By ALLISSA KLINE
Business First

M&T Bank has received preliminary approval to receive $600 million through the government's Capital Purchase Program.

The banking company now has 30 days to decide whether it will sell preferred shares to the government in exchange for an influx of cash.

M&T spokesperson Chester Bridger stressed that the deal is not yet done.

"M&T did apply to the program and has received preliminary approval," Bridger said. "But it has not closed, and we have not accepted the money. We have not issued the shares yet."

Thursday's announcement is the first time M&T has addressed whether it applied for the TARP (troubled asset relief program) capital. The program, which was announced this fall by the U.S. Treasury Department, is supposed to be a means to encourage banks to increase capital, which theoretically would stabilize the economy.

The deadline to apply for government funding was Nov. 14.

In a news release, M&T Bank chief financial officer and executive vice president Rene Jones said the bank took its time to think about the impacts and effects of applying for rescue funds.

"Even though our capital ratios are well in excess of the regulatory minimums, we believe it is important to join the industry in support of this program established by the Treasury Department to address the disarray in the financial sector," Jones said. "Since we have sufficient capital to meet the credit needs of our customers and respond to current market conditions, we've taken considerable time to evaluate the benefits of the (Capital Purchase plan) to a healthy bank like M&T, examining how additional capital would be deployed effectively and efficiently."

M&T's announcement follows other local banks who have applied, and in some case accepted, TARP funds. Evans National Bank, Lake Shore Bancorp Inc., Financial Institutions Inc. and Northwest Bancorp Inc. have applied to receive capital, joining KeyCorp and First Niagara Financial Group Inc.

KeyCorp announced last week that it had completed its $2.5 billion capital raise for the TARP program.