Non-performing loans and foreclosures contributed to a 25% drop in net income for M&T Bank ( MTB). The Buffalo, N.Y.-based bank, which posted second-quarter results Monday, is the first in a line of regional banks reporting and its report could serve as an indicator of what's to come from the sector during the earning's season. M&T was able to report a profit of $1.44 a share as opposed to a losing quarter like the major banks posted, but it was still a far cry from last year's $1.95 a share and the results missed analyst expectations of $1.50 a share, according to Thomson Reuters. Net income came in at $160 million, vs. $214 million for second quarter 2007. CFO Rene Jones observed in a company statement, "While M&T is not immune to the effects of the higher credit costs evident throughout the banking industry as we move through the current credit cycle, we, nevertheless, recorded significant profits during the quarter." It also recorded significant late loans, which jumped to $587 million from $296 million a year ago. The bank insisted that the numbers grew as a result of an accounting change that makes the bank recognize non-performing loans as those that are 90 days late as opposed to waiting until the loans were 180 days past due. But it did concede that loans to residential builders that were late in making payments also contributed. M&T also has had to digest some $53 million in assets taken in foreclosure, a huge increase over last year's $18 million, also attributed to residential real estate loan defaults. The provision for credit losses increased to $100 million in the second quarter of 2008, from $30 million in the year-earlier quarter.