This Day On The Street
Continue to site right-arrow
ADVERTISEMENT
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
Cramer's Action Alerts PLUS - See his portfolio and get alerts BEFORE every trade. Learn more NOW!

M&T Bank: Hudson City Deal Delay Loser

NEW YORK ( TheStreet) -- M&T Bank (MTB - Get Report) of Buffalo, N.Y., was the loser among major banking names on Friday, with shares sliding 4.5% to close at $100.24.

M&T in August agreed to acquire Hudson City Bancorp (HCBK - Get Report) of Paramus, N.J., in a deal originally valued at roughly $3.7 billion in cash and stock. The merger was expected to be completed in the second quarter of 2013.

The two banks together announced early on Friday that the time needed to gain regulatory approval of the deal would be "extended substantially," because "M&T has learned that 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 said it had "already commenced a major initiative, including the hiring of an outside consulting firm, intended to fully address the Federal Reserve's concerns."

Hudson City's shares declined 5.5% to close at $8.29.

Heading into the August deal, Hudson City was under pressure because its long-term leverage strategy of increasing wholesale borrowings and investing in mortgage-backed securities had backfired in the prolonged low-rate environment. The company was forced by regulators to undergo two major balance sheet restructurings during 2011.

Hudson City's net interest margin -- the spread between the average yield on loans and investments and the average cost for deposits and borrowings -- was 1.97% in the fourth quarter, narrowing from 2.02% in the third quarter, but improving from 1.73% a year earlier. The Federal Deposit Insurance Corp. reported in its Quarterly Banking Profile that the aggregate fourth-quarter net interest margin for all U.S. banks was 3.32%.

The merger deal values each share of Hudson City at 0.084 of an M&T share, or $8.42 a share, which is just above where Hudson City's stock closed on Friday.

The companies together said they would extend the date after which either company could walk away from the deal until January 31, 2014, but also said "there can be no assurances that the merger will be completed by that date."

M&T will announce its first-quarter results on Monday, with analysts polled by Thomson Reuters expecting the bank to report a profit of $1.96 a share, declining from $2.16 in the fourth quarter, but increasing from $1.50 in the first quarter of 2012. The company on Tuesday will proceed with its special meeting, including a shareholder vote, on the Hudson City deal.

1 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
Try it NOW
Only $9.95
Try it NOW
14-Days Free
Try it NOW

Check Out Our Best Services for Investors

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
Options Profits

Our options trading pros provide over 100 monthly option trading ideas and strategies to help you become a well-seasoned trader.

Product Features:
  • Actionable options commentary and news
  • Real-time trading community
Try it NOW
Try it NOW
Try it NOW
To begin commenting right away, you can log in below using your Disqus, Facebook, Twitter, OpenID or Yahoo login credentials. Alternatively, you can post a comment as a "guest" just by entering an email address. Your use of the commenting tool is subject to multiple terms of service/use and privacy policies - see here for more details.
Submit an article to us!
SYM TRADE IT LAST %CHG
HCBK $9.76 0.00%
JPM $61.28 0.00%
MTB $121.00 0.00%
WFC $54.79 0.00%
AAPL $128.46 0.00%

Markets

DOW 18,132.70 -81.72 -0.45%
S&P 500 2,104.50 -6.24 -0.30%
NASDAQ 4,963.5270 -24.3630 -0.49%

Partners Compare Online Brokers

Free Reports

Free Newsletters from TheStreet

My Subscriptions:

After the Bell

Before the Bell

Booyah! Newsletter

Midday Bell

TheStreet Top 10 Stories

Winners & Losers

Register for Newsletters
Top Rated Stocks Top Rated Funds Top Rated ETFs