FOURTH QUARTER EPS INCREASED 12.0% TOTAL ASSETS SURPASS $60 BILLION
PARAMUS, N.J., Jan. 20 /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 2009 increased 9.9% to $136.6 million as compared to $124.3
million for the fourth quarter of 2008. Diluted earnings per share
increased 12.0% to $0.28 for the fourth quarter of 2009 as compared
to $0.25 for the fourth quarter of 2008. For the year ended
December 31, 2009, net income increased 18.3% to $527.2 million as
compared to $445.6 million for 2008. Diluted earnings per share
increased 18.9% to $1.07 for the year ended December 31, 2009 as
compared to $0.90 for 2008. Net interest margin widened to 2.30%
for the fourth quarter of 2009 as compared to 2.02% for the fourth
quarter of 2008. The Board of Directors declared a quarterly cash
dividend of $0.15 per share payable on March 2, 2010 to
shareholders of record on February 5, 2010. Ronald E. Hermance,
Jr., Chairman, President and Chief Executive Officer commented,
"While many financial institutions continued to struggle in these
difficult times, Hudson City achieved record earnings for the
quarter and the year despite the recession. Earnings for 2009 of
$527.2 million marked our 11th consecutive year of earnings growth
since our 1999 public offering. Net income increased despite
significant increases in FDIC insurance premiums and in the
provision for loan losses. The secret to our success is no secret
at all - at Hudson City, whether you are a customer or shareholder,
"what you see is what you get". It is becoming more difficult to
distinguish a traditional bank from an investment bank. Hudson
City's financial performance did not come from financial
engineering products such as hedges or derivatives. It did not come
from investment banking fees or trading operations. It did not come
from "restructuring" or "reinventing" ourselves. It came from
making residential first mortgages, which we keep on our books, and
funding our 2009 growth with deposits. In fact, during 2009 we
increased our market share in 96% of our branch locations and we
grew deposits by $6.1 billion - a record for Hudson City. Our
strength comes from an industry-leading efficiency ratio and our
commitment to basic lending and banking principles. Our efficiency
ratio was 18.8% in the fourth quarter. One component of our
efficiency is the ratio of compensation and benefits to total
revenue, which is the total of net interest income and non-interest
income. This ratio is 10.2% for Hudson City as compared to an
average of 30.0% for banks and thrifts with assets greater than $50
billion. Our low efficiency ratio provides us with the flexibility
to offer very competitive rates for both loans and deposits." Mr.
Hermance continued, "With all of the good news to report about
Hudson City during 2009, there is no escaping that the economic
recession of 2009 affected our asset quality. Non-performing loans
amounted to $627.7 million at December 31, 2009 as compared to
$217.6 million at December 31, 2008. Accordingly, we increased our
allowance for loan losses during 2009 to $140.1 million at December
31, 2009 from $49.8 million at December 31, 2008. Our provision for
loan losses during 2009 was $137.5 million and our net charge-offs
were $47.2 million. Since our primary loan products are residential
first mortgage loans, rising unemployment rates affect our
borrowers' ability to make loan payments. Compounding the
difficulties associated with rising unemployment, weak housing
markets make it difficult to sell homes and declining house prices
diminish a borrower's equity. However, our loan products and
underwriting standards have resulted in a first mortgage loan
portfolio with an average loan-to-value ratio of 61% using
appraised values at the time of origination, which generally
speaking have increased since origination. This has moderated the
level of charge-offs required as loans become non-performing. While
charge-offs have increased, they have not been large enough to
jeopardize our earnings growth." Mr. Hermance continued, "As we
consider what 2010 may hold for us, we look forward to improving
financial and housing markets and improving economic conditions
overall. We believe we are well-positioned for this. In December,
we filed a shelf registration statement on Form S-3 with the
Securities and Exchange Commission. The shelf registration
statement will allow the Company to issue and sell common stock,
preferred stock, or other types of debt or equity securities in one
or more future offerings in amounts that will be determined at the
time of the offerings. The shelf registration enables us to easily
access the capital markets to support organic growth and should an
opportunistic transaction arise." Financial highlights for the
fourth quarter of 2009 are as follows: -- Basic and diluted
earnings per share were both $0.28 for the fourth quarter of 2009
as compared to $0.25 for both basic and diluted earnings per share
for the fourth quarter of 2008. Basic and diluted earnings per
share were $1.08 and $1.07, respectively for 2009 as compared to
$0.92 and $0.90, respectively for 2008. -- The Board of Directors
declared a quarterly cash dividend of $0.15 per share payable on
March 2, 2010 to shareholders of record at the close of business on
February 5, 2010. -- Net income amounted to $136.6 million for the
fourth quarter of 2009, as compared to $124.3 million for the
fourth quarter of 2008, an increase of 9.9%. For the year ended
December 31, 2009, net income amounted to $527.2 million as
compared to $445.6 million for 2008, an increase of 18.3%. -- Net
interest income increased 27.4% to $331.8 million for the fourth
quarter of 2009 as compared to $260.5 million for the fourth
quarter of 2008 and 32.0% to $1.24 billion for the year ended
December 31, 2009 as compared to $942.0 million for 2008. -- The
provision for loan losses amounted to $45.0 million for the fourth
quarter of 2009 as compared to $9.0 million for the fourth quarter
of 2008. For the year ended December 31, 2009, the provision for
loan losses amounted to $137.5 million as compared to $19.5 million
for 2008. -- Our annualized return on average assets and annualized
return on average shareholders' equity for the fourth quarter of
2009 were 0.92% and 10.21%, respectively. Our return on average
assets and return on average shareholders' equity for the year
ended December 31, 2009 were 0.92% and 10.18%, respectively. -- Our
net interest rate spread and net interest margin were 2.02% and
2.30%, respectively, for the fourth quarter of 2009 and 1.92% and
2.21%, respectively, for 2009. -- Our efficiency ratio was 18.84%
for the fourth quarter of 2009 and 20.80% for 2009. -- Our loan
production was $9.22 billion for the year ended December 31, 2009,
which resulted in a net increase of $2.36 billion in total loans to
$31.78 billion at December 31, 2009 from $29.42 billion at December
31, 2008. -- Deposits increased $6.12 billion, or 33.2%, to $24.58
billion at December 31, 2009 from $18.46 billion at December 31,
2008. -- Borrowed funds decreased $250.0 million to $29.98 billion
at December 31, 2009 from $30.23 billion at December 31, 2008.
