UPDATE 1-M&T Bank, a Berkshire holding, says profit falls

NEW YORK, April 14 (Reuters) - M&T Bank Corp (MTB.N), a large U.S. mid-Atlantic bank, said on Tuesday first-quarter profit fell 68 percent, hurt by an increase in loan losses and writedowns on investments.

Net income for the Buffalo, New York-based lender, which counts Warren Buffett's Berkshire Hathaway Inc (BRKa.N) (BRKb.N) among its largest investors, fell to $64.2 million from $202.2 million a year earlier. Earnings per share fell to 49 cents from $1.82.

M&T said operating profit fell 65 percent to $75 million, or 59 cents per share, from $215.6 million, or $1.94 a share. Results included 18 cents per share of charges for writedowns of investments.

Analysts on average expected profit of 70 cents per share, according to Reuters Estimates.

M&T took $600 million from the government's bank bailout program, the Troubled Asset Relief Program. Net income applicable to common shareholders, reflecting dividend payments on those funds, was not immediately available.

The bank set aside $158 million for credit losses, up from $60 million a year earlier, while net charge-offs rose to $100 million from $46 million. Charge-offs fell from the fourth quarter's $144 million. It said results reflected a "large commercial loan" whose collectibility "is in doubt."

In December, M&T agreed to buy Baltimore-based Provident Bankshares Corp (PBKS.O) for about $400 million in stock to expand in the mid-Atlantic. Provident shareholders this month approved the merger, which is expected to close this quarter.

M&T ended March with about $64.9 billion of assets, and operates more than 700 branches in seven mid-Atlantic states and the District of Columbia. It also took $600 million from the government's Troubled Asset Relief Program.

Berkshire ended 2008 with a 6 percent stake in M&T Bank, according to Thomson ShareWatch.

M&T shares closed Monday at $52.51 on the New York Stock Exchange. The shares have fallen 9 percent this year, compared with a 29 percent decline in the KBW Bank Index .BKX. (Reporting by Jonathan Stempel)