HCBK (MM)

Quarterly Cash Dividend Increased to $0.085 Per Share PARAMUS, N.J., July 25 /PRNewswire-FirstCall/ -- Hudson City Bancorp, Inc. (NASDAQ:HCBK), the holding company for Hudson City Savings Bank, reported today that net income for the second quarter of 2007 was $72.7 million as compared to $73.2 million for the second quarter of 2006. Diluted earnings per share was $0.14 for the second quarter of 2007 as compared to $0.13 for the 2006 quarter. For the six months ended June 30, 2007, net income amounted to $143.9 million as compared to $148.4 million for the same period in 2006. Diluted earnings per share was $0.28 for the six months ended June 30, 2007 as compared to $0.27 for the same period in 2006. The Company also announced that the Board of Directors increased the quarterly cash dividend to $0.085 per share. The cash dividend is payable on September 5, 2007 to stockholders of record at the close of business on August 10, 2007. Ronald E. Hermance, Jr., Chairman, President and Chief Executive Officer, commented, "We are pleased to report an increase in diluted earnings per share to $0.14 for the second quarter of 2007. We have been able to grow earnings per share by remaining focused on our traditional thrift business model which we believe works very well for Hudson City as well as continuing with our stock repurchase program. We are disciplined in actively managing our operating expenses and maintaining high asset quality as we grow the balance sheet. Our efficiency ratio continues to be industry leading and our asset quality remains very high. This allows us to operate at lower margins, grow the franchise and increase net interest income even during an unfavorable interest rate cycle such as we have been experiencing for the past two years. We have not had our earnings affected by the ongoing sub-prime market issues as we do not originate or purchase sub-prime loans, loans with high loan-to- value ratios, negative amortization loans or option ARM loans. Our conservative underwriting standards have resulted in cumulative net charge- offs of $557,000 over the past 10 years." Mr. Hermance continued, "For the first six months of 2007, our assets grew by an annualized 24% which parallels our average growth of 21% for the last 8 years. This growth strategy positions us well for the future and adds to our already strong franchise value. With the shape of the yield curve and a common stock that we feel is attractively priced, we took the opportunity to repurchase 26,828,954 shares of our stock during the first six months of 2007. Due to our increased per share earnings, we are able to increase our dividend to $0.085 per share as part of our continuing commitment to our shareholders. Also, we opened four new branches during the quarter increasing our total footprint to 115 branches with three more to follow this summer." Financial highlights for the second quarter of 2007 are as follows: -- Basic and diluted earnings per common share were both $0.14 for the second quarter of 2007 as compared to $0.14 and $0.13, respectively for the second quarter of 2006. Basic and diluted earnings per common share were both $0.28 for the first six months of 2007 and $0.27 for the same period in 2006. -- The Board of Directors declared a quarterly cash dividend of $0.085 per common share payable on September 5, 2007 to stockholders of record at the close of business on August 10, 2007. -- Net income amounted to $72.7 million for the second quarter of 2007, as compared to $73.2 million for the second quarter of 2006. For the six months ended June 30, 2007, net income amounted to $143.9 million as compared to $148.4 million for the 2006 period. -- Net interest income increased 2.7% to $157.7 million for the second quarter of 2007 and 0.9% to $314.1 million for the six months ended June 30, 2007. -- Our annualized return on average stockholders' equity and annualized return on average assets for the second quarter of 2007 were 6.06% and 0.75%, respectively. Our annualized return on average stockholders' equity and annualized return on average assets for the six months ended June 30, 2007 were 5.93% and 0.77%. -- Our net interest rate margin and net interest rate spread were 1.65% and 1.10%, respectively, for the second quarter of 2007 and 1.67% and 1.10%, respectively, for the first six months of 2007. -- Our efficiency ratio was 25.62% for the second quarter of 2007 and 25.82% for the first six months of 2007. -- Net loans increased $2.82 billion to $21.89 billion at June 30, 2007 from $19.07 billion at December 31, 2006. -- Deposits increased $774.9 million to $14.19 billion at June 30, 2007 from $13.42 billion at December 31, 2006. -- Borrowed funds increased $3.70 billion to $20.67 billion at June 30, 2007 from $16.97 billion at December 31, 2006. -- We repurchased 26,828,954 shares of our common stock during the first six months of 2007 at a total cost of $357.6 million. -- We opened four new branches during the second quarter in