First Quarter EPS Increased 44.4% PARAMUS, N.J., April 21
/PRNewswire-FirstCall/ -- Hudson City Bancorp, Inc. (NASDAQ:HCBK),
the holding company for Hudson City Savings Bank, reported today
that net income for the first quarter of 2009 increased 44.0% to
$127.7 million as compared to $88.7 million for the first quarter
of 2008. Diluted earnings per share increased 44.4% to $0.26 for
the first quarter of 2009 as compared to $0.18 for the first
quarter of 2008. The Board of Directors declared a quarterly cash
dividend of $0.15 per share, a 7.1% increase as compared to $0.14
per share from the prior quarter. Ronald E. Hermance, Jr.,
Chairman, President and Chief Executive Officer, made the following
comments regarding the first quarter's results. "As media reports
about the economy grew gloomier during the first quarter of 2009
and more companies announced dividend cuts and employee layoffs,
Hudson City was posting record levels of earnings, loan production
and deposit growth. We are extremely proud that these results allow
us to announce our sixth consecutive increase in our quarterly
dividend to $0.15 per share. In fact, we have paid a dividend every
quarter since our IPO in 1999. We continually challenge ourselves
by raising the bar every quarter and believe our ability to meet
these challenges is due in no small part to the strength of our
balance sheet. Our assets totaled $56.57 billion at March 31, 2009,
an increase of 4.5% from December 31, 2008. Over 43% of these
assets are securities issued by U.S. Government-sponsored
enterprises and which therefore have an implied credit guarantee
from the U.S. Government. In addition, almost 84% of these
securities are mortgage-backed securities which provide us with
strong monthly cash flows. Approximately 81% of our mortgage-backed
securities are variable-rate which helps us manage our interest
rate risk. At March 31, 2009, we had pre-tax net unrealized gains
of $272.4 million on our securities available for sale portfolio
and $247.7 million on our held to maturity portfolio. Our
securities portfolio, coupled with the fact that approximately 52%
of our assets are prime first mortgage loans secured by one- to
four-family homes, provides a great amount of strength to our
balance sheet. We cultivated this balance sheet over many years and
it reflects our devotion to the basic and conservative thrift model
which has served us and our shareholders well and which we believe
will continue to do so in the future. "We earned $127.7 million or
$0.26 per diluted share this quarter, an increase of 44% from the
first quarter of 2008. Our earnings growth comes during a period of
unprecedented challenges facing our industry. Our business model
and the Hudson City philosophy and culture have helped us to avoid
many of the problems facing financial institutions during this
economic recession. While the provision for loan losses amounted to
$20.0 million for the first quarter of 2009, our conservative
underwriting standards have helped to mitigate charge-offs which
were $4.7 million for the quarter. In addition, the real estate
markets in the New York metropolitan area have not experienced
value declines as severe as many other parts of the country. We
increased the provision for loan losses from $9.0 million in the
fourth quarter of 2008 in response to the worsening economic
conditions in the first quarter, particularly rising unemployment
levels, as well as an increase in our non-performing loans to
$320.2 million at March 31, 2009. "Our loan production of $2.04
billion during the first quarter of 2009 is a testament to our
ability to grow our customer base during this active refinancing
period. We are very proud that Hudson City now has the eighth
largest residential portfolio in the country. "We have been able to
fully fund our 2009 loan production with deposits. We grew deposits
by $1.98 billion during the first quarter of 2009 - a 10.7%
increase. Customers who sought safety and stability for their money
found both with Hudson City. Our commitment to customer service and
our ability to pay competitive rates allowed us to not only attract
deposits, but also to retain them. We believe the key to our
strong, stable earnings record is the active management of funding
costs which we were able to decrease 64 basis points from the first
quarter of 2008 and 19 basis points from the linked fourth quarter
of 2008. At March 31, 2009, we had $13.7 billion of time deposits
scheduled to mature within one year with an average rate of 3.11%.
