The shares trade for 2.4 times tangible book value, and for 12 times the consensus 2013 EPS estimate of $7.75. The consensus 2012 EPS estimate is $6.89.
based on a quarterly payout of 97 cents, the shares have a dividend yield of 4.11%.M&T's ROA for the 12-month period ended June 30 was 0.97%, while the company's ROE was 8.16%, according to Thomson Reuters Bank insight. The company on Aug. 27 agreed to acquire Hudson City Bancorp (HCBK) of Paramus, N.J., for about $3.7 billion in stock and cash. The deal valued Hudson City at $7.22 a share, or 80% of its reported June 30 tangible book value of $9.08. M&T Bank of Buffalo, N.Y., has $80.8 billion in total assets, and Hudson City has $43.6 billion in assets, with 135 branches, with 97 branches in New Jersey, 29 in New York, and nine in Fairfield County, Conn. M&T will acquire $25 billion in deposits and $28 billion in loans through the Hudson City deal, after which M&T plans to "repay approximately $13 billion of Hudson City's long-term borrowings by liquidating its comparably sized investment portfolio." 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." The deal is expected to be completed during the second quarter of 2013. M&T 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. The U.S. Treasury on Aug. 17 completed a public offering of the $381.5 million in M&T TARP preferred shares held by the government. The preferred shares have a 5.00% coupon, which was originally scheduled to rise to 9.00% in February 2014 for the remaining $230 of the bank's original TARP bailout, with the coupon on the $151.5 million in assistance originally provided to Provident Bancshares rising to 9.00% in November 2013. M&T on Aug. 20 made proposed an innovative amendment -- which was later approved -- under which the dividend rate on all of the former TARP preferred shares will rise to 6.375% on November 15, 2013, with the company agreeing not to redeem the shares until Nov. 15, 2018. While this is significantly lower than the original reset rate of 9.00%, it was a good deal for all parties, because it enabled M&T to avoid repaying TARP over the next year, while providing the preferred shareholders an above-market dividend. Credit Suisse analyst Craig Siegenthaler has a neutral rating on M&T, with a $102 price target, and on Aug. 28 raised his 2013 EPS estimate for M&T to $8.32 from $7.90 and his 2014 estimate to $9.35 from $8.80, saying that "our accretion forecast is driven by MTB's restructuring of HCBK's long-term borrowings as well as expense synergies resulting from the elimination of redundant outsourced operations." MTB data by YCharts
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