HCBK (MM)

Quarterly Cash Dividend Increased to $0.09 Per Share PARAMUS, N.J., Jan. 23 /PRNewswire-FirstCall/ -- Hudson City Bancorp, Inc. (NASDAQ:HCBK), the holding company for Hudson City Savings Bank, reported today that net income for the fourth quarter of 2007 was a record-high for Hudson City at $77.5 million as compared to $69.2 million for the fourth quarter of 2006. Diluted earnings per share increased 23.1% to $0.16 for the fourth quarter of 2007 as compared to $0.13 for the fourth quarter of 2006. For the year ended December 31, 2007, net income amounted to $295.9 million as compared to $288.6 million for 2006. Diluted earnings per share was $0.58 for the year ended December 31, 2007 as compared to $0.53 for 2006. The Board of Directors declared a quarterly cash dividend of $0.09 per share. The cash dividend is payable on March 1, 2008 to stockholders of record at the close of business on February 11, 2008. Ronald E. Hermance, Jr., Chairman, President and Chief Executive Officer, commented, "The fourth quarter of 2007 was an exciting time for our Company. We reported net income of $77.5 million or $0.16 per share -- a record-high for Hudson City. We were also named the Best Managed Bank of 2007 by Forbes and we were cited as the top-performing bank in the S&P 500 with an 8.2% increase in the price of our stock during 2007. We are especially pleased that we were able to generate these returns for our stockholders in a quarter that was challenging for the financial services industry. The weakening housing market and sub-prime mortgage crisis continues to affect the industry, but because we never offered sub-prime loans and other exotic loan products, our earnings have not been significantly affected by credit losses. In addition, our investment portfolio includes only Government-sponsored agency bonds and Government-sponsored agency mortgage-backed securities. While our non-performing assets have increased and housing market conditions have deteriorated during 2007, we have not experienced significant charge-offs. This is because we require that borrowers have significant equity in the underlying property which provides protection to both us and our borrowers in challenging economic times." Mr. Hermance continued, "The Federal Reserve lowered the target Federal funds rate to 4.25% during the fourth quarter and the Treasury yield curve steepened. However, competitive pricing pressures slowed the lowering of deposit costs and, as a result, our margin decreased slightly to 1.64% from 1.65% from the linked quarter. Despite the slight margin compression, we were able to grow net interest income 5.3% over the linked quarter and 14.8% over the 2006 quarter as a result of our growth initiatives. We grew the loan portfolio 27% in 2007 to $24.20 billion and grew deposits by 13% to $15.15 billion. We were able to achieve this growth because of our strong capital and liquidity positions while many of our competitors were scaling back loan production. As expected, the Federal Reserve continued to lower short-term interest rates in January and it is widely anticipated that further reductions will occur during 2008. We believe that these interest rate reductions will cause deposit pricing competition to rationalize which should result in higher margins and profit growth. However, even if the Federal Reserve does not lower interest rates further, we believe that we are uniquely positioned to grow earnings in 2008. Our growth strategy, our liquidity and capital positions and our industry-leading efficiency ratio allows us to increase net interest income even in a static interest rate environment. As part of our growth strategy, we plan to open 8 new branches in 2008 and continue developing our newer markets in Connecticut and New York. While we have operated in Fairfield County, Connecticut for only 18 months, loan production from this market is second only to Bergen County, New Jersey where our headquarters is located. As always, we appreciate the confidence and loyalty of our stockholders and customers and we look forward to 2008 with great excitement." Financial highlights for the fourth quarter of 2007 are as follows: -- Basic and diluted earnings per common share were both $0.16 for the fourth quarter of 2007 as compared to $0.13 for the fourth quarter of 2006. Basic and diluted earnings per common share were $0.59 and $0.58, respectively for 2007 and $0.54 and $0.53, respectively, for 2006. -- The Board of Directors declared a quarterly cash dividend