M&T Bank Corp. has received federal approval to acquire Hudson City Bancorp Inc. for $3.7 billion in a deal that took more than three years to complete after being held up by the Federal Reserve.
The transaction is still pending approval from the New York State Department of Financial Services and other closing conditions, which M&T said are expected to be completed on or around Nov. 1.
The initial announcement Buffalo-based M&T would take over Hudson City”™s 135 branches was in August 2012, but, in April 2013, M&T said additional time was needed and the deadline to complete the transaction was extended numerous times thereafter.
“The Federal Reserve has identified certain regulatory concerns with M&T”™s procedures, systems and processes relating to M&T”™s Bank Secrecy Act and anti-money-laundering compliance program,” M&T”™s said in 2013.
M&T hired an independent consulting firm as part of the bank’s initiative to address the issues outlined by the Federal Reserve.
In response to requests for comment about those issues, Chet Bridger, an M&T spokesman, provided part of an annual report letter penned in March by Robert G. Wilmers, the bank”™s chairman and CEO.
In the letter, Wilmers wrote the bank invested $151 million in 2014 and $60 million in 2013 to improve its Bank Security Act and anti-money-laundering program.
Part of that investment includes a new Know Your Customer program, which has now been implemented for over a year and helps bank employees better assesses a customer’s potential risks.
“The expanse and depth of our new BSA/AML program is both imposing and remarkable; it ensures that the risk profile of every customer of the bank, old and new, is understood and property managed,” Wilmers wrote.
The consideration and exchange ratio of the original agreement will remain intact, meaning each Hudson City share will receive consideration valued at 8.4 percent of an M&T share in the form of either M&T stock or cash.
In a previous 2012 report by the Business Journal, the estimated $3.7 billion value of the acquisition was based on the closing price of M&T stock Aug. 24, 2012, which was approved by the boards of directors of each company.
M&T”™s presence in Westchester County, which includes 70 employees at seven branches and a regional headquarters office in Tarrytown, will now include Hudson City”™s 10 Westchester branches. M&T currently has one commercial banking office in Norwalk and 25 total Fairfield County employees. With the acquisition of Hudson City, M&T will have nine additional branches in the county.
Hudson City”™s 29 remaining branches are in New Jersey where the bank is based.
A M&T spokesman was unsure of how many Hudson City workers are employed in Westchester and Fairfield counties.
The Hudson City branches will keep that name until being converted to M&T”™s network, which is expected in early 2016.
