Hudson City had reportedly planned to branch out to commercial real estate lending when MTB made its approach. Hagerman and Greene said they were “favorable” about the merger of the banks, calling the market premium modest. At the same time, they expressed concerns about the near-term effects, and rated the transaction overall “neutral.”

“Overall, the transaction represents a continuing of what has become an MTB hallmark: leveraging the company's top-tier earnings power/capital formation to extract value from an otherwise underperforming/troubled franchise,” the two analysts wrote.

“MTB's ability to reposition the company's balance sheet (specifically the company's liabilities and unwieldy 4.2% borrowing costs) unlocks meaningful value,” wrote Hagerman and Greene.

But they also stressed the “however,” noting that Hudson City’s $28 billion loan portfolio is almost exclusively residential mortgage, while MTB’s focus has been on commercial banking. Given the “still evolving” capital requirements on 1-4 multifamily mortgages, and the likelihood that the residential lending market will continue to be stressed for some time, MTB’s earnings goals might be threatened, the analysts said.