       21,320,341
                                                   ------------------------------------------------                -----------------
Premises and equipment                                      161,367        116,924        (18,794)     (4)                  259,497
Goodwill and core deposit intangible                        624,648         52,109         568,890  (1)-(10)              1,245,647
Accrued interest and other assets                           819,874        201,764          19,138     (5)                1,040,776
                                                   ------------------------------------------------                -----------------
       Total assets                               $      21,746,100      7,038,933         535,846                $      29,320,879
                                                   ================================================                =================

       LIABILITIES AND STOCKHOLDERS' EQUITY
Interest-bearing deposits                         $      12,681,798      4,330,294           7,504     (6)        $      17,019,596
Short-term borrowings                                     2,604,919        431,199                                        3,036,118
Long-term borrowings                                      1,774,816        859,147         368,522   (1)(7)               3,002,485
                                                   ------------------------------------------------                -----------------
       Interest-bearing liabilities                      17,061,533      5,620,640         376,026                       23,058,199
                                                   ------------------------------------------------                -----------------
Non-interest bearing deposits                             2,541,690        708,849                                        3,250,539
Other liabilities                                           290,860        143,132          57,683     (8)                  491,675
                                                   ------------------------------------------------                -----------------
       Total liabilities                                 19,894,083      6,472,621         433,709                       26,800,413
                                                   ------------------------------------------------                -----------------
Common equity                                             1,852,017        566,312         102,137     (9)                2,520,466
                                                   ------------------------------------------------                -----------------
       Total stockholders' equity                         1,852,017        566,312         102,137                        2,520,466
                                                   ------------------------------------------------                -----------------
       Total liabilities and stockholders' equity $      21,746,100      7,038,933         535,846                $      29,320,879
                                                   ================================================                =================
</TABLE>





      See accompanying notes to pro forma condensed combined balance sheet.

<PAGE>   2
                              M&T BANK CORPORATION

                PRO FORMA CONDENSED COMBINED STATEMENT OF INCOME

                  (AMOUNTS IN THOUSANDS, EXCEPT PER SHARE DATA)
                                   (UNAUDITED)

          The following unaudited pro forma condensed combined statement of
income for the six-month period ended June 30, 2000 gives effect to M&T's
acquisition of Keystone using the purchase method of accounting assuming the
acquisition was consummated on January 1, 1999. Keystone was acquired by M&T on
October 6, 2000.

<TABLE>
<CAPTION>
                                                                          For the six months ended June 30, 2000
                                                               --------------------------------------------------------------------
                                                                                           Pro forma
                                                                  M&T        Keystone      adjustments                 Pro forma
                                                               ---------------------------------------                -------------
Interest income
<S>                                                          <C>                 <C>           <C>                 <C>
          Loans and leases, including fees                   $    721,237        200,181          813      (11)     $      922,231
          Money-market assets                                      13,202          3,296                                    16,498
          Investment securities
              Fully taxable                                        66,721         46,130        3,888      (12)            116,739
              Exempt from federal taxes                             5,158          6,762                                    11,920
                                                               ---------------------------------------                -------------
                   Total interest income                          806,318        256,369        4,701                    1,067,388
                                                               ---------------------------------------                -------------

Interest expense
          Deposits                                                270,382         94,918       (1,411)     (13)            363,889
          Short-term borrowings                                    81,985         10,108                                    92,093
          Long-term borrowings                                     60,070         26,123       15,873    (14)(15)          102,066
                                                               ---------------------------------------                -------------
                   Total interest expense                         412,437        131,149       14,462                      558,048
                                                               ---------------------------------------                -------------
Net interest income                                               393,881        125,220       (9,761)                     509,340
Provision for credit losses                                        15,000          8,425                                    23,425
                                                               ---------------------------------------                -------------
Net interest income after provision for credit losses             378,881        116,795       (9,761)                     485,915

Other income
          Mortgage banking revenues                                29,531          3,986                                    33,517
          Service charges on deposit accounts                      41,414          9,798                                    51,212
          Trust income                                             19,741         13,936                                    33,677
          Brokerage services income                                17,462          4,053                                    21,515
          Trading account and foreign exchange gains                  513              -                                       513
          Gain on sales of bank investment securities                  26            204                                       230
          Other revenues from operations                           36,693         17,606                                    54,299
                                                               --------------------------                             -------------
              Total other income                                  145,380         49,583                                   194,963
Other expense
          Salaries and employee benefits                          153,639         52,801                                   206,440
          Equipment and net occupancy                              35,702         21,043       (2,082)     (16)             54,663
          Printing, postage and supplies                            8,716          3,832                                    12,548
          Amortization of goodwill and core deposit
            intangible                                             28,510          2,102       23,198      (17)             53,810
          Other costs of operations                                79,740         30,925          525      (18)            111,190
                                                               ---------------------------------------                -------------
              Total other expense                                 306,307        110,703       21,641                      438,651
                                                               ---------------------------------------                -------------
Income before income taxes                                        217,954         55,675      (31,402)                     242,227
Income taxes                                                       78,181         15,626       (7,927)     (19)             85,880
                                                               ---------------------------------------                -------------
Net income                                                   $    139,773         40,049      (23,475)              $      156,347
                                                               =======================================                =============

