The merger of M&T Bank Corp. and Hudson City Bancorp, which was supposed to be completed in August, now has a proposed completion date of January 2014. But M&T said “there is no assurance” that time frame will produce the merged entity.
The Federal Reserve raised regulatory concerns about the merged bank”™s anti-money laundering policies.
In a prepared statement, M&T said, “M&T has already commenced a major initiative, including the hiring of an outside consulting firm, intended to fully address the Federal Reserve”™s concerns.”
The Fed”™s questions stem from paperwork submitted September 2012.
M&T said further, “In view of the potential timeframe required to implement this initiative, demonstrate its efficacy to the satisfaction of the Federal Reserve and otherwise meet any other regulatory requirements that may be imposed in connection with these matters, M&T and Hudson City believe that the timeframe for closing the transaction will be extended substantially beyond the date previously expected. M&T and Hudson City intend to extend the date after which either party may elect to terminate the merger agreement if the merger has not yet been completed from August 27, 2013 to January 31, 2014, but there can be no assurances that the merger will be completed by that date.”
M&T, meantime, posted 1Q stock returns that were favorable, with per-common share dividends up 32 percent year over year from 1Q 2012. And the annualized rate of returns on assets was up from 1.06 percent in 1Q 2012 to 1.36 percent for 1Q 2013.
Hudson City’s 135 branch offices are in New Jersey (97 branches), downstate New York (29 branches) and Connecticut (9 branches). The two banks have noted “very little overlap” in their branch presences.
M&T expects with the merger”™s approval to gain approximately $25 billion in deposits and $28 billion in loans from the acquisition (before acquisition accounting adjustments).
There are a total 725 commercial and retail facilities bearing the M&T name on the East Coast. Its largest presence remains in the Empire State, where 7,462 of its 15,050 employees work.
Shareholders of the two banks are expected to vote on the merger this week. M&T reported the new date for merging would not affect that vote, which the bank expects to be approved.