Monroe, Connecticut; in White Plains, New York; and in Old Bridge and Kendall Park in New Jersey. In July 2007 we opened a branch in Fairfield, Connecticut. Statement of Financial Condition Summary Total assets increased $4.18 billion, or 11.8%, to $39.69 billion at June 30, 2007 from $35.51 billion at December 31, 2006. The increase in total assets reflected a $2.82 billion increase in loans and a $1.77 billion increase in total mortgage-backed securities. The increase in loans reflected our continued loan purchase activity as well as our focus on the origination of one- to four-family first mortgage loans in New Jersey, New York and Connecticut. For the first six months of 2007, we purchased first mortgage loans of $2.37 billion and originated first mortgage loans of $1.36 billion, compared to purchases of $1.49 billion and originations of $1.18 billion for the comparable period in 2006. The purchase of mortgage loans during the first six months of 2007 allowed us to continue to grow and geographically diversify our mortgage loan portfolio at a relatively low overhead cost while maintaining our traditional thrift business model. The increase in total mortgage-backed securities reflected purchases of approximately $2.74 billion, approximately 98% of which were variable-rate instruments (adjustable annually) or hybrid instruments (adjustable annually after fixed periods of three to seven years). Total liabilities increased $4.46 billion, or 14.6%, to $35.04 billion at June 30, 2007 from $30.58 billion at December 31, 2006. The increase in total liabilities primarily reflected a $3.70 billion increase in borrowed funds and a $774.9 million increase in deposits. The increase in borrowed funds was the result of $6.0 billion of new borrowings at a weighted-average rate of 4.36%, partially offset by repayments of $2.31 billion with a weighted average rate of 3.78%. The new borrowings have final maturities of ten years and initial reprice dates ranging from one to three years. The increase in total deposits reflected a $794.5 million increase in our time deposits and a $224.5 million increase in our money market checking accounts. These increases were partially offset by a $305.1 million decrease in our interest-bearing transaction accounts, due primarily to customers shifting deposits to short-term time deposits. Total stockholders' equity decreased $277.1 million to $4.65 billion at June 30, 2007 from $4.93 billion at December 31, 2006. The decrease was primarily due to repurchases of 26,828,954 shares of our outstanding common stock at an aggregate cost of $357.6 million and cash dividends paid to common stockholders of $82.4 million. These decreases to stockholders' equity were partially offset by net income of $143.9 million for the six months ended June 30, 2007. As of June 30, 2007, 17.5 million shares may be repurchased under our existing stock repurchase programs. At June 30, 2007, our stockholders' equity to asset ratio was 11.72% and our tangible book value per share was $9.06. Statement of Income Summary Net interest income increased $4.1 million, or 2.7%, to $157.7 million for the second quarter of 2007 as compared to $153.6 million for the second quarter of 2006. Net interest income increased $2.8 million, or 0.9%, to $314.1 million for the six months ended June 30, 2007 compared to $311.3 million for the corresponding period in 2006. Our net interest margin decreased 38 basis points to 1.65% and our net interest rate spread decreased 26 basis points to 1.10%, when comparing the second quarter of 2007 with the corresponding period in 2006. Our net interest margin decreased 42 basis points to 1.67% and our net interest rate spread decreased 31 basis points to 1.10%, during the first six months of 2007 as compared to the same period in 2006. During the second quarter of 2007, long-term rates, in particular the 10- year bond, increased while short-term rates decreased, resulting in a return to a slightly positively sloped yield curve. However, competitive pricing pressures continued to affect deposit pricing and the increase in longer-term interest rates have increased the cost of our borrowings which were primarily used to fund our mortgage loan production. The average yields earned on our interest-earning assets have also increased, but at a slower pace than the increase in the cost of interest-bearing liabilities. Historically, fixed- rate mortgage loan rates follow the same trends as the 5- and 10-year U.S. Treasury rates. Total interest and dividend income for the three months ended June 30, 2007 increased $127.4 million, or 33.2%, to $511.5 million as compared to $384.1 million for the three months ended June 30, 2006. The increase in total interest and dividend income was primarily due to a $7.72 billion, or 25.6%, increase in the average balance of total interest-earning assets to $37.92 billion for the second quarter of 2007 as compared to $30.20 billion for the second quarter of 2006. The increase in interest and dividend