It took Hudson City Bancorp in Paramus, N.J., less than two weeks to decide that it is still committed to selling itself to M&T Bank in Buffalo.
The companies said in a press release Friday that they have extended the termination date for their long-delayed merger to Oct. 31, using the same consideration and exchange ratio outlined in the original merger agreement. It is the fourth time the companies have pushed back the termination date since they agreed to merge in 2012.
M&T and Hudson City said in the release that they were advised by the Federal Reserve Board that the agency intends to act on the merger application by Sept. 30.
Hudson City shares were up nearly 3%, to $9.57 apiece, in late-morning trading; they gained as much as 5.5% earlier in the day, which Bloomberg said was their best intraday performance since October 2012. M&T shares had fallen 1.7%, to just over $121 apiece, as of late morning.
M&T and Hudson disclosed on April 6 that they were still unable to get the Federal Reserve Board to sign off on the deal. The $37 billion-asset Hudson City, however, said at that time that its
That didn't happen.
"We have been advised by M&T that it has made significant progress towards addressing all of the Federal Reserve's concerns," Denis Salamone, Hudson City's chairman and chief executive, said in Friday's release. "Based on our discussions with M&T and through the due diligence we have conducted, we believe that it is reasonable to agree to an extension to allow the regulatory process to be completed."
Hudson City's board also consulted with its financial advisor and legal team "to assess the nature and timing of the delay" before agreeing to the latest extension, Salamone added.
Prior delays were attributed to the Fed's concerns about M&T's Bank Secrecy Act and anti-money-laundering controls. Since June 2013, the $97 billion-asset company has been operating under a memorandum of understanding with the Fed, but it has been working actively to address its problems. M&T spent $151 million last year on BSA and anti-money-laundering enhancements.
Hudson City may also have a regulatory hiccup looming. Bloomberg reported earlier this week that the Justice Department and Consumer Financial Protection Bureau are looking at whether the company violated the Fair Housing Act. The report said that a preliminary review by the CFPB concluded that Hudson City had denied loans to people in minority communities.
Friday's release made no mention of the potential Hudson City investigation.
"We are fully committed to this merger, because we continue to believe strongly that it remains an extremely beneficial opportunity for both companies, including the shareholders, customers and communities we serve," Robert Wilmers, M&T's chairman and chief executive, said in Friday's release.