of $0.09 per common share payable on March 1, 2008 to stockholders of record at the close of business on February 11, 2008. -- Net income amounted to $77.5 million for the fourth quarter of 2007, as compared to $69.2 million for the fourth quarter of 2006. For the year ended December 31, 2007, net income amounted to $295.9 million as compared to $288.6 million for 2006. -- Net interest income increased 14.8% to $170.9 million for the fourth quarter of 2007 and 5.5% to $647.2 million for the year ended December 31, 2007. -- Our annualized return on average stockholders' equity and annualized return on average assets for the fourth quarter of 2007 were 6.73% and 0.72%, respectively. Our return on average stockholders' equity and return on average assets for the year ended December 31, 2007 were 6.23% and 0.74%, respectively. -- Our net interest rate spread and net interest margin were 1.16% and 1.64%, respectively, for the fourth quarter of 2007 and 1.11% and 1.65%, respectively, for the year ended December 31, 2007. -- Our efficiency ratio was 25.9% for the fourth quarter of 2007 and 25.7% for the year ended December 31, 2007. -- Net loans increased $5.13 billion to $24.20 billion at December 31, 2007 from $19.07 billion at December 31, 2006. -- Deposits increased $1.73 billion to $15.15 billion at December 31, 2007 from $13.42 billion at December 31, 2006. -- Borrowed funds increased $7.17 billion to $24.14 billion at December 31, 2007 from $16.97 billion at December 31, 2006. -- We repurchased 40,578,954 shares of our common stock during 2007 at a total cost of $550.2 million. -- The Board of Directors established April 22, 2008 as the date for the Annual Meeting of Stockholders. The voting record date will be March 3, 2008. Statement of Financial Condition Summary Total assets increased $8.91 billion, or 25.1%, to $44.42 billion at December 31, 2007 from $35.51 billion at December 31, 2006. The increase in total assets reflected a $5.13 billion increase in loans and a $5.24 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. During 2007, we purchased $3.97 billion of loans and originated $3.35 billion of loans, compared to purchases of $2.71 billion and originations of $2.31 billion in 2006. The purchase of mortgage loans during 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 $5.24 billion increase in total mortgage-backed securities reflected purchases of approximately $7.09 billion, substantially all of which were variable-rate instruments. Total liabilities increased $9.23 billion, or 30.2%, to $39.81 billion at December 31, 2007 from $30.58 billion at December 31, 2006. The increase in total liabilities primarily reflected a $7.17 billion increase in borrowed funds and a $1.73 billion increase in deposits. The increase in borrowed funds was the result of $10.73 billion of new borrowings at a weighted-average rate of 4.22%, partially offset by repayments of $3.56 billion with a weighted average rate of 3.57%. 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 $1.64 billion increase in our time deposits and a $656.5 million increase in our money market checking accounts. These increases were partially offset by a $575.2 million decrease in our interest-bearing transaction accounts and savings accounts, due primarily to customers shifting deposits to short-term time deposits. Total stockholders' equity decreased $318.9 million to $4.61 billion at December 31, 2007 from $4.93 billion at December 31, 2006. The decrease was primarily due to repurchases of 40,578,954 shares of our outstanding common stock at an aggregate cost of $550.2 million and cash dividends paid to common stockholders of $165.4 million. These decreases to stockholders' equity were partially offset by net income of $295.9 million for the year ended December 31, 2007 and a $66.2 million increase in accumulated other comprehensive income. At December 31, 2007, our stockholders' equity to asset ratio was 10.38% and our tangible book value per share was $9.22. The accumulated other comprehensive income of $16.6 million at December 31, 2007 includes a $19.6 million after-tax net unrealized gain on securities available for sale ($33.2 million pre-tax). We invest primarily in mortgage- backed securities issued by Ginnie Mae, Fannie Mae and Freddie Mac, as well as U.S. Government and Agency securities. The Company does not purchase unrated or private label mortgage-backed securities or other higher risk securities such as those backed by sub-prime loans. The accumulated other