Our current rate for a one-year CD is 2.25%. We are also very
pleased with our online banking program which was enhanced in
December 2008 to allow customers to open accounts online. We now
have over $125 million in deposits that were opened through the
internet as of March 31, 2009. "We believe that our consistent
earnings performance, our strong liquidity and capital positions
and our success in building market share are a validation of our
business model and banking philosophy. Hudson City is the largest
bank that did not participate in any of the Government 'bailout'
programs. We chose not to participate in TARP or other capital and
debt programs because we did not need the capital or the liquidity.
At March 31, 2009, we had a total risk-based capital ratio of
21.20% and a consolidated tangible common equity ratio of 8.67%. We
also did not believe it was in the best interest of our
shareholders. It is important to have at our disposal the
flexibility to utilize all capital management tools, such as the
ability to pay dividends at the rate we deem appropriate and to
repurchase our shares when we believe it makes financial sense. As
always, our priorities are with our shareholders and customers.
These priorities have guided us since our inception 141 years ago
and through many economic cycles. We believe they will see us
through this cycle and many more to come." Financial highlights for
the first quarter of 2009 are as follows: -- Basic and diluted
earnings per common share were both $0.26 for the first quarter of
2009 as compared to $0.18 for both basic and diluted earnings per
share for the first quarter of 2008. -- The Board of Directors
declared a quarterly cash dividend of $0.15 per common share
payable on May 30, 2009 to shareholders of record at the close of
business on May 8, 2009. -- Net income amounted to $127.7 million
for the first quarter of 2009, as compared to $88.7 million for the
first quarter of 2008. -- Net interest income increased 46.8% to
$283.8 million for the first quarter of 2009 as compared to $193.3
million for the first quarter of 2008. -- Our annualized return on
average assets and annualized return on average shareholders'
equity for the first quarter of 2009 were 0.93% and 10.21%,
respectively, as compared to 0.79% and 7.60%, respectively, for the
first quarter of 2008. -- Our net interest rate spread and net
interest margin were 1.75% and 2.06%, respectively, for the first
quarter of 2009 as compared to 1.27% and 1.72%, respectively, for
the first quarter of 2008. -- Our efficiency ratio was 19.15% for
the first quarter of 2009 compared with 24.66% for the first
quarter of 2008. -- Net loans increased $669.4 million to $30.11
billion at March 31, 2009 from $29.44 billion at December 31, 2008.
-- Deposits increased $1.98 billion to $20.44 billion at March 31,
2009 from $18.46 billion at December 31, 2008. -- Borrowed funds
increased $50.0 million to $30.28 billion at March 31, 2009 from
$30.23 billion at December 31, 2008. Statement of Financial
Condition Summary Total assets increased $2.42 billion, or 4.5%, to
$56.57 billion at March 31, 2009 from $54.15 billion at December
31, 2008. The increase in total assets reflected a $669.4 million
increase in loans, a $1.20 billion increase in total
mortgage-backed securities, and a $518.6 million increase in
investment securities. The increase in loans reflected our focus on
the origination of one- to four-family first mortgage loans in New
Jersey, New York and Connecticut, as well as our continued loan
purchase activity. For the first three months of 2009, we
originated $1.32 billion and purchased $723.3 million of loans,
compared to originations of $820.4 million and purchases of $534.4
million for the first quarter of 2008. The origination and
purchases of loans were partially offset by principal repayments of
$1.35 billion for the first three months of 2009 as compared to
$655.9 million for the comparable period in 2008. Loan originations
have increased due primarily to our competitive rates, decreased
lending competition and an increase in mortgage refinancings caused
by market interest rates that are at near-historic lows. The
increase in refinancing activity occurring in the marketplace has
also caused the increased in principal repayments in the first
quarter of 2009. The $1.20 billion increase in total
mortgage-backed securities reflected purchases of $1.75 billion
partially offset by repayments of $699.1 million. Total investment
securities increased $518.6 million during the first quarter of
2009. The increase in investment securities is primarily due to
purchases of $1.30 billion. The increase was partially offset by
calls of investment securities of $775.0 million. During the first
quarter of 2009, the calls of investment securities resulted in a
pre-tax gain of $148,000. Total liabilities increased $2.31
billion, or 4.7%, to $51.52 billion at March 31, 2009 from $49.21
billion at December 31, 2008. The increase in total liabilities
primarily reflected a $1.98 billion increase in deposits, a $207.9
million increase in due to brokers, and a $50.0 million increase in
borrowed funds. The increase in total deposits reflected a $1.35
billion increase in our time deposits, a $418.3 million increase in
our money market checking accounts and a $136.3 million increase in
our interest-bearing transaction accounts and savings accounts. The
increase in borrowed funds was the result of $650.0 million of new
borrowings at a weighted-average rate of 1.62%, largely offset by
repayments of $600.0 million with a weighted average rate of 1.52%.