income was also partially due to an increase of 31 basis points in the annualized weighted- average yield on total interest-earning assets to 5.40% for the three month period ended June 30, 2007 from 5.09% for the comparable period in 2006. Total interest and dividend income for the six months ended June 30, 2007 increased $247.3 million, or 33.2%, to $991.1 million as compared to $743.8 million for the six months ended June 30, 2006. The increase in total interest and dividend income was primarily due to a $7.49 billion, or 25.5%, increase in the average balance of total interest-earning assets to $36.87 billion for the six months ended June 30, 2007 as compared to $29.38 billion for the corresponding period in 2006. The increase in interest and dividend income was also partially due to an increase of 32 basis points in the annualized weighted-average yield on total interest-earning assets to 5.38% for the six months ended June 30, 2007 from 5.06% for the comparable period in 2006. Interest and fees on mortgage loans increased $66.2 million to $289.8 million for the second quarter of 2007 as compared to $223.6 million for the same period in 2006 primarily due to a $4.32 billion increase in the average balance of first mortgage loans, which reflected our continued emphasis on the growth of our mortgage loan portfolio. The increase in mortgage loan income was also due to a 12 basis point increase in the weighted-average yield to 5.67%, reflecting the origination and purchase of mortgage loans during the period of rising interest rates in 2007. For the six months ended June 30, 2007, interest and fees on mortgage loans increased $126.7 million to $559.5 million as compared to $432.8 million for the six months ended June 30, 2006 primarily due to a $4.09 billion increase in the average balance of first mortgage loans. The increase in interest income on mortgage loans was also due to a 14 basis point increase in the weighted-average yield to 5.67%. Interest on mortgage-backed securities increased $46.0 million to $136.4 million for the second quarter of 2007 as compared to $90.4 million for the second quarter of 2006. This increase was due primarily to a $2.91 billion increase in the average balance of mortgage-backed securities during the second quarter of 2007 as compared to the second quarter of 2006, and a 45 basis point increase in the weighted-average yield to 5.11%. Interest on mortgage-backed securities increased $88.0 million to $260.2 million for the six months ended June 30, 2007 as compared to $172.2 million for the six months ended June 30, 2006. This increase was due primarily to a $2.78 billion increase in the average balance of mortgage-backed securities during the first six months of 2007 as compared to the first six months of 2006, and a 47 basis point increase in the weighted-average yield to 5.08%. The increases in the average balances of mortgage-backed securities were due to purchases of variable-rate mortgage-backed securities as part of our interest rate risk management strategy. Since our primary lending activities are the origination and purchase of fixed rate mortgage loans, the purchase of variable-rate mortgage-backed securities provides us with an asset that reduces our exposure to interest rate fluctuations while providing a source of cash flow from monthly principal and interest payments. The increase in the weighted average yields on mortgage-backed securities is a result of the purchase of new securities at higher rates than the existing portfolio as well as the repricing of securities in the existing portfolio. Total interest expense for the three months ended June 30, 2007 increased $123.2 million, or 53.4%, to $353.8 million as compared to $230.6 million for the three months ended June 30, 2006. This increase was primarily due to an $8.22 billion, or 33.2%, increase in the average balance of total interest- bearing liabilities to $33.00 billion for the quarter ended June 30, 2007 compared with $24.78 billion for the second quarter of 2006. This increase in interest-bearing liabilities was primarily used to fund asset growth. The increase in total interest expense was also due to a 57 basis point increase in the weighted-average cost of total interest-bearing liabilities to 4.30% for the quarter ended June 30, 2007 compared with 3.73% for the quarter ended June 30, 2006. Total interest expense for the six months ended June 30, 2007 increased $244.4 million, or 56.5%, to $677.0 million as compared to $432.6 million for the six months ended June 30, 2006. This increase was primarily due to a $7.97 billion, or 33.4%, increase in the average balance of total interest- bearing liabilities to $31.89 billion for the six months ended June 30, 2007 compared with $23.92 billion for the corresponding period in 2006. The increase in total interest expense was also due to a 63 basis point increase in the weighted-average cost of total interest-bearing liabilities to 4.28% for the six months ended June 30, 