Statement of Financial Condition Summary Total assets increased
$6.12 billion, or 11.3%, to $60.27 billion at December 31, 2009
from $54.15 billion at December 31, 2008. The increase in total
assets reflected a $2.28 billion increase in loans, a $1.82 billion
increase in investment securities, and a $1.59 billion increase in
total mortgage-backed securities. The increase in loans reflected
our focus on loan portfolio growth through 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
2009, we originated $6.06 billion and purchased $3.16 billion of
loans, compared to originations of $5.04 billion and purchases of
$3.06 billion for 2008. The origination and purchases of loans were
partially offset by principal repayments of $6.77 billion for 2009
as compared to $2.82 billion for 2008. Loan originations have
increased primarily due to our competitive rates and an increase in
mortgage refinancing caused by market interest rates that are at
near-historic lows. The increase in refinancing activity occurring
in the marketplace has also caused the increase in principal
repayments during 2009. Total investment securities increased $1.82
billion during 2009. The increase in investment securities is
primarily due to purchases of $5.87 billion, partially offset by
calls of investment securities of $4.02 billion. Total
mortgage-backed securities increased $1.59 billion during 2009,
reflecting purchases of $6.87 billion of variable-rate
mortgage-backed securities and collateralized mortgage obligations
("CMOs"), all of which were issued by U.S. government-sponsored
enterprises ("GSEs"). The increase was partially offset by
repayments of $4.73 billion and sales of $761.6 million. The sales
of the mortgage-backed securities, which occurred in the second
quarter, resulted in a net gain of $24.0 million. We used the
proceeds from the securities sales to fund the purchase of first
mortgage loans. We decided to use securities sales as a funding
source because the yields on the purchased loans were similar to
those of the securities sold and we believe that if we held the
securities, the unrealized gains would diminish since prepayment
speeds are relatively high. There are no 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.
Total liabilities increased $5.72 billion, or 11.6%, to $54.93
billion at December 31, 2009 from $49.21 billion at December 31,
2008. The increase in total liabilities primarily reflected a $6.12
billion increase in deposits, partially offset by a $250.0 million
decrease in borrowed funds. The increase in total deposits
reflected a $3.12 billion increase in our time deposits, a $2.34
billion increase in our money market checking accounts and a $575.5
million increase in our interest-bearing transaction accounts and
savings accounts. The decrease in borrowed funds was the result of
repayments of $1.00 billion with a weighted average rate of 1.62%
largely offset by $750.0 million of new borrowings at a
weighted-average rate of 1.69%. During 2009, we modified $1.73
billion of borrowings to extend the call dates of the borrowings by
between three and four years, thereby reducing our interest rate
risk. Due to brokers amounted to $100.0 million as compared to
$239.1 million at December 31, 2008. Due to brokers at December 31,
2009 represents securities purchased in the fourth quarter of 2009
with settlement dates in the first quarter of 2010. Total
shareholders' equity increased $400.4 million to $5.34 billion at
December 31, 2009 from $4.94 billion at December 31, 2008. The
increase was primarily due to net income of $527.2 million for the
year ended December 31, 2009 and a $136.9 million increase in
accumulated other comprehensive income primarily due to an increase
in the net unrealized gain on securities available-for-sale. These
increases to shareholders' equity were partially offset by cash
dividends paid to common shareholders of $288.4 million and
repurchases of our common stock of $43.5 million. At December 31,
2009, our shareholders' equity to asset ratio was 8.86% and our
tangible book value per share was $10.53. The accumulated other
comprehensive income of $184.5 million at December 31, 2009
includes a $205.8 million after-tax net unrealized gain on
securities available for sale ($347.9 million pre-tax) partially
offset by a $21.3 million after-tax accumulated other comprehensive
loss related to the funded status of our employee benefit plans.
Statement of Income Summary The Federal Open Market Committee of
the Federal Reserve Bank (the "FOMC") noted that economic activity
has continued to improve during the fourth quarter of 2009. The
FOMC also noted that the housing sector has shown signs of
improvement. However, the national unemployment rate increased to
10.0% in December 2009 as compared to 9.8% in September 2009 and
7.4% in December 2008. Lower household wealth and tight credit
conditions in addition to the increase in the national unemployment
rate has resulted in the FOMC maintaining the overnight lending
rate at zero to 0.25% during the fourth quarter of 2009. As a
result, short-term market interest rates have remained at low
levels during the fourth quarter of 2009. This allowed us to
continue to re-price our short-term deposits thereby reducing our
cost of funds. While longer-term market interest rates increased
during the fourth quarter of 2009, rates on mortgage-related assets
have declined slightly, although to a lesser extent than the
decline in our cost of funds. As a result, our net interest rate
spread and net interest margin increased for the fourth quarter and
full year of 2009 from the three and twelve-month periods ended
December 31, 2008. Net interest income increased $71.3 million, or
27.4%, to $331.8 million for the fourth quarter of 2009 as compared
to $260.5 million for the fourth quarter of 2008. During the fourth
quarter of 2009, our net interest rate spread increased 35 basis
points to 2.02%, as compared to 1.67% for the same quarter in 2008.
Our net interest margin increased 28 basis points to 2.30% as
compared to 2.02% for the fourth quarter of 2008. Net interest
income increased $301.5 million, or 32.0%, to $1.24 billion for
2009 as compared to $942.0 million for 2008. During 2009, our net
interest rate spread increased 35 basis points to 1.92% and our net
interest margin increased 25 basis points to 2.21% as compared to
2008. Total interest and dividend income for the fourth quarter of
2009 increased $34.5 million, or 4.9%, to $746.5 million as
compared to $712.0 million for the fourth quarter of 2008. The
increase in total interest and dividend income was primarily due to
a $6.42 billion, or 12.4%, increase in the average balance of total
interest-earning assets to $58.40 billion for the fourth quarter of
2009 as compared to $51.98 billion for the fourth quarter of 2008.
