UPDATE: ISI Group Initiates Coverage on M&T Bank on Near-Term Noise Ahead of HCBK Deal Closing

In a report published Tuesday, ISI Group analyst Keith Murray initiated coverage on M&T Bank Corporation MTB with a Buy rating and $130.00 price target. In the report, ISI Group noted, “We are initiating coverage of M&T Bank with a Buy rating and 12-month price target of $130. While we expect M&T to have plenty of noise in the short-term around expenses and consumer loan securitizations, we think investors have a chance to buy into an above average bank at an average PE multiple (M&T currently trades at 11x our 2015E EPS, in line with the group). We think the purchase of HCBK will happen in early 2014 and be a positive catalyst for the stock. We think the deal offers upside in NJ and in future mortgage revenue and we see MTB earning $10 per share in 2015. While some investors still have concerns around the BSA/AML issues that caused a delay in the deal, we note that these are more of an industry issue (a handful of other banks were cited for deficiencies in these areas) and M&T continues to build up its capabilities in these areas to satisfy regulators.” M&T Bank Corporation closed on Monday at $110.60.