2007 compared with 3.65% for the six months ended June 30, 2006. The increase in the average cost of interest-bearing liabilities for the three- and six-month periods in 2007 reflected higher short-term interest rates as compared to the same periods in 2006, which affects both our deposits and borrowed funds. We have also experienced a very competitive environment for deposits and a shift within our deposits to higher costing short-term time deposits. Interest expense on deposits increased $48.0 million to $146.4 million for the second quarter of 2007 as compared to $98.4 million for the second quarter of 2006. This increase is due primarily to a $2.32 billion increase in the average balance of interest-bearing deposits to $13.43 billion during the second quarter of 2007 quarter as compared to the comparable period in 2006. In addition, the average cost of interest-bearing deposits increased 82 basis points to 4.37% for the 2007 quarter as compared to 3.55% for the 2006 quarter. For the six months ended June 30, 2007, interest expense on deposits increased $100.6 million to $288.4 million as compared to $187.8 million for the six months ended June 30, 2006. This increase is due primarily to a $2.26 billion increase in the average balance of interest-bearing deposits to $13.30 billion during the first six months of 2007 as compared to $11.04 billion for the first six months of 2006. In addition, the average cost of interest- bearing deposits increased 94 basis points to 4.37% for the six months ended June 30, 2007 as compared to 3.43% for the corresponding period in 2006. The increases in the average balance of interest-bearing deposits reflects our growth strategy and includes deposits from the 21 branches added to our branch network during 2006 as well as deposit growth in existing branches. The increase in the average cost of deposits for the three- and six-month periods reflected a very competitive environment for deposits and the shift within our deposits to higher costing short-term time deposits. Interest expense on borrowed funds increased $75.3 million to $207.4 million for the second quarter of 2007 as compared to $132.1 million for the second quarter of 2006 primarily due to a $5.90 billion increase in the average balance of borrowed funds and a 37 basis point increase in the weighted-average cost of borrowed funds to 4.25%. Interest expense on borrowed funds increased $143.8 million to $388.6 million for the six months ended June 30, 2007 as compared to $244.8 million the six months ended June 30, 2006 primarily due to a $5.71 billion increase in the average balance of borrowed funds and a 39 basis point increase in the weighted-average cost of borrowed funds to 4.22%. Borrowed funds were primarily used to fund the growth in interest-earning assets. The increase in the average cost of borrowed funds reflected new borrowings with a higher interest rate than existing borrowings and borrowings that were called. The provision for loan losses amounted to $500,000 for the quarter ended June 30, 2007 (none for the quarter ended June 30, 2006). The provision for loan losses amounted to $800,000 for the six months ended June 30, 2007 (none for the comparable period in 2006). The allowance for loan losses amounted to $31.5 million and $30.6 million at June 30, 2007 and December 31, 2006 respectively. We recorded net recoveries of $31,000 for the six months ended June 30, 2007 as compared to net recoveries of $2,000 for the first six months of 2006. The allowance for loan losses as a percent of total loans was 0.14% at June 30, 2007 compared with 0.16% at December 31, 2006. The ratio of the allowance for loan losses to non-performing loans was 81.81% at June 30, 2007 compared with 102.09% at December 31, 2006. Non-performing loans, defined as non-accruing loans and accruing loans delinquent 90 days or more, amounted to $38.5 million at June 30, 2007 and $30.0 million at December 31, 2006. The ratio of non-performing loans to total loans was 0.18% at June 30, 2007 compared with 0.16% at December 31, 2006. Total non-interest income was $1.8 million for the second quarter of 2007 compared with $1.5 million for the second quarter of 2006. Total non-interest income for the six months ended June 30, 2007 was $3.4 million compared with $2.7 million for the comparable period in 2006. The increase in non-interest income is primarily due to an increase in service charges on deposits as a result of deposit account growth. Total non-interest expense increased $2.4 million, or 6.2%, to $40.9 million for the three months ended June 30, 2007 from $38.5 million for the three months ended June 30, 2006. The increase is primarily due to a $1.5 million increase in net occupancy expense, a $421,000 increase in compensation and benefits and a $401,000 increase in other non-interest expense. Total non- interest expense for the six months ended June 30, 2007 was $82.0 million compared with $76.8 million during the corresponding 2006 period. The increase