Due to brokers amounted to $447.0 million as compared to $239.1
million at December 31, 2008. Due to brokers at March 31, 2009
represents securities purchased in the first quarter of 2009 with
settlement dates in the second quarter of 2009. Total shareholders'
equity increased $114.0 million to $5.05 billion at March 31, 2009
from $4.94 billion at December 31, 2008. The increase was primarily
due to net income of $127.7 million for the quarter ended March 31,
2009 and a $85.2 million increase in accumulated other
comprehensive income. These increases to shareholders' equity were
partially offset by cash dividends paid to common shareholders of
$68.3 million and repurchases of 3.8 million shares of our
outstanding common stock at an aggregate cost of $40.7 million. At
March 31, 2009, our shareholders' equity to asset ratio was 8.93%
and our tangible book value per share was $10.07. The accumulated
other comprehensive income of $132.8 million at March 31, 2009
includes a $161.1 million after-tax net unrealized gain on
securities available for sale ($272.4 million pre-tax). We invest
primarily in mortgage-backed securities issued by Ginnie Mae,
Fannie Mae and Freddie Mac, as well as other securities issued by
U.S. government-sponsored enterprises. There were no debt
securities past due or securities for which the Company currently
believes it is not probable that it will collect all amounts due
according to the contractual terms of the security. Statement of
Income Summary The national economy has continued to contract,
evidenced by increasing job losses, declining household wealth and
tight credit conditions. As a result of these issues, the Federal
Open Market Committee of the Federal Reserve Bank ("FOMC")
maintained the overnight lending rate at zero to 0.25% during the
first quarter. In addition, the FOMC plans to increase the Federal
Reserve's balance sheet with additional purchases of agency
mortgage-backed securities and debt of $750 billion and $100
billion, respectively. The FOMC has also decided to purchase up to
$300 billion of longer-term Treasury securities during the next six
months. These measures are aimed at providing additional support to
the mortgage and lending markets as well as improve conditions in
private credit markets. Short-term market interest rates have
remained at low levels during the first quarter of 2009.
Longer-term market interest rates continued to decrease during the
first quarter of 2009. The re-pricing of our short-term deposits
has allowed us to significantly reduce our cost of funds. As a
result, our net interest rate spread and net interest margin
increased from the fourth quarter of 2008 as well as from the first
quarter of 2008. Net interest income increased $90.5 million, or
46.8%, to $283.8 million for the first quarter of 2009 as compared
to $193.3 million for the first quarter of 2008. During the first
quarter of 2009, our net interest rate spread increased 48 basis
points to 1.75%, as compared to 1.27% for the same quarter in 2008.
Our net interest margin increased 34 basis points to 2.06% as
compared to 1.72% for the first quarter of 2008. Total interest and
dividend income for the first quarter of 2009 increased $110.0
million, or 17.9%, to $723.3 million as compared to $613.3 million
for the first quarter of 2008. The increase in total interest and
dividend income was primarily due to a $9.53 billion, or 21.5%,
increase in the average balance of total interest-earning assets to
$53.90 billion for the first quarter of 2009 as compared to $44.37
billion for the first quarter of 2008. The increase in the average
balance of total interest-earning assets was partially offset by a
decrease of 16 basis points in the annualized weighted-average
yield to 5.37% for the quarter ended March 31, 2009 from 5.53% for
the same quarter in 2008. Interest and fees on mortgage loans
increased $67.9 million to $414.2 million for the first quarter of
2009 as compared to $346.3 million for the same period in 2008.
