HCBK (MM)

Total Assets Surpass $42.0 Billion PARAMUS, N.J., Oct. 24 /PRNewswire-FirstCall/ -- Hudson City Bancorp, Inc. (NASDAQ:HCBK), the holding company for Hudson City Savings Bank, reported today that net income for the third quarter of 2007 was $74.4 million as compared to $71.0 million for the third quarter of 2006. Diluted earnings per share increased 15.4% to $0.15 for the third quarter of 2007 as compared to $0.13 for the 2006 quarter. For the nine months ended September 30, 2007, net income amounted to $218.4 million as compared to $219.4 million for the same period in 2006. Diluted earnings per share was $0.42 for the nine months ended September 30, 2007 as compared to $0.40 for the same period in 2006. The Board of Directors declared a quarterly cash dividend of $0.085 per share. The cash dividend is payable on December 1, 2007 to stockholders of record at the close of business on November 13, 2007. Ronald E. Hermance, Jr., Chairman, President and Chief Executive Officer, commented, "We are pleased to report record third quarter earnings per share of $0.15 on a diluted basis. The increase in earnings per share reflects our continued focus on our traditional thrift business model. These earnings occurred in a quarter that found many mortgage lenders struggling. While we are not immune from economic and market conditions our earnings have not been significantly affected by the current mortgage-market turmoil since we only originate and purchase residential mortgage loans to qualified borrowers with considerable down payment amounts. Our non-performing loans amounted to $58.8 million or 0.26% of total loans at September 30, 2007, compared to $38.5 million or 0.18% at June 30, 2007. While our non-performing loans have been increasing during 2007, as a percentage of total loans they are now comparable to historical norms. From 2000 to 2002, our non-performing loans to total loans averaged 0.27%. Since 2003, we have experienced steady declines in our non-performing loan ratio to historical lows as a result of low market interest rates, strong real estate markets, and strong portfolio growth." Mr. Hermance continued, "With our strong capital and liquidity positions, we continued to execute our growth strategy during the third quarter. For the first nine months of 2007, on an annualized basis our assets grew by 25.6%, our net loans grew by 27.7% and our deposits grew by 12.0%. We opened three new branches during the quarter and a fourth branch in early October increasing our total footprint to 119 branches. In addition, we have recently committed to opening three branches in Fairfield County, Connecticut, one in Suffolk County, New York and one in Ocean County, New Jersey in the first half of 2008. We are very excited about the opportunities that these market areas present. The demographics of these communities match very closely with our thrift business model and product offerings." Mr. Hermance continued, "During the third quarter, short-term interest rates decreased and the yield curve began to steepen. As a result of these interest rate changes and our growth strategy, our interest rate spread increased to 1.14% for the third quarter from 1.10% for the linked quarter and our net interest margin remained unchanged at 1.65%. We repurchased 9,850,000 shares of our common stock during the third quarter and have repurchased 36,678,954 shares for the nine months ended September 30, 2007. We repurchased fewer shares in the third quarter as compared to the preceding two quarters due to the growth opportunities that were available to us." Financial highlights for the third quarter of 2007 are as follows: -- Basic and diluted earnings per common share were both $0.15 for the third quarter of 2007 as compared to $0.13 for both for the third quarter of 2006. Basic and diluted earnings per common share were $0.43 and $0.42, respectively for the first nine months of 2007 and $0.41 and $0.40, respectively, for the same period in 2006. -- The Board of Directors declared a quarterly cash dividend of $0.085 per common share payable on December 1, 2007 to stockholders of record at the close of business on November 13, 2007. -- Net income amounted to $74.4 million for the third quarter of 2007, as compared to $71.0 million for the third quarter of 2006. For the nine months ended September 30, 2007, net income amounted to $218.4 million as compared to $219.4 million for the 2006 period. -- Net interest income increased 5.9% to $162.2 million for the third quarter of 2007 and 2.6% to $476.3 million for the nine