PARAMUS, N.J., Oct. 20 /PRNewswire-FirstCall/ -- Hudson City
Bancorp, Inc. (Nasdaq: HCBK), the holding company for Hudson City
Savings Bank, reported today that net income for the third quarter
of 2010 amounted to $124.6 million as
compared to $135.1 million for the
third quarter of 2009. Diluted earnings per share was
$0.25 for the third quarter of 2010
as compared to $0.27 for the third
quarter of 2009. For the nine months ended September 30, 2010, net income amounted to
$416.0 million as compared to
$390.7 million for the same period in
2009. Diluted earnings per share was $0.84 for the nine months ended September 30, 2010 as compared to $0.80 for the same period in 2009. The Board of
Directors declared a quarterly cash dividend of $0.15 per share payable on November 30, 2010 to shareholders of record on
November 5, 2010.
Ronald E. Hermance, Jr.,
Chairman, President and Chief Executive Officer commented, "The
continued low interest rate environment further negatively impacted
our net interest margin in the third quarter. We believe that
these historically-low market interest rates coupled with the
expected second round of quantitative easing by the Federal Reserve
Board will continue to place pressure on our net interest margin
for the remainder of 2010. Asset growth in this environment
is just not prudent. As a result, our total assets at
September 30, 2010 remained virtually
unchanged from December 31, 2009.
Our loan portfolio has decreased slightly in 2010, not only
due to our strategy to maintain a near-zero growth rate, but also
due to the unprecedented involvement of the government-sponsored
enterprises (the "GSEs") in the mortgage market. We believe
that when rates eventually begin to increase and the GSEs lessen
their involvement in the secondary markets, we will be well
positioned to increase our loan production."
Mr. Hermance continued, "Our non-performing loans have been
increasing at a slower pace over the last two quarters.
Because our loan products are largely single-family first
mortgage loans, our delinquency trends are affected primarily by
unemployment and house prices. The current economic recovery
has been weak and, as a result, the unemployment rate has not
improved. In addition, the under-employment rate is causing
many individuals to struggle to meet their household expenses and
they tend to drift into early stage delinquencies. There is
also a considerable amount of housing inventory that must be
cleared before the housing market can truly recover. Even in
the face of these challenges, our asset quality remains solid and
credit costs are manageable, reflecting our adherence to sound
underwriting, credit review and collection policies and
procedures."
Mr. Hermance concluded, "While this economic cycle has certainly
impacted us, our conservative loan underwriting standards and an
investment portfolio without any credit impairment, have helped to
protect our balance sheet during this economic cycle. In
addition, our strategically straightforward approach to banking
means we have very manageable overhead costs to help mitigate the
impact of a declining net interest margin. At the same time,
we are operating in an environment with increased regulatory
oversight. We expect that this could result in additional
regulatory requirements and increased compliance costs."
Financial highlights for the third quarter of 2010 are as
follows:
- Both basic and diluted earnings per share were $0.25 for the third quarter of 2010 as compared
to $0.28 and $0.27 for basic and diluted earnings per share,
respectively, for the third quarter of 2009. Both basic and diluted
earnings per common share were $0.84
for the first nine months of 2010 as compared to $0.80 for both basic and diluted earnings per
share for the same period in 2009.
- The Board of Directors declared a quarterly cash dividend of
$0.15 per share payable on
November 30, 2010 to shareholders of
record at the close of business on November
5, 2010.
- Net income amounted to $124.6
million for the third quarter of 2010, as compared to
$135.1 million for the third quarter
of 2009. For the nine months ended September 30, 2010, net income amounted to
$416.0 million as compared to
$390.7 million for the same period in
2009.
- Net interest income decreased 10.8% to $290.3 million for the third quarter of 2010 and
increased 3.0% to $939.0 million for
the nine months ended September 30,
2010.
- Our net interest rate spread and net interest margin were 1.73%
and 1.97%, respectively, for the third quarter of 2010 and 1.86%
and 2.10%, respectively, for the first nine months of 2010.
- The provision for loan losses amounted to $50.0 million for the third quarter of 2010 as
compared to $40.0 million for the
third quarter of 2009. For the nine months ended September 30, 2010, the provision for loan losses
amounted to $150.0 million as
compared to $92.5 million for the
same period in 2009.
- Our annualized return on average assets and annualized return
on average shareholders' equity for the third quarter of 2010 were
0.82% and 8.86%, respectively. Our annualized return on average
assets and annualized return on average shareholders' equity for
the nine months ended September 30,
2010 were 0.91% and 10.07%, respectively.
- Our efficiency ratio was 20.27% for the third quarter of 2010
and 18.94% for the first nine months of 2010. The efficiency ratio
is calculated by dividing non-interest expense by the sum of net
interest income and non-interest income.
- Non-interest income amounted to $33.9
million for the third quarter of 2010 and $100.1 million for the nine months ended
September 30, 2010. Included in
non-interest income were net realized securities gains of
$31.0 million and $92.4 million, respectively, for the three and
nine months ended September 30,
2010.
- Deposits increased $336.6
million, or 1.4%, to $24.91
billion at September 30, 2010
from $24.58 billion at December 31, 2009.
- Borrowings decreased $150.0 million to
$29.83 billion at September 30,
2010. We modified $4.03
billion of borrowings during the first nine months of 2010
to extend call dates by between three and five years.
Statement of Financial Condition Summary
During the first nine months of 2010, our total assets increased
$348.9 million, or 0.6%, to
$60.62 billion at September 30, 2010 from $60.27 billion at December
31, 2009. The increase in total assets reflected a
$658.9 million increase in total
mortgage-backed securities partially offset by a $252.2 million decrease in investment securities
and a $94.6 million decrease in net
loans. Total assets decreased $316.5
million from June 30, 2010 as
mortgage refinancing activity caused loan repayments and
prepayments on mortgage-backed securities to remain at elevated
levels during 2010. During this same time period, available
reinvestment yields on these types of assets also decreased.
We lowered our deposit rates beginning in the first quarter
of 2010 to slow our deposit growth from the 2009 levels since the
low yields that are available to us for mortgage loans and
investment securities have made a growth strategy less prudent
until market conditions improve. This resulted in a decrease
in deposits during the second and third quarters of 2010.
The decrease in loans primarily reflects the elevated levels of
loan repayments during 2010 as a result of continued low market
interest rates. Historically our focus has been on loan portfolio
growth through the origination of one- to four-family first
mortgage loans in New Jersey,
New York, Pennsylvania and Connecticut and, to a lesser extent, the
purchases of mortgage loans. During the first nine months of
2010, we originated $4.28 billion and
purchased $580.1 million of loans,
compared to originations of $4.66
billion and purchases of $2.45
billion for the same period in 2009. The origination
and purchases of loans were offset by principal repayments of
$4.74 billion in the first nine
months of 2010 as compared to $5.34
billion for the first nine months of 2009. Loan
originations continue to be strong as a result of elevated levels
of mortgage refinancing activity caused by low market interest
rates. The refinancing activity has also caused increased
levels of repayments to continue in 2010 as some of our customers
refinanced with other banks. Our loan purchase activity has
significantly declined as the GSEs have been actively purchasing
loans as part of their efforts to keep mortgage rates low to
support the housing market during the recent economic recession.
As a result, the sellers from whom we have historically
purchased loans are selling to the GSEs. We expect that the
amount of loan purchases may continue to be at reduced levels for
the near-term.
Total mortgage-backed securities increased $658.9 million during the first nine months of
2010, reflecting purchases of $8.88
billion of mortgage-backed securities issued by GSEs,
substantially all of which were hybrid adjustable-rate securities.
The increase was partially offset by repayments received of
$6.36 billion and sales of
$1.90 billion. The sales
resulted in net realized securities gains of $92.4 million (pre-tax). We believe that
the continued elevated levels of prepayments and the eventual
increase in interest rates will reduce the amount of unrealized
gains available in the portfolio. Accordingly, we sold these
securities to take advantage of the favorable pricing that
currently exists in the market.
