It took three long years but the Federal Reserve has finally given the green light to M&T Bank (NYSE: MTB) to acquire Hudson City Bancorp Inc (NASDAQ: HCBK).
As a result, M&T revised its compliance risk management program created to comply with the anti-money-laundering laws and to take other steps to enhance its compliance practices, according to a filing with the Securities and Exchange Commission. The bank denied the allegations by the Department of Justice and the Consumer Financial Protection Bureau, but said it wanted to avoid litigation so it could focus on “continuing to provide fair credit services to its customers and working to complete its pending merger with M&T Bank“.
To view the full article, register now. However, the end of the second quarter saw Hudson City only having deposits of $18 billion and loans of $20 billion.
“At M&T, we are deeply committed to the success of the customers and communities we serve, and we look forward to the opportunity to bring that strong commitment to Hudson City’s markets”, Wilmer said.
Buffalo-based M&T agreed to buy Hudson City for $3.7 billion in 2012, but the lenders were forced to extend the termination date several times because of regulatory concerns.
Hudson City has also faced scrutiny from regulators. Later in the summer M&T shares hit all-time highs after an earnings report that beat expectations and included higher revenue and loans. When the deal was announced, M&T said it expected to gain $25 billion in deposits and $28 billion in loans from the merger. It has assets of over $132 billion.
Should the deal be completed, M&T Bank would become the fifth-largest bank in New Jersey by deposits.
M&T shareholder Paul Durnan probed M&T Chief Executive Bob Wilmers on the deal at a recent annual meeting and was anxious a denial from the Fed could make it hard for the bank to do any deals in the future.
M&T Bank picks up 135 total branches in downstate New York, New Jersey and in Connecticut.
The Fed’s approval comes just in time: The merger agreement expires October 31.