Filed by M & T Bank Corporation
Pursuant to Rule 425 under the Securities Act of 1933
and deemed filed pursuant to Rule 14a-12
under the Securities Exchange Act of 1934
Subject company: M & T Bank Corporation
Commission File No. 001-09861
On May 17, 2000, M & T Bank Corporation issued the following press release:
Contact: M&T Bank Corporation For Immediate Release
Michael Zabel (716) 842-5385 Wednesday, May 17, 2000
Tara Ellis (716) 842-5385
Keystone Financial, Inc.
Jacquelyn Basso (717) 231-5723
Elizabeth Braungard (717) 231-5732
KEYSTONE FINANCIAL, INC. TO MERGE WITH M&T BANK CORPORATION
HARRISBURG, PA (May 17, 2000) --- M&T Bank Corporation ("M&T") (NYSE:MTB), a
$22.8 billion bank holding company headquartered in Buffalo, New York and
Harrisburg, Pennsylvania-based Keystone Financial, Inc. ("Keystone")
(NASDAQ:KSTN) with $7.0 billion in assets announced jointly today that Keystone
will merge into M&T.
Giving M&T its most significant presence outside New York State to date, the
merger will create a banking franchise with 450 branches and nearly 1,000 ATMs
in four states: New York, Pennsylvania, Maryland and West Virginia.
The combined company will become Pennsylvania's fifth largest retail deposit
holder, with a network of 171 branches in 33 counties throughout the central
part of the state. Headquartered in Harrisburg, Keystone currently operates in
Altoona, State College, Pottsville, Williamsport, suburban Philadelphia and
other Pennsylvania communities. An additional 25 branches are located in
Cumberland, Hagerstown and Frederick, Maryland and the Keyser area of West
Virginia.
M&T is upstate New York's largest retail deposit holder with 272 branches in New
York and northeastern Pennsylvania. Keystone's merger with M&T will create the
29th largest independent bank holding company in the United States with $29.8
billion in pro forma assets.
"M&T Bank has grown successfully because we work hard to understand our
customers' personal and professional needs - and then to provide high quality
financial products and services that meet those needs. As we expand further into
Pennsylvania and beyond, we
(more)
<PAGE>
M&T BANK
2-2-2-2-2
remain committed to establishing that same kind of relationship with our new
customers - just as we are committed to the well-being of the communities we
serve," Robert G. Wilmers, M&T Bank chairman and CEO, said.
"With this merger, Keystone joins forces with a financial services institution
long-known for quality, consistency and success. Together, we will create an
even stronger institution that will benefit our customers and communities," Carl
L. Campbell, Keystone Financial, Inc. chairman and CEO, said.
The merged institution will provide customers with a full range of financial
products and services, including 24-hour internet banking and telephone banking
services, an extensive ATM network, a wide array of investment and insurance
products and a full line of mortgage products.
Both M&T and Keystone are leading SBA lenders in their respective states, and
the new company will offer a complete lineup of commercial banking products and
services to small- and medium-sized businesses.
Officials at both companies noted that, because there is very little overlap
between the two retail branch networks, the merger will result in few branch
consolidations. The companies expect to retain nearly all of Keystone's current
front-line employees who interact with customers.
Merger Terms
Under terms of the merger agreement, Keystone shareholders will have the option
of receiving 0.050 shares of M&T common stock or $21.50 in cash in exchange for
each outstanding share of Keystone common stock, subject to the requirement
that, in total, 65% of the 48,930,000 shares of Keystone stock currently
outstanding are exchanged for
(more)
<PAGE>
M&T BANK
3-3-3-3-3
M&T stock and the remainder for cash.
Based on the current number of shares of Keystone common stock currently
outstanding and assuming 31,804,500 shares of Keystone common stock are
exchanged for 1,590,225 shares of M&T common stock, the merger has an indicated
value of $1 billion, making it M&T's largest merger ever.
Simultaneously with the completion of the merger, M&T will effect a 10-for-1
split on its common stock, with the 0.05 exchange ratio being adjusted to 0.5 to
reflect the split. M&T also intends to double the cash dividend on its common
stock in connection with the closing of the merger to the equivalent of $2.50
per quarter on each pre-split share.
The transaction has been approved by the boards of directors of both companies,
and is subject to receiving various regulatory approvals and approvals of each
company's stockholders, among other conditions. It is anticipated that the
transaction will be completed in the fourth quarter of 2000. In conjunction with
this process, the annual meeting Keystone scheduled for May 25, 2000 has been
postponed indefinitely. Special shareholders meetings of both companies will be
scheduled to vote on the merger.
Following the merger, Mr. Campbell will become a vice chairman of M&T Bank
Corporation and its principal banking subsidiary, M&T Bank, and a member of the
M&T and M&T Bank boards of directors. Mr. Campbell also will serve as chairman
of M&T's Pennsylvania operations. Four other directors of Keystone also will
join the M&T Bank Corporation and M&T Bank boards of directors. Mr. Wilmers will
continue as president and CEO of M&T Bank Corporation and chairman and CEO of
M&T Bank.
M&T Bank Profile
Since 1983, when Mr. Wilmers became chairman and CEO of M&T Bank Corporation
(more)
<PAGE>
M&T Bank
4-4-4-4-4
(formerly First Empire State Corporation), M&T has grown from less than $2
billion in assets to $22.8 billion as of March 31, 2000.