Total liabilities increased $65.3
million, or 0.1%, to $54.99
billion at September 30, 2010
from $54.93 billion at December 31, 2009. The increase in total
liabilities primarily reflected a $336.6
million increase in deposits partially offset by a
$150.0 million decrease in borrowed
funds and a $100.0 million decrease
in amounts due to brokers. The increase in total deposits reflected
a $413.8 million increase in our
interest-bearing transaction accounts and savings accounts and a
$37.6 million increase in our time
deposits. These increases were partially offset by a decrease of
$119.5 million in our money market
accounts. The increase in our interest-bearing transaction accounts
is primarily due to a $322.7 million
increase in our High Value checking account product. Borrowings
amounted to $29.83 billion at
September 30, 2010 as compared to
$29.98 billion at December 31, 2009. During the first nine
months of 2010, we modified $4.03
billion of borrowings to extend the call dates of the
borrowings by between three and five years.
Total shareholders' equity increased $283.6 million to $5.62 billion at September 30, 2010 from $5.34 billion at December
31, 2009. The increase was primarily due to net income of
$416.0 million for the nine months
ended September 30, 2010 and a
$68.0 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 $221.8
million. At September 30,
2010, our shareholders' equity to asset ratio was 9.28% and
our tangible book value per share was $11.08.
The accumulated other comprehensive income of $252.5 million at September 30, 2010 includes a $273.0 million after-tax net unrealized gain on
securities available for sale ($461.5
million pre-tax) partially offset by a $20.5 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 Board of Governors of
the Federal Reserve System (the "FOMC") noted that the pace of
recovery in output and employment has slowed in recent months.
Household spending is increasing gradually, but remains
constrained by high unemployment, modest income growth, lower
housing wealth, and tight credit. The national unemployment rate
was 9.6% in September 2010 as
compared to 9.5% in June 2010 and
10.0% in December 2009. The
FOMC decided to maintain the overnight lending rate at zero to
0.25% during the third quarter of 2010. As a result, short-term
market interest rates have remained at low levels during the third
quarter of 2010. This allowed us to continue to re-price our
deposits thereby reducing our cost of funds. The yields on
mortgage-related assets have also remained at low levels as the
10-year treasury fell to 2.5% during the third quarter of 2010.
Our net interest rate spread decreased to 1.73% for the third
quarter of 2010 as compared to 1.89% for the linked second quarter
of 2010 and 2.04% for the third quarter of 2009. Our net
interest margin decreased to 1.97% for the third quarter of 2010 as
compared to 2.13% for the linked second quarter of 2010 and 2.31%
for the third quarter of 2009. While our deposits continued
to reprice to lower rates during the third quarter of 2010, the
cost of our borrowings increased slightly due to the modification
of certain borrowings. In addition, the low market interest
rates resulted in lower yields on our mortgage-related
interest-earning assets as customers refinanced to lower mortgage
rates and our new loan production and asset purchases were at the
current low market interest rates. Mortgage-related assets
represented 87.4% of our average interest-earning assets during the
2010 third quarter.
Net interest income decreased $35.2
million, or 10.8%, to $290.3
million for the third quarter of 2010 as compared to
$325.5 million for the third quarter
of 2009. Net interest income increased $27.3 million, or 3.0%, to $939.0 million for the first nine months of 2010
as compared to $911.7 million for the
first nine months of 2009. During the first nine months of 2010,
our net interest rate spread decreased 3 basis points to 1.86% and
our net interest margin decreased 8 basis points to 2.10% as
compared to the same period in 2009.
Total interest and dividend income for the third quarter of 2010
decreased $55.4 million, or 7.4%, to
$688.8 million from $744.2 million for the third quarter of 2009. The
decrease in total interest and dividend income was primarily due to
a decrease of 60 basis points in the annualized weighted-average
yield on total interest-earning assets to 4.63% for the quarter
ended September 30, 2010 from 5.23%
for the same quarter in 2009. The decrease in the annualized
weighted-average yield was partially offset by an increase in the
average balance of total interest-earning assets of $2.56 billion, or 4.5%, to $59.49 billion for the third quarter of 2010 as
compared to $56.93 billion for the
third quarter of 2009.
Total interest and dividend income decreased $54.0 million, or 2.5%, to $2.14 billion for the nine month period ended
September 30, 2010 from $2.20 billion for the same period in 2009.
The decrease in interest and dividend income was due to a
decrease of 47 basis points in the annualized weighted-average
yield on total interest-earning assets to 4.81% for the nine months
ended September 30, 2010 from 5.28%
for the comparable period in 2009. The decrease in the annualized
weighted-average yield was partially offset by an increase in the
average balance of total interest-earning assets of $3.91 billion, or 7.0%, to $59.33 billion for the nine months ended
September 30, 2010 as compared to
$55.42 billion for the nine months
ended September 30, 2009.
Interest on first mortgage loans decreased $7.4 million to $417.1 million for the third
quarter of 2010 as compared to $424.5
million for the same period in 2009. This was primarily due
to a 29 basis point decrease in the weighted-average yield to 5.29%
from 5.58% for the 2009 third quarter. The decrease in the
weighted-average yield was partially offset by a $1.12 billion increase in the average balance of
first mortgage loans to $31.56
billion, reflecting our historical emphasis on the growth of
our mortgage loan portfolio. During 2010 our mortgage loan
portfolio decreased slightly as refinancing activity resulted in
continued elevated levels of loan repayments and the weak real
estate markets resulted in decreased home purchase mortgage
activity. In addition, loan purchase activity has
significantly declined as the GSEs have been actively purchasing
loans as part of their efforts to keep mortgage rates low to
support the housing market during the recent economic recession.
As a result, the sellers from whom we have historically
purchased loans are selling to the GSEs.
For the nine months ended September 30,
2010, interest on first mortgage loans increased
$19.5 million to $1.27 billion as
compared to $1.25 billion for the
nine months ended September 30, 2009.
This was primarily due to a $1.72
billion increase in the average balance of first mortgage
loans to $31.56 billion, which
reflected our historical emphasis on the growth of our mortgage
loan portfolio. The increase in the average balance of first
mortgage loans was partially offset by a 23 basis point decrease in
the weighted-average yield to 5.37% for the nine months ended
September 30, 2010 as compared to
5.60% for the same period in 2009.
Interest on mortgage-backed securities decreased $37.2 million to $206.6 million for the third
quarter of 2010 as compared to $243.8
million for the third quarter of 2009. This decrease
was due primarily to an 88 basis point decrease in the
weighted-average yield to 4.05% for the third quarter of 2010 from
4.93% for the third quarter of 2009. The decrease in the
weighted-average yield was partially offset by a $640.3 million increase in the average balance of
mortgage-backed securities to $20.40
billion during the third quarter of 2010 as compared to
$19.76 billion for the third quarter
of 2009.
Interest on mortgage-backed securities decreased $82.7 million to $660.5 million for the nine
months ended September 30, 2010 as
compared to $743.2 million for the
nine months ended September 30, 2009.
This decrease was due primarily to a 75 basis point decrease
in the weighted-average yield to 4.31% during the first nine months
of 2010 from 5.06% for the same period in 2009. The decrease in the
weighted-average yield was partially offset by a $837.5 million increase in the average balance of
mortgage-backed securities to $20.41
billion during the first nine months of 2010 as compared to
$19.57 billion for the comparable
period in 2009.
The increases in the average balances of mortgage-backed
securities were due to purchases of primarily variable-rate hybrid
securities. We purchase these types of securities as part of
our overall management of interest rate risk and to provide us with
a source of monthly cash flows. The decrease in the weighted
average yield on mortgage-backed securities is a result of lower
yields on securities that have been purchased since the second half
of 2009 when market interest rates were lower than the yield earned
on the existing portfolio.
Interest on investment securities decreased $8.1 million to $49.9 million for the third
quarter of 2010 as compared to $58.0
million for the same period in 2009. This decrease was
due primarily to a decrease in the average yield of investment
securities of 80 basis points to 3.84% for the third quarter of
2010 as compared to 4.64% for the third quarter of 2009. The
decrease in the weighted-average yield on investment securities was
partially offset by a $199.4 million
increase in the average balance of investment securities to
$5.20 billion for the third quarter
of 2010 from $5.00 billion for the
third quarter of 2009.
