PARAMUS, N.J., Jan. 19, 2011 /PRNewswire/ -- Hudson City
Bancorp, Inc. (Nasdaq: HCBK), the holding company for Hudson City
Savings Bank, reported today that net income for the fourth quarter
of 2010 amounted to $121.2 million as
compared to $136.6 million for the
fourth quarter of 2009. Diluted earnings per share was
$0.25 for the fourth quarter of 2010
as compared to $0.28 for the fourth
quarter of 2009. For the year ended December 31, 2010, net income amounted to
$537.2 million as compared to
$527.2 million for 2009.
Diluted earnings per share was $1.09 for the year ended December 31, 2010 as compared to $1.07 for 2009. The Board of Directors declared a
quarterly cash dividend of $0.15 per
share payable on February 25, 2011 to
shareholders of record on February 4,
2011.
Ronald E. Hermance, Jr., Chairman
and Chief Executive Officer commented, "We are very proud of
reporting another record year of earnings, our 11th in a row.
However, our fourth quarter earnings are more reflective of
the trend we expect in 2011. Conditions in the mortgage
market continued to produce substantial headwinds. During
2010, market interest rates were at historical lows and pushed
mortgage rates below 5%. This caused prepayments and
refinancing activity to increase, resulting in lower yields on our
mortgage-related assets. As expected, the continued low
interest rate environment continued to negatively impact our net
interest margin in the fourth quarter. The recent increase in
longer term market interest rates have pushed mortgage rates
higher, but the continued elevated levels of unemployment, the weak
housing market and the unprecedented level of the U.S.
government-sponsored enterprises (the "GSEs") involvement in the
mortgage market have impacted our ability to grow our loan
portfolio as the GSEs were involved in over 90% of U.S. mortgage
production."
Mr. Hermance continued, "Going forward we expect these
conditions will significantly hinder our ability to continue
earnings at recent historical levels. During 2011 our net
interest margin may decrease from the 2010 fourth quarter level.
A positive event in the fourth quarter was the slowing in the
rate of loan delinquency growth. This plus a relatively
stable level of charge-offs allowed us to decrease our quarterly
provision for loan losses from $50.0 million
to $45.0 million."
Mr. Hermance also commented, "As we look forward to market
conditions that are more conducive to our business model, we are
exploring the best ways to reduce interest rate risk, strengthen
our balance sheet to restore traditional earnings trends and to
prepare our balance sheet for future growth. We expect that this
process would result in a further restructuring of our funding mix
– a process we started in 2009 with the modification of putable
borrowings to extend or eliminate put dates and to fund asset
growth with customer deposits. Any such restructuring will
focus on the prospects for long-term overall earnings stability and
growth as market and economic conditions become normalized.
We believe that it is important to adjust to current market
conditions and prepare to capture a greater share of the
residential mortgage market when conditions improve. While it
is difficult to predict when that may occur, we believe that this
is the time to look ahead to the 'new normal'."
Mr. Hermance continued, "We are also very aware that the
regulatory environment, as indicated by legislative and regulatory
reactions to the recent recession and financial crisis, is expected
to result in greater oversight and additional regulations for
Hudson City and the entire
industry. We expect capital and liquidity levels to become an
even greater focus in 2011. Although our regulatory capital
ratios are in excess of the requirements to be considered 'well
capitalized' for bank regulatory purposes, we believe the current
regulatory environment will necessitate maintaining a reasonable
cushion above the applicable regulatory requirements to be
considered 'well capitalized.' Accordingly, we will consider
our level of earnings, capital ratios and asset growth in our
future decisions regarding dividends."
Mr. Hermance concluded, "With all of the challenges facing our
business, we are committed to shareholder value. Your
management team remains focused on our core residential lending
model and adapting this model to changes in the marketplace as they
occur. We thank you for your continued support of
Hudson City."
Financial highlights for the fourth quarter of 2010 are as
follows:
- Both basic and diluted earnings per share were $0.25 for the fourth quarter of 2010 as compared
to $0.28 for both basic and diluted
earnings per share for the fourth quarter of 2009. Both basic and
diluted earnings per common share were $1.09 for 2010 as compared to $1.08 and $1.07 for
basic and diluted earnings per share, respectively, for 2009.
- Net income amounted to $121.2
million for the fourth quarter of 2010, as compared to
$136.6 million for the fourth quarter
of 2009. For the year ended December
31, 2010, net income amounted to $537.2 million as compared to $527.2 million for 2009.
