On the surface, this is a huge premium.  Provident shareholders willreceive 0.171625 shares of M&T common stock in exchange for eachshare of Provident common stock.  Based on M&T’s closing stockprice of $61.18 on December 16, 2008, the deal is valued at $10.50 perProvident share.  The purchase price represents a 3.7% premium to coredeposits and 1.4x tangible book value.

M&T has $65.2 billion in assets, and has operations in theBaltimore-Washington metropolitan area. Provident is based in Baltimoreand has roughly $6.4 billion in assets.  M&T also expects to gainapproximately $4.6 billion in deposits and $4.3 billion in loans fromthe merger.

In addition, M&T willget to add 143 Provident branch offices and 198 ATMs located primarilyin Maryland and Virginia.  This will then add on to M&T’s existing177 branches and 545 ATMs in the same region. When combined withM&T’s existing Mid-Atlantic franchise, the merger will give M&Tthe second-largest deposit share in Maryland and will triple itspresence in Virginia.

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Jon C. Ogg
December 19, 2008