M&T also has grown through 14 mergers and acquisitions conducted during the
1990's, including its 1998 acquisition of ONBANCorp's 59 branches in New York
and 19 in Pennsylvania.
Although M&T's steady growth has vaulted it into the upper ranks of American
banking organizations, it has not fundamentally altered the way it conducts
business - M&T remains committed to operating as a "community bank." A
conservative managerial approach - one that stresses in-depth market and
customer knowledge, local decision-making, consistent lending decisions and
support for local initiatives - defines M&T's operating philosophy.
As a community bank, M&T recognizes that its success is uniquely dependent on
the well-being of the communities in which it operates. By all measures, M&T
provides significant support for its regional markets and impacts favorably on
the economic and social well-being of its neighbors.
M&T Bank has earned the highest possible ratings from both the Federal Reserve
Bank of New York and the New York State Banking Department since 1988 for
meeting the credit needs of the communities it serves. M&T also has been
consistently recognized for exceptional commitment to entrepreneurs and small
business owners. And, M&T receives high marks for its level of community support
and volunteer efforts.
This press release contains forward-looking statements with respect to the
anticipated effects of the merger. The following factors, among others, could
cause the actual results
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<PAGE>
M&T Bank
5-5-5-5-5
of the merger to differ materially from M&T's expectations: the ability to
timely and fully realize the expected cost savings and revenues; competition;
changes in economic conditions, interest rates and financial markets; and
changes in legislation or regulatory requirements. M&T does not assume any duty
to update forward-looking statements.
Information regarding the identity of the persons who, under SEC rules, be
deemed to be participants in the solicitation of shareholders of M&T and
Keystone in connection with the merger, and their interest in the solicitation,
is set forth in filings made by M&T and Keystone on the date of this press
release with the SEC.
M&T and Keystone will be filing a joint proxy statement/prospectus and other
relevant documents concerning the transaction with the SEC. Investors are urged
to read the joint proxy statement/prospectus when it becomes available and any
other relevant documents filed with the SEC because they will contain important
information. Investors will be able to obtain these documents free of charge at
the SEC's web site (www.sec.gov). In addition, documents filed with the SEC by
M&T may be obtained free of charge by contacting M&T Bank Corporation at One M&T
Plaza, Buffalo, New York 14203, Attention: Investor Relations, (716) 842-5445.
Documents filed with the SEC by Keystone will be available free of charge by
contacting Keystone Financial, Inc., P.O. Box 708, Altoona, Pennsylvania, 16603,
Attention: Shareholder Relations, (717) 233-1555.
Investors should read the joint proxy/prospectus carefully when it becomes
available before making any voting or investing decisions.
#####
<PAGE>
For Release: Immediate, Wednesday, May 17, 2000
Media Contact: Keystone Financial, Inc.
Jacquelyn Basso (717-231- 5723)
Elizabeth Braungard (717-231-5732)
M&T Bank Corporation
Michael Piemonte (716-842-5887)
KEYSTONE FINANCIAL AND M&T BANK CORPORATION ANNOUNCE
MERGER M&T Bank Corporation to pay $1 billion in stock and cash
HARRISBURG, PENNSYLVANIA and BUFFALO, NEW YORK (May 17, 2000) - Keystone
Financial, Inc. ("Keystone") (NASDAQ: KSTN), Harrisburg, Pennsylvania and M&T
Bank Corporation ("M&T") (NYSE: MTB), Buffalo, New York, today jointly announced
that they have entered into a definitive agreement for a merger between the two
companies.
The merger will create a strong northeast banking franchise with 424 branches in
New York and Pennsylvania and 25 in northern Maryland and West Virginia. The
enlarged franchise would make M&T the 29th largest independent banking company
in the United States with proforma combined assets of approximately $29.8
billion as of March 31, 2000. Keystone's banking subsidiary, Keystone Financial
Bank, N.A., will be merged into Manufacturers and Traders Trust Company ("M&T
Bank"), M&T's principal commercial banking subsidiary.
Carl L. Campbell, chairman, president and chief executive officer of Keystone,
said, "With this merger, Keystone joins forces with a financial services
institution long-known for quality, consistency and success. Together, we will
create an even stronger institution that will benefit the stockholders,
customers and the community."
Robert G. Wilmers, president and chief executive officer of M&T, said, "M&T Bank
has grown successfully across New York State and northeastern Pennsylvania
because we provide high quality financial products and services to our customers
through relationships that enable us to understand their personal and business
needs. Our partnership with Keystone gives M&T a well-established foundation
from which to broaden our geographic reach and expand our combined businesses.
As we expand our presence in Pennsylvania and enter the Maryland and West
Virginia markets, we remain committed to providing that same high quality
service to our new customers and, we will be committed to the well-being of the
communities we serve."
Following the merger, Mr. Campbell will be elected vice chairman of the board of
directors of M&T and vice chairman of M&T Bank. Four other directors of Keystone
will join Mr. Campbell on M&T's and M&T Bank's board of directors. Mr. Wilmers
will continue as president and chief executive officer of M&T and chairman and
chief executive officer of M&T Bank.
- more -
<PAGE>
KEYSTONE FINANCIAL AND M&T BANK CORPORATION Page 2.
Because the franchises do not overlap, no branch consolidations between Keystone
and M&T are anticipated as a result of the merger.