The increase in the average balance of total interest-earning
assets was partially offset by a decrease of 37 basis points in the
annualized weighted-average yield to 5.11% for the quarter ended
December 31, 2009 from 5.48% for the same quarter in 2008. Total
interest and dividend income for the year ended December 31, 2009
increased $288.6 million, or 10.9%, to $2.94 billion as compared to
$2.65 billion for the year ended December 31, 2008. The increase in
total interest and dividend income was primarily due to an $8.20
billion, or 17.0%, increase in the average balance of total
interest-earning assets to $56.30 billion for the year ended
December 31, 2009 as compared to $48.10 billion for 2008. The
increase in the average balance of total interest-earning assets
was partially offset by a decrease of 29 basis points in the
weighted-average yield on total interest-earning assets to 5.23%
for the year ended December 31, 2009 from 5.52% for 2008. Interest
and fees on mortgage loans increased $13.4 million to $426.8
million for the fourth quarter of 2009 as compared to $413.4
million for the same period in 2008. This was primarily due to a
$2.44 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 a 28 basis point
decrease in the weighted-average yield to 5.51% from 5.79% for the
2008 fourth quarter. For the year ended December 31, 2009, interest
and fees on mortgage loans increased $155.3 million to $1.68
billion as compared to $1.52 billion for the year ended December
31, 2008 primarily due to a $3.75 billion increase in the average
balance of first mortgage loans to $30.13 billion as compared to
$26.38 billion 2008. The increase in the average balance of first
mortgage loans was partially offset by a decrease of 21 basis
points in the weighted-average yield to 5.57% for 2009 as compared
to 5.78% for 2008. Interest on mortgage-backed securities decreased
$2.3 million to $240.5 million for the fourth quarter of 2009 as
compared to $242.8 million for the fourth quarter of 2008. This
decrease was due primarily to a 37 basis point decrease in the
weighted-average yield to 4.84% for the fourth quarter of 2009 from
5.21% for the fourth quarter of 2008. The decrease in the
weighted-average yield was partially offset by a $1.24 billion
increase in the average balance of mortgage-backed securities to
$19.86 billion during the fourth quarter of 2009 as compared to
$18.62 billion for the fourth quarter of 2008. Interest on
mortgage-backed securities increased $108.7 million to $983.7
million for the year ended December 31, 2009 as compared to $875.0
million for the year ended December 31, 2008. This increase was due
primarily to a $3.08 billion increase in the average balance of
mortgage-backed securities to $19.77 billion during 2009 as
compared to $16.69 billion for 2008, partially offset by a 26 basis
point decrease in the weighted-average yield to 4.98% for 2009 as
compared to 5.24% for 2008. The increases in the average balances
of mortgage-backed securities provide us with 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 for 2009 when market interest rates were lower than the yield
earned on the existing portfolio. Interest on investment securities
increased $19.3 million to $61.4 million for the fourth quarter of
2009 as compared to $42.1 million for the same period in 2008. This
increase was due primarily to a $2.01 billion increase in the
average balance of investment securities to $5.42 billion for the
fourth quarter of 2009 from $3.41 billion for the fourth quarter of
2008. The impact on interest income from the increase in the
average balance of investment securities was partially offset by a
decrease in the average yield of investment securities of 41 basis
points to 4.53%. Interest on investment securities increased $37.2
million to $213.4 million for 2009 as compared to $176.2 million
for 2008. This increase was due primarily to a $974.9 million
increase in the average balance of investment securities to $4.58
billion for 2009 from $3.60 billion for 2008. The impact on
interest income from the increase in the average balance of
investment securities was partially offset by a decrease in the
average yield of investment securities of 23 basis points to 4.66%.
Dividends on Federal Home Loan Bank of New York ("FHLB") stock
increased $5.1 million, or 69.9%, to $12.4 million for the fourth
quarter of 2009 as compared to $7.3 million for the fourth quarter
of 2008. This increase was due primarily to a 221 basis point
increase in the average yield earned to 5.66% as compared to 3.45%
for the fourth quarter of 2008. The increase in dividend income was
also due to a $31.5 million increase in the average balance to
$876.6 million for the fourth quarter of 2009 as compared to $845.1
million for the same period in 2008. Dividends on FHLB stock
decreased $4.9 million, or 10.2%, to $43.1 million for 2009 as
compared to $48.0 million for 2008. This decrease was due primarily
to a 115 basis point decrease in the average yield earned to 4.92%
as compared to 6.07% for the year ended December 31, 2008. The
decrease in the average yield earned was partially offset by an
$86.4 million increase in the average balance to $876.7 million for
2009 as compared to $790.3 million for 2008. Total interest expense
for the quarter ended December 31, 2009 decreased $36.8 million, or
8.2%, to $414.7 million as compared to $451.5 million for the
quarter ended December 31, 2008. This decrease was primarily due to
a 72 basis point decrease in the weighted-average cost of total
interest-bearing liabilities to 3.09% for the quarter ended
December 31, 2009 compared with 3.81% for the quarter ended
December 31, 2008. The decrease was partially offset by a $6.24
billion, or 13.3%, increase in the average balance of total
interest-bearing liabilities to $53.33 billion for the quarter
ended December 31, 2009 compared with $47.09 billion for the fourth
quarter of 2008. This increase in interest-bearing liabilities was
primarily used to fund asset growth. Total interest expense for the
year ended December 31, 2009 decreased $12.9 million to $1.70
billion as compared to $1.71 billion for the year ended December
31, 2008. This decrease was primarily due to a 64 basis point
decrease in the weighted-average cost of total interest-bearing
liabilities to 3.31% for the year ended December 31, 2009 compared
with 3.95% for the year ended December 31, 2008. The decrease was
partially offset by a $7.99 billion, or 18.5%, increase in the
average balance of total interest-bearing liabilities to $51.27
billion for the year ended December 31, 2009 as compared to $43.28
billion for 2008. Interest expense on deposits decreased $39.5
million, or 26.7%, to $108.5 million for the fourth quarter of 2009
as compared to $148.0 million for the fourth quarter of 2008. This
decrease is due primarily to a decrease in the average cost of
interest-bearing deposits of 154 basis points to 1.85% for the
fourth quarter of 2009 as compared to 3.39% for the fourth quarter
of 2008. The decrease was partially offset by a $5.95 billion
increase in the average balance of interest-bearing deposits to
$23.32 billion during the fourth quarter of 2009 as compared to
$17.37 billion for the fourth quarter of 2008. For the year ended
December 31, 2009, interest expense on deposits decreased $97.9
million to $483.5 million as compared to $581.4 million for the
year ended December 31, 2008. This decrease is due primarily to a
133 basis point decrease in the average cost of deposits to 2.29%
for the year ended December 31, 2009 as compared to 3.62% for 2008.
This decrease was partially offset by a $5.05 billion increase in
the average balance of interest-bearing deposits to $21.13 billion
during 2009 as compared to $16.08 billion for 2008. The increases
in the average balances of interest-bearing deposits reflect our
plan to expand our branch network and to grow deposits in our
existing branches by offering competitive rates. Also, in response
to the economic recession, we believe that households have
increased their personal savings and customers have sought insured
bank deposit products as an alternative to investments such as
equity securities and bonds. We believe these factors contributed
to our deposit growth. The decrease in the average cost of deposits
for 2009 reflected lower market interest rates. At December 31,
2009, time deposits scheduled to mature within one year totaled
$13.08 billion with an average cost of 1.87%. These time deposits
are scheduled to mature as follows: $6.11 billion with an average
cost of 1.86% in the first quarter of 2010, $4.53 billion with an
average cost of 1.86% in the second quarter of 2010, $1.51 billion
with an average cost of 1.98% in the third quarter of 2010 and
$930.4 million with an average cost of 1.84% in the fourth quarter
of 2010. The current rates for our six month and one year time
deposits are 1.35% and 1.55%, respectively. 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 $2.8 million to $306.3 million for the fourth quarter of
2009 as compared to $303.5 million for the fourth quarter of 2008.