months ended September 30, 2007. -- Our annualized return on average stockholders' equity and annualized return on average assets for the third quarter of 2007 were 6.41% and 0.73%, respectively. Our annualized return on average stockholders' equity and annualized return on average assets for the nine months ended September 30, 2007 were 6.09% and 0.75%, respectively. -- Our net interest rate spread and net interest margin were 1.14% and 1.65%, respectively, for the third quarter of 2007 and 1.11% and 1.66%, respectively, for the first nine months of 2007. -- Our efficiency ratio was 25.07% for the third quarter of 2007 and 25.56% for the first nine months of 2007. -- Net loans increased $3.96 billion to $23.03 billion at September 30, 2007 from $19.07 billion at December 31, 2006. -- Deposits increased $1.21 billion to $14.63 billion at September 30, 2007 from $13.42 billion at December 31, 2006. -- Borrowed funds increased $5.92 billion to $22.89 billion at September 30, 2007 from $16.97 billion at December 31, 2006. -- We repurchased 36,678,954 shares of our common stock during the first nine months of 2007 at a total cost of $491.3 million. Statement of Financial Condition Summary Total assets increased $6.81 billion, or 19.2%, to $42.32 billion at September 30, 2007 from $35.51 billion at December 31, 2006. The increase in total assets reflected a $3.96 billion increase in loans and a $3.19 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 nine months of 2007, we purchased first mortgage loans of $3.06 billion and originated first mortgage loans of $2.44 billion, compared to purchases of $1.91 billion and originations of $1.67 billion for the comparable period in 2006. The purchase of mortgage loans during the first nine 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 $4.65 billion, substantially all of which were variable-rate instruments. Total liabilities increased $7.15 billion, or 23.4%, to $37.73 billion at September 30, 2007 from $30.58 billion at December 31, 2006. The increase in total liabilities primarily reflected a $5.92 billion increase in borrowed funds and a $1.21 billion increase in deposits. The increase in borrowed funds was the result of $9.03 billion of new borrowings at a weighted-average rate of 4.31%, partially offset by repayments of $3.11 billion with a weighted average rate of 3.66%. The new borrowings have final maturities of ten years and initial reprice dates ranging from one to five years. The increase in total deposits reflected a $1.27 billion increase in our time deposits and a $434.0 million increase in our money market checking accounts. These increases were partially offset by a $515.4 million decrease in our interest-bearing transaction accounts, due primarily to customers shifting deposits to short- term time deposits. Total stockholders' equity decreased $340.7 million to $4.59 billion at September 30, 2007 from $4.93 billion at December 31, 2006. The decrease was primarily due to repurchases of 36,678,954 shares of our outstanding common stock at an aggregate cost of $491.3 million and cash dividends paid to common stockholders of $124.3 million. These decreases to stockholders' equity were partially offset by net income of $218.4 million for the nine months ended September 30, 2007. At September 30, 2007, our stockholders' equity to asset ratio was 10.85% and our tangible book value per share was $9.10. Statement of Income Summary Net interest income increased $9.1 million, or 5.9%, to $162.2 million for the third quarter of 2007 as compared to $153.1 million for the third quarter of 2006. Net interest income increased $11.9 million, or 2.6%, to $476.3 million for the nine months ended September 30, 2007 compared to $464.4 million for the corresponding period in 2006. During the third quarter of 2007, our net interest rate spread decreased 16 basis points to 1.14% and our net interest margin decreased 28 basis points to 1.65% as compared to the corresponding period in 2006. During the first nine months of 2007, our net interest rate spread decreased 26 basis points to 1.11% and our net interest margin decreased 37 basis points to 1.66% as compared to the same period in 2006. The Federal Open Market Committee of the Federal Reserve Bank ("FOMC") decreased the overnight lending rate by 50 basis points at its meeting in September 2007 to 4.75%. This decrease in the overnight lending rate was the first rate change since June 2006. As a result, short-term market interest rates continued to decrease during the third quarter. Intermediate-term market