Simultaneous with the completion of the merger, M&T intends to declare a
10-for-1 split on its common stock. M&T also intends to double the cash dividend
on its common stock after the closing of the merger to the equivalent of $2.50
per quarter on each pre-split share.
Under the terms of the proposed merger, stockholders of Keystone may elect to
receive .05 of a pre-split share of M&T common stock or $21.50 in cash in
exchange for each outstanding share of Keystone common stock, although 65% of
the 48,930,000 shares of Keystone common stock currently outstanding must be
exchanged for shares of M&T common stock. The selection of the method of payment
by Keystone's stockholders will be subject to allocation and proration if the
election for common stock would be more or less than this 65%. The merger is
expected to be tax-free to Keystone stockholders except to the extent they
receive cash, and will be accounted for as a purchase.
Based on the current number of shares of Keystone common stock currently
outstanding and the closing price of M&T common stock on May 15, 2000, the
merger has an indicated value of $1 billion. On the same basis, the pro forma
market capitalization of M&T would be approximately $3.8 billion following the
merger
Keystone also granted M&T a stock option to acquire up to 19.9 percent of the
shares of common stock of Keystone under certain circumstances.
The transaction has been approved by the board of directors of both companies,
and is subject to a number of conditions, including various regulatory approvals
and approvals of each company's stockholders. The doubling of the quarterly cash
dividend on M&T's common stock and the 10-for-1 common stock split are subject
to the approval of M&T's board of directors at the time the cash and stock
dividends are declared. It is anticipated that the merger will be completed in
late 2000.
This press release contains forward-looking statements with respect to the
anticipated effects of the merger. The following factors, among others, could
cause the actual results of the merger to differ materially from M&T's
expectations: the ability to timely and fully realize expected cost savings and
revenues; competition; changes in economic conditions, interest rates and
financial markets; and changes in legislation or regulatory requirements. M&T
does not assume any duty to update forward-looking statements.
ADDITIONAL INFORMATION
Information regarding the identity of the persons who may, under SEC rules, be
deemed to be participants in the solicitation of shareholders of M&T and
Keystone in connection with the merger, and their interests in the solicitation,
is set forth in a Schedule 14A filed on the date of this press release with the
SEC.
- more -
<PAGE>
KEYSTONE FINANCIAL AND M&T BANK CORPORATION Page 3.
M&T and Keystone will be filing a joint proxy statement/prospectus and other
relevant documents concerning the transaction with the SEC. Investors are urged
to read the joint proxy statement/prospectus when it becomes available and any
other relevant documents filed with the SEC because they will contain important
information. Investors will be able to obtain the documents free of charge at
the SEC's web site (www.sec.gov). In addition, documents filed with the SEC by
M&T may be obtained free of charge by contacting M&T Bank Corporation at One M&T
Plaza, Buffalo, New York 14203, Attention: Investor Relations, (716) 842-5445.
Documents filed with the SEC by Keystone will be available free of charge by
contacting Keystone Financial, Inc., P.O. Box 708, Altoona, Pennsylvania, 16603,
Attention: Shareholder Relations (717) 233-1555.
Investors should read the joint proxy statement/prospectus carefully when it
becomes available before making any voting or investment decisions.
#####
FOR ANALYSTS: To participate in an analyst presentation at 10:30 a.m., EDT,
Wednesday, May 17, dial toll-free 1-888-603-9742, Code #11111. The presentation
can be played back until June 16, 2000 by calling 1-888-433-2207.
<PAGE>
Filed by M & T Bank Corporation
Pursuant to Rule 425 under the Securities Act of 1933
and deemed filed pursuant to Rule 14a-12
under the Securities Exchange Act of 1934
Subject company: M & T Bank Corporation
Commission File No. 001-09861
On May 17, 2000, M & T Bank Corporation and Keystone Financial, Inc. made the
following analyst information Investor Presentation:
[M&T BANK LOGO]
Acquisition of Keystone Financial, Inc.
A Logical and Attractive Franchise Extension
Investor Presentation
May 17, 2000
<PAGE>
- --------------------------------------------------------------------------------
M&T Management Conference Call Information
- --------------------------------------------------------------------------------
The senior management team of M&T will present an overview of the Keystone
transaction and respond to investor questions via conference call on May 17,
2000 at 10:30 am eastern standard time. Please call in at least 10 minutes prior
to the start of the call. ----------------------------------------
- -------------------------
A taped playback of the call will be available through June 16, 2000
Dial-In Number: (888) 603-9742
Pass Code: 11111
Play-Back Number: (888) 433-2207*
- -------------------------------------------------
* Will not become available until one hour after the conference call is
completed.
Keystone
M&T Bank ------------------------------------------------------------- Financial
<PAGE>
- --------------------------------------------------------------------------------
Forward Looking Information
- --------------------------------------------------------------------------------
This presentation contains forward looking statements with respect to the
financial condition, results of operations and business of M&T Bank Corporation
("M&T") and Keystone Financial, Inc. ("Keystone") and assuming the consummation
of the transaction, a combined M&T and Keystone, including statements relating
to: (i) the cost savings and revenue enhancements and accretion to reported and
cash earnings that will be realized from the merger; and (ii) the restructuring
charges expected to be incurred in connection with the merger. These forward
looking statements involve certain risks and uncertainties. Factors that may
cause actual results to differ materially from those contemplated by such
forward looking statements include, among other things, the following
possibilities: (i) expected cost savings from the merger cannot be fully
realized or realized within the expected time; (ii) revenues following the
merger are lower than expected; (iii) competitive pressure among depository
institutions increase significantly; (iv) the integration of the business of M&T
and Keystone costs more, takes longer or is less successful than expected; (v)
the cost of additional capital is more than expected; (vi) changes in the
interest rate environment reduces interest margins; (vii) general economic
conditions, either nationally or in the states in which the combined company
will be doing business, are less favorable than expected; (viii) legislation or
regulatory requirements or changes adversely affect the business in which the
combined company will be engaged; and (ix) changes may occur in the securities
market. Neither M&T nor Keystone assume any obligation to update forward looking
statements.