For the nine months ended September 30,
2010, interest on investment securities increased
$10.1 million to $162.1 million as
compared to $152.0 million for the
nine months ended September 30, 2009.
This increase was due primarily to a $908.0 million increase in the average balance of
investment securities to $5.20
billion during the first nine months of 2010 from
$4.29 billion for the same period in
2009. 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 57 basis
points to 4.15% for the 2010 nine-month period as compared to 4.72%
for the same period in 2009.
Dividends on Federal Home Loan Bank of New York ("FHLB") stock decreased $2.2 million, or 17.9%, to $10.1 million for the third quarter of 2010 as
compared to $12.3 million for the
third quarter of 2009. This decrease was due primarily to a
99 basis point decrease in the average dividend yield earned to
4.60% as compared to 5.59% for the third quarter of 2009. The
decrease in dividend income was partially offset by a $2.6 million increase in the average balance to
$881.4 million for the third quarter
of 2010 as compared to $878.8 million
for the same period in 2009. The increase in the average
balance was due to purchases of FHLB stock to meet membership
requirements.
Dividends on FHLB stock increased $970,000, or 3.2%, to $31.7 million for the first nine months of 2010
as compared to $30.7 million for the
same period in 2009. This increase was due primarily to a 13
basis point increase in the average dividend yield earned to 4.80%
for the first nine months of 2010 as compared to 4.67% for the same
period in 2009. The increase in dividend income was also due
to a $2.9 million increase in the
average balance to $879.7 million for
the first nine months of 2010 as compared to $876.8 million for the same period in 2009.
The increase in the average balance was due to purchases of
FHLB stock to meet membership requirements.
Interest on Federal funds sold amounted to $604,000 for the third quarter of 2010 as
compared to $344,000 for the third
quarter of 2009. The average balance of Federal funds sold
amounted to $1.10 billion for the
third quarter of 2010 as compared to $475.1
million for the third quarter of 2009. The yield
earned on Federal funds sold was 0.22% for the 2010 third quarter
and 0.29% for the 2009 third quarter. The increase in the
average balance of Federal funds sold is a result of liquidity
provided by increased levels of repayments on mortgage-related
assets and calls of investment securities.
Interest on Federal funds sold amounted to $1.6 million for the first nine months of 2010 as
compared to $707,000 for the
comparable period in 2009. The average balance of Federal
funds sold amounted to $928.0 million
for the first nine months of 2010 as compared to $460.3 million for the same period in 2009.
The yield earned on Federal funds sold was 0.23% for the nine
months ended September 30, 2010 and
0.21% for the nine months ended September
30, 2009. The increase in the average balance of
Federal funds sold is a result of liquidity provided by increased
levels of repayments on mortgage-related assets and calls of
investment securities.
Total interest expense for the quarter ended September 30, 2010 decreased $20.2 million, or 4.8%, to $398.5 million from $418.7
million for the quarter ended September 30, 2009. This decrease was
primarily due to a 29 basis point decrease in the weighted-average
cost of total interest-bearing liabilities to 2.90% for the quarter
ended September 30, 2010 compared
with 3.19% for the quarter ended September
30, 2009. The decrease was partially offset by a
$2.45 billion, or 4.7%, increase in
the average balance of total interest-bearing liabilities to
$54.53 billion for the quarter ended
September 30, 2010 compared with
$52.08 billion for the third quarter
of 2009. This increase in interest-bearing liabilities was
primarily used to fund asset growth.
Total interest expense for the nine months ended September 30, 2010 decreased $81.3 million, or 6.3%, to $1.20 billion from $1.28
billion for the nine months ended September 30, 2009. This decrease was
primarily due to a 44 basis point decrease in the weighted-average
cost of total interest-bearing liabilities to 2.95% for the nine
months ended September 30, 2010
compared with 3.39% for the nine months ended September 30, 2009. The decrease was partially
offset by a $3.95 billion, or 7.8%,
increase in the average balance of total interest-bearing
liabilities to $54.56 billion for the
nine months ended September 30, 2010
compared with $50.61 billion for the
first nine months of 2009. This increase in interest-bearing
liabilities was primarily used to fund asset growth in the second
half of 2009.
Interest expense on deposits decreased $22.4 million, or 19.8%, to $90.5 million for the third quarter of 2010 from
$112.9 million for the third quarter
of 2009. This decrease is due primarily to a decrease in the
average cost of interest-bearing deposits of 58 basis points to
1.46% for the third quarter of 2010 as compared to 2.04% for the
third quarter of 2009. The decrease was partially offset by a
$2.58 billion increase in the average
balance of interest-bearing deposits to $24.59 billion during the third quarter of 2010
as compared to $22.01 billion for the
third quarter of 2009.
For the nine months ended September 30,
2010, interest expense on deposits decreased $84.9 million, or 22.6%, to $290.1 million from $375.0
million for the nine months ended September 30, 2009. This decrease is due
primarily to a decrease in the average cost of interest-bearing
deposits of 87 basis points to 1.58% for the first nine months of
2010 compared with 2.45% for the first nine months of 2009.
The decrease was partially offset by a $4.16 billion increase in the average balance of
interest-bearing deposits to $24.60
billion during the first nine months of 2010 as compared to
$20.44 billion for the first nine
months of 2009.
The increases in the average balances of interest-bearing
deposits reflect our expanded branch network and our historical
efforts to grow deposits in our existing branches by offering
competitive rates. Also, in response to the economic
conditions in 2009, we believe that households increased their
personal savings and customers 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 in 2009. However, total deposits have decreased
$474.2 million since March 31, 2010. We lowered our deposit
rates to slow our deposit growth from 2009 levels since the low
yields that are available to us for mortgage loans and investment
securities have made a growth strategy less prudent until market
conditions improve.
The decrease in the average cost of deposits for 2010 reflected
lower market interest rates. At September 30, 2010, time deposits scheduled to
mature within one year totaled $10.69
billion with an average cost of 1.32%. These time
deposits are scheduled to mature as follows: $4.05 billion with an average cost of 1.20% in
the fourth quarter of 2010, $3.42
billion with an average cost of 1.33% in the first quarter
of 2011, $1.90 billion with an
average cost of 1.44% in the second quarter of 2011 and
$1.32 billion with an average cost of
1.49% in the third quarter of 2011. The current yields
offered for our six month, one year and two year time deposits are
0.75%, 1.00% and 1.50%, respectively. In addition, our money
market savings accounts are currently yielding 1.00%. 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.
We have historically used borrowings to fund a portion of the
growth in interest-earning assets. However, we were able to
fund substantially all of our growth in 2009 and for the first nine
months of 2010 with deposits. 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 the first nine months of 2010, we modified
$4.03 billion of borrowings to extend
the call dates of the borrowings by between three and five years.
Interest expense on borrowed funds increased $2.2 million to $308.0 million for the third
quarter of 2010 as compared to $305.8
million for the third quarter of 2009. This increase was
primarily due to a 4 basis point increase in the weighted-average
cost of borrowed funds to 4.08% for the third quarter of 2010 as
compared to 4.04% for the third quarter of 2009 reflecting the
incremental cost of the debt modifications. This increase was
primarily offset by a $132.6 million
decrease in the average balance of borrowed funds to $29.93 billion for the third quarter of 2010 as
compared to $30.07 billion for the
third quarter of 2009.
Interest expense on borrowed funds increased $3.6 million to $912.2 million for the nine
months ended September 30, 2010 as
compared to $908.6 million for the
comparable period in 2009. This increase was primarily due to a 4
basis point increase in the weighted-average cost of borrowed funds
to 4.07% for the first nine months of 2010 as compared to 4.03% for
the first nine months of 2009 reflecting the incremental cost of
the debt modifications. This increase was partially offset by
a $215.8 million decrease in the
average balance of borrowed funds to $29.96
billion for the first nine months of 2010 as compared to
$30.18 billion for the first nine
months of 2009.