interest rates, those with maturities of two to five years, and long-term market interest rates also decreased during the third quarter of 2007, but at a slower pace than the short-term interest rates. The result of these interest rate changes was a steepening of the yield curve during the third quarter of 2007. During the third quarter of 2007, our net interest rate spread increased 4 basis points from the second quarter of 2007 due primarily to changes in market interest rates. Total interest and dividend income for the three months ended September 30, 2007 increased $126.2 million, or 29.9%, to $548.2 million as compared to $422.0 million for the three months ended September 30, 2006. The increase in total interest and dividend income was primarily due to a $7.93 billion, or 24.6%, increase in the average balance of total interest-earning assets to $40.11 billion for the third quarter of 2007 as compared to $32.18 billion for the third quarter of 2006. The increase in interest and dividend income was also partially due to an increase of 22 basis points in the annualized weighted-average yield on total interest-earning assets to 5.47% for the three month period ended September 30, 2007 from 5.25% for the comparable period in 2006. Total interest and dividend income for the nine months ended September 30, 2007 increased $373.5 million, or 31.9%, to $1.54 billion as compared to $1.17 billion for the nine months ended September 30, 2006. The increase in total interest and dividend income was primarily due to a $7.64 billion, or 25.2%, increase in the average balance of total interest-earning assets to $37.96 billion for the nine months ended September 30, 2007 as compared to $30.32 billion for the corresponding period in 2006. The increase in interest and dividend income was also partially due to an increase of 28 basis points in the annualized weighted-average yield on total interest-earning assets to 5.41% for the nine months ended September 30, 2007 from 5.13% for the comparable period in 2006. Interest and fees on mortgage loans increased $67.7 million to $313.9 million for the third quarter of 2007 as compared to $246.2 million for the same period in 2006 primarily due to a $4.64 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 three basis point increase in the weighted-average yield to 5.71%. For the nine months ended September 30, 2007, interest and fees on mortgage loans increased $194.4 million to $873.4 million as compared to $679.0 million for the nine months ended September 30, 2006 primarily due to a $4.27 billion increase in the average balance of first mortgage loans. The increase in interest income on mortgage loans was also due to a 10 basis point increase in the weighted-average yield to 5.68%, reflecting the origination and purchase of mortgage loans during the period of rising interest rates in 2007. Interest on mortgage-backed securities increased $51.5 million to $151.1 million for the third quarter of 2007 as compared to $99.6 million for the third quarter of 2006. This increase was due primarily to a $3.36 billion increase in the average balance of mortgage-backed securities during the third quarter of 2007 as compared to the third quarter of 2006, and a 37 basis point increase in the weighted-average yield to 5.20%. Interest on mortgage-backed securities increased $139.5 million to $411.3 million for the nine months ended September 30, 2007 as compared to $271.8 million for the nine months ended September 30, 2006. This increase was due primarily to a $2.97 billion increase in the average balance of mortgage- backed securities during the first nine months of 2007 as compared to the first nine months of 2006, and a 43 basis point increase in the weighted- average yield to 5.12%. 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 September 30, 2007 increased $117.1 million, or 43.5%, to $386.0 million as compared to $268.9 million for the three months ended September 30, 2006. This increase was primarily due to an $8.36 billion, or 31.0%, increase in the average balance of total interest-bearing liabilities to $35.34 billion for the quarter ended September 30, 2007 compared with $26.98 billion for the third 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 38 basis point increase in the weighted-average cost of total interest-bearing liabilities to 4.33% for the quarter ended September 30, 2007 compared with 3.95% for the quarter ended September 30, 2006. Total interest expense for the nine months ended September 30, 2007 increased $361.5 million, or 51.5%, to $1.06 