M&T hired an outside consulting firm as part of its effort to respond to the Fed, the Buffalo, New York-based bank said today in a statement.
“In view of the potential timeframe required to implement this initiative, demonstrate its efficacy to the satisfaction of the Federal Reserve and otherwise meet any other regulatory requirements that may be imposed in connection with these matters, M&T and Hudson City believe that the timeframe for closing the transaction will be extended substantially,” the companies said in a statement.
The banks extended until Jan. 31 the date at which either party can terminate the deal if a combination hasn’t already been closed, and said “there can be no assurances that the merger will be completed by that date.” The prior deadline was Aug. 27.
M&T announced the agreement in August, valued at $3.7 billion at the time, as part of an effort to expand into New Jersey. The exchange ratio of shares will remain the same as disclosed the day of the announcement, and both companies plan to proceed with shareholders’ meetings next week to consider the deal, according to the statement.
The Fed “identified certain regulatory concerns with M&T’s procedures, systems and processes relating to M&T’s Bank Secrecy Act and anti-money-laundering compliance program,” according to the statement.
The bank slid 5.6 percent to $99 at 9:14 a.m. in New York. Paramus, New Jersey-based Hudson City fell 7.1 percent to $8.15.
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