This was primarily due to a $300.9 million increase in the average
balance of borrowed funds to $30.02 billion for the fourth quarter
of 2009 as compared to $29.71 billion for the fourth quarter of
2008. The weighted-average cost of borrowed funds amounted to
4.05%. Interest expense on borrowed funds increased $84.9 million
to $1.21 billion for the year ended December 31, 2009 as compared
to $1.13 billion for the year ended December 31, 2008. This was
primarily due to a $2.94 billion increase in the average balance of
borrowed funds to $30.14 billion, partially offset by a 12 basis
point decrease in the weighted-average cost of borrowed funds to
4.03% for 2009. We have historically used borrowings to fund a
portion of the growth in interest-earning assets. However, we have
been able to fund substantially all of our growth in 2009 with
deposits. We anticipate that we will be able to continue to use
deposit growth to fund our asset growth, however, we may use
borrowings as a supplemental funding source if deposit growth
decreases. The decrease in the average cost of borrowings for 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 believe,
given current market conditions, that the likelihood that a
significant portion of these borrowings would be called will not
increase substantially unless interest rates were to increase by at
least 300 basis points. During 2009, we modified $1.73 billion of
borrowings to extend the call dates of the borrowings by between
three and four years, thereby reducing our interest rate risk. The
provision for loan losses amounted to $45.0 million for the quarter
ended December 31, 2009 as compared to $9.0 million for the quarter
ended December 31, 2008. For the year ended December 31, 2009, the
provision for loan losses amounted to $137.5 million as compared to
$19.5 million for the year ended December 31, 2008. The increase in
the provision for loan losses was due primarily to an increase in
non-performing loans and rising levels of unemployment during 2009.
Non-performing loans, defined as non-accruing loans and accruing
loans delinquent 90 days or more, amounted to $627.7 million at
December 31, 2009 compared with $217.6 million at December 31,
2008. The ratio of non-performing loans to total loans was 1.98% at
December 31, 2009 compared with 0.74% at December 31, 2008. The
allowance for loan losses amounted to $140.1 million and $49.8
million at December 31, 2009 and December 31, 2008, respectively.
The allowance for loan losses as a percent of total loans and as a
percent of non-performing loans was 0.44% and 22.32%, respectively
at December 31, 2009, as compared to 0.17% and 22.89%, respectively
at December 31, 2008. Net charge-offs amounted to $19.8 million for
the quarter ended December 31, 2009 as compared to net charge-offs
of $1.8 million for the same quarter in 2008. For the year ended
December 31, 2009, net charge-offs amounted to $47.2 million as
compared to $4.4 million of net charge-offs for 2008. These
charge-offs were primarily due to the results of our reappraisal
process for our non-performing residential first mortgage loans and
include $1.7 million and $7.4 million in charge-offs for the
quarter and year ended December 31, 2009, respectively, for loans
that were transferred to foreclosed real estate. We generally
obtain new collateral values for loans on or before 180 days of
delinquency. If the estimated fair value of the collateral (less
estimated selling costs) is less than the recorded investment in
the loan, we charge-off an amount to reduce the loan to the fair
value of the collateral less estimated selling costs. As a result,
certain losses inherent in our non-performing loans are being
recognized as charge-offs which may result in a lower ratio of the
allowance for loan losses to non-performing loans, particularly
when accompanied by a concurrent increase in total non-performing
loans (i.e. due to the addition of new non-performing loans). Total
non-interest income was $2.2 million for the fourth quarter 2009 as
compared to $2.0 million for the same quarter in 2008. Total
non-interest income for the year ended December 31, 2009 was $33.6
million compared with $8.5 million for 2008. Included in
non-interest income for the year ended December 31, 2009 were net
gains on securities transactions of $24.2 million substantially all
of which resulted from the sale of $761.6 million of
mortgage-backed securities available-for-sale. Proceeds from the
securities sale were primarily used to fund the purchase of first
mortgage loans during the second quarter of 2009. Total
non-interest expense increased $10.6 million, or 20.3%, to $62.9
million for the fourth quarter of 2009 from $52.3 million for the
fourth quarter of 2008. The increase is primarily due to increases
of $9.3 million in Federal deposit insurance expense and $1.6
million increase in compensation and employee benefits expense. The
increase in Federal deposit insurance expense is due primarily to
the increases in our deposit insurance assessment rate as a result
of a restoration plan implemented by the FDIC to recapitalize the
Deposit Insurance Fund. The increase in compensation and employee
benefits expense included a $672,000 increase in pension costs, a
$446,000 increase in costs related to our health plan and a
$527,000 increase in expense related to our stock benefit plans. At
December 31, 2009, we had 1,482 full-time equivalent employees as
compared to 1,451 at December 31, 2008. Included in other
non-interest expense for the fourth quarter of 2009 were
write-downs on foreclosed real estate and net losses on the sale of
foreclosed real estate of $325,000 as compared to $218,000 for the
fourth quarter of 2008. Total non-interest expense for the year
ended December 31, 2009 was $265.6 million as compared to $198.1
million during 2008. The increase is primarily due to the FDIC
special assessment of $21.1 million, a $30.8 million increase in
Federal deposit insurance expense, a $9.9 million increase in
compensation and employee benefits expense, and a $4.0 million
increase in other non-interest expense. The special assessment and
the increase in our deposit assessment rate were the result of the
restoration plan implemented by the FDIC to recapitalize the
Deposit Insurance Fund. The increase in compensation and employee
benefits expense included a $6.0 million increase in compensation
costs, due primarily to normal increases in salary as well as
additional full time employees, a $3.3 million increase in pension
costs and a $3.4 million increase in costs related to our health
plan. These increases were partially offset by a $2.8 million
decrease in expenses related to our stock benefit plans. This
decrease was due primarily to a decrease in ESOP expense as a
result of changes in the price of our common stock during 2009.