is primarily due to a $3.2 million increase in net occupancy expense and a $2.1 million increase in other non-interest expense. The increase in net occupancy expense and other non-interest expense is primarily the result of our branch expansion, including the addition of 14 branches from the Sound Federal acquisition in July 2006 as well as growth in the existing franchise. Our efficiency ratio was 25.62% for the three months ended June 30, 2007 as compared to 24.84% for the three months ended June 30, 2006. Our ratio of non-interest expense to average total assets for the second quarter of 2007 was 0.42% as compared to 0.50% for the second quarter of 2006. Our efficiency ratio for the six months ended June 30, 2007 was 25.82% compared with 24.46% for the corresponding 2006 period. Our ratio of non-interest expense to average total assets for the six months ended June 30, 2007 was 0.44% compared with 0.52% for the corresponding period in 2006. Income tax expense amounted to $45.5 million for the three months ended June 30, 2007 compared with $43.4 million for the corresponding period in 2006. Our effective tax rate for the three months ended June 30, 2007 was 38.48% compared with 37.21% for the corresponding period in 2006. Income tax expense for the six months ended June 30, 2007 was $90.8 million compared with $88.8 million for the corresponding 2006 period. Our effective tax rate for the six months ended June 30, 2007 was 38.69% compared with 37.44% for the six months ended June 30, 2006. The increase in the effective tax rate was due primarily to a change in the New Jersey tax code that eliminated the dividends received deduction for dividends paid by our real estate investment trust subsidiary to its parent company. Hudson City Bancorp maintains its corporate offices in Paramus, New Jersey. Hudson City Savings Bank, a well-established community financial institution serving its customers since 1868, is ranked in the top fifty U.S. financial institutions by asset size and is the largest thrift institution headquartered in New Jersey. Hudson City Savings currently operates a total of 116 branch offices in the New York metropolitan area. Forward-Looking Statements This release may contain certain "forward looking statements" within the meaning of the Private Securities Litigation Reform Act of 1995, and may be identified by the use of such words as "may," "believe," "expect," "anticipate," "should," "plan," "estimate," "predict," "continue," and "potential" or the negative of these terms or other comparable terminology. Examples of forward-looking statements include, but are not limited to, estimates with respect to the financial condition, results of operations and business of Hudson City Bancorp. Any or all of the forward-looking statements in this release and in any other public statements made by Hudson City may turn out to be wrong. They can be affected by inaccurate assumptions Hudson City might make or by known or unknown risks and uncertainties. Consequently, no forward-looking statement can be guaranteed. Hudson City does not intend to update any of the forward-looking statements after the date of this release or to conform these statements to actual events. Hudson City Bancorp, Inc. and Subsidiary Consolidated Statements of Financial Condition June 30, December 31, 2007 2006 (In thousands except share and per (unaudited) share amounts) Assets: Cash and due from banks $119,530 $125,630 Federal funds sold 84,077 56,616 Total cash and cash equivalents 203,607 182,246 Securities available for sale: Mortgage-backed securities 2,071,133 2,404,421 Investment securities 3,782,151 4,379,615 Securities held to maturity: Mortgage-backed securities 9,028,614 6,925,210 Investment securities 1,533,978 1,533,969 Total securities 16,415,876 15,243,215 Loans 21,894,961 19,083,617 Deferred loan costs 24,622 16,159 Allowance for loan losses (31,457) (30,625) Net loans 21,888,126 19,069,151 Federal Home Loan Bank of New York stock 601,976 445,006 Foreclosed real estate, net 3,699 3,161 Accrued interest receivable 222,480 194,229 Banking premises and equipment, net 76,209 73,929 Goodwill 151,972 150,831 Other assets 127,490 144,813 Total Assets $39,691,435 $35,506,581 Liabilities and Stockholders' Equity: Deposits: Interest-bearing $13,609,629 $12,917,286 Noninterest-bearing 580,881 498,301 Total deposits 14,190,510 13,415,587 Repurchase agreements 10,516,000 8,923,000 Federal Home Loan Bank of New York advances 10,150,000 8,050,000 Total borrowed funds 20,666,000 16,973,000 Accrued expenses and other liabilities 181,778 187,738 Total liabilities 35,038,288 30,576,325 Common stock, $0.01 par value, 3,200,000,000 shares authorized; 741,466,555 shares issued; 531,829,695 shares outstanding at June 30, 2007 and 557,787,921 shares outstanding at December 31, 2006 7,415 7,415 Additional paid-in capital 4,566,324 4,553,614 Retained earnings 1,935,611 1,877,840 Treasury stock, at cost; 209,636,860 shares at June 30, 2007 and 183,678,634 shares