- Net interest income decreased 24.1% to $251.8 million for the fourth quarter of 2010 as
compared to the fourth quarter of 2009 and decreased 4.3% to
$1.19 billion for the year ended
December 31, 2010.
- Our net interest rate spread and net interest margin were 1.48%
and 1.73%, respectively, for the fourth quarter of 2010 and 1.77%
and 2.01%, respectively, for 2010.
- The provision for loan losses amounted to $45.0 million for both the fourth quarter of 2010
and 2009, respectively. For the year ended December 31, 2010, the provision for loan losses
amounted to $195.0 million as
compared to $137.5 million for 2009.
- Our annualized return on average assets and annualized return
on average shareholders' equity for the fourth quarter of 2010 were
0.80% and 8.50%, respectively. Our return on average assets and
return on average shareholders' equity for the year ended
December 31, 2010 were 0.88% and
9.66%, respectively.
- Our annualized ratio of non-interest expense to average assets
was 0.46% for the fourth quarter of 2010 and 0.44% for 2010.
- Non-interest income amounted to $62.9
million for the fourth quarter of 2010 and $163.0 million for the year ended December 31, 2010. Included in non-interest
income were net realized securities gains of $60.2 million and $152.6
million, respectively, for the quarter and year ended
December 31, 2010.
- Deposits increased $595.1
million, or 2.4%, to $25.17
billion at December 31, 2010
from $24.58 billion at December 31, 2009.
- Borrowings decreased $300.0 million to
$29.68 billion at December 31,
2010 from $29.98 billion at
December 31, 2009. We modified
$4.03 billion of borrowings during
2010 to extend put dates by between three and five years.
Statement of Financial Condition Summary
Total assets increased $898.3
million, or 1.5%, to $61.17
billion at December 31, 2010
from $60.27 billion at December 31, 2009. The increase in total assets
reflected a $2.95 billion increase in
total mortgage-backed securities partially offset by a $1.25 billion decrease in investment securities
and a $947.2 million decrease in net
loans.
Our net loans decreased $947.2
million during year ended December
31, 2010 to $30.77 billion.
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 2010, we originated
$5.83 billion and purchased
$764.3 million of loans, compared to
originations of $6.06 billion and
purchases of $3.16 billion for 2009.
The origination and purchases of loans were offset by
principal repayments of $7.26 billion
in 2010 as compared to $6.77 billion
for 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 caused
increased levels of repayments 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 many of their loans to the GSEs.
We expect that the amount of loan purchases will continue to
be at reduced levels for the near-term.
Total mortgage-backed securities increased $2.95 billion during 2010 to $24.03 billion, reflecting purchases of
$15.49 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 $8.37
billion and sales of $3.92
billion. The sales resulted in net realized securities
gains of $152.6 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 $727.2
million, or 1.3%, to $55.66
billion at December 31, 2010
from $54.93 billion at December 31, 2009. The increase in total
liabilities primarily reflected a $595.1
million increase in deposits and a $438.2 million increase in amounts due to brokers
partially offset by a $300.0 million
decrease in borrowed funds. The increase in total deposits
reflected a $1.25 billion increase in
our money market accounts and a $151.5
million increase in our interest-bearing transaction
accounts and savings accounts. These increases were partially
offset by a decrease of $788.9
million in our time deposits as customers shifted deposits
to our money market savings account. Borrowings amounted to
$29.68 billion at December 31, 2010 as compared to $29.98 billion at December
31, 2009. During 2010, we modified $4.03 billion of borrowings to extend the put
dates of the borrowings by between three and five years.
Total shareholders' equity increased $171.1 million to $5.51 billion at December 31, 2010 from $5.34 billion at December
31, 2009. The increase was primarily due to net income of
$537.2 million for the year ended
December 31, 2010. These increases to
shareholders' equity were partially offset by cash dividends paid
to common shareholders of $295.8
million and a $99.1 million
decrease in accumulated other comprehensive income. At
December 31, 2010, our shareholders'
equity to asset ratio was 9.01% and our tangible book value per
share was $10.85.
