Hudson City Bancorp Inc. (HCBK) and M&T Bank Corp. (MTB)
said additional time will be needed to get regulatory clearance for
their proposed merger, as the Federal Reserve has expressed
concerns about M&T Bank's anti-money-laundering compliance
program and certain other procedures.
M&T, which said the concerns relate to its procedures tied
to the Bank Secrecy Act, has hired an outside consulting firm to
help address the Fed's concerns. The act includes requirements that
help detect and prevent money laundering.
In August, Hudson agreed to be acquired by M&T Bank Corp.
(MTB) in a deal that was valued at $3.7 billion, giving Buffalo,
N.Y.-based M&T Bank a franchise stretching from Connecticut to
Virginia. M&T filed its regulatory applications with its
regulators in September, and the deal was expected to close in the
second quarter.
The banks said Friday that the timeframe for closing the deal
will be "extended substantially" beyond the previous date. The pair
also intend to extend the date after which either bank can choose
to terminate the merger agreement if the merger hasn't yet been
completed to Jan. 31 from Aug. 27.
M&T and Hudson City will continue with their special
shareholders meetings to consider the merger on Tuesday and
Thursday, respectively.
If the acquisition goes through, M&T will gain Hudson City's
135 branch offices, mostly located in New Jersey, as well as about
$25 billion in deposits and $28 billion in loans, giving it the
fourth-largest deposit share in New Jersey.
Shares of Hudson were recently halted for news. The stock has
climbed 27% in the past 12 months. Shares of M&T edged down 67
cents to $104.25 in recent premarket trading.
Write to Saabira Chaudhuri at saabira.chaudhuri@dowjones.com
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