If you get antsy standing in line for more than a few minutes, then you'll have plenty of empathy for M&T Bank's (NYSE:MTB) multi-year efforts to close its latest acquisition.

Source: Jan Vašek, via Pexels.com. 

The regional lender had to wait more than three years before getting the nod earlier this month from regulators to close its purchase of New Jersey-based peer Hudson City Bancorp (UNKNOWN:HCBK.DL). Over that long stretch, the total cost of the deal rose, while in certain respects, the value of the target declined.

Federal Reserve reservations
The delay was due to concerns expressed by the Federal Reserve, essentially the lead regulator on the case. The Fed was uncomfortable with M&T Bank's anti-money laundering controls, and it strongly encouraged improvement in same in order to grant its blessing.

Changing an anti-money laundering regime doesn't happen overnight. M&T Bank's long campaign to do so was the chief reason the Fed's approval process lasted nearly as long as a presidential administration.

It was also not cheap to undertake. The bank spent tens of millions of dollars, at least, on compliance with the Fed's conditions. Profitability generally stagnated in the fiscal years following the Fed's decision, with those expenses being at least part of the reason why.

Perhaps that's why the share price of M&T Bank has lagged that of its peers. Since the Hudson City deal was first announced back in ye olden days of 2012, the stock has risen by 34%. Over that time, the Nasdaq Bank Index has improved by 56%.

Ups and downs
M&T Bank's stock might not have risen as much as its peers, but even a modest improvement means a higher price tag for Hudson City. This is because, according to the terms of the deal, the latter's shareholders can elect to receive M&T Bank stock, an equivalent amount in cash, or a mix of both, for their holdings.

Three years ago, M&T Bank estimated this would cost it the equivalent of approximately $3.7 billion. Thanks to that stock price appreciation, this figure recently stood at roughly $5.5 billion.

Meanwhile, some of Hudson City's key fundamentals have gone in the opposite direction. Originally, M&T Bank counted on acquiring about $25 billion in deposits and an overall loan book worth around $28 billion. That was then, this is now; in its latest quarter, those numbers stood at just above $18 billion and slightly below $20 billion, respectively.

HCBK Total Deposits (Quarterly) Chart

HCBK Total Deposits (Quarterly) data by YCharts.

Compounding this, M&T Bank is an effective lender adept at turning over business. Hudson City isn't in its league.

A glance at several key ratios for the pair illustrates the difference: Return on assets, trailing 12 months: 1.2% for M&T Bank vs. 0.3% for Hudson City. Return on equity (trailing-12-month): 8.7% for the former, 2.4% the latter. Net interest margin: 3.2% and 0.7%, respectively.

Branch building
Ultimately, this is a lousy deal for M&T Bank shareholders, right? After all, the company is getting less than it expected, and paying more for it. At the same time, it's sacrificed three-plus years of its life -- not to mention piles of money -- trying to make the Fed happy.

I think that's the wrong way to consider the situation. Instead, look at it this way: At a stroke, the company significantly widens its footprint, adding Hudson City's 135 branches to its current tally of over 650.

And the location of those branches is complimentary rather than overlapping, giving the new owner a presence in Hudson City's wheelhouse of New Jersey, in addition to well-off enclaves of the Tri-State area in downstate New York and suburban Connecticut.

Additionally, M&T Bank is gaining a bank that, although it's had its struggles, is nevertheless profitable. Hudson City was in the black in each of its previous three fiscal years, most recently netting $158 million on $1.2 billion in total revenue.

Lastly, the time and expense M&T Bank spent on sprucing up its anti-money laundering controls weren't a waste by any stretch of the imagination. Good practices in this area are to every party's benefit; no one wants to lose time/money being investigated, penalized, or sued. No matter the impetus behind it, this is a more than worthwhile investment.

As mentioned, Hudson City isn't as sharp a lender as M&T Bank. But the former has a well-situated branch network and plenty of potential -- and now, a new owner that knows how to get the best out of a set of assets.