at December 31, 2006 (1,582,271) (1,230,793) Unallocated common stock held by the employee stock ownership plan (225,254) (228,257) Accumulated other comprehensive loss, net of tax (48,678) (49,563) Total stockholders' equity 4,653,147 4,930,256 Total Liabilities and Stockholders' Equity $39,691,435 $35,506,581 Hudson City Bancorp, Inc. and Subsidiary Consolidated Statements of Income (Unaudited) For the Three Months For the Six Months Ended June 30, Ended June 30, 2007 2006 2007 2006 (In thousands, except per share data) Interest and Dividend Income: First mortgage loans $289,772 $223,632 $559,454 $432,819 Consumer and other loans 7,078 3,883 13,970 7,397 Mortgage-backed securities held to maturity 109,563 60,163 205,080 113,785 Mortgage-backed securities available for sale 26,805 30,255 55,096 58,416 Investment securities held to maturity 18,630 18,632 37,243 37,263 Investment securities available for sale 48,351 42,841 99,186 85,398 Dividends on Federal Home Loan Bank of New York stock 8,747 3,209 16,219 5,717 Federal funds sold 2,548 1,525 4,893 3,033 Total interest and dividend income 511,494 384,140 991,141 743,828 Interest Expense: Deposits 146,432 98,408 288,395 187,772 Borrowed funds 207,404 132,143 388,634 244,788 Total interest expense 353,836 230,551 677,029 432,560 Net interest income 157,658 153,589 314,112 311,268 Provision for Loan Losses 500 - 800 - Net interest income after provision for loan losses 157,158 153,589 313,312 311,268 Non-Interest Income: Service charges and other income 1,823 1,451 3,373 2,715 Gains on securities transactions, net - 4 - 4 Total non-interest income 1,823 1,455 3,373 2,719 Non-Interest Expense: Compensation and employee benefits 25,812 25,391 51,560 51,743 Net occupancy expense 7,070 5,598 14,279 11,110 Federal deposit insurance assessment 447 402 888 826 Computer and related services 715 702 1,381 1,299 Other expense 6,823 6,422 13,856 11,822 Total non-interest expense 40,867 38,515 81,964 76,800 Income before income tax expense 118,114 116,529 234,721 237,187 Income Tax Expense 45,450 43,361 90,814 88,791 Net income $72,664 $73,168 $143,907 $148,396 Basic Earnings Per Share $0.14 $0.14 $0.28 $0.27 Diluted Earnings Per Share $0.14 $0.13 $0.28 $0.27 Weighted Average Number of Common Shares Outstanding: Basic 504,902,448 539,678,609 511,622,385 544,292,209 Diluted 514,998,167 552,077,216 522,157,901 556,622,424 Hudson City Bancorp, Inc. and Subsidiary Consolidated Average Balance Sheets (Unaudited) For the Three Months Ended June 30, 2007 Average Average Yield/ Balance Interest Cost (Dollars in thousands) Assets: Interest-earnings assets: First mortgage loans, net (1) $20,437,687 $289,772 5.67 % Consumer and other loans 428,474 7,078 6.61 Federal funds sold 195,085 2,548 5.24 Mortgage-backed securities at amortized cost 10,673,572 136,368 5.11 Federal Home Loan Bank stock 567,694 8,747 6.16 Investment securities, at amortized cost 5,615,664 66,981 4.77 Total interest-earning assets 37,918,176 511,494 5.40 Noninterest-earnings assets 607,385 Total Assets $38,525,561 Liabilities and Stockholders' Equity: Interest-bearing liabilities: Savings accounts $790,499 1,639 0.83 Interest-bearing transaction accounts 1,878,714 15,799 3.37 Money market accounts 1,019,661 9,836 3.87 Time deposits 9,736,187 119,158 4.91 Total interest-bearing deposits 13,425,061 146,432 4.37 Repurchase agreements 9,383,033 98,186 4.20 Federal Home Loan Bank of New York advances 10,191,209 109,218 4.30 Total borrowed funds 19,574,242 207,404 4.25 Total interest-bearing liabilities 32,999,303 353,836 4.30 Noninterest-bearing liabilities: Noninterest-bearing deposits 527,819 Other noninterest-bearing liabilities 205,159 Total noninterest-bearing liabilities 732,978 Total liabilities 33,732,281 Stockholders' equity 4,793,280 Total Liabilities and Stockholders' Equity $38,525,561 Net interest income/net interest rate spread (2) $157,658 1.10 % Net interest-earning assets/net interest margin (3) $4,918,873 1.65 % Ratio of interest-earning assets to interest-bearing liabilities 1.15 x For the Three Months Ended June 30, 2006 Average Average Yield/ Balance Interest Cost (Dollars in thousands) Assets: Interest-earnings assets: First mortgage loans, net (1) $16,120,819 $223,632 5.55 % Consumer and other loans 261,948 3,883 5.93 Federal funds sold 129,132 1,525 4.74 Mortgage-backed securities at amortized cost 7,764,976 90,418 4.66 Federal Home Loan Bank stock 320,724 3,209 4.00 Investment securities, at amortized cost 5,602,907 61,473 4.39 Total interest-earning assets 30,200,506 384,140 5.09 Noninterest-earnings assets 309,918 Total Assets $30,510,424 Liabilities and Stockholders' Equity: Interest-bearing liabilities: Savings accounts $768,446 1,894 0.99 Interest-bearing transaction accounts 2,908,015 24,363 3.36 Money market accounts 637,811 4,458 2.80 Time deposits 6,789,930 67,693 4.00 Total interest-bearing deposits 11,104,202 98,408 3.55 Repurchase agreements 8,259,341 76,574 3.72 Federal Home Loan Bank of New York