The provision for loan losses amounted to $50.0 million for the quarter ended September 30, 2010 as compared to $40.0 million for the quarter ended September 30, 2009. The increase in the
provision for loan losses for the quarter ended September 30, 2010 and the resulting increase in
the allowance for loan losses ("ALL") is due primarily to the
increase in non-performing loans during the first nine months of
2010, continuing elevated levels of unemployment and an increase in
charge-offs. In addition, although home prices appear to have
started to stabilize, they are still declining slightly in some of
our lending markets. Non-performing loans, defined as
non-accruing loans and accruing loans delinquent 90 days or more,
amounted to $837.5 million at
September 30, 2010 compared with
$790.1 million at June 30, 2010 and $627.7
million at December 31, 2009.
The ratio of non-performing loans to total loans was 2.64% at
September 30, 2010 compared with
2.46% at June 30, 2010 and 1.98% at
December 31, 2009. Loans
delinquent 30 to 59 days amounted to $432.7
million at September 30, 2010
as compared to $396.5 million at
June 30, 2010 and $430.9 million at December
31, 2009. Loans delinquent 60 to 89 days amounted to
$188.6 million at September 30, 2010 as compared to $168.6 million at June 30,
2010 and $182.5 million at
December 31, 2009. The ALL
amounted to $216.3 million and
$140.1 million at September 30, 2010 and December 31, 2009, respectively. The
allowance for loan losses as a percent of total loans and as a
percent of non-performing loans was 0.68% and 25.83%, respectively
at September 30, 2010, as compared to
0.44% and 22.32%, respectively at December
31, 2009. The increases in these ratios were due to
our consideration of the continuing weak economic conditions,
particularly prolonged elevated levels of unemployment and
underemployment, and continued weak conditions in the housing
markets in our primary lending area, in our determination of the
allowance for loan losses.
Net charge-offs amounted to $26.7
million for the quarter ended September 30, 2010 as compared to net charge-offs
of $13.2 million for the same quarter
in 2009. For the nine months ended September 30, 2010, net charge-offs amounted to
$73.8 million as compared to
$27.5 million of net charge-offs for
the same period in 2009. The ratio of net charge-offs to
average loans was 0.33% and 0.31% for the three and nine months
ended September 30, 2010,
respectively as compared to 0.17% and 0.09% for the same respective
periods in 2009.
Total non-interest income was $33.9
million for the third quarter 2010 as compared to
$2.5 million for the same quarter in
2009. Included in non-interest income for the three month period
ended September 30, 2010 were net
gains on securities transactions of $31.0
million which resulted from the sale of $810.7 million of mortgage-backed securities
available-for-sale.
Total non-interest income for the nine months ended September 30, 2010 was $100.1 million compared with $31.4 million for the comparable period in 2009.
Included in non-interest income for the nine months ended
September 30, 2010 were net gains on
securities transactions of $92.4
million which resulted from the sale of $1.90 billion of mortgage-backed securities
available-for-sale. Included in non-interest income for the nine
months ended September 30, 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. We believe
that the continued elevated levels of prepayments and the eventual
increase in interest rates will reduce the amount of unrealized
gains in the available-for-sale portfolio. Accordingly, we
sold these securities to take advantage of the favorable pricing
that currently exists in the market.
Total non-interest expense increased $2.8
million, or 4.5%, to $65.7
million for the third quarter of 2010 from $62.9 million for the third quarter of 2009.
The increase is primarily due to an increase of $4.1 million in Federal deposit insurance expense
due primarily to an increase in total deposits. The increase
in Federal deposit insurance expense was partially offset by a
$2.0 million decrease in compensation
and employee benefits expense. The decrease in compensation
and employee benefits expense included a $2.2 million decrease in expense related to our
stock benefit plans and a $1.0
million decrease in pension expense. These decreases were
partially offset by a $1.3 million
increase in costs related to our health plan and a $367,000 increase in compensation costs.
At September 30, 2010, we had 1573
full-time equivalent employees as compared to 1,483 at September 30, 2009. Included in other
non-interest expense for the third quarter of 2010 were gains on
the sale of foreclosed real estate (net of write-downs on
foreclosed real estate) of $391,000
as compared to net losses of $481,000
for the third quarter of 2009.
Total non-interest expense decreased $5.9
million, or 2.9%, to $196.8
million for the nine months ended September 30, 2010 from $202.7 million for the nine months ended
September 30, 2009. The
decrease is primarily due to the absence of the FDIC special
assessment of $21.1 million that was
assessed during the second quarter of 2009 and a $4.2 million decrease in compensation and
employee benefits expense. These decreases were partially
offset by an increase of $17.6
million in Federal deposit insurance expense. The
increase in Federal deposit insurance expense is due primarily to
an increase in total deposits and 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 decrease in compensation and employee benefits expense
included a $4.6 million decrease in
expense related to our stock benefit plans and a $3.0 million decrease in pension expense.
These decreases were partially offset by a $3.6 million increase in compensation costs due
primarily to normal increases in salary as well as additional full
time employees. Included in other non-interest expense for
the nine months ended September 30,
2010 were write-downs on foreclosed real estate and net
losses on the sale of foreclosed real estate, of $1.2 million as compared to $2.0 million for the comparable period in 2009.
Our efficiency ratio was 20.27% for the 2010 third quarter as
compared to 19.18% for the 2009 third quarter. For the nine
months ended September 30, 2010, our
efficiency ratio was 18.94% compared with 21.49% for the
corresponding 2009 period. 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 both the third quarter of 2010
and 2009 was 0.43%. Our annualized ratio of non-interest
expense to average total assets for the nine months ended
September 30, 2010 was 0.43% compared
with 0.48% for the corresponding period in 2009.
Income tax expense amounted to $83.9
million for the third quarter of 2010 compared with
$90.0 million for the same quarter in
2009. Our effective tax rate for the third quarter of 2010
was 40.25% compared with 39.98% for the third quarter of 2009.
Income tax expense for the nine months ended September 30, 2010 was $276.2 million compared with $257.2 million for the corresponding 2009 period.
Our effective tax rate for the nine months ended September 30, 2010 was 39.90% compared with
39.70% for the nine months ended September
30, 2009.