Keystone
M&T Bank ------------------------------------------------------------- Financial
<PAGE>
- --------------------------------------------------------------------------------
Transaction Summary
- --------------------------------------------------------------------------------
<TABLE>
<S> <C>
Transaction: Acquisition of Keystone by M&T
Transaction Value: $21.01 per Keystone share/(a)
Approximately $1.03 billion in aggregate value
M&T Stock Split: 10-for-1
Consideration/Election Procedure: Cash/stock election procedure subject to proration such that 35% of total
Keystone shares receive cash and 65% receive M&T common stock
Pricing Mechanism: Exchange ratio of 0.05x (pre-split) on the stock consideration and cash
consideration of $21.50 per share are both fixed
Collars / Walk-Aways: None
M&T Dividend: 100% increase to $10.00 per share (pre-split)
Accounting Treatment: Purchase accounting (goodwill amortized over 20 years straight-line; core
deposit intangible amortized over 7 years accelerated)
</TABLE>
- ---------------------------------------
(a) Based on M&Ts closing price of $415.00 on May 16, 2000.
Keystone
M&T Bank ------------------------------------------------------------- Financial
1
<PAGE>
- --------------------------------------------------------------------------------
Transaction Summary
- --------------------------------------------------------------------------------
<TABLE>
<S> <C>
Synergies: $43 million pre-tax (approximately 20% of Keystone's total non-interest
expense)
Restructuring Charge: Estimated at $52 million after-tax ($75 million pre-tax)
Management: Robert G. Wilmers - President & CEO
Robert J. Bennett - Chairman
Jorge G. Pereira - Vice Chairman
Carl L. Campbell - Vice Chairman
Board of Directors: 5 Board seats granted to Keystone out of a pro forma total of 26 M&T Board
seats
Due Diligence: Comprehensive due diligence completed, including credit file reviews
Approvals: Shareholders of M&T and Keystone
Normal regulatory approvals
Expected Closing: Fourth quarter 2000
Pro Forma Ownership: 20% M&T Insiders
5% Warren Buffett
</TABLE>
Keystone
M&T Bank ------------------------------------------------------------- Financial
2
<PAGE>
- --------------------------------------------------------------------------------
Strategic Rationale
- --------------------------------------------------------------------------------
<PAGE>
- --------------------------------------------------------------------------------
Management Interests Remain Aligned with Shareholder Interests
- --------------------------------------------------------------------------------
[PIE CHARTS ILLUSTRATING EXISTING AND PROFORMA
OWNERSHIP OF M&T BANK CORPORATION STOCK]
Keystone
M&T Bank ------------------------------------------------------------- Financial
3
<PAGE>
- --------------------------------------------------------------------------------
A Logical Franchise Extension
- --------------------------------------------------------------------------------
o Logical geographic extension of M&T's strong New York franchise
/ / Already #1 in deposit market share in Upstate New York, pro forma M&T
would also rank #1 in Central Pennsylvania
- Combined geographic area of Upstate New York and Central
Pennsylvania would rank as the 10th largest U.S. state in terms
of total deposits
/ / Ability to leverage M&T's proven New York super-community banking
strategy across Keystone's franchise
/ / Familiarity with these markets
- Existing M&T presence through the ONBANCorp acquisition
- Similar demographics
- M&T has proven that it can generate top-tier performance and
growth in these markets
/ / Increases scale of banking franchise
/ / Complementary business models
- New small business and middle market lending opportunities for
M&T
- Enhances M&T's Trust and Investment Services business, adding
$3.3 billion in assets under management, including $1.2 billion
in mutual funds
Keystone
M&T Bank ------------------------------------------------------------- Financial
4
<PAGE>
- --------------------------------------------------------------------------------
Low Level of Operational Risk
- --------------------------------------------------------------------------------
o Proven integration experience at M&T under the current management team
o History of delivering and even exceeding on projections at M&T:
/ / Exceeded the EPS projection made at announcement in the ONBANCorp
transaction by 4%
/ / One of only 6 banks to do so out of 27 total banks who have announced
deals greater than $850 million in value since 1995
/ / In the 17 quarters since 1995, M&T has exceeded the consensus First
Call quarterly estimates by an average of 2% per quarter
o Only the third largest deal announced by M&T on a relative basis
o Integration will be facilitated by KSTN's 1999 consolidation of its banks
under a single charter
o Minimal business disruption expected given no branch overlap
Keystone
M&T Bank ------------------------------------------------------------- Financial
5
<PAGE>
- --------------------------------------------------------------------------------
Financially Attractive with Straightforward, Conservative Assumptions
- --------------------------------------------------------------------------------
o Had the deal been accounted for as a pooling, it would have been
accretive in the first full year
o As structured, the transaction is accretive to cash EPS in the first
full year
o Favorably priced relative to comparable transactions
o Generates an internal rate of return ("IRR") well in excess of M&T's
cost of equity capital
o Financing mix is shareholder focused:
/ / Blended cost of capital has been minimized
/ / Cash flow per share is significantly improved compared to a
pooling deal
o No revenue enhancements have been assumed, but opportunities have been
identified
Keystone
M&T Bank ------------------------------------------------------------- Financial
6
<PAGE>
- --------------------------------------------------------------------------------
Favorably Priced Relative to Comparable Transactions
- --------------------------------------------------------------------------------
<TABLE>
<CAPTION>
Implied Comparable MTB/KSTN
MTB/KSTN Transactions Multiples as a % of
Multiples Average (a) Comparable Avg.
