Terms

Series

Fixed Rate Cumulative Perpetual Preferred Stock, Series A and Series C

Liquidation Preference

$1,000.00

Coupon Rate

5%

Rate Type

Fixed

Annual Dividend

$50.00

Payment Frequency

Quarterly

Cumulative

Yes

Perpetual

Yes

Convertible

No

Callable

Yes

First Call Date

November 15, 2018

First Call Price

$1,000.00

Redemption Notice Period

30 days

Capital Stack Ranking

Junior To: All Existing And Future Indebtedness Of M&T Bank Corporation, Any Future Preferred Stock Expressly Senior To The Preferred Shares, All Obligations And Preferred Equity Of Subsidiaries (Structural Subordination); Pari Passu With: Fixed Rate Non-Cumulative Perpetual Preferred Stock, Series D, Any Other Parity Stock; Senior To: Common Stock, Any Junior Stock

Regulatory (Basel III) Call

Yes

Tax Classification

Qualified Dividend

Qualifies for QDI

Yes

Qualifies for DRD

Yes

Shares Offered

381,500

Prospectus Summary

M&T Bank Corporation is offering 230,000 shares of its Fixed Rate Cumulative Perpetual Preferred Stock, Series A, and 151,500 shares of its Series C, each with a $1,000 liquidation preference and $1.00 par value, sold by the U.S. Treasury as part of a TARP CPP exit. Both series carry an initial fixed rate of 5% per annum (subject to a pending amendment; otherwise stepping up to 9% in late 2013/early 2014), payable quarterly on February 15, May 15, August 15, and November 15. These are cumulative preferred shares, meaning any skipped dividend accrues with compounding interest and must be paid in full before any distributions can be made to common or junior stockholders. The Preferred Shares rank senior to M&T's common stock and any junior equity, and pari passu with the Series D preferred, but are junior to all existing and future indebtedness of M&T Bank Corporation. Because M&T is a holding company conducting virtually all operations through its bank subsidiary (Manufacturers and Traders Trust Company, representing 99% of assets), holders are structurally subordinated to all creditors and depositors of the bank subsidiary — approximately $68 billion in deposits and borrowings as of June 2012. Upon effectiveness of the proposed amendment, the first optional call date moves to November 15, 2018; a regulatory capital treatment event call (whole redemption only, within 90 days) is available if the shares risk losing Tier 1 Capital status under Federal Reserve guidelines — a relevant risk given evolving Basel III implementation. At par ($1,000), the initial 5% coupon generates $50 annually or $12.50 per quarter. Dividends are expected to qualify for the preferential 15%/20% qualified dividend income (QDI) rate for individual investors and the dividends-received deduction (DRD) for corporate holders, as M&T is a domestic C-corporation bank holding company. The record date falls on the 15th calendar day preceding each payment date. The dividend stopper prohibits any common stock or junior equity distributions if preferred dividends are in arrears, and payments on the Preferred Shares themselves can be blocked if M&T is in default or deferring interest on its outstanding junior subordinated notes — a scenario investors should monitor.

Summarized from the SEC prospectus filing.

Distribution History

Ranking vs. Other Preferreds

Dividend Stopper Provisions

Dividend Stopper Description

If any accrued dividends on the Preferred Shares remain unpaid, the Company may not pay dividends on or repurchase its common stock or any junior or parity stock; additionally, if the Company is deferring interest or in default on its junior subordinated notes, it is blocked from paying dividends on the Preferred Shares.

Other Preferreds from M&T Bank Corporation

Div Score Breakdown

Reinvesty's multi-factor safety analysis for this preferred, composite score: 72 (Strong)