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M&T Bank is expected to complete its purchase of Hudson City Bancorp despite unexpected regulatory issues. But an analyst had fun speculating about who might step in as the buyer if that deal collapsed.
August 23 -
Nine months ago FirstMerit executives were under fire for agreeing to buy Citizens Republic. Its shares plummeted. Now its stock is trading near a 52-week high. See how they did it.
June 28 -
Shareholders for M&T and Hudson City will meet next week to vote on the banks' merger, though a Fed review of M&T's anti-money-laundering compliance could throw a wrench in the works.
April 12 -
Stiffer oversight of banks with assets of $50 billion or more will keep New York Community Bancorp, of Westbury, N.Y., out of the M&A game until a major acquisition comes along, CEO Joseph Ficalora says.
July 31
The stories of three closely watched midsize banks crystallize the different and sometimes tedious stages of being a bank buyer these days.
Executives from FirstMerit (FMER), M&T Bank (MTB) and New York Community Bancorp (NYCB) each shared a little bit more detail about their discrete experiences in M&A during presentations Monday at the Barclays Global Financial Services Conference.
FirstMerit updated investors about the integration of Citizens Republic Bancorp. M&T shared a few tidbits about the internal changes it is making so it can gain regulatory approval to complete its deal to buy Hudson City Bancorp (HCBK). New York Community continued talking up its appetite for a transformative deal.
FirstMerit (Absorbing New Purchase)
The Akron, Ohio, company completed its
Deal-related costs are shaping up to be cheaper than originally expected. FirstMerit expects merger-related expenses to be $79 million, down about 10% than initially forecast, Greig says.
Cost saves were pegged for $59 million, but Greig says the number could be higher because "we've identified additional opportunities for evaluation and potential implementation in 2014."
FirstMerit has also recruited 21 bankers in Michigan and Wisconsin two states it entered through the deal to help with the integration and has sold $2.3 billion of mortgage-backed securities and municipal bonds "with credit ratings below our policy minimums." It also liquidated nearly $700 million of high-cost borrowings.
The deal, which increased FirstMerit's assets by 40%,
Prior to betting on Michigan with the Citizens deal, FirstMerit was pushing its way into Chicago through a branch deal and a couple of failed-bank acquisitions. In announcing the Citizens deal, Greig said that
"As we looked at M&A in Chicago, there's been very little that complements our commercial strategy," Greig says.
M&T (Closing the Deal)
M&T's
The deal is now expected to close by Jan. 31. Rene Jones, chief financial officer of M&T, offered a progress report on the internal changes the Buffalo company is making to win the Fed's blessing.
"There's quite a bit of work that has to go through that process," Jones said. "It's hard for us to share a lot of information, so we can give you some sense that things are going well and today we think we've hit all our milestones."
M&T has overhauled its anti-laundering compliance staff. The changes include the hiring of 184 people, more than doubling the size of the department.
"The infrastructure that you need to build is the same infrastructure, regardless of whether you're a global bank or a regional bank headquartered in Buffalo," Jones said.
During the Q&A, Jones was also asked to refresh investors on
"We've always wanted to be in New Jersey, we have customer contact in New Jersey, but over the last 30 years we've never found a place that we could get into economically that had a good, sizable-enough franchise but at the same time happened at a place where we could add some strategic value," Jones says. "It gives us a free option on New Jersey, but it does it in an economical way. And I think without it it would be very, very hard for us to sort of establish a strong enough market share position to operate a bank very effectively and efficiently over time."
New York Community Bancorp (On the Prowl)
The $44 billion-asset New York lender known for its prowess in multifamily lending has built the infrastructure to handle the regulation that comes along with being in the big-bank stratosphere. Now it just wants to find the partner to take it over the $50 billion threshold.
"It is our intention that our next deal will be a large deal," CEO Joseph Ficalora said at the conference. "So, we don't want to tiptoe over the $50 billion,
At $50 billion, New York Community would be considered a systemically important financial institution under the Dodd-Frank Act and would be subjected to a slew of additional regulation and oversight.
Despite its name, the company is also not limiting its hunt to just New York. Ficalora says that its confidence to branch out of the Big Apple comes from its 2009 acquisition of the failed AmTrust Bank in Cleveland from the Federal Deposit Insurance Corp. That acquisition took the company into Arizona and Florida.
"AmTrust demonstrates pretty clearly that our footprint is irrelevant," Ficalora says. "Being out of our footprint in our particular case does not represent undue risk. It actually represents an opportunity to have a better funding source that we can manage to our advantage."
New York Community has been attached to several large potential sellers most recently it was named as a
Its name has also been tossed around as a
Earlier this year, it was