Receiving Wide Coverage ...
The M&T-Hudson City Deal: It's the biggest bank merger announced this year, and one of the biggest since the dark days of 2008 (either No. 7 or No. 11, depending on whether you rely on the Journal or the FT, respectively). M&T, based in Buffalo, will pay $3.7 billion in stock for the struggling Hudson City in Paramus, N.J. … And it still feels kind of weird to describe Hudson City as "struggling." Remember, this was the mortgage lender that, after the bubble burst, received widespread praise for having just said no to subprime and stuck to old-timey, fuddy-duddy practices like verifying borrowers' incomes. (In 2008 Jim Cramer proclaimed Hudson City CEO Ron Hermance "the George Bailey Banker of the Year.") But mortgage lending entails hazards other than the borrower not paying you back, such as the borrower paying you back sooner than expected, and interest rate risk has bedeviled Hudson City of late. Aaron Elstein of Crain's New York Business recaps how forces largely beyond management's control (the Fed's zero interest rate policy, the expansion of Fannie and Freddie into the lower reaches of Hudson City's jumbo mortgage market) led to "a sad end" for this local savings bank. … The Journal has a short profile of M&T Chief Executive Bob Wilmers, another stalwart old-school banker. The Times' Peter Eavis notes that the all-stock deal will help the buyer build its regulatory capital ratios, which have lagged those of other regional banks. Reuters' BreakingViews raises the possibility of an unsolicited counter-bid. And The Washington Post places the deal within the broader trend of consolidation among small and midsize banks. Lastly, we had to chuckle at the anticlimactic headline for this press release: "Hudson City Bancorp, Inc. Board of Directors Under Investigation [gasp!] … by Glancy Binkow & Goldberg LLP." It's a plaintiffs' law firm, fishing for clients among Hudson City shareholders who may have been upset by Hermance's revelation on the conference call that M&T approached his bank and "it was not a bidding process at all." Fair enough, in any company the board certainly has a fiduciary responsibility to seek the best value for shareholders, but for a second there we thought it was the SEC announcing that "investigation." Sensationalism is unbecoming, counselor.
Wall Street Journal
Speaking of private-market jumbo mortgages, they're staging a comeback, according to this Journal story.
The Swiss bank Julius Baer fired an employee for allegedly stealing client data, an act that kind of defeats the whole purpose of using a Swiss bank.