This was primarily due to a $5.30 billion increase in the average
balance of first mortgage loans, reflecting our continued emphasis
on the growth of our mortgage loan portfolio. The increase in the
average balance of first mortgage loans was partially offset by an
11 basis point decrease in the weighted-average yield to 5.65%. The
decrease in the weighted-average yield is a result of the continued
decrease in market interest rates during the first quarter of 2009.
Interest on mortgage-backed securities increased $56.5 million to
$250.9 million for the first quarter of 2009 as compared to $194.4
million for the first quarter of 2008. This increase was due
primarily to a $4.75 billion increase in the average balance of
mortgage-backed securities to $19.44 billion during the first
quarter of 2009 as compared to the first quarter of 2008, partially
offset by a 13 basis point decrease 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 loan production includes a concentration 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 decrease in the
weighted average yield on mortgage-backed securities is a result of
lower yields on securities purchased during the second half of 2008
and first quarter of 2009 when market interest rates were lower
than the yield earned on the existing portfolio. Dividends on FHLB
stock decreased $7.8 million, or 54.9%, to $6.4 million for the
first quarter of 2009 as compared to $14.2 million for the first
quarter of 2008. This decrease was due primarily to a 497 basis
point decrease in the average yield earned to 2.92% as compared to
7.89% for the first quarter of 2008. The decrease in the average
yield earned was partially offset by a $150.6 million increase in
the average balance to $872.1 million for the first quarter of 2009
as compared to $721.5 million for the same quarter in 2008. We
cannot predict the future amount of dividends that the FHLB will
pay or the timing of any changes in the dividend yield. Total
interest expense for the three months ended March 31, 2009
increased $19.5 million, or 4.6%, to $439.5 million as compared to
$420.0 million for the quarter ended March 31, 2008. This increase
was primarily due to a $9.57 billion, or 24.1%, increase in the
average balance of total interest-bearing liabilities to $49.23
billion for the quarter ended March 31, 2009 compared with $39.66
billion for the first quarter of 2008. This increase in
interest-bearing liabilities was primarily used to fund asset
growth. The increase in the average balance of total
interest-bearing liabilities was partially offset by a 64 basis
point decrease in the weighted-average cost of total
interest-bearing liabilities to 3.62% for the quarter ended March
31, 2009 compared with 4.26% for the quarter ended March 31, 2008.
Interest expense on deposits decreased $19.2 million, or 12.2%, to
$138.8 million for the first quarter of 2009 as compared to $158.0
million for the first quarter of 2008. This decrease is due
primarily to a decrease in the average cost of interest-bearing
deposits of 128 basis points to 2.98% for the 2009 quarter as
compared to 4.26% for the 2008 quarter. The decrease was partially
offset by a $3.93 billion increase in the average balance of
interest-bearing deposits to $18.86 billion during the first
quarter of 2009 as compared to $14.93 billion for the comparable
period in 2008. The increases in the average balances of
interest-bearing deposits reflect our strategy to expand our branch
network and to grow our existing branches by offering competitive
rates. In addition, we believe the turmoil in the credit and equity
markets have made deposit products in strong financial institutions
desirable for many customers. The decrease in the average cost of
deposits for the 2009 quarter reflected lower market interest
rates. At March 31, 2009, time deposits scheduled to mature within
one year totaled $13.70 billion with an average cost of 3.11%.
Based on our deposit retention experience and current pricing
strategy, we anticipate that a significant portion of these time
deposits will remain with us as renewed time deposits or as
transfers to other deposit products at the prevailing rate.
