Oct. 21--M&T Bank Corp. said Tuesday that third-quarter profits rose by 41 percent, fueled by a pair of acquisitions in Maryland, below-average loan losses, a higher profit margin and more fees.

The Buffalo-based bank reported net income of $127.7 million, or 97 cents per share, up from $91.2 million, or 82 cents per share, in the same three-month period a year ago.

That included an after-tax gain of $18 million, or 15 cents per share, from its government-assisted takeover of failed Bradford Bank in the Baltimore area, a transaction through which the Federal Deposit Insurance Corp. will reimburse M&T for most loan losses. M&T assumed $361 million in deposits and purchased $469 million in assets, including $302 million in loans.

On the other side, M&T incurred $9 million in after-tax expenses from that acquisition and its purchase in the second quarter of Baltimore-based Provident Bankshares Corp. And it incurred $29 million in after-tax "other-than- temporary impairment" charges on investments, or $47 million before taxes, with $45 million of that tied to privately issued mortgage-backed securities.

But it reversed a $10 million tax reserve of money previously set aside for potential tax liabilities in certain jurisdictions.

In all, the one-time gains and charges reduced earnings by $9 million, or 8 cents per share, but the acquisitions also added 8 cents per share to earnings. Net operating income, without the special items, rose by 28 percent to $128.8 million, or 98 cents per share, from $100.8 million, or 91 cents per share.

Wall Street had expected about 66 cents, based on the consensus of analysts. Shares closed at $67.32, up $1.05.

M&T "continues to stand out among its peers for remaining profitable through the downturn and not having reduced its dividend," research analyst Joseph Fenech of Sandler O'Neill & Partners LP wrote in a re-

search report. "The improved capital position also bolsters management's claim that the company is not in need of additional capital."

Bank officials credited the performance--which is in contrast to many peers and the nation's biggest banks--to M&T's conservative operating philosophy.

Credit losses were "below current industry experience," while the profit margin and the ratio of common equity to assets rose noticeably, said Rene F. Jones, the bank's executive vice president and chief financial officer.

"We thought it was a very solid quarter," Jones said. "Our results were steady, very consistent with what we had been expecting.