--------- ----------- ---------------
<S> <C> <C> <C>
Price as a Multiple of:
LTM Cash EPS 11.9x/(b) 17.3x 69%
Forward Cash EPS 10.8/(c) 15.2 71
LTM GAAP EPS 12.5/(b) 18.9 66
Forward GAAP EPS 11.3/(c) 16.3 69
Book Value 1.84/(b) 2.69 69
Tangible Book Value 2.04/(b) 3.08 66
Tangible Book Premium to Deposits 10.4%/(b) 26.1% 40
Premium to Market - 1 Day Prior to Announcement 33.4 29.4 114
Premium to Market - 30 Day Average Price 31.5 27.9 113
</TABLE>
- -------------------------------------------------
(a) Comparable transactions include billion dollar plus traditional bank
acquisitions announced since January 1, 1999; seven deals in total.
(b) Based on financial results for the 12 month period ended March 31, 2000.
(c) Based on First Call quarterly estimates as of May 16, 2000 for the next
four quarters through March 31, 2001.
Keystone
M&T Bank ------------------------------------------------------------- Financial
7
<PAGE>
- --------------------------------------------------------------------------------
Consistent with M&T's Geographic Strategy - "The Highway Franchise"
- --------------------------------------------------------------------------------
[MAP ILLUSTRATING BRANCH LOCATIONS]
- ---------------------------------------
Sources: SNL Securities, L.P. & MapInfo.
Keystone
M&T Bank ------------------------------------------------------------- Financial
8
<PAGE>
- --------------------------------------------------------------------------------
Pro Forma M&T: #1 in Upstate New York and #1 in Central Pennsylvania
- --------------------------------------------------------------------------------
- --------------------------------------------------------------------------------
Deposit Share - Upstate NY/(a)
- --------------------------------------------------------------------------------
Deposits
Rank Institution ($MM) % Share
---------- -------------------------------------- ------------ -----------
--------------------------------------------------------------------------
1 Current M&T Bank $12,277 16.11%
--------------------------------------------------------------------------
2 HSBC Holdings, Plc 11,460 15.04
3 KeyCorp 6,716 8.81
4 FleetBoston Financial 6,714 8.81
5 Charter One Financial 5,219 6.85
6 Chase Manhattan Corp. 3,126 4.10
7 Trustco Bank Corp of NY 1,904 2.50
8 BSB Bancorp Inc. 1,827 2.40
9 Community Bank System Inc. 1,372 1.80
10 Premier National 1,226 1.61
11 Niagara Bancorp Inc. (Mhc) 1,167 1.53
12 Citigroup Inc. 1,031 1.35
- --------------------------------------------------------------------------------
Deposit Share - Central PA/(b)
- --------------------------------------------------------------------------------
Deposits
Rank Institution ($MM) % Share
---------- -------------------------------------- ------------ -----------
-------------------------------------------------------------------------
- Pro Forma M&T Bank $4,222 9.11%
-------------------------------------------------------------------------
1 Allfirst 4,117 8.89
2 Keystone 3,512 7.58
3 PNC Financial 3,113 6.72
4 Fulton Financial 2,768 5.97
5 First Union 2,472 5.34
6 Harris Financial 2,271 4.90
7 Mellon Financial 2,057 4.44
8 Susquehanna 1,613 3.48
9 Sovereign Bancorp 1,498 3.23
10 Northwest Bancorp 1,258 2.72
16 Current M&T Bank 710 1.53
- ---------------------------------------
Source: SNL Securities, L.P.
(a) Includes only NY counties north of Westchester, excluding New York, Queens,
Nassau, Suffolk, Bronx, Richmond, Rockland, Kings and Westchester
(b) Includes only PA counties east of Jefferson / Indiana counties and west of
Carbon / Lehigh counties (i.e., excludes counties surrounding Pittsburgh
and Philadelphia).
Keystone
M&T Bank ------------------------------------------------------------- Financial
9
<PAGE>
- --------------------------------------------------------------------------------
Enhanced Financial Scale Creating a Leading Northeast Bank
- --------------------------------------------------------------------------------
($ in millions)
<TABLE>
<CAPTION>
Pro Forma Rank Among Rank Among
Combined ($) U.S. Banks(a) Northeast Banks(b)
------------ ------------- ------------------
<S> <C> <C> <C>
1999 Net Income(c) $349.3 #32 #5
1999 Net Income with full synergies(c) 377.5 30 5
Market Capitalization(d) 3.9 31 5
Assets 29.8 29 5
Net Loans 21.9 27 5
Deposits 20.2 29 5
Common Equity 2.4 28 5
</TABLE>
- ---------------------------------------
* Source: SNL Securities, L.P. Balance sheet results as of March 31, 2000.