Interest expense on borrowed funds increased $38.7 million to
$300.7 million for the first quarter of 2009 as compared to $262.0
million for the first quarter of 2008. This was primarily due to a
$5.65 billion increase in the average balance of borrowed funds to
$30.37 billion partially offset by a 24 basis point decrease in the
weighted-average cost of borrowed funds to 4.02%. Borrowed funds
were used to supplement deposit growth to fund a significant
portion of the growth in interest-earning assets during 2008. We
have been able to fund substantially all of our 2009 growth with
deposits. The decrease in the average cost of borrowings for the
first quarter of 2009 reflected new borrowings in 2009 and 2008,
when market interest rates were lower than existing borrowings and
borrowings that matured. Substantially all of our borrowings are
callable quarterly at the discretion of the lender after an initial
non-call period of one to five years with a final maturity of ten
years. We anticipate that none of the borrowings will be called in
2009 assuming that market interest rates remain at current levels.
The provision for loan losses amounted to $20.0 million for the
quarter ended March 31, 2009 as compared to $2.5 million for the
quarter ended March 31, 2008 and $9.0 million for the fourth
quarter of 2008. The increase in the provision for loan losses was
due primarily to an increase in non-performing loans and worsening
economic conditions, particularly rising levels of unemployment,
during the first quarter of 2009. Non-performing loans, defined as
non-accruing loans and accruing loans delinquent 90 days or more,
amounted to $320.2 million at March 31, 2009 and $217.6 million at
December 31, 2008. The ratio of non-performing loans to total loans
was 1.06% at March 31, 2009 compared with 0.74% at December 31,
2008. The allowance for loan losses amounted to $65.1 million and
$49.8 million at March 31, 2009 and December 31, 2008,
respectively. The allowance for loan losses as a percent of total
loans and non-performing loans was 0.22% and 20.3%, respectively at
March 31, 2009, as compared to 0.17% and 22.89%, respectively at
December 31, 2008. We recorded net charge-offs of $4.7 million for
the quarter ended March 31, 2009 as compared to net charge-offs of
$0.5 million for the same quarter in 2008. While our underwriting
standards have helped to moderate the increase in charge-offs as
compared to the increase in non-performing loans, we do expect
higher levels of future charge-offs due to defaults from rising
unemployment coupled with expected further declines in home values,
particularly in the New York Metropolitan area. Total non-interest
income was $2.3 million for the first quarter 2009 as compared to
$2.2 million for the same quarter in 2008. Non-interest income
primarily consists of service charges on loans and deposits. Total
non-interest expense increased $6.7 million, or 13.9%, to $54.8
million for the first quarter of 2009 from $48.1 million for the
first quarter of 2008. The increase is primarily due to a $1.2
million increase in compensation and employee benefits expense, a
$1.1 million increase in net occupancy expense, a $2.2 million
increase in Federal deposit insurance expense and a $2.2 increase
in other non-interest expense. The increase in compensation and
employee benefits expense included a $1.6 million increase in
compensation costs, due primarily to normal increases in salary as
well as additional full time employees for our new branches, a $1.4
million increase in pension costs and an $842,000 increase in costs
related to our health plan. These increases were partially offset
by a $2.5 million decrease in expense related to our stock benefit
plans. This decrease was due primarily to a decrease in ESOP
expense as a result of a decline in the value of our common stock.
At March 31, 2009, we had 1,458 full-time equivalent employees as
compared to 1,355 at March 31, 2008. The increase in net occupancy
expense and other non-interest expense is primarily the result of
our branch expansion as well as growth in the existing franchise.