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 135 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
|
|
|
|
|
September
30,
|
|
December
31,
|
|
|
|
|
|
2010
|
2009
|
|
|
(In thousands, except share and
per share amounts)
|
(unaudited)
|
|
|
|
|
|
|
|
|
|
|
|
|
Assets:
|
|
|
|
|
|
|
Cash and due from
banks
|
|
$
147,614
|
|
$
198,752
|
|
|
Federal funds sold and other
overnight deposits
|
|
485,479
|
|
362,449
|
|
|
Total cash and cash equivalents
|
|
633,093
|
|
561,201
|
|
|
|
|
|
|
|
|
|
|
Securities available for
sale:
|
|
|
|
|
|
|
Mortgage-backed
securities
|
|
14,961,441
|
|
11,116,531
|
|
|
Investment
securities
|
|
90,797
|
|
1,095,240
|
|
|
Securities held to
maturity:
|
|
|
|
|
|
|
Mortgage-backed
securities
|
|
6,777,579
|
|
9,963,554
|
|
|
Investment
securities
|
|
4,939,922
|
|
4,187,704
|
|
|
|
Total securities
|
|
26,769,739
|
|
26,363,029
|
|
|
|
|
|
|
|
|
|
|
Loans
|
|
|
31,749,402
|
|
31,779,921
|
|
|
Net deferred loan
costs
|
|
93,442
|
|
81,307
|
|
|
Allowance for loan
losses
|
|
(216,283)
|
|
(140,074)
|
|
|
|
Net loans
|
|
31,626,561
|
|
31,721,154
|
|
|
|
|
|
|
|
|
|
|
Federal Home Loan Bank of New
York stock
|
|
878,690
|
|
874,768
|
|
|
Foreclosed real estate,
net
|
|
40,276
|
|
16,736
|
|
|
Accrued interest
receivable
|
|
273,606
|
|
304,091
|
|
|
Banking premises and equipment,
net
|
|
70,456
|
|
70,116
|
|
|
Goodwill
|
|
152,109
|
|
152,109
|
|
|
Other assets
|
|
172,102
|
|
204,556
|
|
|
|
Total Assets
|
|
$
60,616,632
|
|
$ 60,267,760
|
|
|
|
|
|
|
|
|
|
|
Liabilities and Shareholders'
Equity:
|
|
|
|
|
|
|
Deposits:
|
|
|
|
|
|
|
Interest-bearing
|
|
$
24,323,915
|
|
$ 23,992,007
|
|
|
Noninterest-bearing
|
|
590,706
|
|
586,041
|
|
|
|
Total deposits
|
|
24,914,621
|
|
24,578,048
|
|
|
|
|
|
|
|
|
|
|
Repurchase agreements
|
|
14,950,000
|
|
15,100,000
|
|
|
Federal Home Loan Bank of New
York advances
|
|
14,875,000
|
|
14,875,000
|
|
|
|
Total borrowed funds
|
|
29,825,000
|
|
29,975,000
|
|
|
|
|
|
|
|
|
|
|
Due to brokers
|
|
-
|
|
100,000
|
|
|
Accrued expenses and other
liabilities
|
|
254,241
|
|
275,560
|
|
|
|
Total liabilities
|
|
54,993,862
|
|
54,928,608
|
|
|
|
|
|
|
|
|
|
|
Common stock, $0.01 par value,
3,200,000,000 shares authorized; 741,466,555 shares issued;
526,630,332 shares outstanding at September 30, 2010 and
526,493,676 shares outstanding at December 31,
2009
|
|
7,415
|
|
7,415
|
|
|
Additional paid-in
capital
|
|
4,699,677
|
|
4,683,414
|
|
|
Retained earnings
|
|
2,595,547
|
|
2,401,606
|
|
|
Treasury stock, at cost;
214,836,223 shares at September 30, 2010 and 214,972,879 shares at
December 31, 2009
|
|
(1,726,653)
|
|
(1,727,579)
|
|
|
Unallocated common stock held by
the employee stock ownership plan
|
|
(205,732)
|
|
(210,237)
|
|
|
Accumulated other comprehensive
income, net of tax
|
|
252,516
|
|
184,533
|
|
|
|
Total shareholders'
equity
|
|
5,622,770
|
|
5,339,152
|
|
|
|
Total Liabilities and Shareholders' Equity
|
|
$
60,616,632
|
|
$ 60,267,760
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Hudson City
Bancorp, Inc. and Subsidiary
Consolidated
Statements of Income
(Unaudited)
|
|
|
|
|
|
For the
Three Months
|
|
For the Nine
Months
|
|
Ended
September 30,
|
|
Ended
September 30,
|
|
|
|
|
|
2010
|
|
2009
|
|
2010
|
|
2009
|
|
|
|
|
|
(In
thousands, except per share data)
|
|
Interest and Dividend
Income:
|
|
|
|
|
|
|
|
|
|
|
First mortgage loans
|
|
$
417,071
|
|
$
424,521
|
|
$
1,271,476
|
|
$ 1,252,011
|
|
|
Consumer and other
loans
|
|
4,525
|
|
5,212
|
|
13,938
|
|
16,629
|
|
|
Mortgage-backed securities held
to maturity
|
|
82,783
|
|
128,996
|
|
285,228
|
|
368,212
|
|
|
Mortgage-backed securities
available for sale
|
|
123,841
|
|
114,821
|
|
375,223
|
|
374,995
|
|
|
Investment securities held to
maturity
|
|
47,415
|
|
30,835
|
|
144,106
|
|
44,920
|
|
|
Investment securities available
for sale
|
|
2,443
|
|
27,155
|
|
17,992
|
|
107,074
|
|
|
Dividends on Federal Home Loan
Bank of New York stock
|
|
10,128
|
|
12,281
|
|
31,668
|
|
30,698
|
|
|
Federal funds sold and other
overnight deposits
|
|
604
|
|
344
|
|
1,629
|
|
707
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Total interest and
dividend income
|
|
688,810
|
|
744,165
|
|
2,141,260
|
|
2,195,246
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Interest Expense:
|
|
|
|
|
|
|
|
|
|
|
Deposits
|
|
90,526
|
|
112,925
|
|
290,115
|
|
375,003
|
|
|
Borrowed funds
|
|
307,950
|
|
305,783
|
|
912,152
|
|
908,558
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Total interest
expense
|
|
398,476
|
|
418,708
|
|
1,202,267
|
|
1,283,561
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Net interest income
|
|
290,334
|
|
325,457
|
|
938,993
|
|
911,685
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Provision for Loan
Losses
|
|
50,000
|
|
40,000
|
|
150,000
|
|
92,500
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Net interest income after
provision for loan losses
|
|
240,334
|
|
285,457
|
|
788,993
|
|
819,185
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Non-Interest Income:
|
|
|
|
|
|
|
|
|
|
|
Service charges and other
income
|
|
2,842
|
|
2,513
|
|
7,656
|
|
7,207
|
|
|
Gain on securities transactions,
net
|
|
31,017
|
|
-
|
|
92,411
|
|
24,185
|
|
|
Total non-interest
income
|
|
33,859
|
|
2,513
|
|
100,067
|
|
31,392
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Non-Interest Expense:
|
|
|
|
|
|
|
|
|
|
|
Compensation and employee
benefits
|
|
32,054
|
|
34,043
|
|
99,005
|
|
103,166
|
|
|
Net occupancy expense
|
|
8,275
|
|
7,965
|
|
24,546
|
|
24,260
|
|
|
Federal deposit insurance
assessment
|
|
15,000
|
|
10,930
|
|
40,927
|
|
23,294
|
|
|
FDIC special
assessment
|
|
-
|
|
-
|
|
-
|
|
21,098
|
|
|
Other expense
|
|
10,377
|
|
9,982
|
|
32,355
|
|
30,843
|
|
|
Total non-interest
expense
|
|
65,706
|
|
62,920
|
|
196,833
|
|
202,661
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Income before income tax
expense
|
|
208,487
|
|
225,050
|
|
692,227
|
|
647,916
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Income tax expense
|
|
83,918
|
|
89,964
|
|
276,182
|
|
257,248
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Net income
|
|
$
124,569
|
|
$
135,086
|
|
$
416,045
|
|
$
390,668
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Basic earnings per
share
|
|
$
0.25
|
|
$
0.28
|
|
$
0.84
|
|
$
0.80
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Diluted earnings per
share
|
|
$
0.25
|
|
$
0.27
|
|
$
0.84
|
|
$
0.80
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Weighted Average Number of
Common Shares Outstanding:
|
|
|
|
|
|
|
|
|
|
|
|
Basic
|
|
493,164,078
|
|
489,545,739
|
|
492,873,570
|
|
488,048,312
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Diluted
|
|
493,983,690
|
|
491,992,378
|
|
494,489,274
|
|
491,356,241
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Hudson City
Bancorp, Inc. and
Subsidiary
Consolidated
Average Balance Sheets
(Unaudited)
|
|
|
|
|
For the
Three Months Ended September 30,
|
|
|
|
|
|
2010
|
|
2009
|
|
|
|
|
|
|
|
|
|
Average
|
|
|
|
|
|
Average
|
|
|
|
|
|
Average
|
|
|
|
Yield/
|
|
Average
|
|
|
|
Yield/
|
|
|
|
|
|
Balance
|
|
Interest
|
|
Cost
|
|
Balance
|
|
Interest
|
|
Cost
|
|
|
|
|
|
(Dollars in
thousands)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Assets:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Interest-earnings
assets:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
First mortgage loans, net
(1)
|
$ 31,561,184