comprehensive income of $16.6 million at December 31, 2007 represented an improvement from the accumulated other comprehensive loss of $49.6 million at December 31, 2006 reflecting an net unrealized gain on securities available for sale as compared to a net unrealized loss at December 31, 2006 as a result of lower market interest rates. Statement of Income Summary Net interest income increased $22.1 million, or 14.9%, to $170.9 million for the fourth quarter of 2007 as compared to $148.8 million for the fourth quarter of 2006. Net interest income increased $34.0 million, or 5.5%, to $647.2 million for the year ended December 31, 2007 compared to $613.2 million for the corresponding period in 2006. During the fourth quarter of 2007, our net interest rate spread was 1.16%, unchanged from the same quarter in 2006. Our net interest margin decreased 14 basis points to 1.64% as compared to the fourth quarter of 2006. During 2007, our net interest rate spread decreased 20 basis points to 1.11% and our net interest margin decreased 31 basis points to 1.65% as compared to 2006. The Federal Open Market Committee of the Federal Reserve Bank ("FOMC") decreased the overnight lending rate by an additional 50 basis points to 4.25% during the fourth quarter. As a result, short-term market interest rates continued to decrease. Longer-term market interest rates also decreased during the fourth quarter of 2007, but at a slower pace than the short-term interest rates and, as a result, the yield curve steepened. However, competitive pricing pressures prevented us from lowering our deposit costs to the same extent as the decreases in the yield curve. As a result, our net interest rate spread and net interest margin were substantially unchanged from the linked quarter. Total interest and dividend income for the three months ended December 31, 2007 increased $139.2 million, or 31.0%, to $588.2 million as compared to $449.0 million for the three months ended December 31, 2006. The increase in total interest and dividend income was primarily due to an $8.63 billion, or 25.4%, increase in the average balance of total interest-earning assets to $42.57 billion for the fourth quarter of 2007 as compared to $33.94 billion for the fourth quarter of 2006. The increase in interest and dividend income was also partially due to an increase of 24 basis points in the annualized weighted-average yield on total interest-earning assets to 5.53% for the three month period ended December 31, 2007 from 5.29% for the comparable period in 2006. Total interest and dividend income for the year ended December 31, 2007 increased $512.7 million, or 31.8%, to $2.13 billion as compared to $1.61 billion for the year ended December 31, 2006. The increase in total interest and dividend income was primarily due to a $7.99 billion, or 25.6%, increase in the average balance of total interest-earning assets to $39.22 billion for the year ended December 31, 2007 as compared to $31.23 billion for 2006. The increase in interest and dividend income was also partially due to an increase of 25 basis points in the annualized weighted-average yield on total interest- earning assets to 5.42% for the year ended December 31, 2007 from 5.17% for 2006. Interest and fees on mortgage loans increased $78.6 million to $332.1 million for the fourth quarter of 2007 as compared to $253.5 million for the same period in 2006 primarily due to a $5.06 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 13 basis point increase in the weighted-average yield to 5.74%. For the year ended December 31, 2007, interest and fees on mortgage loans increased $272.9 million to $1.21 billion as compared to $932.6 million for the year ended December 31, 2006 primarily due to a $4.52 billion increase in the average balance of first mortgage loans. The increase in interest income on mortgage loans was also due to a 9 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 during the first half of 2007. Interest on mortgage-backed securities increased $66.4 million to $176.6 million for the fourth quarter of 2007 as compared to $110.2 million for the fourth quarter of 2006. This increase was due primarily to a $4.43 billion increase in the average balance of mortgage-backed securities during the fourth quarter of 2007 as compared to the fourth quarter of 2006, and a 34 basis point increase in the weighted-average yield to 5.30%. Interest on mortgage-backed securities increased $205.9 million to $587.9 million for the year ended December 31, 2007 as compared to $382.0 million for the year ended December 31, 2006. This increase was due primarily to a $3.37 billion increase in the average balance of mortgage-backed securities during 2007 as compared to 2006, and a 40 basis point increase in the weighted- average yield to 5.16%. 