billion as compared to $701.5 million for the nine months ended September 30, 2006. This increase was primarily due to an $8.11 billion, or 32.5%, increase in the average balance of total interest-bearing liabilities to $33.06 billion for the nine months ended September 30, 2007 compared with $24.95 billion for the corresponding period in 2006. The increase in total interest expense was also due to a 54 basis point increase in the weighted-average cost of total interest-bearing liabilities to 4.30% for the nine months ended September 30, 2007 compared with 3.76% for the nine months ended September 30, 2006. The increase in the average cost of interest-bearing liabilities for the three- and nine-month periods in 2007 reflected a very competitive environment for deposits and a shift within our deposits to higher costing short-term time deposits. In addition, higher short-term interest rates for the nine months ended September 30, 2007 as compared to the same period in 2006, affected the average cost of both our deposits and borrowed funds. Interest expense on deposits increased $39.2 million to $155.1 million for the third quarter of 2007 as compared to $115.9 million for the third quarter of 2006. This increase is due primarily to a $2.02 billion increase in the average balance of interest-bearing deposits to $13.85 billion during the third quarter of 2007 quarter as compared to $11.83 billion for the comparable period in 2006. In addition, the average cost of interest-bearing deposits increased 55 basis points to 4.44% for the 2007 quarter as compared to 3.89% for the 2006 quarter. For the nine months ended September 30, 2007, interest expense on deposits increased $139.8 million to $443.5 million as compared to $303.7 million for the nine months ended September 30, 2006. This increase is due primarily to a $2.19 billion increase in the average balance of interest-bearing deposits to $13.49 billion during the first nine months of 2007 as compared to $11.30 billion for the first nine months of 2006. In addition, the average cost of interest-bearing deposits increased 81 basis points to 4.40% for the nine months ended September 30, 2007 as compared to 3.59% 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 28 branches added to our branch network during 2006 and 2007, as well as deposit growth in existing branches. The increase in the average cost of deposits for the three- and nine-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 $77.9 million to $230.9 million for the third quarter of 2007 as compared to $153.0 million for the third quarter of 2006 primarily due to a $6.35 billion increase in the average balance of borrowed funds and a 25 basis point increase in the weighted- average cost of borrowed funds to 4.26%. Interest expense on borrowed funds increased $221.8 million to $619.6 million for the nine months ended September 30, 2007 as compared to $397.8 million the nine months ended September 30, 2006 primarily due to a $5.93 billion increase in the average balance of borrowed funds and a 33 basis point increase in the weighted-average cost of borrowed funds to 4.23%. 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 $2.0 million for the quarter ended September 30, 2007 (none for the quarter ended September 30, 2006). The provision for loan losses amounted to $2.8 million for the nine months ended September 30, 2007 (none for the comparable period in 2006). The increase in the provision for loan losses was due primarily to an increase in non- performing loans and also to the growth in the loan portfolio. Non-performing loans, defined as non-accruing loans and accruing loans delinquent 90 days or more, amounted to $58.8 million at September 30, 2007 and $30.0 million at December 31, 2006. The ratio of non-performing loans to total loans was 0.26% at September 30, 2007 compared with 0.16% at December 31, 2006. The allowance for loan losses amounted to $32.9 million and $30.6 million at September 30, 2007 and December 31, 2006 respectively. The allowance for loan losses as a percent of total loans and non-performing loans was 0.14% and 55.87%, respectively at September 30, 2007 as compared to 0.16% and 102.09%, respectively at December 31, 2006. We recorded net charge-offs of $575,000 for the nine months ended September 30, 2007 as compared to net recoveries of $2,000 for the first nine months of 2006. The increase in charge-offs was related to non-performing residential mortgage loans for which appraised values indicated declines in the value of the underlying collateral. Total