Included in other non-interest expense for the year ended December
31, 2009 were write-downs on foreclosed real estate and net losses
on the sale of foreclosed real estate, of $2.4 million as compared
to $1.3 million for 2008. Our efficiency ratio was 18.84% for the
2009 fourth quarter as compared to 19.91% for the 2008 fourth
quarter. For the year ended December 31, 2009, our efficiency ratio
was 20.80% compared with 20.84% for 2008. The efficiency ratio is
calculated by dividing non-interest expense, by the sum of net
interest income and non-interest income. Our annualized ratio of
non-interest expense to average total assets for the fourth quarter
of 2009 was 0.42% as compared to 0.40% for the fourth quarter of
2008. Our ratio of non-interest expense to average total assets for
the year ended December 31, 2009 was 0.46% compared with 0.41% for
2008. Income tax expense amounted to $89.5 million for the three
months ended December 31, 2009 compared with $76.9 million for the
corresponding period in 2008. Our effective tax rate for the fourth
quarter of 2009 was 39.58% compared with 38.23% for the fourth
quarter of 2008. Income tax expense for the year ended December 31,
2009 was $346.7 million compared with $287.3 million for 2008. Our
effective tax rate for the year ended December 31, 2009 was 39.67%
compared with 39.21% for the year ended December 31, 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 Bank currently operates a total of 131 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. TABLES FOLLOW Hudson
City Bancorp, Inc. and Subsidiary Consolidated Statements of
Financial Condition December 31, December 31, 2009 2008 ---- ----
(In thousands, except share and per share amounts) (unaudited)
Assets: ------- Cash and due from banks $198,752 $184,915 Federal
funds sold and other overnight deposits 362,449 76,896 -------
------ Total cash and cash equivalents 561,201 261,811 Securities
available for sale: Mortgage-backed securities 11,116,531 9,915,554
Investment securities 1,095,240 3,413,633 Securities held to
maturity: Mortgage-backed securities 9,963,554 9,572,257 Investment
securities 4,187,704 50,086 --------- ------ Total securities
26,363,029 22,951,530 Loans 31,779,921 29,418,888 Net deferred loan
costs 81,307 71,670 Allowance for loan losses (140,074) (49,797)
-------- ------- Net loans 31,721,154 29,440,761 Federal Home Loan
Bank of New York stock 874,768 865,570 Foreclosed real estate, net
16,736 15,532 Accrued interest receivable 304,091 299,045 Banking
premises and equipment, net 70,116 73,502 Goodwill 152,109 152,109
Other assets 204,556 85,468 ------- ------ Total Assets $60,267,760
$54,145,328 =========== =========== Liabilities and Shareholders'
Equity: --------------- Deposits: Interest-bearing $23,992,007
$17,949,846 Noninterest-bearing 586,041 514,196 ------- -------
Total deposits 24,578,048 18,464,042 Repurchase agreements
15,100,000 15,100,000 Federal Home Loan Bank of New York advances
14,875,000 15,125,000 ---------- ---------- Total borrowed funds
29,975,000 30,225,000 Due to brokers 100,000 239,100 Accrued
expenses and other liabilities 275,560 278,390 ------- -------
Total liabilities 54,928,608 49,206,532 ---------- ----------
Common stock, $0.01 par value, 3,200,000,000 shares authorized;
741,466,555 shares issued; 526,493,676 shares outstanding at
December 31, 2009 and 523,770,617 shares outstanding at December
31, 2008 7,415 7,415 Additional paid-in capital 4,683,414 4,641,571
Retained earnings 2,401,606 2,196,235 Treasury stock, at cost;
214,972,879 shares at December 31, 2009 and 217,695,938 shares at
December 31, 2008 (1,727,579) (1,737,838) Unallocated common stock
held by the employee stock ownership plan (210,237) (216,244)
Accumulated other comprehensive income, net of tax 184,533 47,657
------- ------ Total shareholders' equity 5,339,152 4,938,796
--------- --------- Total Liabilities and Shareholders' Equity
$60,267,760 $54,145,328 =========== =========== Hudson City
Bancorp, Inc. and Subsidiary Consolidated Statements of Income
(Unaudited) For the Three Months Ended December 31, 2009 2008 (In
thousands, except per share data) Interest and Dividend Income:
First mortgage loans $426,778 $413,400 Consumer and other loans
5,047 6,206 Mortgage-backed securities held to maturity 125,337
125,558 Mortgage-backed securities available for sale 115,114
117,224 Investment securities held to maturity 41,661 626
Investment securities available for sale 19,719 41,464 Dividends on
Federal Home Loan Bank of New York stock 12,405 7,280 Federal funds
sold and other overnight deposits 479 202 --- --- Total interest
and dividend income 746,540 711,960 ------- ------- Interest
Expense: Deposits 108,465 147,959 Borrowed funds 306,282 303,549
------- ------- Total interest expense 414,747 451,508 -------
------- Net interest income 331,793 260,452 Provision for Loan
Losses 45,000 9,000 ------ ----- Net interest income after
provision for loan losses 286,793 251,452 ------- -------
Non-Interest Income: Service charges and other income 2,192 1,995
Gain on securities transactions, net - - --- --- Total non-interest
income 2,192 1,995 ----- ----- Non-Interest Expense: Compensation
and employee benefits 33,905 32,302 Net occupancy expense 8,010
8,020 Federal deposit insurance assessment 11,800 2,536 FDIC
special assessment - - Other expense 9,220 9,406 ----- ----- Total
non-interest expense 62,935 52,264 ------ ------ Income before
income tax expense 226,050 201,183 Income tax expense 89,474 76,905
------ ------ Net income $136,576 $124,278 ======== ======== Basic
earnings per share $0.28 $0.25 ===== ===== Diluted earnings per
share $0.28 $0.25 ===== ===== Weighted Average Number of Common
Shares Outstanding: Basic 491,439,292 487,856,516 Diluted
492,231,761 495,581,054 For the Years Ended December 31, 2009 2008
(In thousands, except per share data) Interest and Dividend Income:
First mortgage loans $1,678,789 $1,523,521 Consumer and other loans
21,676 26,184 Mortgage-backed securities held to maturity 493,549
497,912 Mortgage-backed securities available for sale 490,109
377,096 Investment securities held to maturity 86,581 13,390
Investment securities available for sale 126,793 162,818 Dividends
on Federal Home Loan Bank of New York stock 43,103 48,009 Federal
funds sold and other overnight deposits 1,186 4,295 ----- -----
Total interest and dividend income 2,941,786 2,653,225 ---------
--------- Interest Expense: Deposits 483,468 581,357 Borrowed funds
1,214,840 1,129,891 --------- --------- Total interest expense
1,698,308 1,711,248 --------- --------- Net interest income
1,243,478 941,977 Provision for Loan Losses 137,500 19,500 -------
------ Net interest income after provision for loan losses
1,105,978 922,477 --------- ------- Non-Interest Income: Service
charges and other income 9,399 8,485 Gain on securities
transactions, net 24,185 - ------ --- Total non-interest income