The accumulated other comprehensive income of $85.4 million at December
31, 2010 includes a $117.3
million after-tax net unrealized gain on securities
available for sale ($198.3 million
pre-tax) partially offset by a $31.9
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 economic
recovery is continuing, though at a rate that has been insufficient
to bring down unemployment. 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 9.4% in December
2010 as compared to 9.6% in September
2010 and 9.9% in December
2009. The FOMC decided to maintain the overnight
lending rate at zero to 0.25% during the fourth quarter of 2010. As
a result, short-term market interest rates have remained at low
levels during the fourth quarter of 2010. The yields on
mortgage-related assets have also remained at low levels during
that same quarter. Our net interest rate spread decreased to
1.48% for the fourth quarter of 2010 as compared to 1.73% for the
linked third quarter of 2010 and 2.04% for the fourth quarter of
2009. Our net interest margin decreased to 1.73% for the
fourth quarter of 2010 as compared to 1.97% for the linked third
quarter of 2010 and 2.30% for the fourth quarter of 2009. The
decrease in net interest margin during the fourth quarter of 2010
is primarily due to the low market interest rates that 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 88.4% of
our average interest-earning assets during the 2010 fourth
quarter.
Net interest income decreased $80.0
million, or 24.1%, to $251.8
million for the fourth quarter of 2010 as compared to
$331.8 million for the fourth quarter
of 2009. Net interest income decreased $52.7 million, or 4.3%, to $1.19 billion for 2010 from $1.24 billion for 2009. During 2010, our net
interest rate spread decreased 16 basis points to 1.77% and our net
interest margin decreased 21 basis points to 2.01% as compared to
2009.
Total interest and dividend income for the fourth quarter of
2010 decreased $103.3 million, or
13.8%, to $643.2 million from
$746.5 million for the fourth quarter
of 2009. The decrease in total interest and dividend income was
primarily due to a decrease of 78 basis points in the annualized
weighted-average yield on total interest-earning assets to 4.35%
for the quarter ended December 31,
2010 from 5.13% 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 $871.1
million, or 1.5%, to $59.10
billion for the fourth quarter of 2010 as compared to
$58.23 billion for the fourth quarter
of 2009.
Total interest and dividend income decreased $157.3 million, or 5.4%, to $2.78 billion for the year ended December 31, 2010 from $2.94 billion for the year ended December 31, 2009. The decrease in interest
and dividend income was due to a decrease of 54 basis points in the
weighted-average yield on total interest-earning assets to 4.70%
for the year ended December 31, 2010
from 5.24% for 2009. The decrease in the weighted-average yield was
partially offset by an increase in the average balance of total
interest-earning assets of $3.14
billion, or 5.6%, to $59.27
billion for the year ended December
31, 2010 as compared to $56.13
billion for the year ended December
31, 2009.
Interest on first mortgage loans decreased $31.2 million to $395.6 million for the fourth
quarter of 2010 as compared to $426.8
million for the comparable period in 2009. This was
primarily due to a 39 basis point decrease in the weighted-average
yield to 5.12% from 5.51% for the 2009 fourth quarter. The decrease
in interest income on mortgage loans was also due to an
$84.1 million decrease in the average
balance of first mortgage loans to $30.91
billion. During 2010 our mortgage loan portfolio decreased
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 a greater percentage of
their product to the GSEs.
For the year ended December 31,
2010, interest on first mortgage loans decreased slightly to
$1.67 billion as compared to
$1.68 billion for the year ended
December 31, 2009. This was primarily
due to a 26 basis point decrease in the weighted-average yield to
5.31% for the year ended December 31,
2010 as compared to 5.57% for 2009. The effect of the
decrease in the weighted-average yield was partially offset by a
$1.27 billion increase in the average
balance of first mortgage loans to $31.40
billion, which reflected our historical emphasis on the
growth of our mortgage loan portfolio.
Interest on mortgage-backed securities decreased $49.4 million to $191.1 million for the fourth
quarter of 2010 as compared to $240.5
million for the fourth quarter of 2009. This decrease
was due primarily to a 124 basis point decrease in the
weighted-average yield to 3.64% for the fourth quarter of 2010 from
4.88% for the fourth quarter of 2009. The effect of the decrease in
the weighted-average yield was partially offset by a $1.30 billion increase in the average balance of
mortgage-backed securities to $20.99
billion during the fourth quarter of 2010 as compared to
$19.69 billion for the fourth quarter
of 2009.