advances 5,414,286 55,569 4.12 Total borrowed funds 13,673,627 132,143 3.88 Total interest-bearing liabilities 24,777,829 230,551 3.73 Noninterest-bearing liabilities: Noninterest-bearing deposits 458,355 Other noninterest-bearing liabilities 190,545 Total noninterest-bearing liabilities 648,900 Total liabilities 25,426,729 Stockholders' equity 5,083,695 Total Liabilities and Stockholders' Equity $30,510,424 Net interest income/net interest rate spread (2) $153,589 1.36 % Net interest-earning assets/net interest margin (3) $5,422,677 2.03 % Ratio of interest-earning assets to interest-bearing liabilities 1.22 x (1) Amount includes deferred loan costs and non-performing loans and is net of the allowance for loan losses. (2) Determined by subtracting the annualized weighted average cost of total interest-bearing liabilities from the annualized weighted average yield on total interest-earning assets. (3) Determined by dividing annualized net interest income by total average interest-earning assets. Hudson City Bancorp, Inc. and Subsidiary Consolidated Average Balance Sheets (Unaudited) For the Six Months Ended June 30, 2007 Average Average Yield/ Balance Interest Cost (Dollars in thousands) Assets: Interest-earnings assets: First mortgage loans, net (1) $19,731,035 $559,454 5.67 % Consumer and other loans 426,018 13,970 6.56 Federal funds sold 187,396 4,893 5.27 Mortgage-backed securities at amortized cost 10,239,739 260,176 5.08 Federal Home Loan Bank stock 520,601 16,219 6.23 Investment securities, at amortized cost 5,764,587 136,429 4.73 Total interest-earning assets 36,869,376 991,141 5.38 Noninterest-earnings assets 596,273 Total Assets $37,465,649 Liabilities and Stockholders' Equity: Interest-bearing liabilities: Savings accounts $794,209 3,468 0.88 Interest-bearing transaction accounts 1,945,341 32,516 3.37 Money market accounts 977,515 17,992 3.71 Time deposits 9,584,729 234,419 4.93 Total interest-bearing deposits 13,301,794 288,395 4.37 Repurchase agreements 9,153,243 187,617 4.13 Federal Home Loan Bank of New York advances 9,436,740 201,017 4.30 Total borrowed funds 18,589,983 388,634 4.22 Total interest-bearing liabilities 31,891,777 677,029 4.28 Noninterest-bearing liabilities: Noninterest-bearing deposits 507,294 Other noninterest-bearing liabilities 213,065 Total noninterest-bearing liabilities 720,359 Total liabilities 32,612,136 Stockholders' equity 4,853,513 Total Liabilities and Stockholders' Equity $37,465,649 Net interest income/net interest rate spread (2) $314,112 1.10 % Net interest-earning assets/net interest margin (3) $4,977,599 1.67 % Ratio of interest-earning assets to interest-bearing liabilities 1.16 x For the Six Months Ended June 30, 2006 Average Average Yield/ Balance Interest Cost (Dollars in thousands) Assets: Interest-earnings assets: First mortgage loans, net (1) $15,644,241 $432,819 5.53 % Consumer and other loans 252,321 7,397 5.86 Federal funds sold 134,582 3,033 4.54 Mortgage-backed securities at amortized cost 7,463,089 172,201 4.61 Federal Home Loan Bank stock 284,523 5,717 4.02 Investment securities, at amortized cost 5,597,919 122,661 4.38 Total interest-earning assets 29,376,675 743,828 5.06 Noninterest-earnings assets 308,618 Total Assets $29,685,293 Liabilities and Stockholders' Equity: Interest-bearing liabilities: Savings accounts $782,286 3,837 0.99 Interest-bearing transaction accounts 3,155,099 52,444 3.35 Money market accounts 532,804 6,451 2.44 Time deposits 6,568,518 125,040 3.84 Total interest-bearing deposits 11,038,707 187,772 3.43 Repurchase agreements 8,204,696 150,402 3.70 Federal Home Loan Bank of New York advances 4,672,459 94,386 4.07 Total borrowed funds 12,877,155 244,788 3.83 Total interest-bearing liabilities 23,915,862 432,560 3.65 Noninterest-bearing liabilities: Noninterest-bearing deposits 448,328 Other noninterest-bearing liabilities 184,831 Total noninterest-bearing liabilities 633,159 Total liabilities 24,549,021 Stockholders' equity 5,136,272 Total Liabilities and Stockholders' Equity $29,685,293 Net interest income/net interest rate spread (2) $311,268 1.41 % Net interest-earning assets/net interest margin (3) $5,460,813 2.09 % Ratio of interest-earning assets to interest-bearing liabilities 1.23 x (1) Amount includes deferred loan costs and non-performing loans and is net of the allowance for loan losses. (2) Determined by subtracting the annualized weighted average cost of total interest-bearing liabilities from the annualized weighted average yield on total interest-earning assets. (3) Determined by dividing annualized net interest income by total average interest-earning assets. Hudson City Bancorp, Inc. and Subsidiary Other Financial Data (Unaudited) At or for the Quarter Ended June 30, March 31, Dec. 31, 2007 2007 2006 (Dollars in thousands, except per share data) Net interest income $157,658 $156,454 $148,837 Provision for loan losses 500 300 - Non-interest income 1,823 1,550 1,903 Non-interest expense: Compensation and employee benefits 25,812 25,748 