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 December 31, 2007 increased $117.2 million, or 39.1%, to $417.3 million as compared to $300.1 million for the three months ended December 31, 2006. This increase was primarily due to a $9.04 billion, or 31.3%, increase in the average balance of total interest-bearing liabilities to $37.88 billion for the quarter ended December 31, 2007 compared with $28.84 billion for the fourth 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 24 basis point increase in the weighted-average cost of total interest-bearing liabilities to 4.37% for the quarter ended December 31, 2007 compared with 4.13% for the quarter ended December 31, 2006. Total interest expense for the year ended December 31, 2007 increased $478.7 million, or 47.9%, to $1.48 billion as compared to $1.00 billion for the year ended December 31, 2006. This increase was primarily due to an $8.43 billion, or 32.5%, increase in the average balance of total interest-bearing liabilities to $34.36 billion for the year ended December 31, 2007 compared with $25.93 billion for 2006. The increase in total interest expense was also due to a 45 basis point increase in the weighted-average cost of total interest-bearing liabilities to 4.31% for the year ended December 31, 2007 compared with 3.86% for the year ended December 31, 2006. The increase in the average cost of interest-bearing liabilities for the three- and twelve-month periods in 2007 reflected a very competitive environment for deposits and a shift within our deposits to higher costing short-term time deposits as well as the growth and re-pricing of our interest-bearing liabilities during the higher short-term interest rate environment experienced during the second half of 2006 and first half of 2007. Interest expense on deposits increased $31.1 million to $163.5 million for the fourth quarter of 2007 as compared to $132.4 million for the fourth quarter of 2006. This increase is due primarily to a $1.81 billion increase in the average balance of interest-bearing deposits to $14.44 billion during the fourth quarter of 2007 quarter as compared to $12.63 billion for the comparable period in 2006. In addition, the average cost of interest-bearing deposits increased 33 basis points to 4.49% for the 2007 quarter as compared to 4.16% for the 2006 quarter. For the year ended December 31, 2007, interest expense on deposits increased $170.8 million to $606.9 million as compared to $436.1 million for the year ended December 31, 2006. This increase is due primarily to a $2.12 billion increase in the average balance of interest-bearing deposits to $13.76 billion during 2007 as compared to $11.64 billion for 2006. In addition, the average cost of interest-bearing deposits increased 66 basis points to 4.41% for the year ended December 31, 2007 as compared to 3.75% for 2006. The increases in the average balance of interest-bearing deposits reflects our growth strategy and includes deposits from the 29 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 twelve-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 $86.1 million to $253.8 million for the fourth quarter of 2007 as compared to $167.7 million for the fourth quarter of 2006 primarily due to a $7.23 billion increase in the average balance of borrowed funds and a 20 basis point increase in the weighted-average cost of borrowed funds to 4.30%. Interest expense on borrowed funds increased $307.9 million to $873.4 million for the year ended December 31, 2007 as compared to $565.5 million for the year ended December 31, 2006 primarily due to a $6.3 billion increase in the average balance of borrowed funds and a 28 basis point increase in the weighted-average cost of borrowed funds to 4.24%. 