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M&T Bank Corp. said Tuesday that first-quarter earnings rose 19 percent, as the Buffalo-based banking company made more commercial loans, wrote off fewer loans and kept costs under control.

M&T reported earnings of $189 million, or $1.62 per share, up from $159 million, or $1.30 per share, in the same period a year ago. Net operating earnings, which don't include one-time merger charges or amortization and other accounting expenses, were $199 million, or $1.70 per share. That's up 15 percent.

Earnings met Wall Street expectations. Shares fell 99 cents to $102.14. It's the second-highest performing stock among the 24-member KBW Philadelphia Stock Exchange Banks Index.

"I think the performance was a reasonable one. These are tough times," said Chairman and Chief Executive Robert G. Wilmers. "There are always areas that you wish could have done better. As long as we keep our revenues up and expenses down, we'll do OK."

M&T's board in December authorized the repurchase of up to 5 million shares. The bank bought back 1.9 million shares during the first quarter at an average cost of $101.14 per share.

The bank said it still expects to earn between $6.60 and $6.80 per share for 2005. The bank raised its quarterly cash dividend 13 percent to 45 cents per share, payable June 30 to stockholders of record on June 1.

"The results were largely as expected," said bank analyst Joseph Fenech of Sandler O'Neill & Partners in New York. "Revenue growth is probably going to be on the weak side for the remainder of 2005. That's something that's affecting most of the banking industry at this point."

M&T, the 17th-largest U.S.-based bank holding company with $53.9 billion in assets, has been growing earnings despite a lackluster economy in parts of its market. The bank has been struggling to grow commercial loans because of slack demand from business customers, but like many banks it has also benefited from improved credit quality and efforts to cut costs.

The bank said it has launched a five-point program to control costs and boost revenues, with an ultimate goal of $50 million in gains by mid-2006.

"We're in a lot of different businesses in a lot of different geographies. It's not always predictable," Wilmers said. "We're always trying to do better."

Net interest income from taking deposits and making loans rose 5 percent to $446 million, as average loans rose 7 percent to $39.1 billion and deposits increased 9 percent to $36.3 billion. Loan growth was offset by a narrowing of the profit margin because of rising interest rates over the last nine months.

Total commercial loans rose 12.3 percent to $24.3 billion, with business loans rising 10.9 percent and commercial mortgages up 13.4 percent. Residential mortgages rose 5.3 percent to $3.2 billion, while consumer loans fell just under 1 percent to $11 billion as a drop in auto loans countered growth in home equity loans.

Commercial customers are using 44.6 percent of their lines of credit in the quarter, up from December, and the bank has $1.3 billion each in commercial and retail loans in the pipeline.

Credit quality remained steady, as the bank set aside $24 million to cover loan losses and wrote off $19 million as uncollectible. That compares to $20 million and $18 million, respectively, a year ago. But bad loans fell 30 percent to $180 million, largely because several big commercial loans were sold, paid off or written off.

Fee income rose 3 percent to $234 million, driven by a 17 percent jump in residential and commercial mortgage banking revenues to $33.4 million.

Deposit service charges and trust revenues were both flat, at $88.4 million and $33.5 million, respectively. Brokerage fees rose 2 percent to $14.2 million, while trading and foreign exchange revenues fell 5 percent to $4.9 million.

Operating expenses fell 6 percent to $367 million, despite a 3 percent rise in salaries and benefits, which represents more than half of the total. The bank expects pension costs to be higher in 2005.

M&T also held its annual shareholders meeting Tuesday. Shareholders re-elected 24 directors and ratified PricewaterhouseCoopers as the bank's auditor with more than 92 percent of shares in favor, but a much smaller majority of 82 percent approved the bank's 2005 Incentive Compensation Plan.