25,067 Net occupancy expense 7,070 7,209 7,386 Other non-interest expense 7,985 8,140 9,114 Total non-interest expense 40,867 41,097 41,567 Income before income tax expense 118,114 116,607 109,173 Income tax expense 45,450 45,364 39,961 Net income $72,664 $71,243 $69,212 Total assets $39,691,435 $37,465,150 $35,506,581 Loans, net 21,888,126 20,254,880 19,069,151 Mortgage-backed securities Available for sale 2,071,133 2,273,874 2,404,421 Held to maturity 9,028,614 8,086,955 6,925,210 Other securities Available for sale 3,782,151 4,117,442 4,379,615 Held to maturity 1,533,978 1,533,978 1,533,969 Deposits 14,190,510 13,914,315 13,415,587 Borrowings 20,666,000 18,516,000 16,973,000 Stockholders' equity 4,653,147 4,831,052 4,930,256 Performance Data: Return on average assets (1) 0.75% 0.78% 0.80% Return on average equity (1) 6.06% 5.80% 5.55% Net interest rate spread (1) 1.10% 1.10% 1.16% Net interest margin (1) 1.65% 1.70% 1.78% Non-interest expense to average assets 0.42% 0.45% 0.48% Efficiency ratio (2) 25.62% 26.01% 27.58% Dividend payout ratio 57.14% 57.14% 57.69% Per Common Share Data: Basic earnings per common share $0.14 $0.14 $0.13 Diluted earnings per common share $0.14 $0.13 $0.13 Book value per share (3) $9.39 $9.47 $9.45 Tangible book value per share (3) $9.06 $9.15 $9.13 Dividends per share $0.080 $0.080 $0.075 Capital Ratios: Equity to total assets (consolidated) 11.72% 12.89% 13.89% Tier 1 leverage capital (Bank) 10.18% 10.75% 11.30% Total risk-based capital 27.50% 28.93% 30.99% Other Data: Full-time equivalent employees 1,298 1,272 1,272 Number of branch offices 115 111 111 Asset Quality Data: Total non-performing loans $38,452 $34,205 $29,998 Total non-performing assets $42,151 $36,830 $33,159 Non-performing loans to total loans 0.18% 0.17% 0.16% Non-performing assets to total assets 0.11% 0.10% 0.09% Allowance for loan losses to non- performing loans 81.81% 90.61% 102.09% Allowance for loan losses to total loans 0.14% 0.15% 0.16% At or for the Quarter Ended Sept. 30, 2006 June 30, 2006 (Dollars in thousands, except per share data) Net interest income $153,128 $153,589 Provision for loan losses - - Non-interest income 1,669 1,455 Non-interest expense: Compensation and employee benefits 26,633 25,391 Net occupancy expense 6,519 5,598 Other non-interest expense 7,436 7,526 Total non-interest expense 40,588 38,515 Income before income tax expense 114,209 116,529 Income tax expense 43,238 43,361 Net income $70,971 $73,168 Total assets $33,638,004 $31,329,322 Loans, net 18,276,303 16,954,111 Mortgage-backed securities Available for sale 2,575,038 2,703,212 Held to maturity 5,873,952 5,241,004 Other securities Available for sale 4,127,179 3,979,207 Held to maturity 1,533,971 1,533,969 Deposits 12,807,077 11,613,829 Borrowings 15,648,000 14,550,000 Stockholders' equity 5,002,242 4,998,655 Performance Data: Return on average assets (1) 0.87% 0.96% Return on average equity (1) 5.69% 5.76% Net interest rate spread (1) 1.30% 1.36% Net interest margin (1) 1.93% 2.03% Non-interest expense to average assets 0.50% 0.50% Efficiency ratio (2) 26.22% 24.84% Dividend payout ratio 57.69% 53.57% Per Common Share Data: Basic earnings per common share $0.13 $0.14 Diluted earnings per common share $0.13 $0.13 Book value per share (3) $9.47 $9.36 Tangible book value per share (3) $9.19 $9.36 Dividends per share $0.075 $0.075 Capital Ratios: Equity to total assets (consolidated) 14.87% 15.96% Tier 1 leverage capital (Bank) 11.92% 13.20% Total risk-based capital 32.66% 36.71% Other Data: Full-time equivalent employees 1,252 1,151 Number of branch offices 110 94 Asset Quality Data: Total non-performing loans $26,354 $18,206 Total non-performing assets $28,090 $19,891 Non-performing loans to total loans 0.14% 0.11% Non-performing assets to total assets 0.08% 0.06% Allowance for loan losses to non- performing loans 103.93% 150.45% Allowance for loan losses to total loans 0.15% 0.16% (1) Ratios are annualized. (2) Computed by dividing non-interest expense by the sum of net interest income and non-interest income. (3) Computed based on total common shares issued, less treasury shares, unallocated ESOP shares and unvested stock awards. Tangible book value excludes goodwill and other intangible assets. Hudson City Bancorp, Inc. and Subsidiary Book Value Calculations June 30, 2007 (In thousands, except share and per share amounts) Stockholders' equity $4,653,147 Goodwill and other intangible assets (163,410) Tangible stockholders' equity $4,489,737 Book Value Share Computation: Issued 741,466,555 Treasury shares (209,636,860) Shares outstanding 531,829,695 Unallocated ESOP shares (36,081,925) Unvested RRP shares (319,044) Shares in trust (23,494) Book value shares 495,405,232 Book value per share $9.39 Tangible book value per share $9.06 DATASOURCE: Hudson City Bancorp, Inc. CONTACT: Susan Munhall, Investor Relations of Hudson City Bancorp, Inc., +1-201-967-8290, Web site: http://www.hcbk.com/

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