Hudson City, M&T Merger Hits Snag as Fed Raises Compliance Concerns

Michael Teague  |

Last August, M&T Bank Corp. (MTB) and Hudson City Bancorp Inc. (HCBK) announced a $3.7 billion merger that was supposed to close by the second quarter of this year.

That process has now been delayed for the foreseeable future, as M&T announced on Friday that it has hired a consultant to help it respond to concerns from the Federal Reserve regarding compliance with the Bank Secrecy Act, especially as concerns procedures for spotting and preventing money laundering.

Regulators are reportedly not concerned about money laundering per se, so much as the strength of the mechanisms in place to detect and put a stop to it.

The acquisition would expand M&T’s reach to some 135 East Coast branches, expanding its overall network to a total of some 870 branches.

Despite the delay, both banks plan to move forward with their respective shareholder votes on the deal later in the month. Hudson’s shareholders will be compensated with 60 percent M&T shares and 40 percent cash. Both parties have agreed to extend the deadline for terminating the merger in the event that it is not yet complete from Jan. 31, 2014.

The sale price announced last August will not change.

M&T’s shares took a hit on the news, dropping 4.57 percent to $100.13, while Hudson City lost 5.47 percent to $8.29.

The deal would give M&T $109 billion in assets, $89 billion in loans, and $ 87 billion in deposits, which would propel it into the company of the nation’s top 15 biggest banks.

DISCLOSURE: The views and opinions expressed in this article are those of the authors, and do not represent the views of equities.com. Readers should not consider statements made by the author as formal recommendations and should consult their financial advisor before making any investment decisions. To read our full disclosure, please go to: http://www.equities.com/disclaimer

Companies

Symbol Name Price Change % Volume
HCBK Hudson City Bancorp Inc n/a n/a n/a 0 Trade
YYP.TEST null n/a n/a n/a 0 Trade
MTB M&T Bank Corporation 172.27 3.13 1.85 1,284,675 Trade

Comments


Watchlist

Symbol Last Price Change % Change
AAPL

     
AMZN

     
HD

     
JPM

     
IBM

     
BA

     
WMT

     
DIS

     
XOM

     

World Economic Forum at Davos 2019 - Dominic Briggs General Partner Blockwall Management

Matt Bird sits down with Dominic Briggs, General Partner Blockwall Management at the World Economic Forum at Davos 2019

Emerging Growth

DirectView Holdings Inc

DirectView Holdings Inc designs and installs surveillance systems, digital video recording and services. The company through its subsidiaries operates within two divisions security and surveillance and video conferencing services.