Interest on mortgage-backed securities decreased $132.1 million to $851.6 million for the year
ended December 31, 2010 as compared
to $983.7 million for the year ended
December 31, 2009. This
decrease was due primarily to an 88 basis point decrease in the
weighted-average yield to 4.14% during 2010 from 5.02% for 2009.
The effect of the decrease in the weighted-average yield was
partially offset by a $953.0 million
increase in the average balance of mortgage-backed securities to
$20.56 billion during 2010 as
compared to $19.60 billion for
2009.
The increases in the average balances of mortgage-backed
securities were due to purchases of primarily variable-rate hybrid
securities. We purchased these securities to reinvest cash
flows resulting from prepayments on our mortgage loans and the
calls of investment securities. The elevated levels of
prepayments, weak home purchase activity and the GSEs involvement
in the mortgage market have made it difficult for us to reinvest
cash flows into the mortgage portfolio. 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 $24.8 million to $36.6 million for the fourth
quarter of 2010 as compared to $61.4
million for the fourth quarter of 2009. This decrease
was due primarily to a decrease in the average yield of investment
securities of 117 basis points to 3.36% for the fourth quarter of
2010 as compared to 4.53% for the fourth quarter of 2009. The
decrease in interest income on investment securities was also due
to a $1.05 billion decrease in the
average balance of investment securities to $4.37 billion for the fourth quarter of 2010 from
$5.42 billion for the fourth quarter
of 2009.
For the year ended December 31,
2010, interest on investment securities decreased
$14.7 million to $198.7 million as
compared to $213.4 million for the
year ended December 31, 2009.
This decrease was due primarily to a decrease in the average
yield of investment securities of 68 basis points to 3.98% for 2010
as compared to 4.66% for 2009. The decrease in the
weighted-average yield on investment securities was partially
offset by a $415.1 million increase
in the average balance of investment securities to $4.99 billion during 2010 from $4.58 billion for 2009.
Dividends on Federal Home Loan Bank of New York ("FHLB") stock increased $2.0 million, or 16.1%, to $14.4 million for the fourth quarter of 2010 as
compared to $12.4 million for the
fourth quarter of 2009. This increase was due primarily to a
94 basis point increase in the average dividend yield earned to
6.60% as compared to 5.66% for the fourth quarter of 2009. The
increase in the average dividend yield was partially offset by a
$944,000 decrease in the average
balance to $875.7 million for the
fourth quarter of 2010 as compared to $876.6
million for the fourth quarter of 2009.
Dividends on FHLB stock increased $3.0
million, or 7.0%, to $46.1
million for 2010 as compared to $43.1
million for 2009. This increase was due primarily to a
33 basis point increase in the average dividend yield earned to
5.25% for 2010 as compared to 4.92% for 2009. The increase in
dividend income was also due to a $2.0
million increase in the average balance to $878.7 million for 2010 as compared to
$876.7 million for 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 $985,000 for the fourth quarter of 2010 as
compared to $479,000 for the fourth
quarter of 2009. The average balance of Federal funds sold
amounted to $1.62 billion for the
fourth quarter of 2010 as compared to $880.1
million for the fourth quarter of 2009. The yield
earned on Federal funds sold was 0.24% for the 2010 fourth quarter
and 0.22% for the 2009 fourth 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 $2.6 million for 2010 as compared to $1.2 million for 2009. The average balance
of Federal funds sold amounted to $1.10
billion for 2010 as compared to $566.1 million for 2009. The yield earned
on Federal funds sold was 0.24% for the year ended December 31, 2010 and 0.21% for the year ended
December 31, 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 December 31, 2010 decreased $23.3 million, or 5.6%, to $391.4 million from $414.7
million for the quarter ended December 31, 2009. This decrease was
primarily due to a 22 basis point decrease in the weighted-average
cost of total interest-bearing liabilities to 2.87% for the quarter
ended December 31, 2010 compared with
3.09% for the quarter ended December 31,
2009. The decrease was partially offset by a $743.8 million, or 1.4%, increase in the average
balance of total interest-bearing liabilities to $54.08 billion for the quarter ended December 31, 2010 compared with $53.33 billion for the fourth quarter of
2009.
Total interest expense for the year ended December 31, 2010 decreased $104.6 million, or 6.2%, to $1.59 billion from $1.70
billion for the year ended December
31, 2009. This decrease was primarily due to a 38
basis point decrease in the weighted-average cost of total
interest-bearing liabilities to 2.93% for the year ended
December 31, 2010 compared with 3.31%
for the year ended December 31, 2009.
