M&T Bank Corp said it would buy Hudson City Bancorp Inc in a deal valued at about $3.7 billion, expanding its franchise in the eastern United States.

M&T expects to gain about $25 billion in deposits and $28 billion in loans from the merger, before adjustments, the Buffalo, New York-based bank said.

The transaction is expected to be immediately accretive to the combined company's capital ratios, as well as its GAAP and operating earnings per share.