M&T Bank said on Friday that a review by the Federal Reserve of its anti-money-laundering procedures and systems would delay the closing of its $3.7 billion acquisition of Hudson City Bancorp.
The Buffalo-based bank had announced its cash-and-stock deal for Hudson City, based in Paramus, N.J., in August.
The banks said on Friday that additional time would be needed to obtain regulatory clearance. As a result, the banks plan to extend the deadline to complete the merger to Jan. 31, 2014 from Aug. 27, 2013.
“M&T has already commenced a major initiative, including the hiring of an outside consulting firm, intended to fully address the Federal Reserve’s concerns,†the banks said.
The statement did not identify the consulting firm, but the bank’s chief executive, Robert G. Wilmers, had earlier praised the work of the consulting firm Promontory Financial Group, telling DealBook: “They have a lot of first-class people who know the problems facing the banking business, and who know the regulations extremely well.â€
The terms of the transaction remain the same, and votes on the deal by shareholders of the two banks will proceed as scheduled next week.
The acquisition of Hudson City would allow M&T to expand in markets in New York, New Jersey and Connecticut, adding 135 branches and $25 billion in deposits.