|
|
$ 417,071
|
|
5.29
|
%
|
$ 30,445,939
|
|
$ 424,521
|
|
5.58
|
%
|
|
|
Consumer and other
loans
|
342,374
|
|
4,525
|
|
5.29
|
|
369,556
|
|
5,212
|
|
5.64
|
|
|
|
Federal funds sold and other
overnight deposits
|
1,104,738
|
|
604
|
|
0.22
|
|
475,094
|
|
344
|
|
0.29
|
|
|
|
Mortgage-backed securities at
amortized cost
|
20,402,928
|
|
206,624
|
|
4.05
|
|
19,762,620
|
|
243,817
|
|
4.93
|
|
|
|
Federal Home Loan Bank
stock
|
881,380
|
|
10,128
|
|
4.60
|
|
878,827
|
|
12,281
|
|
5.59
|
|
|
|
Investment securities, at
amortized cost
|
5,196,235
|
|
49,858
|
|
3.84
|
|
4,996,795
|
|
57,990
|
|
4.64
|
|
|
|
|
Total interest-earning
assets
|
59,488,839
|
|
688,810
|
|
4.63
|
|
56,928,831
|
|
744,165
|
|
5.23
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Noninterest-earnings assets
(4)
|
1,469,928
|
|
|
|
|
|
1,249,336
|
|
|
|
|
|
|
|
|
Total Assets
|
$ 60,958,767
|
|
|
|
|
|
$ 58,178,167
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Liabilities and Shareholders'
Equity:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Interest-bearing
liabilities:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Savings accounts
|
$
861,079
|
|
1,524
|
|
0.70
|
|
$
759,757
|
|
1,437
|
|
0.75
|
|
|
|
Interest-bearing transaction
accounts
|
2,430,111
|
|
5,651
|
|
0.92
|
|
1,831,426
|
|
7,351
|
|
1.59
|
|
|
|
Money market accounts
|
5,069,129
|
|
11,687
|
|
0.91
|
|
4,109,583
|
|
17,606
|
|
1.70
|
|
|
|
Time deposits
|
16,232,326
|
|
71,664
|
|
1.75
|
|
15,311,050
|
|
86,531
|
|
2.24
|
|
|
|
|
Total interest-bearing
deposits
|
24,592,645
|
|
90,526
|
|
1.46
|
|
22,011,816
|
|
112,925
|
|
2.04
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Repurchase agreements
|
15,057,609
|
|
156,609
|
|
4.13
|
|
15,100,000
|
|
154,175
|
|
4.05
|
|
|
|
Federal Home Loan Bank of New
York advances
|
14,875,000
|
|
151,341
|
|
4.04
|
|
14,965,217
|
|
151,608
|
|
4.02
|
|
|
|
|
Total borrowed funds
|
29,932,609
|
|
307,950
|
|
4.08
|
|
30,065,217
|
|
305,783
|
|
4.04
|
|
|
|
|
Total interest-bearing
liabilities
|
54,525,254
|
|
398,476
|
|
2.90
|
|
52,077,033
|
|
418,708
|
|
3.19
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Noninterest-bearing
liabilities:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Noninterest-bearing
deposits
|
543,667
|
|
|
|
|
|
542,273
|
|
|
|
|
|
|
|
Other noninterest-bearing
liabilities
|
264,696
|
|
|
|
|
|
330,793
|
|
|
|
|
|
|
|
|
Total noninterest-bearing
liabilities
|
808,363
|
|
|
|
|
|
873,066
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Total liabilities
|
55,333,617
|
|
|
|
|
|
52,950,099
|
|
|
|
|
|
|
Shareholders' equity
|
5,625,150
|
|
|
|
|
|
5,228,068
|
|
|
|
|
|
|
|
|
Total Liabilities and
Shareholders' Equity
|
$ 60,958,767
|
|
|
|
|
|
$ 58,178,167
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Net interest income/net interest
rate spread (2)
|
|
|
$ 290,334
|
|
1.73
|
|
|
|
$ 325,457
|
|
2.04
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Net interest-earning assets/net
interest margin (3)
|
$ 4,963,585
|
|
|
|
1.97
|
%
|
$ 4,851,798
|
|
|
|
2.31
|
%
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Ratio of interest-earning assets
to interest-bearing liabilities
|
|
|
|
|
1.09
|
x
|
|
|
|
|
1.09
|
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.
|
|
|
(4)
|
Includes the average balance of
principal receivable related to FHLMC mortgage-backed securities of
$209.5 million and $181.3 million for the quarters ended September
30, 2010 and 2009, respectively.
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Hudson City
Bancorp, Inc. and Subsidiary
Consolidated
Average Balance Sheets
(Unaudited)
|
|
|
|
|
For the Nine
Months Ended September 30,
|
|
|
|
|
|
2010
|
|
2009
|
|
|
|
|
|
|
|
|
|
Average
|
|
|
|
|
|
Average
|
|
|
|
|
|
Average
|
|
|
|
Yield/
|
|
Average
|
|
|
|
Yield/
|
|
|
|
|
|
Balance
|
|
Interest
|
|
Cost
|
|
Balance
|
|
Interest
|
|
Cost
|
|
|
|
|
|
(Dollars in
thousands)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Assets:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Interest-earnings
assets:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
First mortgage loans, net
(1)
|
$31,557,701
|
|
$1,271,476
|
|
5.37
|
%
|
$29,832,820
|
|
$1,252,011
|
|
5.60
|
%
|
|
|
Consumer and other
loans
|
350,193
|
|
13,938
|
|
5.31
|
|
385,774
|
|
16,629
|
|
5.75
|
|
|
|
Federal funds sold and other
overnight deposits
|
927,964
|
|
1,629
|
|
0.23
|
|
460,265
|
|
707
|
|
0.21
|
|
|
|
Mortgage-backed securities at
amortized cost
|
20,412,325
|
|
660,451
|
|
4.31
|
|
19,574,806
|
|
743,207
|
|
5.06
|
|
|
|
Federal Home Loan Bank
stock
|
879,680
|
|
31,668
|
|
4.80
|
|
876,773
|
|
30,698
|
|
4.67
|
|
|
|
Investment securities, at
amortized cost
|
5,202,508
|
|
162,098
|
|
4.15
|
|
4,294,557
|
|
151,994
|
|
4.72
|
|
|
|
|
Total interest-earning
assets
|
59,330,371
|
|
2,141,260
|
|
4.81
|
|
55,424,995
|
|
2,195,246
|
|
5.28
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Noninterest-earnings assets
(4)
|
1,566,867
|
|
|
|
|
|
1,170,312
|
|
|
|
|
|
|
|
|
Total Assets
|
$60,897,238
|
|
|
|
|
|
$56,595,307
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Liabilities and Shareholders'
Equity:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Interest-bearing
liabilities:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Savings accounts
|
$
831,128
|
|
4,546
|
|
0.73
|
|
$
740,889
|
|
4,179
|
|
0.75
|
|
|
|
Interest-bearing transaction
accounts
|
2,337,134
|
|
19,448
|
|
1.11
|
|
1,732,510
|
|
24,459
|
|
1.89
|
|
|
|
Money market accounts
|
5,170,008
|
|
41,375
|
|
1.07
|
|
3,498,955
|
|
50,564
|
|
1.93
|
|
|
|
Time deposits
|
16,257,836
|
|
224,746
|
|
1.85
|
|
14,464,413
|
|
295,801
|
|
2.73
|
|
|
|
|
Total interest-bearing
deposits
|
24,596,106
|
|
290,115
|
|
1.58
|
|
20,436,767
|
|
375,003
|
|
2.45
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Repurchase agreements
|
15,085,714
|
|
463,030
|
|
4.10
|
|
15,100,295
|
|
457,252
|
|
4.05
|
|
|
|
Federal Home Loan Bank of New
York advances
|
14,875,000
|
|
449,122
|
|
4.04
|
|
15,076,250
|
|
451,306
|
|
4.00
|
|
|
|
|
Total borrowed funds
|
29,960,714
|
|
912,152
|
|
4.07
|
|
30,176,545
|
|
908,558
|
|
4.03
|
|
|
|
|
Total interest-bearing
liabilities
|
54,556,820
|
|
1,202,267
|
|
2.95
|
|
50,613,312
|
|
1,283,561
|
|
3.39
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Noninterest-bearing
liabilities:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Noninterest-bearing
deposits
|
539,435
|
|
|
|
|
|
537,326
|
|
|
|
|
|
|
|
Other noninterest-bearing
liabilities
|
289,828
|
|
|
|
|
|
324,534
|
|
|
|
|
|
|
|
|
Total noninterest-bearing
liabilities
|
829,263
|
|
|
|
|
|
861,860
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Total liabilities
|
55,386,083
|
|
|
|
|
|
51,475,172
|
|
|
|
|
|
|
Shareholders' equity
|
5,511,155
|
|
|
|
|
|
5,120,135
|
|
|
|
|
|
|
|
|
Total Liabilities and
Shareholders' Equity
|
$60,897,238
|
|
|
|
|
|
$56,595,307
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Net interest income/net interest
rate spread (2)
|
|
|
$ 938,993
|
|
1.86
|
|
|
|
$ 911,685
|
|
1.89
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Net interest-earning assets/net
interest margin (3)
|
$ 4,773,551
|
|
|
|
2.10
|
%
|
$ 4,811,683
|
|
|
|
2.18
|
%
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Ratio of interest-earning assets
to interest-bearing liabilities
|
|
|
|
|
1.09
|
x
|
|
|
|
|
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.