The increase in the Federal deposit insurance expense is the result
of an assessment credit that was used to offset a portion of our
first quarter 2008 deposit insurance assessment. Included in other
non-interest expense for the first quarter of 2009 were write downs
on foreclosed real estate and net losses from the sale of
foreclosed real estate of $1.2 million as compared to $164,000 for
the first quarter of 2008. Our efficiency ratio was 19.15% for the
three months ended March 31, 2009 as compared to 24.66% for the
three months ended March 31, 2008. Our annualized ratio of
non-interest expense to average total assets for the first quarter
of 2009 was 0.40% as compared to 0.43% for the first quarter of
2008. Income tax expense amounted to $83.6 million for the three
months ended March 31, 2009 compared with $56.3 million for the
corresponding period in 2008. Our effective tax rate for the first
quarter of 2009 was 39.58% compared with 38.82% for the first
quarter of 2008. 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 twenty-five 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 130 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 March 31, December
31, 2009 2008 (In thousands except share (unaudited) and per share
amounts) Assets: Cash and due from banks $230,123 $184,915 Federal
funds sold 118,019 76,896 Total cash and cash equivalents 348,142
261,811 Securities available for sale: Mortgage-backed securities
11,149,867 9,915,554 Investment securities 3,532,186 3,413,633
Securities held to maturity: Mortgage-backed securities 9,537,148
9,572,257 Investment securities 450,140 50,086 Total securities
24,669,341 22,951,530 Loans 30,105,753 29,418,888 Deferred loan
costs 69,498 71,670 Allowance for loan losses (65,121) (49,797) Net
loans 30,110,130 29,440,761 Federal Home Loan Bank of New York
stock 867,820 865,570 Foreclosed real estate, net 11,626 15,532
Accrued interest receivable 299,952 299,045 Banking premises and
equipment, net 73,479 73,502 Goodwill 152,109 152,109 Other assets
37,159 85,468 Total Assets $56,569,758 $54,145,328 Liabilities and
Shareholders' Equity: Deposits: Interest-bearing $19,851,689
$17,949,846 Noninterest-bearing 584,227 514,196 Total deposits
20,435,916 18,464,042 Repurchase agreements 15,100,000 15,100,000
Federal Home Loan Bank of New York advances 15,175,000 15,125,000
Total borrowed funds 30,275,000 30,225,000 Due to brokers 446,969
239,100 Accrued expenses and other liabilities 359,075 278,390
Total liabilities 51,516,960 49,206,532 Common stock, $0.01 par
value, 3,200,000,000 shares authorized; 741,466,555 shares issued;
521,260,395 and 523,770,617 shares outstanding at March 31, 2009
and December 31, 2008 7,415 7,415 Additional paid-in capital
4,642,552 4,641,571 Retained earnings 2,253,361 2,196,235 Treasury
stock, at cost; 220,206,160 and 217,695,938 shares at March 31,
2009 and December 31, 2008 (1,768,615) (1,737,838) Unallocated
common stock held by the employee stock ownership plan (214,742)
(216,244) Accumulated other comprehensive income, net of tax
132,827 47,657 Total shareholders' equity 5,052,798 4,938,796 Total
Liabilities and Shareholders' Equity $56,569,758 $54,145,328 Hudson
City Bancorp, Inc. and Subsidiary Consolidated Statements of Income
(Unaudited) For the Three Months Ended March 31, 2009 2008 (In
thousands, except per share data) Interest and Dividend Income:
First mortgage loans $414,208 $346,277 Consumer and other loans
5,990 6,856 Mortgage-backed securities held to maturity 121,931
124,845 Mortgage-backed securities available for sale 128,983
69,510 Investment securities held to maturity 2,358 10,946