(a) Includes all independent U.S. commercial banks.
(b) Includes banks headquartered in NY, PA, MA, CT, ME, VT, DE, MD, RI, NH and
NJ. Excludes money center banks.
(c) Excludes nonrecurring charges.
(d) Based on pro forma shares outstanding and M&T's price of $415.00 as of May
16, 2000. No market value attributed to expected synergies.
Keystone
M&T Bank ------------------------------------------------------------- Financial
10
<PAGE>
- --------------------------------------------------------------------------------
Merger Integration Experience at M&T
- --------------------------------------------------------------------------------
<TABLE>
<CAPTION>
Deposits Deposits Acquired/
Announce Acquired Current Rank M&T Deposits
Date Target ($MM) Primary City in Target City at Announcement
-------- ------------------------- -------- ---------------------- -------------- ---------------
<S> <C> <C> <C> <C> <C>
- -----------------------------------------------------------------------------------------------------------------------------
- Keystone $5,052 NM NM 33.3%
- -----------------------------------------------------------------------------------------------------------------------------
6/4/99 Chase Branches $634 Binghamton #2 4.3%
12/9/98 FNB Rochester 498 Rochester 2 3.3
10/28/97 ONBANCorp Inc. 4,025 Syracuse 1 35.9
4/1/94 Ithaca Bancorp 339 Ithaca 2 4.6
2/24/92 Central Trust and 1,312 Rochester, Binghamton 2 17.6
Endicott Trust
5/31/91 GoldDome 2,100 GoldDome 1 33.8
9/28/90 Empire of America 1,300 Buffalo 1 21.0
1/26/90 Monroe Savings 486 Rochester 2 7.8
East New York Savings
Mid-Atlantic Banks
</TABLE>
Keystone
M&T Bank ------------------------------------------------------------- Financial
11
<PAGE>
- --------------------------------------------------------------------------------
Financial Impact
- --------------------------------------------------------------------------------
<PAGE>
- --------------------------------------------------------------------------------
Baseline "Street" Assumptions
- --------------------------------------------------------------------------------
("Street Estimates Utilized for Both Companies -- Does not Constitute Management
Forecasts*)
o M&T Stand-Alone "Street" Assumptions:
// 2001 First Call consensus estimate of $40.32 per share (fd)
// 2001 implied First Call aggregate net income of $311 million
// EPS grown at a rate of 10.5% annually after 2001 (I/B/E/S)
// Continue to deploy excess capital to maximize shareholder returns
o Keystone Stand-Alone "Street" Assumptions:
// 2001 First Call consensus estimate of $1.83 per share (fd)
// 2001 implied First Call aggregate net income of $89 million
// EPS grown at a rate of 8.5% annually after 2001 (I/B/E/S)
- -------------------------------------------------
* "Street" estimates include First Call and I/B/E/S sources. First Call and
I/B/E/S are recognized data services that monitor and publish compilations of
earnings estimates by select research analysts regarding companies of
interest to institutional investors.
Keystone
M&T Bank ------------------------------------------------------------- Financial
12
<PAGE>
- --------------------------------------------------------------------------------
Pro Forma Impact Based on "Street" Estimates
- --------------------------------------------------------------------------------
($ in Millions, except per Share Amounts)
2001 2002 2003
------ ------ ------
M&T Earnings $311.1 $337.8 $366.6
Keystone Earnings 89.4 97.0 105.2
------ ------ ------
Combined Earnings $400.6 $434.9 $471.8
Cost Savings (after-tax) $14.1 $28.2 $29.3
Net Cost of Financing (23.5) (22.5) (22.6)
Amortization Add-back for KSTN 4.1 4.1 4.1
New Intangible Amortization (41.2) (39.0) (36.6)
------ ------ ------
Pro Forma Earnings $354.1 $405.7 $446.1
====== ====== ======
------------------------------------------------------------------------------
Pro Forma CASH EPS $46.92 $53.29 $58.77
Pro Forma GAAP EPS $37.61 $44.03 $49.56
------------------------------------------------------------------------------
Average Shares Outstanding (fd) 9.4 9.2 9.0
------------------------------------------------------------------------------
Cash EPS Accretion / (Dilution) 1.3% 5.2% 6.0%
GAAP EPS Accretion / (Dilution) (6.7)% (1.2%) 0.7%
------------------------------------------------------------------------------
- -------------------------------------------------
* Based on "Street" estimates for both companies and does not constitute
Management forecasts. Excludes estimated merger related charges.
Keystone
M&T Bank ------------------------------------------------------------- Financial
13
<PAGE>
- --------------------------------------------------------------------------------
Strong Pro Forma Financial Position
- --------------------------------------------------------------------------------
($ in Millions)
<TABLE>
<CAPTION>
At March 31, 2000
----------------------------
M&T Keystone Pro Forma(a)
------- -------- ------------
<S> <C> <C> <C>
Balance Sheet Items:
Total Assets $22,762 $7,012 $30,221
Total Gross Loans 17,703 4,533 22,236
Total Deposits 15,151 5,053 20,203
Intangibles 638 53 1,203
Equity 1,832 556 2,646
Reserves for Loans Losses 319 61 379
Capital Securities 310 0 490
Capital Ratios:
Equity/Assets 8.1% 7.9% 8.8%
Tang. Common Equity/Assets 5.4 7.2 5.0
Asset Quality Ratios:
NPAs/Loans + REO 0.43% 0.86% 0.52%
Loan Loss Reserve/NPLs 475.7 168.9 368.5
Loan Loss Reserve/Loans 1.8 1.3 1.7
</TABLE>
- -------------------------------------------------
(a) At 12/31/00, includes impact of restructuring charges and other purchase
accounting adjustments.