The effect of the decrease in the weighted-average cost was
partially offset by a $3.13 billion,
or 6.1%, increase in the average balance of total interest-bearing
liabilities to $54.40 billion for the
year ended December 31, 2010 compared
with $51.27 billion for 2009.
Interest expense on deposits decreased $22.3 million, or 20.6%, to $86.2 million for the fourth quarter of 2010 from
$108.5 million for the fourth quarter
of 2009. This decrease is due primarily to a decrease in the
average cost of interest-bearing deposits of 44 basis points to
1.41% for the fourth quarter of 2010 as compared to 1.85% for the
fourth quarter of 2009. The decrease was partially offset by
a $1.00 billion increase in the
average balance of interest-bearing deposits to $24.32 billion during the fourth quarter of 2010
as compared to $23.32 billion for the
fourth quarter of 2009.
For the year ended December 31,
2010, interest expense on deposits decreased $107.2 million, or 22.2%, to $376.3 million from $483.5
million for the year ended December
31, 2009. This decrease is due primarily to a decrease
in the average cost of interest-bearing deposits of 75 basis points
to 1.54% for 2010 compared with 2.29% for 2009. The decrease
was partially offset by a $3.36
billion increase in the average balance of interest-bearing
deposits to $24.49 billion during
2010 as compared to $21.13 billion
for 2009.
The increases in the average balances of interest-bearing
deposits reflect our expanded branch network and our efforts to
grow deposits in 2009 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. We lowered our deposit rates during 2010 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 and our decision to lower deposit rates
to slow deposit growth. At December
31, 2010, time deposits scheduled to mature within one year
totaled $10.60 billion with an
average cost of 1.32%. These time deposits are scheduled to
mature as follows: $4.58 billion with
an average cost of 1.18% in the first quarter of 2011, $2.96 billion with an average cost of 1.19% in
the second quarter of 2011, $1.40
billion with an average cost of 1.44% in the third quarter
of 2011 and $1.66 billion with an
average cost of 1.82% in the fourth 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
1.25%. 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, in the past, 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 2010 with
deposits. Substantially all of our borrowings are putable
quarterly at the discretion of the lender after an initial non-put
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
put back will not increase substantially unless interest rates were
to increase by at least 200 basis points.
Interest expense on borrowed funds decreased $1.1 million to $305.2 million for the fourth
quarter of 2010 as compared to $306.3
million for the fourth quarter of 2009. This decrease was
primarily due to a $259.8 million
decrease in the average balance of borrowed funds to $29.76 billion for the fourth quarter of 2010 as
compared to $30.02 billion for the
fourth quarter of 2009. This decrease was substantially
offset by a 2 basis point increase in the weighted-average cost of
borrowed funds to 4.07% for the fourth quarter of 2010 as compared
to 4.05% for the fourth quarter of 2009. The slight increase
in the average cost of our borrowings is due primarily to our
strategy of modifying current borrowings to extend the put
dates.
Interest expense on borrowed funds increased $2.5 million to $1.22 billion for the year ended
December 31, 2010 as compared to
$1.21 billion for 2009. This increase
was primarily due to a 4 basis point increase in the
weighted-average cost of borrowed funds to 4.07% for 2010 as
compared to 4.03% for 2009. This increase was primarily
offset by a $226.9 million decrease
in the average balance of borrowed funds to $29.91 billion for 2010 as compared to
$30.14 billion for 2009.
The provision for loan losses amounted to $45.0 million for the quarters ended December 31, 2010 and 2009, respectively.
For the linked third quarter of 2010, the provision for loan
losses amounted to $50.0 million.
