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.

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