|
|
|
(4)
|
Includes the average balance of
principal receivable related to FHLMC mortgage-backed securities of
$323.7 million and $163.3 million for the nine months ended
September 30, 2010 and 2009, respectively.
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Hudson
City Bancorp, Inc. and
Subsidiary
Book Value
Calculations
|
|
|
|
September
30,
|
|
|
|
|
2010
|
|
|
(In thousands, except share and
per share amounts)
|
|
|
|
|
|
|
|
|
|
Shareholders' equity
|
|
$
5,622,770
|
|
|
Goodwill and other intangible
assets
|
|
(157,092)
|
|
|
Tangible Shareholders'
equity
|
|
$
5,465,678
|
|
|
|
|
|
|
|
Book Value Share
Computation:
|
|
|
|
|
Issued
|
|
741,466,555
|
|
|
Treasury
shares
|
|
(214,836,223)
|
|
|
Shares outstanding
|
|
526,630,332
|
|
|
Unallocated ESOP
shares
|
|
(32,954,826)
|
|
|
Unvested RRP
shares
|
|
(353,235)
|
|
|
Shares in
trust
|
|
(149,694)
|
|
|
Book value shares
|
|
493,172,577
|
|
|
|
|
|
|
|
Book value per share
|
|
$
11.40
|
|
|
|
|
|
|
|
Tangible book value per
share
|
|
$
11.08
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Hudson City
Bancorp, Inc.
Other
Financial Data
Securities Portfolio at
September 30, 2010:
|
|
|
|
|
|
|
|
|
|
Amortized
|
|
Estimated
|
|
Unrealized
|
|
|
Cost
|
|
Fair
Value
|
|
Gain/(Loss)
|
|
|
(dollars in
thousands)
|
|
Held to Maturity:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Mortgage-backed
securities:
|
|
|
|
|
|
|
FHLMC
|
$ 3,239,926
|
|
$
3,416,153
|
|
$
176,227
|
|
FNMA
|
1,782,463
|
|
1,879,575
|
|
97,112
|
|
FHLMC and FNMA
CMO's
|
1,653,281
|
|
1,733,372
|
|
80,091
|
|
GNMA
|
101,909
|
|
105,152
|
|
3,243
|
|
Total
mortgage-backed securities
|
6,777,579
|
|
7,134,252
|
|
356,673
|
|
|
|
|
|
|
|
|
Investment
securities:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
United States GSE
debt
|
4,939,922
|
|
4,967,621
|
|
27,699
|
|
Total
investment securities
|
4,939,922
|
|
4,967,621
|
|
27,699
|
|
|
|
|
|
|
|
|
Total held to
maturity
|
$ 11,717,501
|
|
$
12,101,873
|
|
$
384,372
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Available for
sale:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Mortgage-backed
securities:
|
|
|
|
|
|
|
FHLMC
|
$ 4,511,226
|
|
$
4,693,180
|
|
$
181,954
|
|
FNMA
|
7,346,785
|
|
7,549,480
|
|
202,695
|
|
FHLMC and FNMA
CMO's
|
728,436
|
|
747,703
|
|
19,267
|
|
GNMA
|
1,917,530
|
|
1,971,078
|
|
53,548
|
|
Total
mortgage-backed securities
|
14,503,977
|
|
14,961,441
|
|
457,464
|
|
|
|
|
|
|
|
|
Investment
securities:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
United States GSE
debt
|
80,000
|
|
83,483
|
|
3,483
|
|
Equity
securities
|
6,767
|
|
7,314
|
|
547
|
|
Total
investment securities
|
86,767
|
|
90,797
|
|
4,030
|
|
|
|
|
|
|
|
|
Total available for
sale
|
$ 14,590,744
|
|
$
15,052,238
|
|
$
461,494
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Hudson
City Bancorp, Inc.
Other
Financial Data
Loan Data at September 30,
2010:
|
|
|
|
Non-Performing
Loans
|
|
Total
Loans
|
|
|
|
Loan
|
|
|
|
Percent
of
|
|
Loan
|
|
|
Percent
of
|
|
|
|
Balance
|
|
Number
|
|
Total
Loans
|
|
Balance
|
|
Number
|
Total
Loans
|
|
|
|
(dollars in
thousands)
|
|
First Mortgage
Loans:
|
|
|
|
|
|
|
|
|
|
|
|
|
One- to four- family
|
|
$ 758,338
|
|
2,014
|
|
2.39%
|
|
$ 30,753,962
|
|
73,155
|
96.86%
|
|
FHA/VA
|
|
57,941
|
|
208
|
|
0.18%
|
|
380,108
|
|
1,652
|
1.20%
|
|
PMI
|
|
5,029
|
|
19
|
|
0.02%
|
|
224,924
|
|
702
|
0.71%
|
|
Construction
|
|
7,886
|
|
6
|
|
0.02%
|
|
10,519
|
|
8
|
0.03%
|
|
Commercial
|
|
3,648
|
|
4
|
|
0.01%
|
|
50,421
|
|
96
|
0.16%
|
|
Total mortgage
loans
|
|
832,842
|
|
2,251
|
|
2.62%
|
|
31,419,934
|
|
75,613
|
98.96%
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Home equity loans
|
|
3,624
|
|
34
|
|
0.01%
|
|
310,481
|
|
8,063
|
0.98%
|
|
Other loans
|
|
1,004
|
|
6
|
|
0.01%
|
|
18,987
|
|
2,277
|
0.06%
|
|
Total
|
|
$ 837,470
|
|
2,291
|
|
2.64%
|
|
$ 31,749,402
|
|
85,953
|
100.00%
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
- Charge-offs amounted to $26.7
million for the third quarter of 2010 and $73.8 million for the nine months ended
September 30, 2010.
- 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.
- Based on the valuation indices, house prices have declined in
the New York metropolitan area,
where 69.4% of our non-performing loans were located at
September 30, 2010, by approximately
19% from the peak of the market in 2006 through July 2010 and by 29% nationwide during that
period. For the first seven months of 2010, the house price
indices increased by 1.6% in the New
York metropolitan area and increased 1.2% nationwide.