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 higher interest rates than existing borrowings and borrowings that were called. The provision for loan losses amounted to $2.0 million for the quarter ended December 31, 2007 (none for the quarter ended December 31, 2006) and $4.8 million for the year ended December 31, 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 $79.4 million at December 31, 2007 and $30.0 million at December 31, 2006. The ratio of non- performing loans to total loans was 0.33% at December 31, 2007 compared with 0.16% at December 31, 2006. The allowance for loan losses amounted to $34.7 million and $30.6 million at December 31, 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 43.8%, respectively at December 31, 2007 as compared to 0.16% and 102.09%, respectively at December 31, 2006. We recorded net charge-offs of $684,000 for the year ended December 31, 2007 as compared to net charge-offs of $76,000 for 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 $1.9 million for the fourth quarter of both 2007 and 2006. Total non-interest income for the year ended December 31, 2007 was $7.3 million compared with $6.3 million for 2006. Total non-interest expense increased $3.2 million, or 7.7%, to $44.8 million for the three months ended December 31, 2007 from $41.6 million for the three months ended December 31, 2006. The increase is primarily due to a $3.4 million increase in compensation and benefits expense. Total non- interest expense for the year ended December 31, 2007 was $167.9 million compared with $159.0 million for 2006. The increase is primarily due to a $4.6 million increase in net occupancy expense and a $3.2 million increase in compensation expense. The increase in net occupancy expense and compensation 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 25.92% for the three months ended December 31, 2007 as compared to 27.58% for the three months ended December 31, 2006. Our ratio of non-interest expense to average total assets for the fourth quarter of 2007 was 0.41% as compared to 0.48% for the fourth quarter of 2006. Our efficiency ratio was 25.66% for each of the years ended December 31, 2007 and 2006. Our ratio of non-interest expense to average total assets for the year ended December 31, 2007 was 0.42% compared with 0.50% for 2006. Income tax expense amounted to $48.4 million for the three months ended December 31, 2007 compared with $40.0 million for the corresponding period in 2006. Our effective tax rate for the three months ended December 31, 2007 was 38.46% compared with 36.60% for the corresponding period in 2006. Income tax expense for the year ended December 31, 2007 was $185.9 million compared with $172.0 million for 2006. Our effective tax rate for the year ended December 31, 2007 was 38.59% compared with 37.34% for the year ended December 31, 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 December 31, December 31, 2007 2006 (In thousands except share and per (unaudited) share amounts) Assets: Cash and due from banks $111,245 $125,630 Federal funds sold 106,299 56,616 Total cash and cash equivalents 217,544 182,246 Securities available for sale: Mortgage-backed securities 5,005,409 2,404,421 Investment securities 2,765,491 4,379,615 Securities held to maturity: Mortgage-backed securities 9,565,526 6,925,210 Investment securities 1,408,501 1,533,969 Total securities 18,744,927 15,243,215 Loans 24,192,281 19,083,617 Deferred loan costs 40,598 16,159 Allowance for loan losses (34,741) (30,625) Net loans 24,198,138 19,069,151 Federal Home Loan Bank of New York stock 695,351 445,006 Foreclosed real estate, net 4,055 3,161 Accrued interest receivable 245,113 194,229 Banking premises and equipment, net 75,094 73,929 Goodwill 152,109 150,831 Other assets 91,640 144,813 Total Assets $44,423,971 $35,506,581 Liabilities and Stockholders' Equity: Deposits: Interest-bearing $14,635,412 $12,917,286 Noninterest-bearing 517,970 498,301 Total deposits 15,153,382 13,415,587 Repurchase agreements 12,016,000 8,923,000 Federal Home Loan Bank of New York advances 12,125,000 8,050,000 Total borrowed funds 24,141,000 16,973,000 Due to brokers 281,853 - Accrued expenses and other liabilities 236,429 187,738 Total liabilities 39,812,664 30,576,325 Common stock, $0.01 par value, 3,200,000,000 shares authorized; 741,466,555 shares issued; 518,569,602 and 557,787,921 shares outstanding at December 31, 2007 and 2006, respectively 7,415 7,415 Additional paid-in capital 4,578,578 4,553,614 Retained earnings 2,002,049 1,877,840 Treasury stock, at cost; 222,896,953 and 183,678,634 shares at December 31, 2007 and 2006, respectively (1,771,106) (1,230,793) Unallocated common stock held by the employee stock ownership plan (222,251) (228,257) Accumulated other comprehensive income (loss), net of tax 16,622 (49,563) Total stockholders' equity 4,611,307 4,930,256 Total Liabilities and Stockholders' Equity $44,423,971 $35,506,581 Hudson City Bancorp, Inc. and Subsidiary Consolidated Statements of Income (Unaudited) For the Three Months For the Years Ended December 31, Ended December 31, 2007 2006 2007 2006 (In thousands, except per share data) Interest and Dividend Income: First mortgage loans $332,064 $253,501 $1,205,461 $932,550 Consumer and other loans 7,170 6,876 28,247 19,698 Mortgage-backed securities held to maturity 128,116 80,383 457,720 262,417 Mortgage-backed securities available for sale 48,469 29,790 130,185 119,578 Investment securities held to maturity 18,335 18,656 74,198 74,592 Investment securities available for sale 37,332 50,628 179,909 181,259 Dividends on Federal Home Loan Bank of New York stock 12,657 6,150 39,492 16,507 Federal funds sold 4,018 2,986 12,293 8,242 Total interest and dividend income 588,161 448,970 2,127,505 1,614,843 Interest Expense: Deposits 163,486 132,430 606,936 436,096 Borrowed funds 253,820 167,703 873,386 565,514 Total interest expense 417,306 300,133 1,480,322 1,001,610 Net interest income 170,855 148,837 647,183 613,233 Provision for Loan Losses 2,000 - 4,800 - Net interest income after provision for loan losses 168,855 148,837 642,383 613,233 Non-Interest Income: Service charges and other income 1,845 1,903 7,267 6,287 Gains on securities transactions, net 6 - 6 4 Total non-interest income 1,851 1,903 7,273 6,291 Non-Interest Expense: Compensation and employee benefits 28,516 25,067 106,630 103,443 Net occupancy expense 7,592 7,386 29,589 25,015 Federal deposit insurance assessment 408 438 1,701 1,695 Computer and related services 591 734 2,605 2,812 Other expense 7,654 7,942 27,388 25,990 Total non-interest expense 44,761 41,567 167,913 158,955 Income before income tax expense 125,945 109,173 481,743 460,569 Income Tax Expense 48,437 39,961 185,885 171,990 Net income $77,508 $69,212 $295,858 $288,579 Basic Earnings Per Share $0.16 $0.13 $0.59 $0.54 Diluted Earnings Per Share $0.16 $0.13 $0.58 $0.53 Weighted Average Number of Common Shares Outstanding: Basic 484,247,113 525,402,246 499,607,828 536,214,778 Diluted 495,337,581 535,514,559 509,927,433 546,790,604 Hudson City Bancorp, Inc. and Subsidiary Consolidated Average Balance Sheets (Unaudited) For the Three Months Ended December 31, 2007 Average Average Yield/ Balance Interest Cost (Dollars in thousands) Assets: Interest-earnings assets: First mortgage loans, net (1) $23,125,486 $332,064 5.74 % Consumer and other loans 437,095 7,170 6.56 Federal funds sold 342,690 4,018 4.65 Mortgage-backed securities at amortized cost 13,324,671 176,585 5.30 Federal Home Loan Bank stock 671,921 12,657 7.53 Investment securities, at amortized cost 4,672,616 55,667 4.77 Total interest-earning assets 42,574,479 588,161 5.53 Noninterest-earnings assets 669,677 Total Assets $43,244,156 Liabilities and Stockholders' Equity: Interest-bearing liabilities: Savings accounts $739,820 1,405 0.75 Interest-bearing transaction accounts 1,600,935 13,587 3.37 Money market accounts 1,468,580 15,744 4.25 Time deposits 10,635,653 132,750 4.95 Total interest-bearing deposits 14,444,988 163,486 4.49 Repurchase agreements 11,831,217 128,347 4.30 Federal Home Loan Bank of New York advances 11,604,348 125,473 4.29 Total borrowed funds 23,435,565 253,820 4.30 Total interest-bearing liabilities 37,880,553 417,306 4.37 Noninterest-bearing liabilities: Noninterest-bearing deposits 509,005 Other noninterest-bearing liabilities 245,548 Total noninterest-bearing liabilities 754,553 Total liabilities 38,635,106 Stockholders' equity 4,609,050 Total Liabilities and Stockholders' Equity $43,244,156 Net interest income/net interest rate spread (2) $170,855 1.16 % Net interest-earning assets/net interest margin (3) $4,693,926 1.64 % Ratio of interest-earning assets to interest-bearing liabilities 1.12 x For the Three Months Ended December 31, 2006 Average Average Yield/ Balance Interest Cost (Dollars in thousands) Assets: Interest-earnings assets: First mortgage loans, net (1) $18,066,112 $253,501 5.61 % Consumer and other loans 418,754 6,876 6.57 Federal funds sold 224,945 2,986 5.27 Mortgage-backed securities at amortized cost 8,887,791 110,173 4.96 Federal Home Loan Bank stock 423,484 6,150 5.81 Investment securities, at amortized cost 5,915,679 69,284 4.68 Total interest-earning assets 33,936,765 448,970 5.29 Noninterest-earnings assets 579,248 Total Assets $34,516,013 Liabilities and Stockholders' Equity: Interest-bearing liabilities: Savings accounts $811,329 2,025 0.99 Interest-bearing transaction accounts 2,174,634 17,841 3.25 Money market accounts 877,976 7,627 3.45 Time deposits 8,763,673 