For the year ended December 31,
2010, the provision for loan losses amounted to $195.0 million as compared to $137.5 million for 2009. The increase in
our provision for loan losses during 2010 as compared to 2009 was a
result of the increase in non-performing loans, continuing elevated
levels of unemployment and an increase in charge-offs. The
decrease in the provision for loan losses during the fourth quarter
of 2010 as compared to the linked third quarter was due to a
slower growth rate in non-performing loans, a stable level of
charge-offs, stabilizing economic conditions and slightly improved
unemployment and underemployment rates. In addition, home
prices appear to have started to stabilize in many of our lending
markets. While there has been a modest improvement in the
factors we consider in the determination of the allowance for loan
losses, adverse changes in these factors in the future may require
increases in the allowance for loan losses and in the provision for
loan losses. Non-performing loans, defined as non-accruing
loans and accruing loans delinquent 90 days or more, amounted to
$871.3 million at December 31, 2010 compared with $837.5 million at September 30, 2010 and $627.7 million at December
31, 2009. The ratio of non-performing loans to total loans
was 2.82% at December 31, 2010
compared with 2.64% at September 30,
2010 and 1.98% at December 31,
2009. Loans delinquent 30 to 59 days amounted to
$418.9 million at December 31, 2010 as compared to $432.7 million at September 30, 2010 and $430.9 million at December
31, 2009. Loans delinquent 60 to 89 days amounted to
$193.2 million at December 31, 2010 as compared to $188.6 million at September 30, 2010 and $182.5 million at December
31, 2009. The allowance for loans losses amounted to
$236.6 million and $140.1 million at December
31, 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
0.77% and 27.15%, respectively at December
31, 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 weak
economic conditions during 2010, 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 $24.7
million for the quarter ended December 31, 2010 as compared to net charge-offs
of $19.8 million for the same quarter
in 2009. For the year ended December
31, 2010, net charge-offs amounted to $98.5 million as compared to $47.2 million of net charge-offs for 2009.
The ratio of net charge-offs to average loans was 0.32% and
0.31% for the three months and year ended December 31, 2010, respectively as compared to
0.25% and 0.15% for the same respective periods in 2009.
Total non-interest income was $62.9
million for the fourth quarter 2010 as compared to
$2.2 million for the same quarter in
2009. Included in non-interest income for the three month period
ended December 31, 2010 were net
gains on securities transactions of $60.2
million which resulted from the sale of $2.02 billion of mortgage-backed securities
available-for-sale.
Total non-interest income for the year ended December 31, 2010 was $163.0 million compared with $33.6 million for 2009. Included in
non-interest income for the year ended December 31, 2010 were net gains on securities
transactions of $152.6 million which
resulted from the sale of $3.92
billion of mortgage-backed securities available-for-sale.
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. 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 $6.7
million, or 10.7%, to $69.6
million for the fourth quarter of 2010 from $62.9 million for the fourth quarter of 2009.
The increase is primarily due to increases of $3.2 million in Federal deposit insurance expense
due primarily to an increase in total deposits, $2.4 million in other expense and $893,000 in compensation and employee benefits
expense. The increase in compensation and employee benefits
included a $2.2 million increase in
compensation costs due primarily to normal increases in salary as
well as additional full time employees. This increase was partially
offset by a $1.4 million decrease in
expense related to our stock benefit plans. At December 31, 2010, we had 1,562 full-time
equivalent employees as compared to 1,482 at December 31, 2009. Included in other
expense for the fourth quarter of 2010 were write-downs on
foreclosed real estate and net losses on the sale of foreclosed
real estate of $1.6 million as
compared to $325,000 for the fourth
quarter of 2009. In addition, the increase in other expense
is also due to an $887,000 increase
in regulatory and professional services.
Total non-interest expense increased $791,000 to $266.4 million for the year ended
December 31, 2010 from $265.6 million for the year ended December 31, 2009. The increase is
primarily due to a $20.9 million
increase in Federal deposit insurance expense and a $3.9 million increase in other expense partially
offset by the absence of the FDIC special assessment of
$21.1 million and a decrease of
$3.3 million in compensation and
employee benefits expense. The decrease in compensation and
employee benefits expense included a $6.0
million decrease in expense related to our stock benefit
plans and a $3.6 million decrease in
pension expense. These decreases were partially offset by a
$5.8 million increase in compensation
costs due primarily to normal increases in salary as well as
additional full time employees. 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 increase in
other expense is due primarily to a $2.9
million increase in regulatory and professional services.
Included in other non-interest expense for the year ended
December 31, 2010 were write-downs on
foreclosed real estate and net losses on the sale of foreclosed
real estate, of $2.7 million as
compared to $2.4 million for 2009.
Our efficiency ratio was 22.10% for the 2010 fourth quarter as
compared to 18.84% for the 2009 fourth quarter. For the year
ended December 31, 2010, our
efficiency ratio was 19.68% compared with 20.80% for 2009.
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 2010 was 0.46% as compared to
0.42% for the fourth quarter of 2009. Our ratio of
non-interest expense to average total assets for the year ended
December 31, 2010 was 0.44% compared
with 0.46% for the year ended December 31,
2009.
