NEW YORK ( TheStreet) -- M&T Bank ( MTB) 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) 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.