non-interest income was $2.0 million for the third quarter of 2007 compared with $1.7 million for the third quarter of 2006. Total non-interest income for the nine months ended September 30, 2007 was $5.4 million compared with $4.4 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 $600,000, or 1.5%, to $41.2 million for the three months ended September 30, 2007 from $40.6 million for the three months ended September 30, 2006. The increase is primarily due to a $1.2 million increase in net occupancy expense, partially offset by a $348,000 decrease in other non-interest expense and a $146,000 decrease in computer and related services. Total non-interest expense for the nine months ended September 30, 2007 was $123.2 million compared with $117.4 million during the corresponding 2006 period. The increase is primarily due to a $4.4 million increase in net occupancy expense and a $1.7 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 25.07% for the three months ended September 30, 2007 as compared to 26.22% for the three months ended September 30, 2006. Our ratio of non-interest expense to average total assets for the third quarter of 2007 was 0.40% as compared to 0.50% for the third quarter of 2006. Our efficiency ratio for the nine months ended September 30, 2007 was 25.56% compared with 25.04% for the corresponding 2006 period. Our ratio of non- interest expense to average total assets for the nine months ended September 30, 2007 was 0.43% compared with 0.51% for the corresponding period in 2006. Income tax expense amounted to $46.6 million for the three months ended September 30, 2007 compared with $43.2 million for the corresponding period in 2006. Our effective tax rate for the three months ended September 30, 2007 was 38.52% compared with 37.86% for the corresponding period in 2006. Income tax expense for the nine months ended September 30, 2007 was $137.4 million compared with $132.0 million for the corresponding 2006 period. Our effective tax rate for the nine months ended September 30, 2007 was 38.63% compared with 37.57% for the nine months ended September 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 119 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 Bancorp may turn out to be wrong. They can be affected by inaccurate assumptions Hudson City Bancorp might make or by known or unknown risks and uncertainties. Consequently, no forward-looking statement can be guaranteed. Hudson City Bancorp 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 September 30, December 31, 2007 2006 (In thousands except share and per (unaudited) share amounts) Assets: Cash and due from banks $107,893 $125,630 Federal funds sold 202,458 56,616 Total cash and cash equivalents 310,351 182,246 Securities available for sale: Mortgage-backed securities 2,683,594 2,404,421 Investment securities 3,663,715 4,379,615 Securities held to maturity: Mortgage-backed securities 9,837,898 6,925,210 Investment securities 1,533,982 1,533,969 Total securities 17,719,189 15,243,215 Loans 23,030,345 19,083,617 Deferred loan costs 33,920 16,159 Allowance for loan losses (32,850) (30,625) Net loans 23,031,415 19,069,151 Federal Home Loan Bank of New York stock 657,101 445,006 Foreclosed real estate, net 3,405 3,161 Accrued interest receivable 253,199 194,229 Banking premises and equipment, net 76,224 73,929 Goodwill 152,109 150,831 Other assets 113,801 144,813 Total Assets $42,316,794 $35,506,581 Liabilities and Stockholders' Equity: Deposits: Interest-bearing $14,105,685 $12,917,286 Noninterest-bearing 520,041 498,301 Total deposits 14,625,726 13,415,587 Repurchase agreements 11,616,000 8,923,000 Federal Home Loan Bank of New York advances 11,275,000 8,050,000 Total borrowed funds 22,891,000 16,973,000 Accrued expenses and other liabilities 210,558 187,738 Total liabilities 37,727,284 30,576,325 Common stock, $0.01 par value, 3,200,000,000 shares authorized; 741,466,555 shares issued; 522,375,189 shares outstanding at September 30, 2007 and 557,787,921 shares outstanding at December 31, 2006 7,415 7,415 Additional paid-in capital 4,572,582 4,553,614 Retained earnings 1,966,167 1,877,840 Treasury stock, at cost; 219,091,366 shares at September 30, 2007 and 183,678,634 shares at December 31, 2006 (1,712,914) (1,230,793) Unallocated common stock held by the employee stock ownership plan (223,752) (228,257) Accumulated other comprehensive loss, net of tax (19,988) (49,563) Total stockholders' equity 4,589,510 4,930,256 Total Liabilities and Stockholders' Equity $42,316,794 $35,506,581 Hudson City Bancorp, Inc. and Subsidiary