Investment securities available for sale 43,303 38,555 Dividends on
Federal Home Loan Bank of New York stock 6,373 14,226 Federal funds
sold 176 2,073 Total interest and dividend income 723,322 613,288
Interest Expense: Deposits 138,824 158,016 Borrowed funds 300,667
261,957 Total interest expense 439,491 419,973 Net interest income
283,831 193,315 Provision for Loan Losses 20,000 2,500 Net interest
income after provision for loan losses 263,831 190,815 Non-Interest
Income: Service charges and other income 2,125 2,221 Gain on
securities transactions, net 148 - Total non-interest income 2,273
2,221 Non-Interest Expense: Compensation and employee benefits
32,731 31,545 Net occupancy expense 8,480 7,371 Federal deposit
insurance assessment 2,616 416 Computer and related services 686
639 Other expense 10,281 8,141 Total non-interest expense 54,794
48,112 Income before income tax expense 211,310 144,924 Income Tax
Expense 83,647 56,255 Net income $127,663 $88,669 Basic Earnings
Per Share $0.26 $0.18 Diluted Earnings Per Share $0.26 $0.18
Weighted Average Number of Common Shares Outstanding: Basic
487,567,802 483,092,588 Diluted 491,326,567 494,384,738 Hudson City
Bancorp, Inc. and Subsidiary Consolidated Average Balance Sheets
(Unaudited) For the Three Months Ended March 31, 2009 2008 Average
Average Average Yield/ Average Yield/ Balance Interest Cost Balance
Interest Cost (Dollars in thousands) Assets: Interest-earnings
assets: First mortgage loans, net (1) $29,346,715 $414,208 5.65%
$24,050,648 $346,277 5.76% Consumer and other loans 402,059 5,990
5.96 435,627 6,856 6.30 Federal funds sold 146,751 176 0.49 277,400
2,073 3.01 Mortgage-backed securities at amortized cost 19,435,625
250,914 5.16 14,690,323 194,355 5.29 Federal Home Loan Bank stock
872,095 6,373 2.92 721,542 14,226 7.89 Investment securities, at
amortized cost 3,692,237 45,661 4.95 4,190,796 49,501 4.72 Total
interest- earning assets 53,895,482 723,322 5.37 44,366,336 613,288
5.53 Noninterest- earnings assets 1,209,460 749,141 Total Assets
$55,104,942 $45,115,477 Liabilities and Shareholders' Equity:
Interest-bearing liabilities: Savings accounts $718,720 1,348 0.76
$731,766 1,372 0.75 Interest-bearing transaction accounts 1,624,474
9,068 2.26 1,565,329 12,901 3.31 Money market accounts 2,918,741
16,705 2.32 1,682,795 15,897 3.80 Time deposits 13,602,195 111,703
3.33 10,952,763 127,846 4.69 Total interest- bearing deposits
18,864,130 138,824 2.98 14,932,653 158,016 4.26 Repurchase
Agreements 15,099,951 151,052 4.06 12,006,644 128,407 4.30 Federal
Home Loan Bank of New York advances 15,266,667 149,615 3.97
12,716,379 133,550 4.22 Total borrowed funds 30,366,618 300,667
4.02 24,723,023 261,957 4.26 Total interest- bearing liabilities
49,230,748 439,491 3.62 39,655,676 419,973 4.26 Noninterest-
bearing liabilities: Noninterest- bearing deposits 563,360 509,924
Other noninterest- bearing liabilities 310,286 280,569 Total
noninterest- bearing liabilities 873,646 790,493 Total Liabilities
50,104,394 40,446,169 Shareholders' equity 5,000,548 4,669,308
Total Liabilities and Shareholders' Equity $55,104,942 $45,115,477
Net interest income/net interest rate spread (2) $283,831 1.75
$193,315 1.27 Net interest- earning assets/ net interest margin (3)
$4,664,734 2.06% $4,710,660 1.72% Ratio of interest- earning assets
to interest- bearing liabilities 1.09x 1.12x (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 March 31, Dec. 31, Sept. 30, June 30,
March 31, 2009 2008 2008 2008 2008 (Dollars in thousands, except
per share data) Net interest income $283,831 $260,452 $255,078
$233,132 $193,315 Provision for loan losses 20,000 9,000 5,000