104,937 4.75 Total interest-bearing deposits 12,627,612 132,430 4.16 Repurchase agreements 8,589,848 86,186 3.98 Federal Home Loan Bank of New York advances 7,619,760 81,517 4.24 Total borrowed funds 16,209,608 167,703 4.10 Total interest-bearing liabilities 28,837,220 300,133 4.13 Noninterest-bearing liabilities: Noninterest-bearing deposits 484,074 Other noninterest-bearing liabilities 205,001 Total noninterest-bearing liabilities 689,075 Total liabilities 29,526,295 Stockholders' equity 4,989,718 Total Liabilities and Stockholders' Equity $34,516,013 Net interest income/net interest rate spread (2) $148,837 1.16 % Net interest-earning assets/net interest margin (3) $5,099,545 1.78 % Ratio of interest-earning assets to interest-bearing liabilities 1.18 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 Years Ended December 31, 2007 Average Average Yield/ Balance Interest Cost (Dollars in thousands) Assets: Interest-earnings assets: First mortgage loans, net (1) $21,208,167 $1,205,461 5.68 % Consumer and other loans 431,491 28,247 6.55 Federal funds sold 248,201 12,293 4.95 Mortgage-backed securities at amortized cost 11,391,487 587,905 5.16 Federal Home Loan Bank stock 586,021 39,492 6.74 Investment securities, at amortized cost 5,358,155 254,107 4.74 Total interest-earning assets 39,223,522 2,127,505 5.42 Noninterest-earnings assets 621,860 Total Assets $39,845,382 Liabilities and Stockholders' Equity: Interest-bearing liabilities: Savings accounts $775,802 6,330 0.82 Interest-bearing transaction accounts 1,806,203 60,641 3.36 Money market accounts 1,176,185 47,172 4.01 Time deposits 10,005,377 492,793 4.93 Total interest-bearing deposits 13,763,567 606,936 4.41 Repurchase agreements 10,305,216 432,852 4.20 Federal Home Loan Bank of New York advances 10,286,869 440,534 4.28 Total borrowed funds 20,592,085 873,386 4.24 Total interest-bearing liabilities 34,355,652 1,480,322 4.31 Noninterest-bearing liabilities: Noninterest-bearing deposits 514,685 Other noninterest-bearing liabilities 222,760 Total noninterest-bearing liabilities 737,445 Total liabilities 35,093,097 Stockholders' equity 4,752,285 Total Liabilities and Stockholders' Equity $39,845,382 Net interest income/net interest rate spread (2) $647,183 1.11 % Net interest-earning assets/net interest margin (3) $4,867,870 1.65 % Ratio of interest-earning assets to interest-bearing liabilities 1.14 x For the Years Ended December 31, 2006 Average Average Yield/ Balance Interest Cost (Dollars in thousands) Assets: Interest-earnings assets: First mortgage loans, net (1) $16,685,920 $932,550 5.59 % Consumer and other loans 316,844 19,698 6.22 Federal funds sold 165,380 8,242 4.98 Mortgage-backed securities at amortized cost 8,022,309 381,995 4.76 Federal Home Loan Bank stock 345,870 16,507 4.77 Investment securities, at amortized cost 5,697,565 255,851 4.49 Total interest-earning assets 31,233,888 1,614,843 5.17 Noninterest-earnings assets 414,084 Total Assets $31,647,972 Liabilities and Stockholders' Equity: Interest-bearing liabilities: Savings accounts $796,410 7,851 0.99 Interest-bearing transaction accounts 2,734,787 90,936 3.33 Money market accounts 688,311 20,670 3.00 Time deposits 7,417,812 316,639 4.27 Total interest-bearing deposits 11,637,320 436,096 3.75 Repurchase agreements 8,313,321 316,444 3.81 Federal Home Loan Bank of New York advances 5,977,115 249,070 4.17 Total borrowed funds 14,290,436 565,514 3.96 Total interest-bearing liabilities 25,927,756 1,001,610 3.86 Noninterest-bearing liabilities: Noninterest-bearing deposits 462,022 Other noninterest-bearing liabilities 195,845 Total noninterest-bearing liabilities 657,867 Total liabilities 26,585,623 Stockholders' equity 5,062,349 Total Liabilities and Stockholders' Equity $31,647,972 Net interest income/net interest rate spread (2) $613,233 1.31 % Net interest-earning assets/net interest margin (3) $5,306,132 1.96 % Ratio of interest-earning assets to interest-bearing liabilities 1.20 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 weighted average cost of total interest- bearing liabilities from the weighted average yield on total interest- earning assets. (3) Determined by dividing 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 Dec. 31, Sept. 30, June 30, 2007 2007 2007 (Dollars in thousands, except per share data) Net interest income $170,855 $162,216 $157,658 Provision for loan losses 2,000 2,000 500 Non-interest income 1,851 2,049 1,823 Non-interest expense: Compensation and employee benefits 28,516 26,554 