Shareholders' equity

9 Months Ended

Sep. 30, 2012

Shareholders' equity

6. Shareholders’ equity

M&T is authorized to issue 1,000,000 shares of preferred stock with a $1.00 par value per share. Preferred shares outstanding rank senior to common shares both as to dividends and liquidation preference, but have no general voting rights.

Issued and outstanding preferred stock of M&T is presented below:

	Shares issued and outstanding		Carrying value September 30,  2012		Carrying value December 31, 2011
			(dollars in thousands)
Series A (a)(b)
Fixed Rate Cumulative Perpetual		230,000	$	226,232	$	224,277
Preferred Stock, Series A, $1,000 liquidation preference per share
Series C (a)(c)
Fixed Rate Cumulative Perpetual		151,500		144,184		140,308
Preferred Stock, Series C, $1,000 liquidation preference per share
Series D (d)
Fixed Rate Non-Cumulative
Perpetual Preferred Stock, Series D, $10,000 liquidation preference per share		50,000		500,000		500,000

(a) Shares were issued as part of the TARP of the U.S. Treasury. Cash proceeds were allocated between the preferred stock and a ten-year warrant to purchase M&T common stock (Series A – 1,218,522 common shares at $73.86 per share, Series C – 407,542 common shares at $55.76 per share). Dividends, if declared, will accrue and be paid quarterly at a rate of 5% per year for the first five years following the original 2008 issuance dates and thereafter were scheduled to increase to 9% per year. In August 2012, the U.S. Treasury sold its holdings of M&T’s Series A and Series C preferred stock to the public, which allowed M&T to exit the TARP. Certain modifications were made to the terms of the Series A and Series C preferred stock, which remain subject to M&T common shareholder approval. Such modifications included a change in the dividend rate on November 15, 2013 to 6.375% (rather than the original 9% noted above) and a provision that M&T will not redeem the preferred shares until on or after November 15, 2018.

(b) On May 18, 2011, M&T redeemed and retired 370,000 shares of Series A Preferred Stock. Accelerated amortization of preferred stock discount associated with the redemption was $11.2 million.

(c) Shares were assumed in an acquisition and a new Series C Preferred Stock was designated.

(d) Shares were issued on May 31, 2011. Dividends, if declared, will be paid semi-annually at a rate of 6.875% per year. The shares are redeemable in whole or in part on or after June 15, 2016. Notwithstanding M&T’s option to redeem the shares, if an event occurs such that the shares no longer qualify as Tier 1 capital, M&T may redeem all of the shares within 90 days following that occurrence.

In addition to the Series A and Series C warrants mentioned in (a) above, a ten-year warrant to purchase 95,383 shares of M&T common stock at $518.96 per share was outstanding at September 30, 2012 and December 31, 2011. That warrant was issued by Wilmington Trust in December 2008 as part of the TARP of the U.S. Treasury along with $330 million of fixed rate cumulative perpetual preferred stock, which was redeemed by M&T immediately prior to the May 16, 2011 acquisition of Wilmington Trust.