3,000 2,500 Non-interest income 2,273 1,995 2,181 2,088 2,221
Non-interest expense: Compensation and employee benefits 32,731
32,302 32,052 31,299 31,545 Other non- interest expense 22,063
19,962 17,371 16,978 16,567 Total non- interest expense 54,794
52,264 49,423 48,277 48,112 Income before income tax expense
211,310 201,183 202,836 183,943 144,924 Income tax expense 83,647
76,905 80,928 73,240 56,255 Net income $127,663 $124,278 $121,908
$110,703 $88,669 Total assets $56,569,758 $54,163,421 $51,774,718
$49,161,986 $46,770,250 Loans, net 30,110,130 29,440,761 28,519,807
27,239,501 24,900,281 Mortgage- backed securities Available for
sale 11,149,867 9,915,554 8,404,667 7,600,182 6,727,124 Held to
maturity 9,537,148 9,572,257 9,669,841 9,336,644 9,676,864 Other
securities Available for sale 3,532,186 3,413,633 3,258,594
3,287,143 3,717,331 Held to maturity 450,140 50,086 50,086 71,695
121,715 Deposits 20,435,916 18,464,042 17,287,463 16,719,345
16,077,113 Borrowings 30,275,000 30,225,000 29,275,000 27,475,000
25,225,000 Shareholders' equity 5,052,798 4,949,472 4,786,132
4,709,594 4,710,089 Performance Data: Return on average assets (1)
0.93% 0.94% 0.97% 0.93% 0.79% Return on average equity (1) 10.21%
10.24% 10.19% 9.27% 7.60% Net interest rate spread (1) 1.75 1.67
1.70 1.56 1.27 Net interest margin (1) 2.06% 2.02% 2.08% 1.97%
1.72% Non-interest expense to average assets (1) 0.40% 0.40% 0.39%
0.41% 0.43% Efficiency ratio (2) 19.15% 19.91% 19.21% 20.52% 24.66%
Dividend payout ratio 53.85% 52.00% 48.00% 50.00% 50.00% Per Common
Share Data: Basic earnings per common share $0.26 $0.25 $0.25 $0.23
0.18 Diluted earnings per common share $0.26 $0.25 $0.25 $0.22
$0.18 Book value per share (3) $10.40 $10.12 $9.85 $9.73 $9.75
Tangible book value per share (3) $10.07 $9.80 $9.52 $9.40 $9.41
Dividends per share $0.140 $0.130 $0.120 $0.110 $0.090 Capital
Ratios: Equity to total assets (consolidated) 8.93% 9.14% 9.24%
9.58% 0.07% Tier 1 leverage capital (Bank) 7.79% 7.99% 8.16% 8.41%
8.85% Total risk- based capital 21.20% 21.48% 21.87% 22.56% 24.07%
Other Data: Full-time equivalent employees 1,458 1,451 1,406 1,391
1,355 Number of branch offices 129 127 125 121 119 Asset Quality
Data: Total non- performing loans $320,158 $217,574 $142,141
$116,315 $102,256 Number of non- performing loans 826 580 386 328
283 Total number of loans 83,982 83,556 81,949 79,929 76,447 Total
non- performing assets $331,784 $233,106 $151,602 $124,466 $107,146
Non-performing loans to total loans 1.06% 0.74% 0.50% 0.43% 0.41%
Non-performing assets to total assets 0.59% 0.43% 0.29% 0.25% 0.23%
Allowance for loan losses $65,121 $49,797 $42,628 $39,078 $36,772
Allowance for loan losses to non-performing loans 20.34% 22.89%
29.99% 33.60% 35.96% Allowance for loan losses to total loans 0.22%
0.17% 0.15% 0.14% 0.15% Provision for loan losses $20,000 $9,000
$5,000 $3,000 $2,500 Net charge-offs $4,675 $1,833 $1,449 $694 $469
(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 March 31, 2009 (In thousands, except share and
per share amounts) Shareholders' equity $5,052,798 Goodwill and
other intangible assets (159,715) Tangible Shareholders' equity
$4,893,083 Book Value Share Computation: Issued 741,466,555
Treasury shares (220,206,160) Shares outstanding 521,260,395
Unallocated ESOP shares (34,398,096) Unvested RRP shares (889,350)
Shares in trust (76,875) Book value shares 485,896,074 Book value
per share $10.40 Tangible book value per share $10.07 DATASOURCE:
Hudson City Savings Bank CONTACT: Susan Munhall, Investor
Relations, Hudson City Bancorp, Inc., +1-201-967-8290, Web Site:
http://www.hcsbonline.com/
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