Keystone
M&T Bank ------------------------------------------------------------- Financial
14
<PAGE>
- --------------------------------------------------------------------------------
Rapid Generation of Deployable Capital
- --------------------------------------------------------------------------------
- ---------------------------------------------
Tangible Common Equity Ratio
- ---------------------------------------------
o Current M&T (3/31/00): 5.40%
o Pro Forma (12/31/00): 5.00%
o Targeted Pro Forma Ratio: 5.40%
- ---------------------------------------------
Pro Forma Cumulative Deployable Capital ($ millions)(a)
-------------------------------------------------------
PF 12/31/01 $88
PF 12/31/02 $311
PF 12/31/03 $536
- -------------------------------------------------
(a) Represents the cumulative tangible capital at each period end in excess of
the amount required to produce a 5.40% tangible common equity ratio.
Keystone
M&T Bank ------------------------------------------------------------- Financial
15
<PAGE>
- --------------------------------------------------------------------------------
Expected Synergies
- --------------------------------------------------------------------------------
($ in Millions, pre-tax)
o 50% of the synergies are expected to be achieved in 2001 and 100% in
2002
<TABLE>
<CAPTION>
KSTN Estimated %
Expenses(a) Savings Savings
----------- ------- -------
<S> <C> <C> <C>
Corporate Overhead $76 $25 33%
Business Line Consolidation 73 4 6
Facilities 43 6 15
Technology and Operations 24 8 33
----------- ------- -------
Total $216 $43 20%
=========== ======= =======
--------------------------------------------------------------------------------
Implied Marginal Efficiency Ratio for KSTN: 48%
--------------------------------------------------------------------------------
</TABLE>
o While no revenue enhancements have been assumed, specific
opportunities have been identified
- -------------------------------------------------
(a) Represents Q1'00 Keystone expenses annualized.
Keystone
M&T Bank ------------------------------------------------------------- Financial
16
<PAGE>
- --------------------------------------------------------------------------------
Estimated Merger Related Charges
- --------------------------------------------------------------------------------
($ in Millions)
Pre-Tax After-Tax
Total Total
----- -----
Human Resources Related $29 $20
Conversion Costs 23 15
Facilities and Equipment 16 10
Deal Costs 7 7
--- ---
Total $75 $52
=== ===
Keystone
M&T Bank ------------------------------------------------------------- Financial
17
<PAGE>
- --------------------------------------------------------------------------------
Summary
- --------------------------------------------------------------------------------
o Transaction makes strategic and financial sense with manageable
execution risk:
/ / Logical geographic expansion into familiar markets
/ / Creates the #1 bank in Central Pennsylvania
/ / Immediately accretive to cash EPS
/ / Attractive IRR
/ / Similar cultures and community banking operating models
/ / Complementary business lines
/ / Effective use of excess capital
Keystone
M&T Bank ------------------------------------------------------------- Financial
18
<PAGE>
- --------------------------------------------------------------------------------
History of Consistently Superior Shareholder Returns
- --------------------------------------------------------------------------------
----------------------------------------
Total Stock Appreciation Since 1990:
------------------------------------
M&T = 568%
S&P Regional Bank Index = 287%
----------------------------------------
S&P Reg'l Bank
Index M&T
----- ---
S&P Banks
Index M&T
---- ---
1/1/90 100% 100%
2/1/90 103% 99%
3/1/90 98% 102%
4/1/90 94% 101%
5/1/90 104% 102%
6/1/90 96% 97%
7/1/90 89% 91%
8/1/90 78% 84%
9/1/90 66% 77%
10/1/90 59% 74%
11/1/90 71% 82%
12/1/90 74% 85%
1/1/91 81% 86%
2/1/91 91% 98%
3/1/91 97% 110%
4/1/91 104% 120%
5/1/91 111% 131%
6/1/91 103% 136%
7/1/91 112% 147%
8/1/91 120% 151%
9/1/91 117% 149%
10/1/91 118% 145%
11/1/91 110% 136%
12/1/91 125% 155%
1/1/92 128% 164%
2/1/92 138% 200%
3/1/92 133% 188%
4/1/92 140% 200%
5/1/92 142% 201%
6/1/92 142% 197%
7/1/92 140% 205%
8/1/92 133% 201%
9/1/92 132% 208%
10/1/92 136% 210%
11/1/92 151% 220%
12/1/92 156% 209%
1/1/93 160% 215%
2/1/93 165% 219%
3/1/93 175% 233%
4/1/93 166% 235%
5/1/93 163% 222%
6/1/93 174% 213%
7/1/93 171% 227%
8/1/93 169% 216%
9/1/93 174% 219%
10/1/93 159% 224%
11/1/93 155% 217%
12/1/93 162% 219%
1/1/94 166% 223%
2/1/94 160% 211%
3/1/94 159% 217%
4/1/94 167% 217%