Net income per common share (20)
          Basic                                              $       1.82           0.82                            $         1.69
          Diluted                                            $       1.77           0.82                            $         1.65

Average common shares outstanding (20)
          Basic                                                    76,872         48,862       15,900                       92,772
          Diluted                                                  79,049         48,930       15,945                       94,994

</TABLE>




  See accompanying notes to pro forma condensed combined statements of income.
<PAGE>   3
                              M&T BANK CORPORATION

                PRO FORMA CONDENSED COMBINED STATEMENT OF INCOME

                  (AMOUNTS IN THOUSANDS, EXCEPT PER SHARE DATA)
                                   (UNAUDITED)

      The following unaudited pro forma condensed combined statement of income
for the year ended December 31, 1999 gives effect to M&T's acquisition of
Keystone using the purchase method of accounting assuming the acquisition was
consummated on January 1, 1999. Keystone was acquired by M&T on October 6, 2000.

<TABLE>
<CAPTION>


                                                                                For the year ended December 31, 1999
                                                          --------------------------------------------------------------------------
                                                                                           Pro forma
                                                                  M&T        Keystone      adjustments                 Pro forma
                                                               ---------------------------------------               ---------------
<S>                                                     <C>                   <C>            <C>        <C>        <C>
Interest income
      Loans and leases, including fees                  $   1,323,262         379,538        3,286      (11)       $      1,706,086
      Money-market assets                                      27,731           5,031                                        32,762
      Investment securities
          Fully taxable                                       118,741          89,357        8,608      (12)                216,706
          Exempt from federal taxes                             8,897          12,105                                        21,002
                                                          -----------------------------------------                  ---------------
               Total interest income                        1,478,631         486,031       11,894                        1,976,556
                                                          -----------------------------------------                  ---------------

Interest expense
      Deposits                                                506,476         173,942       (5,710)     (13)                674,708
      Short-term borrowings                                   104,911          15,844                                       120,755
      Long-term borrowings                                    107,847          38,872       31,973    (14)(15)              178,692
                                                          -----------------------------------------                  ---------------
               Total interest expense                         719,234         228,658       26,263                          974,155
                                                          -----------------------------------------                  ---------------
Net interest income                                           759,397         257,373      (14,369)                       1,002,401
Provision for credit losses                                    44,500          23,376                                        67,876
                                                          -----------------------------------------                  ---------------
Net interest income after provision for
  credit losses                                               714,897         233,997      (14,369)                         934,525

Other income
      Mortgage banking revenues                                71,819          12,765                                        84,584
      Service charges on deposit accounts                      73,612          19,173                                        92,785
      Trust income                                             40,751          26,422                                        67,173
      Brokerage services income                                27,140           8,158                                        35,298
      Trading account and foreign exchange gains                  315               -                                           315
      Gain (loss) on sales of bank investment
        securities                                              1,575            (338)                                        1,237
      Other revenues from operations                           67,163          39,469                                       106,632
                                                          ----------------------------                               ---------------
          Total other income                                  282,375         105,649                                       388,024
Other expense
      Salaries and employee benefits                          284,822         106,850                                       391,672
      Equipment and net occupancy                              73,131          39,272       (4,165)     (16)                108,238
      Printing, postage and supplies                           17,510           8,079                                        25,589
      Amortization of goodwill and core deposit
        intangible                                             49,715           4,324       50,585      (17)                104,624
      School districts' settlement expense                          -          43,658                                        43,658
      Special charges                                               -          26,917                                        26,917
      Other costs of operations                               153,780          61,878        1,037      (18)                216,695
                                                          -----------------------------------------                  ---------------
          Total other expense                                 578,958         290,978       47,457                          917,393
                                                          -----------------------------------------                  ---------------
Income before income taxes                                    418,314          48,668      (61,826)                         405,156
Income taxes                                                  152,688          11,592      (15,507)     (19)                148,773
                                                          -----------------------------------------                  ---------------
Net income                                              $     265,626          37,076      (46,319)                $        256,383
                                                          =========================================                  ===============