33,584 8,485 ------ ----- Non-Interest Expense: Compensation and
employee benefits 137,071 127,198 Net occupancy expense 32,270
30,457 Federal deposit insurance assessment 35,094 4,320 FDIC
special assessment 21,098 - Other expense 40,063 36,101 ------
------ Total non-interest expense 265,596 198,076 ------- -------
Income before income tax expense 873,966 732,886 Income tax expense
346,722 287,328 ------- ------- Net income $527,244 $445,558
======== ======== Basic earnings per share $1.08 $0.92 ===== =====
Diluted earnings per share $1.07 $0.90 ===== ===== Weighted Average
Number of Common Shares Outstanding: Basic 488,908,260 484,907,441
Diluted 491,295,511 495,856,156 Hudson City Bancorp, Inc. and
Subsidiary Consolidated Average Balance Sheets (Unaudited) For the
Three Months Ended December 31,
--------------------------------------- 2009 ---- Average Average
Yield/ Balance Interest Cost ------- -------- ---- (Dollars in
thousands) Assets: ------- Interest-earnings assets: First mortgage
loans, net (1) $30,997,843 $426,778 5.51 % Consumer and other loans
366,953 5,047 5.50 Federal funds sold and other overnight deposits
880,067 479 0.22 Mortgage-backed securities at amortized cost
19,860,114 240,451 4.84 Federal Home Loan Bank stock 876,626 12,405
5.66 Investment securities, at amortized cost 5,415,707 61,380 4.53
--------- ------ Total interest-earning assets 58,397,310 746,540
5.11 ------- Noninterest-earnings assets 1,179,197 --------- Total
Assets $59,576,507 =========== Liabilities and Shareholders'
Equity: ---------------------- Interest-bearing liabilities:
Savings accounts $774,812 1,460 0.75 Interest-bearing transaction
accounts 1,958,061 7,444 1.51 Money market accounts 4,905,054
18,445 1.49 Time deposits 15,680,966 81,116 2.05 ---------- ------
Total interest-bearing deposits 23,318,893 108,465 1.85 ----------
------- Repurchase agreements 15,100,000 154,524 4.06 Federal Home
Loan Bank of New York advances 14,915,761 151,758 4.04 ----------
------- Total borrowed funds 30,015,761 306,282 4.05 ----------
------- Total interest-bearing liabilities 53,334,654 414,747 3.09
---------- ------- Noninterest-bearing liabilities:
Noninterest-bearing deposits 573,011 Other noninterest-bearing
liabilities 319,989 ------- Total noninterest-bearing liabilities
893,000 ------- Total liabilities 54,227,654 Shareholders' equity
5,348,853 --------- Total Liabilities and Shareholders' Equity
$59,576,507 =========== Net interest income/net interest rate
spread (2) $331,793 2.02 ======== Net interest-earning assets/net
interest margin (3) $5,062,656 2.30 % ========== Ratio of
interest-earning assets to interest-bearing liabilities 1.09 x For
the Three Months Ended December 31,
--------------------------------------- 2008 ---- Average Average
Yield/ Balance Interest Cost ------- -------- ---- (Dollars in
thousands) Assets: ------- Interest-earnings assets: First mortgage
loans, net (1) $28,557,645 $413,400 5.79 % Consumer and other loans
412,540 6,206 6.02 Federal funds sold and other overnight deposits
132,144 202 0.61 Mortgage-backed securities at amortized cost
18,623,487 242,782 5.21 Federal Home Loan Bank stock 845,115 7,280
3.45 Investment securities, at amortized cost 3,407,181 42,090 4.94
--------- ------ Total interest-earning assets 51,978,112 711,960
5.48 ------- Noninterest-earnings assets 827,322 ------- Total
Assets $52,805,434 =========== Liabilities and Shareholders'
Equity: ---------------------- Interest-bearing liabilities:
Savings accounts $712,675 1,353 0.76 Interest-bearing transaction
accounts 1,560,839 11,506 2.93 Money market accounts 2,606,648
20,603 3.14 Time deposits 12,493,602 114,497 3.65 ----------
------- Total interest-bearing deposits 17,373,764 147,959 3.39
---------- ------- Repurchase agreements 15,032,609 153,671 4.07
Federal Home Loan Bank of New York advances 14,682,213 149,878 4.06
---------- ------- Total borrowed funds 29,714,822 303,549 4.06
---------- ------- Total interest-bearing liabilities 47,088,586
451,508 3.81 ---------- ------- Noninterest-bearing liabilities:
Noninterest-bearing deposits 538,191 Other noninterest-bearing
liabilities 323,814 ------- Total noninterest-bearing liabilities
862,005 ------- Total liabilities 47,950,591 Shareholders' equity
4,854,843 --------- Total Liabilities and Shareholders' Equity
$52,805,434 =========== Net interest income/net interest rate
spread (2) $260,452 1.67 ======== Net interest-earning assets/net
interest margin (3) $4,889,526 2.02 % ========== Ratio of
interest-earning assets to interest-bearing liabilities 1.10 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 Year Ended December 31,
------------------------------- 2009 ---- Average Average Yield/
Balance Interest Cost ------- -------- ---- (Dollars in thousands)
Assets: ------- Interest- earnings assets: First mortgage loans,
net (1) $30,126,469 $1,678,789 5.57 % Consumer and other loans
381,029 21,676 5.69 Federal funds sold and other overnight deposits
566,079 1,186 0.21 Mortgage-backed securities at amortized cost
19,768,874 983,658 4.98 Federal Home Loan Bank stock 876,736 43,103
4.92 Investment securities, at amortized cost 4,577,148 213,374
4.66 --------- ------- Total interest- earning assets 56,296,335
2,941,786 5.23 --------- Noninterest- earnings assets 1,044,983
--------- Total Assets $57,341,318 =========== Liabilities and
Shareholders' Equity: --------------- Interest-bearing liabilities:
Savings accounts $749,439 5,640 0.75 Interest-bearing transaction
accounts 1,789,361 31,903 1.78 Money market accounts 3,823,116
69,008 1.81 Time deposits 14,771,051 376,917 2.55 ----------
------- Total interest- bearing deposits 21,132,967 483,468 2.29
---------- ------- Repurchase agreements 15,100,221 611,776 4.05
Federal Home Loan Bank of New York advances 15,035,798 603,064 4.01
---------- ------- Total borrowed funds 30,136,019 1,214,840 4.03
---------- --------- Total interest- bearing liabilities 51,268,986
1,698,308 3.31 ---------- --------- Noninterest- bearing
liabilities: Noninterest- bearing deposits 576,575 Other
noninterest- bearing liabilities 317,972 ------- Total noninterest-
bearing liabilities 894,547 ------- Total liabilities 52,163,533
Shareholders' equity 5,177,785 --------- Total Liabilities and
Shareholders' Equity $57,341,318 =========== Net interest
income/net interest rate spread (2) $1,243,478 1.92 ========== Net
interest- earning assets/ net interest margin (3) $5,027,349 2.21 %
========== Ratio of interest- earning assets to interest-bearing
liabilities 1.10 x For the Year Ended December 31,
------------------------------- 2008 ---- Average Average Yield/
Balance Interest Cost ------- -------- ---- (Dollars in thousands)
Assets: ------- Interest-earnings assets: First mortgage loans, net
(1) $26,379,724 $1,523,521 5.78 % Consumer and other loans 422,097
26,184 6.20 Federal funds sold and other overnight deposits 209,607
4,295 2.05 Mortgage-backed securities at amortized cost 16,694,279