- 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
September 30, 2010:
|
|
|
|
|
|
Carrying
|
|
|
Number
Under
|
|
|
|
|
Number
|
|
Value
|
|
|
Contract of
Sale
|
|
|
|
|
(dollars in
thousands)
|
|
|
Foreclosed real
estate
|
|
104
|
|
$
40,276
|
|
|
32
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
- During the first nine months of 2010, we sold 58 foreclosed
properties. Write-downs on foreclosed real estate and net losses on
the sale of foreclosed real estate amounted to $1.2 million for the first nine months of 2010.
|
|
Hudson City
Bancorp, Inc. and Subsidiary
|
|
Other
Financial Data
|
|
(Unaudited)
|
|
|
At or for
the Quarter Ended
|
|
|
Sept. 30,
2010
|
|
June 30,
2010
|
|
March 31,
2010
|
|
Dec. 31,
2009
|
|
Sept. 30,
2009
|
|
|
(Dollars in
thousands, except per share data)
|
|
Net interest income
|
$
290,334
|
|
$
317,514
|
|
$
331,145
|
|
$
331,793
|
|
$
325,457
|
|
Provision for loan
losses
|
50,000
|
|
50,000
|
|
50,000
|
|
45,000
|
|
40,000
|
|
Non-interest income
|
33,859
|
|
33,210
|
|
32,998
|
|
2,192
|
|
2,513
|
|
Non-interest expense:
|
|
|
|
|
|
|
|
|
|
|
Compensation and employee
benefits
|
32,054
|
|
32,789
|
|
34,162
|
|
33,905
|
|
34,043
|
|
Other non-interest
expense
|
33,652
|
|
31,807
|
|
32,369
|
|
29,030
|
|
28,877
|
|
Total non-interest
expense
|
65,706
|
|
64,596
|
|
66,531
|
|
62,935
|
|
62,920
|
|
Income before income tax
expense
|
208,487
|
|
236,128
|
|
247,612
|
|
226,050
|
|
225,050
|
|
Income tax expense
|
83,918
|
|
93,537
|
|
98,727
|
|
89,474
|
|
89,964
|
|
Net income
|
$
124,569
|
|
$
142,591
|
|
$
148,885
|
|
$
136,576
|
|
$
135,086
|
|
Total assets
|
$
60,616,632
|
|
$
60,933,134
|
|
$
61,231,651
|
|
$
60,267,760
|
|
$
58,884,535
|
|
Loans, net
|
31,626,561
|
|
32,062,829
|
|
32,012,852
|
|
31,721,154
|
|
31,088,146
|
|
Mortgage-backed
securities
|
|
|
|
|
|
|
|
|
|
|
Available for
sale
|
14,961,441
|
|
13,825,644
|
|
12,662,490
|
|
11,116,531
|
|
9,550,806
|
|
Held to
maturity
|
6,777,579
|
|
7,619,996
|
|
9,110,956
|
|
9,963,554
|
|
10,751,866
|
|
Other securities
|
|
|
|
|
|
|
|
|
|
|
Available for
sale
|
90,797
|
|
366,937
|
|
457,538
|
|
1,095,240
|
|
2,117,664
|
|
Held to
maturity
|
4,939,922
|
|
5,139,794
|
|
4,887,949
|
|
4,187,704
|
|
3,238,044
|
|
Deposits
|
24,914,621
|
|
25,168,465
|
|
25,388,800
|
|
24,578,048
|
|
23,113,949
|
|
Borrowings
|
29,825,000
|
|
29,975,000
|
|
29,975,000
|
|
29,975,000
|
|
30,025,000
|
|
Shareholders' equity
|
5,622,770
|
|
5,543,256
|
|
5,396,077
|
|
5,339,152
|
|
5,270,181
|
|
Performance Data:
|
|
|
|
|
|
|
|
|
|
|
Return on average assets
(1)
|
0.82%
|
|
0.93%
|
|
0.98%
|
|
0.92%
|
|
0.93%
|
|
Return on average equity
(1)
|
8.86%
|
|
10.42%
|
|
10.96%
|
|
10.21%
|
|
10.34%
|
|
Net interest rate spread
(1)
|
1.73%
|
|
1.89%
|
|
1.97%
|
|
2.02%
|
|
2.04%
|
|
Net interest margin
(1)
|
1.97%
|
|
2.13%
|
|
2.20%
|
|
2.30%
|
|
2.31%
|
|
Non-interest expense to average
assets (1) (4)
|
0.43%
|
|
0.43%
|
|
0.44%
|
|
0.42%
|
|
0.43%
|
|
Compensation and benefits to
total revenue (5)
|
9.89%
|
|
9.35%
|
|
9.38%
|
|
10.15%
|
|
10.38%
|
|
Efficiency ratio
(2)
|
20.27%
|
|
18.42%
|
|
18.27%
|
|
18.84%
|
|
19.18%
|
|
Dividend payout ratio
|
60.00%
|
|
51.72%
|
|
50.00%
|
|
53.57%
|
|
53.57%
|
|
Per Common Share
Data:
|
|
|
|
|
|
|
|
|
|
|
Basic earnings per common
share
|
$0.25
|
|
$0.29
|
|
$0.30
|
|
$0.28
|
|
$0.28
|
|
Diluted earnings per common
share
|
$0.25
|
|
$0.29
|
|
$0.30
|
|
$0.28
|
|
$0.27
|
|
Book value per share
(3)
|
$11.40
|
|
$11.25
|
|
$10.96
|
|
$10.85
|
|
$10.75
|
|
Tangible book value per
share (3)
|
$11.08
|
|
$10.93
|
|
$10.63
|
|
$10.53
|
|
$10.43
|
|
Dividends per share
|
$0.15
|
|
$0.15
|
|
$0.15
|
|
$0.15
|
|
$0.15
|
|
Capital Ratios:
|
|
|
|
|
|
|
|
|
|
|
Equity to total assets
(consolidated)
|
9.28%
|
|
9.10%
|
|
8.81%
|
|
8.86%
|
|
8.95%
|
|
Tier 1 leverage capital
(Bank)
|
7.91%
|
|
7.75%
|
|
7.60%
|
|
7.59%
|
|
7.66%
|
|
Total risk-based capital
(Bank)
|
22.42%
|
|
21.90%
|
|
21.24%
|
|
21.02%
|
|
21.27%
|
|
Other Data:
|
|
|
|
|
|
|
|
|
|
|
Full-time equivalent
employees
|
1,573
|
|
1,557
|
|
1,500
|
|
1,482
|
|
1,483
|
|
Number of branch
offices
|
135
|
|
134
|
|
131
|
|
131
|
|
131
|
|
Asset Quality
Data:
|
|
|
|
|
|
|
|
|
|
|
Total non-performing
loans
|
$
837,469
|
|
$
790,137
|
|
$
744,872
|
|
$
627,695
|
|
$
517,585
|
|
Number of non-performing
loans
|
2,291
|
|
2,110
|
|
1,934
|
|
1,636
|
|
1,315
|
|
Total number of loans
|
85,953
|
|
87,041
|
|
86,863
|
|
86,433
|
|
85,362
|
|
Total non-performing
assets
|
$
877,745
|
|
$
811,827
|
|
$
764,435
|
|
$
644,431
|
|
$
530,362
|
|
Non-performing loans to total
loans
|
2.64%
|
|
2.46%
|
|
2.32%
|
|
1.98%
|
|
1.66%
|
|
Non-performing assets to total
assets
|
1.45%
|
|
1.33%
|
|
1.25%
|
|
1.07%
|
|
0.90%
|
|
Allowance for loan
losses
|
$
216,283
|
|
$
192,983
|
|
$
165,830
|
|
$
140,074
|
|
$
114,833
|
|
Allowance for loan losses to
non-performing loans
|
25.83%
|
|
24.42%
|
|
22.26%
|
|
22.32%
|
|
22.19%
|
|
Allowance for loan losses to
total loans
|
0.68%
|
|
0.60%
|
|
0.52%
|
|
0.44%
|
|
0.37%
|
|
Provision for loan
losses
|
$
50,000
|
|
$
50,000
|
|
$
50,000
|
|
$
45,000
|
|
$
40,000
|
|
Net charge-offs
|
$
26,701
|
|
$
22,846
|
|
$
24,245
|
|
$
19,758
|
|
$
13,220
|
|
Ratio of net charge-offs to
average loans (1)
|
0.33%
|
|
0.29%
|
|
0.30%
|
|
0.25%
|
|
0.17%
|
|
Write-downs and net losses
(gains) on foreclosed real estate
|
$
(391)
|
|
$
173
|
|
$
1,372
|
|
$
325
|
|
$
481
|
|
|
|
|
|
|
|
|
|
|
|
|
(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.
|
|
(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.
|
|
|
|
|
|
|
|
|
|
|
|
SOURCE Hudson City Bancorp, Inc.
Copyright . 20 PR Newswire