Hudson City Bancorp climbed the most in more than two years after saying the Federal Reserve will reach a decision on the lender’s proposed merger with M&T Bank Corp. by Sept. 30.
Hudson City rose 4.2 percent to $9.73 at 9:46 a.m. in New York, after gaining as much as 5.5 percent, the most intraday since October 2012 and the best performance in the 87-company Standard & Poor’s 500 Financials Index. M&T fell 0.8 percent to $122.27.
The lenders extended the deadline for their planned deal for the fourth time, to Oct. 31 from April 30, Paramus, New Jersey-based Hudson City said Friday in a statement. The bank said the Fed gave no assurances it would approve the transaction.
The planned acquisition, the largest pending U.S. bank merger, has repeatedly stalled amid regulatory concerns since it was announced in August 2012. The Fed has held up the deal, valued at $3.7 billion when it was announced, as it reviews Buffalo, New York-based M&T’s money-laundering controls.
Hudson City’s board “continues to believe that the M&T transaction remains financially attractive to Hudson City’s shareholders, and that continuing to pursue completion is in the best interest of Hudson City,” Chief Executive Officer Denis Salamone said in the statement.
M&T CEO Robert Wilmers said the bank remains “fully committed to the merger.”
Hudson City also faces scrutiny from regulators. The Justice Department and Consumer Financial Protection Bureau are examining whether the bank violated the Fair Housing Act and participated in discriminatory lending practices, people familiar with the investigation have told Bloomberg.
Both banks had taken steps in recent weeks to prepare for the completion of the deal, including notifying stockholders of a deadline to decide between stock and cash payment in the merger. Either bank was entitled to terminate the transaction if it wasn’t completed by the deadline.
Other buyers awaiting regulatory approval for deals include CIT Group Inc. and BB&T Corp. CIT, the business lender run by John Thain, announced in July that it would buy OneWest Bank, the regional lender backed by billionaires John Paulson and George Soros, for $3.4 billion. Winston-Salem, North Carolina-based BB&T said Nov. 12 that it agreed to buy Susquehanna Bancshares Inc. for $2.5 billion to expand in the mid-Atlantic U.S.