Income tax expense amounted to $79.0
million for the fourth quarter of 2010 compared with
$89.5 million for the same quarter in
2009. Our effective tax rate for the fourth quarter of 2010
was 39.48% compared with 39.58% for the fourth quarter of 2009.
Income tax expense for the year ended December 31, 2010 was $355.2 million compared with $346.7 million for the year ended December 31, 2009. Our effective tax rate
for the year ended December 31, 2010
was 39.80% compared with 39.67% for the year ended December 31, 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
|
|
|
|
|
December
31,
|
|
December
31,
|
|
|
|
2010
|
2009
|
|
|
(In thousands, except share and
per share amounts)
|
(unaudited)
|
|
|
|
|
|
|
|
|
|
|
Assets:
|
|
|
|
|
|
|
Cash and due from
banks
|
|
$
175,769
|
|
$
198,752
|
|
|
Federal funds sold and other
overnight deposits
|
|
493,628
|
|
362,449
|
|
|
Total cash and cash equivalents
|
|
669,397
|
|
561,201
|
|
|
|
|
|
|
|
|
|
|
Securities available for
sale:
|
|
|
|
|
|
|
Mortgage-backed
securities
|
|
18,120,537
|
|
11,116,531
|
|
|
Investment
securities
|
|
89,795
|
|
1,095,240
|
|
|
Securities held to
maturity:
|
|
|
|
|
|
|
Mortgage-backed
securities
|
|
5,914,372
|
|
9,963,554
|
|
|
Investment
securities
|
|
3,939,006
|
|
4,187,704
|
|
|
|
Total securities
|
|
28,063,710
|
|
26,363,029
|
|
|
|
|
|
|
|
|
|
|
Loans
|
|
|
30,923,897
|
|
31,779,921
|
|
|
Net deferred loan
costs
|
|
86,633
|
|
81,307
|
|
|
Allowance for loan
losses
|
|
(236,574)
|
|
(140,074)
|
|
|
|
Net loans
|
|
30,773,956
|
|
31,721,154
|
|
|
|
|
|
|
|
|
|
|
Federal Home Loan Bank of New
York stock
|
|
871,940
|
|
874,768
|
|
|
Foreclosed real estate,
net
|
|
45,693
|
|
16,736
|
|
|
Accrued interest
receivable
|
|
245,546
|
|
304,091
|
|
|
Banking premises and equipment,
net
|
|
69,444
|
|
70,116
|
|
|
Goodwill
|
|
152,109
|
|
152,109
|
|
|
Other assets
|
|
274,238
|
|
204,556
|
|
|
|
Total Assets
|
|
$
61,166,033
|
|
$
60,267,760
|
|
|
|
|
|
|
|
|
|
|
Liabilities and Shareholders’
Equity:
|
|
|
|
|
|
|
Deposits:
|
|
|
|
|
|
|
Interest-bearing
|
|
$
24,605,896
|
|
$
23,992,007
|
|
|
Noninterest-bearing
|
|
567,230
|
|
586,041
|
|
|
|
Total deposits
|
|
25,173,126
|
|
24,578,048
|
|
|
|
|
|
|
|
|
|
|
Repurchase agreements
|
|
14,800,000
|
|
15,100,000
|
|
|
Federal Home Loan Bank of New
York advances
|
|
14,875,000
|
|
14,875,000
|
|
|
|
Total borrowed funds
|
|
29,675,000
|
|
29,975,000
|
|
|
|
|
|
|
|
|
|
|
Due to brokers
|
|
538,200
|
|
100,000
|
|
|
Accrued expenses and other
liabilities
|
|
269,469
|
|
275,560
|
|
|
|
Total liabilities
|
|
55,655,795
|
|
54,928,608
|
|
|
|
|
|
|
|
|
|
|
Common stock, $0.01 par value,
3,200,000,000 shares authorized;
|
|
|
|
|
|
|
|
741,466,555 shares issued;
526,718,310 shares outstanding
|
|
|
|
|
|
|
|
and 526,493,676 shares
outstanding at December 31, 2010
|
|
|
|
|
|
|
|
and 2009,
respectively
|
|
7,415
|
|
7,415
|
|
|
Additional paid-in
capital
|
|
4,705,255
|
|
4,683,414
|
|
|
Retained earnings
|
|
2,642,338
|
|
2,401,606
|
|
|
Treasury stock, at cost;
214,748,245 and 214,972,879 shares at
|
|
|
|
|
|
|
|
December 31, 2010 and 2009,
respectively
|
|
(1,725,946)
|
|
(1,727,579)
|
|
|