25,812 Net occupancy expense 7,592 7,718 7,070 Other non-interest expense 8,653 6,916 7,985 Total non-interest expense 44,761 41,188 40,867 Income before income tax expense 125,945 121,077 118,114 Income tax expense 48,437 46,634 45,450 Net income $77,508 $74,443 $72,664 Total assets $44,423,971 $42,316,794 $39,691,435 Loans, net 24,198,138 23,031,415 21,888,126 Mortgage-backed securities Available for sale 5,005,409 2,683,594 2,071,133 Held to maturity 9,565,526 9,837,898 9,028,614 Other securities Available for sale 2,765,491 3,663,715 3,782,151 Held to maturity 1,408,501 1,533,982 1,533,978 Deposits 15,153,382 14,625,726 14,190,510 Borrowings 24,141,000 22,891,000 20,666,000 Stockholders' equity 4,611,307 4,589,510 4,653,147 Performance Data: Return on average assets (1) 0.72% 0.73% 0.75% Return on average equity (1) 6.73% 6.41% 6.06% Net interest rate spread (1) 1.16% 1.14% 1.10% Net interest margin (1) 1.64% 1.65% 1.65% Non-interest expense to average assets 0.41% 0.40% 0.42% Efficiency ratio (2) 25.92% 25.07% 25.62% Dividend payout ratio 53.13% 56.67% 57.14% Per Common Share Data: Basic earnings per common share $0.16 $0.15 $0.14 Diluted earnings per common share $0.16 $0.15 $0.14 Book value per share (3) $9.55 $9.44 $9.39 Tangible book value per share (3) $9.22 $9.10 $9.06 Dividends per share $0.085 $0.085 $0.080 Capital Ratios: Equity to total assets (consolidated) 10.38% 10.85% 11.72% Tier 1 leverage capital (Bank) 9.22% 9.59% 10.18% Total risk-based capital 24.91% 25.99% 27.50% Other Data: Full-time equivalent employees 1,307 1,321 1,298 Number of branch offices 119 118 115 Asset Quality Data: Total non-performing loans $79,402 $58,792 $38,452 Total non-performing assets $83,457 $62,197 $42,151 Non-performing loans to total loans 0.33% 0.26% 0.18% Non-performing assets to total assets 0.19% 0.15% 0.11% Allowance for loan losses to non-performing loans 43.75% 55.87% 81.81% Allowance for loan losses to total loans 0.14% 0.14% 0.14% At or for the Quarter Ended March 31, 2007 Dec. 31, 2006 Net interest income $156,454 $148,837 Provision for loan losses 300 - Non-interest income 1,550 1,903 Non-interest expense: Compensation and employee benefits 25,748 25,067 Net occupancy expense 7,209 7,386 Other non-interest expense 8,140 9,114 Total non-interest expense 41,097 41,567 Income before income tax expense 116,607 109,173 Income tax expense 45,364 39,961 Net income $71,243 $69,212 Total assets $37,465,150 $35,506,581 Loans, net 20,254,880 19,069,151 Mortgage-backed securities Available for sale 2,273,874 2,404,421 Held to maturity 8,086,955 6,925,210 Other securities Available for sale 4,117,442 4,379,615 Held to maturity 1,533,978 1,533,969 Deposits 13,914,315 13,415,587 Borrowings 18,516,000 16,973,000 Stockholders' equity 4,831,052 4,930,256 Performance Data: Return on average assets (1) 0.78% 0.80% Return on average equity (1) 5.80% 5.55% Net interest rate spread (1) 1.10% 1.16% Net interest margin (1) 1.70% 1.78% Non-interest expense to average assets 0.45% 0.48% Efficiency ratio (2) 26.01% 27.58% Dividend payout ratio 57.14% 57.69% Per Common Share Data: Basic earnings per common share $0.14 $0.13 Diluted earnings per common share $0.13 $0.13 Book value per share (3) $9.47 $9.45 Tangible book value per share (3) $9.15 $9.13 Dividends per share $0.080 $0.075 Capital Ratios: Equity to total assets (consolidated) 12.89% 13.89% Tier 1 leverage capital (Bank) 10.75% 11.30% Total risk-based capital 28.93% 30.99% Other Data: Full-time equivalent employees 1,272 1,272 Number of branch offices 111 111 Asset Quality Data: Total non-performing loans $34,205 $29,998 Total non-performing assets $36,830 $33,159 Non-performing loans to total loans 0.17% 0.16% Non-performing assets to total assets 0.10% 0.09% Allowance for loan losses to non-performing loans 90.61% 102.09% 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, 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 December 31, 2007 (In thousands, except share and per share amounts) Stockholders' equity $4,611,307 Goodwill and other intangible assets (162,333) Tangible stockholders' equity $4,448,974 Book Value Share Computation: Issued 741,466,555 Treasury shares (222,896,953) Shares outstanding 518,569,602 Unallocated ESOP shares (35,600,831) Unvested RRP shares (255,984) Shares in trust (41,397) Book value shares 482,671,390 Book value per share $9.55 Tangible book value per share $9.22 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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