Net income per common share (20)
      Basic                                             $        3.41            0.76                              $           2.73
      Diluted                                           $        3.28            0.75                              $           2.65

Average common shares outstanding (20)
      Basic                                                    78,003          48,856       15,900                           93,903
      Diluted                                                  80,905          49,186       15,997                           96,902

</TABLE>


  See accompanying notes to pro forma condensed combined statements of income.
<PAGE>   4
                               NOTES TO PRO FORMA
                  CONDENSED COMBINED BALANCE SHEET (UNAUDITED)

Adjustments used in the preparation of the unaudited pro forma condensed
combined balance sheet are as follows:

(1)     The unaudited pro forma condensed combined financial information
        assumes that the funding of the cash consideration of $374,371,000 is
        provided by issuance of subordinated notes payable.

(2)     Adjustment to record acquired investment securities at estimated market
        value.

(3)     Adjustment to record acquired loans at estimated market value.

(4)     Adjustment to record acquired premises and equipment at estimated market
        value. The adjustment includes writedowns associated with duplicate
        facilities, equipment and other fixed assets of Keystone.

(5)     Reflects adjustments to record net pension plan assets, mortgage
        servicing rights and other assets at estimated fair value.

(6)     Adjustment to record interest-bearing deposits of Keystone at estimated
        fair value.

(7)     Adjustment of $5,849,000 to record long-term borrowings of Keystone at
        estimated fair value.

(8)     Adjustments to record fees for investment bankers and other professional
        services associated with the merger, severance benefits associated with
        the elimination of employment positions at Keystone, the estimated net
        tax credits associated with adjustments to reflect the fair value of net
        assets acquired, and other miscellaneous adjustments.

(9)     Reflects issuance of 15,900,292 shares of M&T common stock with a value
        of $659,862,000, estimated fair value of Keystone stock options
        converted into M&T stock options of $8,587,000, and the elimination of
        Keystone's June 30, 2000 equity of $566,312,000.

(10)    Represents incremental core deposit intangible and goodwill.


<PAGE>   5



                               NOTES TO PRO FORMA
               CONDENSED COMBINED STATEMENTS OF INCOME (UNAUDITED)

Adjustments used in the preparation of the unaudited proforma condensed combined
statements of income are as follows:

<TABLE>
<CAPTION>

                                                                             Six months
                                                                                ended            Year ended
                                                                            June 30, 2000     December 31, 1999
                                                                            -------------     -----------------
                                                                                    (dollars in thousands)

<C>                                                                           <C>                    <C>
(11)    Net accretion of discounts related to loans and leases                  $    813               3,286
        using a level-yield method over the estimated remaining
        terms to maturity of the loans and leases.

(12)    Accretion of discount related to investment securities on a                3,888               8,608
        straight-line basis over the estimated weighted-average
        remaining life of the securities.

(13)    Amortization of the mark-to-market adjustments related to                 (1,411)             (5,710)
        deposits using an effective interest method over the
        remaining terms to maturity of the deposits.

(14)    Reflects the estimated increase in interest expense from                  15,012              30,025
        the assumed issuance of $374,371,000 of subordinated
        notes payable to fund the cash portion of the merger
        consideration at an effective interest rate of 8.02%.

(15)    Amortization of mark-to-market adjustments to long-term                      861               1,948
        borrowings on a straight-line basis over the remaining
        terms to maturity of the borrowings.

(16)    Adjustment to depreciation expense related to mark-to-market              (2,082)             (4,165)
        adjustments on premises and equipment.

(17)    Additional amortization on an accelerated basis for core deposit
        intangible and on a straight-line basis for goodwill.
</TABLE>

<TABLE>
<CAPTION>
                                            Estimated life
                                                 (in years)
                                            -------------------
<S>                                                                             <C>                 <C>
               Core deposit intangible                 7                          11,864              28,017
               Goodwill                               20                          11,334              22,568
                                                                                  ------              ------
               Total amortization                                                 23,198              50,585

(18)    Amortization on an accelerated basis of the mark-to-market                   525               1,037
        adjustment on mortgage servicing rights.

(19)    Income tax benefits on pro forma adjustments (other than amortization of  (7,927)            (15,507)
        goodwill) computed using a 39.5% tax rate.

(20)    The pro forma net income per common share amounts and average common
        shares outstanding include the effect of the adjustments described above
        and the issuance of 15,900,292 shares of M&T common stock. The
        calculation of pro forma diluted earnings per share also includes the
        dilutive effect of Keystone stock options converted into M&T stock
        options by application of the "treasury stock method" of accounting.
</TABLE>

</TEXT>
</DOCUMENT>
</SEC-DOCUMENT>
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