Consolidated Statements of Income (Unaudited) For the Three Months For the Nine Months Ended September 30, Ended September 30, 2007 2006 2007 2006 (In thousands, except per share data) Interest and Dividend Income: First mortgage loans $313,943 $246,230 $873,397 $679,049 Consumer and other loans 7,107 5,425 21,077 12,822 Mortgage-backed securities held to maturity 124,524 68,249 329,604 182,034 Mortgage-backed securities available for sale 26,620 31,372 81,716 89,788 Investment securities held to maturity 18,620 18,673 55,863 55,936 Investment securities available for sale 43,391 45,233 142,577 130,631 Dividends on Federal Home Loan Bank of New York stock 10,616 4,640 26,835 10,357 Federal funds sold 3,382 2,223 8,275 5,256 Total interest and dividend income 548,203 422,045 1,539,344 1,165,873 Interest Expense: Deposits 155,055 115,894 443,450 303,666 Borrowed funds 230,932 153,023 619,566 397,811 Total interest expense 385,987 268,917 1,063,016 701,477 Net interest income 162,216 153,128 476,328 464,396 Provision for Loan Losses 2,000 - 2,800 - Net interest income after provision for loan losses 160,216 153,128 473,528 464,396 Non-Interest Income: Service charges and other income 2,049 1,669 5,422 4,384 Gains on securities transactions, net - - - 4 Total non-interest income 2,049 1,669 5,422 4,388 Non-Interest Expense: Compensation and employee benefits 26,554 26,633 78,114 78,376 Net occupancy expense 7,718 6,519 21,997 17,629 Federal deposit insurance assessment 405 431 1,293 1,257 Computer and related services 633 779 2,014 2,078 Other expense 5,878 6,226 19,734 18,048 Total non-interest expense 41,188 40,588 123,152 117,388 Income before income tax expense 121,077 114,209 355,798 351,396 Income Tax Expense 46,634 43,238 137,448 132,029 Net income $74,443 $70,971 $218,350 $219,367 Basic Earnings Per Share $0.15 $0.13 $0.43 $0.41 Diluted Earnings Per Share $0.15 $0.13 $0.42 $0.40 Weighted Average Number of Common Shares Outstanding: Basic 491,331,210 531,129,380 504,784,333 539,843,240 Diluted 500,861,222 540,969,501 514,734,542 550,497,527 Hudson City Bancorp, Inc. and Subsidiary Consolidated Average Balance Sheets (Unaudited) For the Three Months Ended September 30, 2007 Average Average Yield/ Balance Interest Cost (Dollars in thousands) Assets: Interest-earnings assets: First mortgage loans, net (1) $21,990,493 $313,943 5.71 % Consumer and other loans 432,061 7,107 6.58 Federal funds sold 271,404 3,382 4.94 Mortgage-backed securities at amortized cost 11,617,722 151,144 5.20 Federal Home Loan Bank stock 623,693 10,616 6.81 Investment securities, at amortized cost 5,179,482 62,011 4.79 Total interest-earning assets 40,114,855 548,203 5.47 Noninterest-earnings assets 617,794 Total Assets $40,732,649 Liabilities and Stockholders' Equity: Interest-bearing liabilities: Savings accounts $766,928 1,457 0.75 Interest-bearing transaction accounts 1,715,934 14,538 3.36 Money market accounts 1,264,556 13,436 4.22 Time deposits 10,099,706 125,624 4.93 Total interest-bearing deposits 13,847,124 155,055 4.44 Repurchase agreements 10,948,609 116,888 4.24 Federal Home Loan Bank of New York advances 10,547,826 114,044 4.29 Total borrowed funds 21,496,435 230,932 4.26 Total interest-bearing liabilities 35,343,559 385,987 4.33 Noninterest-bearing liabilities: Noninterest-bearing deposits 529,775 Other noninterest-bearing liabilities 214,543 Total noninterest-bearing liabilities 744,318 Total liabilities 36,087,877 Stockholders' equity 4,644,772 Total Liabilities and Stockholders' Equity $40,732,649 Net interest income/net interest rate spread (2) $162,216 1.14 % Net interest-earning assets/net interest margin (3) $4,771,296 1.65 % Ratio of interest-earning assets to interest-bearing liabilities 1.13 x For the Three Months Ended September 30, 2006 Average Average Yield/ Balance Interest Cost (Dollars in thousands) Assets: Interest-earnings assets: First mortgage loans, net (1) $17,355,122 $246,230 5.68 % Consumer and other loans 341,875 5,425 6.35 Federal funds sold 166,404 2,223 5.30 Mortgage-backed securities at amortized cost 8,257,035 99,621 4.83 Federal Home Loan Bank stock 388,951 4,640 4.77 Investment securities, at amortized cost 5,675,493 63,906 4.50 Total interest-earning assets 32,184,880 422,045 5.25 Noninterest-earnings assets 458,055 Total Assets $32,642,935 Liabilities and Stockholders' Equity: Interest-bearing liabilities: Savings accounts $809,278 1,989 0.98 Interest-bearing transaction accounts 2,468,022 20,651 3.32 Money market accounts 805,105 6,592 3.25 Time deposits 7,742,845 86,662 4.44 