875,008 5.24 Federal Home Loan Bank stock 790,305 48,009 6.07
Investment securities, at amortized cost 3,602,206 176,208 4.89
--------- ------- Total interest- earning assets 48,098,218
2,653,225 5.52 --------- Noninterest- earnings assets 788,032
------- Total Assets $48,886,250 =========== Liabilities and
Shareholders' Equity: --------------- Interest-bearing liabilities:
Savings accounts $724,943 5,485 0.76 Interest-bearing transaction
accounts 1,578,419 48,444 3.07 Money market accounts 2,227,261
73,180 3.29 Time deposits 11,546,958 454,248 3.93 ----------
------- Total interest- bearing deposits 16,077,581 581,357 3.62
---------- ------- Repurchase agreements 13,465,540 561,301 4.17
Federal Home Loan Bank of New York advances 13,737,057 568,590 4.14
---------- ------- Total borrowed funds 27,202,597 1,129,891 4.15
---------- --------- Total interest- bearing liabilities 43,280,178
1,711,248 3.95 ---------- --------- Noninterest- bearing
liabilities: Noninterest- bearing deposits 554,584 Other
noninterest- bearing liabilities 289,930 ------- Total noninterest-
bearing liabilities 844,514 ------- Total liabilities 44,124,692
Shareholders' equity 4,761,558 --------- Total Liabilities and
Shareholders' Equity $48,886,250 =========== Net interest
income/net interest rate spread (2) $941,977 1.57 ======== Net
interest- earning assets/ net interest margin (3) $4,818,040 1.96 %
========== Ratio of interest- earning assets to interest-bearing
liabilities 1.11 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 Book Value Calculations December
31, 2009 ---- (In thousands, except share and per share amounts)
Shareholders' equity $5,339,152 Goodwill and other intangible
assets (158,336) -------- Tangible Shareholders' equity $5,180,816
---------- Book Value Share Computation: Issued 741,466,555
Treasury shares (214,972,879) ------------ Shares outstanding
526,493,676 Unallocated ESOP shares (33,676,464) Unvested RRP
shares (593,283) Shares in trust (108,945) -------- Book value
shares 492,114,984 =========== Book value per share $10.85 ======
Tangible book value per share $10.53 ====== Hudson City Bancorp,
Inc. Other Financial Data Securities Portfolio at December 31,
2009: Amortized Estimated Unrealized Cost Fair Value Gain/(Loss)
---- ---------- ----------- (dollars in thousands) Held to
Maturity: Mortgage-backed securities: FHLMC $4,764,429 $4,995,782
$231,353 FNMA 2,510,095 2,616,604 106,509 FHLMC and FNMA CMO's
2,577,011 2,597,658 20,647 GNMA 112,019 114,787 2,768 -------
------- ----- Total mortgage-backed securities 9,963,554 10,324,831
361,277 Investment securities: United States GSE debt 4,187,599
4,070,900 (116,699) Municipal bonds 105 105 - --- --- --- Total
investment securities 4,187,704 4,071,005 (116,699) Total held to
maturity $14,151,258 $14,395,836 $244,578 =========== ===========
======== Available for sale: Mortgage-backed securities: FHLMC
$4,655,629 $4,888,326 $232,697 FNMA 3,782,198 3,907,368 125,170
FHLMC and FNMA CMO's 1,057,007 1,050,763 (6,244) GNMA 1,257,590
1,270,074 12,484 --------- --------- ------ Total mortgage-backed
securities 10,752,424 11,116,531 364,107 Investment securities:
United States GSE debt 1,104,699 1,088,165 (16,534) Equity
securities 6,770 7,075 305 ----- ----- --- Total investment
securities 1,111,469 1,095,240 (16,229) Total available for sale
$11,863,893 $12,211,771 $347,878 =========== =========== ========
Hudson City Bancorp, Inc. Other Financial Data Loan Data at
December 31, 2009: Non-Performing Loans -------------------- Loan
Percent of Total Balance Number Loans ------- ------ ------
(dollars in thousands) First Mortgage Loans: One- to four- family
$579,036 1,469 1.82% FHA/VA 31,855 115 0.10% PMI 2,750 11 0.01%
Construction 9,764 6 0.03% Commercial 1,414 1 0.00% ----- --- ----
Total mortgage loans 624,819 1,602 1.97% Home equity loans 2,794 29
0.01% Other loans 82 5 0.00% --- --- ---- Total $627,695 1,636
1.98% ======== ===== ==== Total Loans ----------- Loan Percent of
Total Balance Number Loans ------- ------ ------ (dollars in
thousands) First Mortgage Loans: One- to four- family $30,831,520
73,606 97.02% FHA/VA 283,750 1,146 0.89% PMI 246,562 763 0.78%
Construction 13,030 9 0.04% Commercial 54,694 101 0.17% ------ ---
---- Total mortgage loans 31,429,556 75,625 98.90% Home equity
loans 329,362 8,443 1.04% Other loans 21,003 2,365 0.07% ------
----- ---- Total $31,779,921 86,433 100.00% =========== ======
====== -- Charge-offs amounted to $19.8 million for the fourth
quarter of 2009, consisting of 187 loans, and $47.2 million for the
year ended December 31, 2009, consisting of 517 loans. These
charge-offs include $18.0 million and $37.8 million for the same
respective periods, that relate to loans that are still in the loan
portfolio at December 31, 2009 and are working through the
foreclosure process. -- Updated valuations are received on or
before the time a loan becomes 180 days past due. If necessary, we
charge-off an amount to reduce the loan's carrying value to the
updated valuation less estimated selling costs. Our policy is that
we receive an updated valuation for these loans annually. -- The
average loan-to-value ratio, using appraised values at time of
origination, of our non-performing one- to four-family mortgage
loans and total one- to four-family mortgage loans was 70.2% and
60.8%, respectively at December 31, 2009. -- Based on the valuation
indices, house prices have declined in the New York metropolitan
area, where 64.0% of our non-performing loans were located at
December 31, 2009, by approximately 19.5% from the peak of the
market in 2006 through October 2009 and by 29.6% nationwide during
that period. From July 2009 through October 2009, the house price
indices increased by 1.1% in the New York metropolitan area. -- Our
quantitative analysis of the allowance for loan losses considers
the results of the reappraisal process as well as the results of
our foreclosed property transactions. -- Our qualitative analysis
of the allowance for loan losses includes a further evaluation of
economic factors, such as trends in the unemployment rate, as well
as ratio analysis to evaluate the overall measurement of the
allowance for loan losses. This analysis includes a review of
delinquency ratios, house price indices, net charge-off ratios and
the ratio of the allowance for loan losses to both non-performing
loans and total loans. Foreclosed real estate at December 31, 2009:
Carrying Number Under Contract of Number Value Sale ------ -----
------------ (dollars in thousands) Foreclosed real estate 41
$16,736 4 -- During 2009, we sold 55 foreclosed properties. It is
currently taking up to 30 months to foreclose on a loan once it
becomes non-performing. Write-downs and net losses on the sale of
foreclosed real estate are charged to operating expenses and
amounted to $325,000 and $2.4 million for the quarter and year
ended December 31, 2009, respectively. Hudson City Bancorp, Inc.