5/1/94 175% 233%
6/1/94 170% 244%
7/1/94 172% 252%
8/1/94 176% 245%
9/1/94 163% 236%
10/1/94 161% 234%
11/1/94 148% 226%
12/1/94 148% 212%
1/1/95 158% 229%
2/1/95 167% 258%
3/1/95 167% 266%
4/1/95 169% 250%
5/1/95 186% 258%
6/1/95 183% 267%
7/1/95 188% 275%
8/1/95 197% 285%
9/1/95 207% 296%
10/1/95 207% 306%
11/1/95 223% 324%
12/1/95 224% 339%
1/1/96 227% 350%
2/1/96 236% 375%
3/1/96 241% 383%
4/1/96 237% 370%
5/1/96 240% 367%
6/1/96 238% 375%
7/1/96 238% 388%
8/1/96 252% 396%
9/1/96 267% 388%
10/1/96 287% 400%
11/1/96 314% 437%
12/1/96 296% 448%
1/1/97 320% 464%
2/1/97 337% 503%
3/1/97 314% 498%
4/1/97 330% 501%
5/1/97 340% 500%
6/1/97 356% 525%
7/1/97 393% 559%
8/1/97 370% 569%
9/1/97 397% 646%
10/1/97 391% 637%
11/1/97 415% 657%
12/1/97 435% 724%
1/1/98 416% 710%
2/1/98 448% 735%
3/1/98 476% 778%
4/1/98 479% 794%
5/1/98 460% 791%
6/1/98 471% 862%
7/1/98 461% 828%
8/1/98 361% 638%
9/1/98 401% 718%
10/1/98 435% 776%
11/1/98 448% 776%
12/1/98 470% 808%
1/1/99 449% 778%
2/1/99 452% 740%
3/1/99 446% 746%
4/1/99 491% 870%
5/1/99 468% 820%
6/1/99 480% 856%
7/1/99 446% 840%
8/1/99 423% 722%
9/1/99 405% 714%
10/1/99 466% 771%
11/1/99 435% 732%
12/1/99 394% 645%
1/1/00 381% 640%
2/1/00 320% 574%
3/1/00 387% 695%
4/1/00 354% 684%
5/1/00 387% 668%
- -------------------------------------------------
Source: FactSet Datasystems
Keystone
M&T Bank ------------------------------------------------------------- Financial
19
<PAGE>
Filed by M & T Bank Corporation
Pursuant to Rule 425 under the Securities Act of 1933
and deemed filed pursuant to Rule 14a-12
under the Securities Exchange Act of 1934
Subject company: M & T Bank Corporation
Commission File No. 001-09861
M & T Bank Corporation issued the following information concerning
participants:
Information Concerning Participants
M&T Bank Corporation (the "Company") and certain other persons named
below may be deemed to be participants in the solicitation of proxies of the
Company's shareholders to approve the proposed merger transaction between the
Company and Keystone Financial, Inc. The participants in this solicitation may
include the directors of the Company: William F. Allyn, Brent D. Baird, John H.
Benisch, Robert J. Bennett, C. Angela Bontempo, Robert T. Brady, Patrick J.
Callan, R. Carlos Carballada, Michael J. Falcone, Richard E. Garman, James V.
Glynn, Patrick W.E. Hodgson, Samuel T. Hubbard, Jr., Reginald B. Newman, II,
Peter J. O'Donnell, Jr., Jorge G. Pereira, Robert E. Sadler, Jr., John L.
Vensel, Herbert L. Washington, Christine B. Whitman and Robert G. Wilmers; as
well as the executive officers of the Company: Robert J. Bennett, Chairman of
the Board; Robert G. Wilmers, President and Chief Executive Officer; Robert E.
Sadler, Jr., Executive Vice President; Michael P. Pinto, Executive Vice
President and Chief Financial Officer; John. L. Pett, Executive Vice President
and Chief Credit Officer; Adam C. Kugler, Executive Vice President and
Treasurer; Emerson L. Brumback, Executive Vice President; Atwood Collins, III,
Executive Vice President; Mark J. Czarnecki, Executive Vice President; Brian E.
Hickey, Executive Vice President; James L. Hoffman, Executive Vice President;
and Ray E. Logan, Executive Vice President Manufacturers and Traders Trust
Company. As of March 1, 2000, Mr. Wilmers owned 7.61% of the Company's
outstanding common stock, Mr. Pereira owned 4.04% of the Company's outstanding
common stock, Mr. Baird owned 2.50% of the Company's outstanding common stock
and Mr. Sadler owned 1.02% of the Company's outstanding common stock and none of
the other foregoing participants individually beneficially owned in excess of 1%
of the Company's outstanding common stock. As of March 1, 2000, the directors
and executive officers of the Company beneficially owned in the aggregate
approximately 17.40% of the Company's outstanding common stock. Additional
information about the directors and executive officers of the Company is
included in the Company's proxy statement for its 2000 Annual Meeting of
Shareholders filed with the SEC on March 10, 2000. Information will also be
included in a joint proxy statement/prospectus to be filed by Keystone
Financial, Inc. and the Company in connection with the proposed merger.
Investors will be able to obtain these documents free of charge at the SEC's web
site (www.sec.gov) or by contacting M&T Bank Corporation, One M&T Plaza, 5th
Floor, Buffalo, NY 14203, Attention: Corporate Reporting, telephone (716)
842-5445.
Investors should read the joint proxy statement/prospectus carefully
when it becomes available before making any voting or investment decisions.