Total interest-bearing deposits 11,825,250 115,894 3.89 Repurchase agreements 8,250,500 79,856 3.84 Federal Home Loan Bank of New York advances 6,901,240 73,167 4.21 Total borrowed funds 15,151,740 153,023 4.01 Total interest-bearing liabilities 26,976,990 268,917 3.95 Noninterest-bearing liabilities: Noninterest-bearing deposits 466,906 Other noninterest-bearing liabilities 207,744 Total noninterest-bearing liabilities 674,650 Total liabilities 27,651,640 Stockholders' equity 4,991,295 Total Liabilities and Stockholders' Equity $32,642,935 Net interest income/net interest rate spread (2) $153,128 1.30 % Net interest-earning assets/net interest margin (3) $5,207,890 1.93 % Ratio of interest-earning assets to interest-bearing liabilities 1.19 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 Nine Months Ended September 30, 2007 Average Average Yield/ Balance Interest Cost (Dollars in thousands) Assets: Interest-earnings assets: First mortgage loans, net (1) $20,492,465 $873,397 5.68 % Consumer and other loans 428,054 21,077 6.57 Federal funds sold 215,706 8,275 5.13 Mortgage-backed securities at amortized cost 10,704,116 411,320 5.12 Federal Home Loan Bank stock 555,343 26,835 6.44 Investment securities, at amortized cost 5,567,410 198,440 4.75 Total interest-earning assets 37,963,094 1,539,344 5.41 Noninterest-earnings assets 603,535 Total Assets $38,566,629 Liabilities and Stockholders' Equity: Interest-bearing liabilities: Savings accounts $785,015 4,925 0.84 Interest-bearing transaction accounts 1,868,032 47,054 3.37 Money market accounts 1,074,245 31,428 3.91 Time deposits 9,758,275 360,043 4.93 Total interest-bearing deposits 13,485,567 443,450 4.40 Repurchase agreements 9,758,275 304,505 4.17 Federal Home Loan Bank of New York advances 9,811,172 315,061 4.29 Total borrowed funds 19,569,447 619,566 4.23 Total interest-bearing liabilities 33,055,014 1,063,016 4.30 Noninterest-bearing liabilities: Noninterest-bearing deposits 514,903 Other noninterest-bearing liabilities 213,546 Total noninterest-bearing liabilities 728,449 Total liabilities 33,783,463 Stockholders' equity 4,783,166 Total Liabilities and Stockholders' Equity $38,566,629 Net interest income/net interest rate spread (2) $476,328 1.11 % Net interest-earning assets/net interest margin (3) $4,908,080 1.66 % Ratio of interest-earning assets to interest-bearing liabilities 1.15 x For the Nine Months Ended September 30, 2006 Average Average Yield/ Balance Interest Cost (Dollars in thousands) Assets: Interest-earnings assets: First mortgage loans, net (1) $16,220,800 $679,049 5.58 % Consumer and other loans 282,499 12,822 6.05 Federal funds sold 145,306 5,256 4.84 Mortgage-backed securities at amortized cost 7,730,646 271,822 4.69 Federal Home Loan Bank stock 319,715 10,357 4.32 Investment securities, at amortized cost 5,624,061 186,567 4.42 Total interest-earning assets 30,323,027 1,165,873 5.13 Noninterest-earnings assets 358,978 Total Assets $30,682,005 Liabilities and Stockholders' Equity: Interest-bearing liabilities: Savings accounts $791,382 5,826 0.98 Interest-bearing transaction accounts 2,923,558 73,095 3.34 Money market accounts 624,568 13,043 2.79 Time deposits 6,964,262 211,702 4.06 Total interest-bearing deposits 11,303,770 303,666 3.59 Repurchase agreements 8,220,132 230,258 3.75 Federal Home Loan Bank of New York advances 5,423,550 167,553 4.13 Total borrowed funds 13,643,682 397,811 3.90 Total interest-bearing liabilities 24,947,452 701,477 3.76 Noninterest-bearing liabilities: Noninterest-bearing deposits 454,587 Other noninterest-bearing liabilities 192,587 Total noninterest-bearing liabilities 647,174 Total liabilities 25,594,626 Stockholders' equity 5,087,379 Total Liabilities and Stockholders' Equity $30,682,005 Net interest income/net interest rate spread (2) $464,396 1.37 % Net interest-earning assets/net interest margin (3) $5,375,575 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 Other Financial Data (Unaudited) At or for the Quarter Ended Sept. 30, June 30, March 31, 2007 2007 2007 (Dollars in thousands, except per share data) Net interest income $162,216 $157,658 $156,454 Provision for loan losses 2,000 500 300 Non-interest income 2,049 1,823 1,550 Non-interest expense: Compensation and employee benefits 26,554 25,812 25,748 Net occupancy expense 7,718 7,070 7,209 Other non-interest expense 6,916 7,985 8,140 Total non-interest expense 41,188 40,867 41,097 Income before income tax expense 121,077 118,114 116,607 Income tax expense 46,634 45,450 45,364 Net income $74,443 $72,664 $71,243 Total assets $42,316,794 $39,691,435 $37,465,150 Loans, net 23,031,415 21,888,126 20,254,880 Mortgage-backed securities Available for sale 2,683,594 2,071,133 2,273,874 Held to maturity 9,837,898 9,028,614 8,086,955 Other securities Available for sale 3,663,715 3,782,151 4,117,442 Held to maturity 1,533,982 1,533,978 1,533,978 Deposits 14,625,726 14,190,510 13,914,315 Borrowings 22,891,000 20,666,000 18,516,000 Stockholders' equity 4,589,510 4,653,147 4,831,052 Performance Data: Return on average assets (1) 0.73% 0.75% 0.78% Return on average equity (1) 6.41% 6.06% 5.80% Net interest rate spread (1) 1.14% 1.10% 1.10% Net interest margin (1) 1.65% 1.65% 1.70% Non-interest expense to average assets 0.40% 0.42% 0.45% Efficiency ratio (2) 25.07% 25.62% 26.01% Dividend payout ratio 56.67% 57.14% 57.14% Per Common Share Data: Basic earnings per common share $0.15 $0.14 $0.14 Diluted earnings per common share $0.15 $0.14 $0.13 Book value per share (3) $9.44 $9.39 $9.47 Tangible book value per share (3) $9.10 $9.06 $9.15 Dividends per share $0.085 $0.080 $0.080 Capital Ratios: Equity to total assets (consolidated) 10.85% 11.72% 12.89% Tier 1 leverage capital (Bank) 9.59% 10.18% 10.75% Total risk-based capital 25.99% 27.50% 28.93% Other Data: Full-time equivalent employees 1,321 1,298 1,272 Number of branch offices 118 115 111 Asset Quality Data: Total non-performing loans $58,792 $38,452 $34,205 Total non-performing assets $62,197 $42,151 $36,830 Non-performing loans to total loans 0.26% 0.18% 0.17% Non-performing assets to total assets 0.15% 0.11% 0.10% Allowance for loan losses to non- performing loans 55.87% 81.81% 90.61% Allowance for loan losses to total loans 0.14% 0.14% 0.15% At or for the Quarter Ended Dec. 31, 2006 Sept. 30, 2006 (Dollars in thousands, except per share data) Net interest income $148,837 $153,128 Provision for loan losses - - Non-interest income 1,903 1,669 Non-interest expense: Compensation and employee benefits 25,067 26,633 Net occupancy expense 7,386 6,519 Other non-interest expense 9,114 7,436 Total non-interest expense 41,567 40,588 Income before income tax expense 109,173 114,209 Income tax expense 39,961 43,238 Net income $69,212 $70,971 Total assets $35,506,581 $33,638,004 Loans, net 19,069,151 18,276,303 Mortgage-backed securities Available for sale 2,404,421 2,575,038 Held to maturity 6,925,210 5,873,952 Other securities Available for sale 4,379,615 4,127,179 Held to maturity 1,533,969 1,533,971 Deposits 13,415,587 12,807,077 Borrowings 16,973,000 15,648,000 Stockholders' equity 4,930,256 5,002,242 Performance Data: Return on average assets (1) 0.80% 0.87% Return on average equity (1) 5.55% 5.69% Net interest rate spread (1) 1.16% 1.30% Net interest margin (1) 1.78% 1.93% Non-interest expense to average assets 0.48% 0.50% Efficiency ratio (2) 27.58% 26.22% Dividend payout ratio 57.69% 57.69% Per Common Share Data: Basic earnings per common share $0.13 $0.13 Diluted earnings per common share $0.13 $0.13 Book value per share (3) $9.45 $9.47 Tangible book value per share (3) $9.13 $9.19 Dividends per share $0.075 $0.075 Capital Ratios: Equity to total assets (consolidated) 13.89% 14.87% Tier 1 leverage capital (Bank) 11.30% 11.92% Total risk-based capital 30.99% 32.66% Other Data: Full-time equivalent employees 1,272 1,252 Number of branch offices 111 110 Asset Quality Data: Total non-performing loans $29,998 $26,354 Total non-performing assets $33,159 $28,090 Non-performing loans to total loans 0.16% 0.14% Non-performing assets to total assets 0.09% 0.08% Allowance for loan losses to non- performing loans 102.09% 103.93% Allowance for loan losses to total loans 0.16% 0.15% (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, unvested stock awards and shares held in trust. Tangible book value excludes goodwill and other intangible assets. Hudson City Bancorp, Inc. and Subsidiary Book Value Calculations September 30, 2007 (In thousands, except share and per share amounts) Stockholders' equity $4,589,510 Goodwill and other intangible assets (162,918) Tangible stockholders' equity $4,426,592 Book Value Share Computation: Issued 741,466,555 Treasury shares (219,091,366) Shares outstanding 522,375,189 Unallocated ESOP shares (35,841,378) Unvested RRP shares (287,512) Shares in trust (35,065) Book value shares 486,211,234 Book value per share $9.44 Tangible book value per share $9.10 DATASOURCE: Hudson City Bancorp, Inc. CONTACT: Susan Munhall, Investor Relations, Hudson City Bancorp, Inc., +1-201-967-8290, Web site: http://www.hcbk.com/

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