and Subsidiary Other Financial Data (Unaudited) At or for the
Quarter Ended --------------------------- Sept. 30, Dec. 31, 2009
2009 June 30, 2009 ------------- ---------- ------------- (Dollars
in thousands, except per share data) Net interest income $331,793
$325,457 $302,397 Provision for loan losses 45,000 40,000 32,500
Non- interest income 2,192 2,513 26,606 Non- interest expense:
Compensation and employee benefits 33,905 34,043 36,392 Other non-
interest expense 29,030 28,877 48,555 ------ ------ ------ Total
non- interest expense 62,935 62,920 84,947 ------ ------ ------
Income before income tax expense 226,050 225,050 211,556 Income tax
expense 89,474 89,964 83,637 ------ ------ ------ Net income
$136,576 $135,086 $127,919 ======== ======== ======== Total assets
$60,267,760 $58,884,535 $57,406,338 Loans, net 31,721,154
31,088,146 30,718,887 Mortgage- backed securities Available for
sale 11,116,531 9,550,806 9,796,644 Held to maturity 9,963,554
10,751,866 10,322,782 Other securities Available for sale 1,095,240
2,117,664 2,209,470 Held to maturity 4,187,704 3,238,044 2,289,869
Deposits 24,578,048 23,113,949 21,692,265 Borrowings 29,975,000
30,025,000 30,025,000 Shareholders' equity 5,339,152 5,270,181
5,143,265 ------------- --------- --------- --------- Performance
Data: Return on average assets (1) 0.92% 0.93% 0.91% Return on
average equity (1) 10.21% 10.34% 9.98% Net interest rate spread (1)
2.02 2.02 1.87 Net interest margin (1) 2.30% 2.30% 2.17% Non-
interest expense to average assets (1) (4) 0.42% 0.43% 0.49%
Compensation and benefits to total revenue (5) 10.15% 10.38% 11.06%
Efficiency ratio (2) 18.84% 19.18% 25.82% Dividend payout ratio
53.57% 53.57% 57.69% Per Common Share Data: Basic earnings per
common share $0.28 $0.28 $0.26 Diluted earnings per common share
$0.28 $0.27 $0.26 Book value per share (3) $10.85 $10.75 $10.54
Tangible book value per share (3) $10.53 $10.43 $10.21 Dividends
per share $0.150 $0.150 $0.150 ---------- ------ ------ ------
Capital Ratios: Equity to total assets (consolidated) 8.86% 8.95%
8.96% Tier 1 leverage capital (Bank) 7.59% 7.66% 7.73% Total risk-
based capital (Bank) 21.02% 21.27% 21.09% ----------- ----- -----
----- Other Data: Full-time equivalent employees 1,482 1,483 1,458
Number of branch offices 131 131 131 --------- --- --- --- Asset
Quality Data: Total non- performing loans $627,695 $517,585
$430,907 Number of non- performing loans 1,636 1,315 1,088 Total
number of loans 86,433 85,362 84,487 Total non- performing assets
$644,431 $530,362 $442,705 Non- performing loans to total loans
1.98% 1.66% 1.40% Non- performing assets to total assets 1.07%
0.90% 0.77% Allowance for loan losses $140,074 $114,833 $88,053
Allowance for loan losses to non- performing loans 22.32% 22.19%
20.43% Allowance for loan losses to total loans 0.44% 0.37% 0.29%
Provision for loan losses $45,000 $40,000 $32,500 Net charge- offs
$19,758 $13,220 $9,569 Write- downs and net losses on foreclosed
real estate $325 $481 $399 At or for the Quarter Ended
--------------------------- March 31, 2009 Dec. 31, 2008
-------------- ------------- (Dollars in thousands, except per
share data) Net interest income $283,831 $260,452 Provision for
loan losses 20,000 9,000 Non-interest income 2,273 1,995
Non-interest expense: Compensation and employee benefits 32,731
32,302 Other non-interest expense 22,063 19,962 ------ ------ Total
non-interest expense 54,794 52,264 ------ ------ Income before
income tax expense 211,310 201,183 Income tax expense 83,647 76,905
------ ------ Net income $127,663 $124,278 ======== ======== Total
assets $56,569,758 $54,145,328 Loans, net 30,110,130 29,440,761
Mortgage-backed securities Available for sale 11,149,867 9,915,554
Held to maturity 9,537,148 9,572,257 Other securities Available for
sale 3,532,186 3,413,633 Held to maturity 450,140 50,086 Deposits
20,435,916 18,464,042 Borrowings 30,275,000 30,225,000
Shareholders' equity 5,052,798 4,938,796 --------------------
--------- --------- Performance Data: Return on average assets (1)
0.93% 0.94% Return on average equity (1) 10.21% 10.24% Net interest
rate spread (1) 1.75 1.67 Net interest margin (1) 2.06% 2.02%
Non-interest expense to average assets (1) (4) 0.40% 0.40%
Compensation and benefits to total revenue (5) 11.44% 12.31%
Efficiency ratio (2) 19.15% 19.91% Dividend payout ratio 53.85%
52.00% Per Common Share Data: Basic earnings per common share $0.26
$0.25 Diluted earnings per common share $0.26 $0.25 Book value per
share (3) $10.40 $10.10 Tangible book value per share (3) $10.07
$9.77 Dividends per share $0.140 $0.130 ------------------- ------
------ Capital Ratios: Equity to total assets (consolidated) 8.93%
9.12% Tier 1 leverage capital (Bank) 7.79% 7.99% Total risk-based
capital (Bank) 21.20% 21.48% ---------------- ----- ----- Other
Data: Full-time equivalent employees 1,458 1,451 Number of branch
offices 129 127 ---------------- --- --- Asset Quality Data: Total
non-performing loans $320,158 $217,574 Number of non- performing
loans 826 580 Total number of loans 83,982 83,556 Total
non-performing assets $331,784 $233,106 Non-performing loans to
total loans 1.06% 0.74% Non-performing assets to total assets 0.59%
0.43% Allowance for loan losses $65,121 $49,797 Allowance for loan
losses to non- performing loans 20.34% 22.89% Allowance for loan
losses to total loans 0.22% 0.17% Provision for loan losses $20,000
$9,000 Net charge-offs $4,675 $1,833 Write-downs and net losses on
foreclosed real estate $1,162 $218 (1) Ratios are annualized. (2)
Computed by dividing non-interest expense by the sum of net
interest income and non-interest income. For the second quarter of
2009, the efficiency ratio includes the FDIC special assessment of
$21.1 million and net securities gains of $24.0 million. (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. (4) Computed by dividing non-interest expense by average
assets. (5) Computed by dividing compensation and benefits by the
sum of net interest income and non-interest income. DATASOURCE:
Hudson City Bancorp, Inc. CONTACT: Susan Munhall, Investor
Relations, Hudson City Bancorp, Inc., +1-201-967-8290,
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