This Day On The Street
Continue to site
This account is pending registration confirmation. Please click on the link within the confirmation email previously sent you to complete registration.
Need a new registration confirmation email? Click here

Hudson City Bancorp: Takeout Winner (Update 1)

M&T also said that the merger with Hudson City will be "accretive to the combined company's capital ratios, capital generation and tangible book value per share, as well as its GAAP and operating earnings per share."

During a conference call with analysts, M&T CFO Rene Jones said that for the combined companies "The pro forma tier 1 common ratio is estimated to improve by roughly 30 to 40 basis points compared to M&T's stand-alone levels that we would have experienced had we not announced the transaction with an estimated range of 8.25% to 8.50% at closing. This is some 115 to 135 basis points above the level in existence at the end of the most recent quarter ended the 6-30-2012."

Jones went on to say that "the transaction is immediately accretive in 2013 with a high-single-digit EPS accretion by 2014 and it provides an above 18% IRR."

M&T Bank CEO Robert Wilmers said "as a thrift, Hudson City focused primarily on deposits and mortgages. M&T will build on Hudson City's loyal customer base to create a comprehensive community banking franchise that provides a full range of checking and savings accounts, debit and credit cards, home equity loans and other lending options, plus small business and commercial banking services and our premier wealth management and corporate trust solutions through Wilmington Trust," which M&T acquired in May 2011.

Shareholders of M&T were obviously pleased at the prospect of making such a large acquisition at 80% of Hudson City's reported June 30 tangible book value of $9.08, while avoiding a dilutive common equity raise. M&T's shares rose 5% to close at $89.82.

Deutsche Bank analyst Matt O'Connor has a "Hold" rating on M&T, but said that "It's tough to find many negatives -- other than one could argue for a lower valuation for the combined company vs. MTB stand alone given the lower quality earnings mix at HCBK and a bigger combined company (which may be tougher to grow and under more regulatory scrutiny)."

M&T has been quite the innovator when it comes to avoiding the dilution of common shareholders. The company owes $230 million in bailout money provided through the Troubled Assets Relief Program, or TARP, in December 2008, in addition to $151.5 million for TARP assistance provided to Provident Bancshares before that company was acquired by M&T in May 2009.
2 of 4

Check Out Our Best Services for Investors

Action Alerts PLUS

Portfolio Manager Jim Cramer and Director of Research Jack Mohr reveal their investment tactics while giving advanced notice before every trade.

Product Features:
  • $2.5+ million portfolio
  • Large-cap and dividend focus
  • Intraday trade alerts from Cramer
Quant Ratings

Access the tool that DOMINATES the Russell 2000 and the S&P 500.

Product Features:
  • Buy, hold, or sell recommendations for over 4,300 stocks
  • Unlimited research reports on your favorite stocks
  • A custom stock screener
Stocks Under $10

David Peltier uncovers low dollar stocks with serious upside potential that are flying under Wall Street's radar.

Product Features:
  • Model portfolio
  • Stocks trading below $10
  • Intraday trade alerts
14-Days Free
Only $9.95
14-Days Free
Dividend Stock Advisor

David Peltier identifies the best of breed dividend stocks that will pay a reliable AND significant income stream.

Product Features:
  • Diversified model portfolio of dividend stocks
  • Updates with exact steps to take - BUY, HOLD, SELL
Trifecta Stocks

Every recommendation goes through 3 layers of intense scrutiny—quantitative, fundamental and technical analysis—to maximize profit potential and minimize risk.

Product Features:
  • Model Portfolio
  • Intra Day Trade alerts
  • Access to Quant Ratings
Real Money

More than 30 investing pros with skin in the game give you actionable insight and investment ideas.

Product Features:
  • Access to Jim Cramer's daily blog
  • Intraday commentary and news
  • Real-time trading forums
Only $49.95
14-Days Free
14-Days Free
HCBK $10.01 0.45%
MTB $119.91 0.24%
AAPL $108.83 -1.80%
FB $91.64 -0.82%
GOOG $632.78 -1.50%


Chart of I:DJI
DOW 16,948.43 +36.14 0.21%
S&P 500 1,995.83 +15.91 0.80%
NASDAQ 4,756.9160 -34.2360 -0.71%

Free Reports

Top Rated Stocks Top Rated Funds Top Rated ETFs