(RTTNews) - Monday, bank holding company M&T Bank Corporation (MTB: News ) reported a 68% decrease in second quarter net earnings hurt primarily by increased provision for credit losses and higher impairment charges. Results were also impacted by integration expenses associated with the acquisition of Provident Bankshares Corporation.

The Buffalo, New York-based company's net income for the quarter plunged to $51.2 million from $160.3 million in the corresponding period last year.

Net income available to common shareholders declined 75% to $40.52 million or $0.36 per share from $160.27 million or $1.44 per share recorded in the prior-year period.

Effective May 23, 2009, M&T completed the acquisition of Provident Bankshares Corporation. Results for the quarter included expenses associated with systems conversions and other costs of integrating operations of $40 million, or $0.35 per common share. In addition, results for the quarter also include $20 million, or $0.17 per share, associated with the special assessment levied by Federal Deposit Insurance Corporation.

Also reflected in the recent quarter's results were $25 million, pre-tax, of other-than-temporary impairment charges on certain available-for-sale investment securities, which reduced net income and earnings per share by $15 million and $0.13, respectively.

Net operating income, which exclude the impact of merger-related expenses and intangible amortization, declined 41% to $100.81 million from $170.4 million in the year-ago quarter.
Net operating earnings per share slid 48% to $0.79 from $1.53 in the same period of the previous year.
On average, sixteen analysts polled by Thomson Reuters expected the company to earn $0.48 per share for the quarter. Analysts' estimates typically exclude special items.

Net interest income for the quarter increased 3% to $501.6 million from $486.6 million in the year-ago quarter. Net interest income after provision for credit losses declined 8% to $354.6 million from $386.6 million in the same period last year.

Provision for credit losses were 47% higher at $147 million from $100 million in the year-ago quarter. Net interest margin was 3.43% compared with 3.39% in the prior year period.

Net charge-offs of loans totaled $138 million, up from $99 million in the year-earlier quarter, largely due to the partial charge-off of a commercial loan transferred to nonaccrual status in this year's first quarter. Allowance for credit loss totaled $855 million or 1.62% of total loans compared with $774 million or 1.58% of total loans in the same period last year.

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