Unallocated common stock held by
the employee stock ownership plan
|
|
(204,230)
|
|
(210,237)
|
|
|
Accumulated other comprehensive
income, net of tax
|
|
85,406
|
|
184,533
|
|
|
|
Total shareholders’
equity
|
|
5,510,238
|
|
5,339,152
|
|
|
|
Total Liabilities and Shareholders’ Equity
|
|
$
61,166,033
|
|
$
60,267,760
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Hudson City
Bancorp, Inc. and Subsidiary
Consolidated
Statements of Income
(Unaudited)
|
|
|
|
|
|
|
|
|
|
For the
Three Months
Ended
December 31,
|
|
For the
Years
Ended
December 31,
|
|
|
|
|
|
|
|
2010
|
|
2009
|
|
2010
|
|
2009
|
|
|
|
|
|
|
|
(In
thousands, except per share data)
|
|
Interest and Dividend
Income:
|
|
|
|
|
|
|
|
|
|
|
First mortgage loans
|
|
$
395,551
|
|
$
426,778
|
|
$
1,667,027
|
|
$
1,678,789
|
|
|
Consumer and other
loans
|
|
4,471
|
|
5,047
|
|
18,409
|
|
21,676
|
|
|
Mortgage-backed securities held
to maturity
|
|
70,795
|
|
125,337
|
|
356,023
|
|
493,549
|
|
|
Mortgage-backed securities
available for sale
|
|
120,349
|
|
115,114
|
|
495,572
|
|
490,109
|
|
|
Investment securities held to
maturity
|
|
35,526
|
|
41,661
|
|
179,632
|
|
86,581
|
|
|
Investment securities available
for sale
|
|
1,120
|
|
19,719
|
|
19,112
|
|
126,793
|
|
|
Dividends on Federal Home Loan
Bank of New York stock
|
|
14,439
|
|
12,405
|
|
46,107
|
|
43,103
|
|
|
Federal funds sold and other
overnight deposits
|
|
985
|
|
479
|
|
2,614
|
|
1,186
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Total interest and
dividend income
|
|
643,236
|
|
746,540
|
|
2,784,496
|
|
2,941,786
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Interest Expense:
|
|
|
|
|
|
|
|
|
|
|
Deposits
|
|
86,232
|
|
108,465
|
|
376,347
|
|
483,468
|
|
|
Borrowed funds
|
|
305,170
|
|
306,282
|
|
1,217,322
|
|
1,214,840
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Total interest
expense
|
|
391,402
|
|
414,747
|
|
1,593,669
|
|
1,698,308
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Net interest income
|
|
251,834
|
|
331,793
|
|
1,190,827
|
|
1,243,478
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Provision for Loan
Losses
|
|
45,000
|
|
45,000
|
|
195,000
|
|
137,500
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Net interest income after
provision for loan losses
|
|
206,834
|
|
286,793
|
|
995,827
|
|
1,105,978
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Non-Interest Income:
|
|
|
|
|
|
|
|
|
|
|
Service charges and other
income
|
|
2,713
|
|
2,192
|
|
10,369
|
|
9,399
|
|
|
Gain on securities transactions,
net
|
|
60,214
|
|
-
|
|
152,625
|
|
24,185
|
|
|
Total non-interest
income
|
|
62,927
|
|
2,192
|
|
162,994
|
|
33,584
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Non-Interest Expense:
|
|
|
|
|
|
|
|
|
|
|
Compensation and employee
benefits
|
|
34,798
|
|
33,905
|
|
133,803
|
|
137,071
|
|
|
Net occupancy expense
|
|
8,143
|
|
8,010
|
|
32,689
|
|
32,270
|
|
|
Federal deposit insurance
assessment
|
|
15,030
|
|
11,800
|
|
55,957
|
|
35,094
|
|
|
FDIC special
assessment
|
|
-
|
|
-
|
|
-
|
|
21,098
|
|
|
Other expense
|
|
11,584
|
|
9,220
|
|
43,939
|
|
40,063
|
|
|
Total non-interest
expense
|
|
69,555
|
|
62,935
|
|
266,388
|
|
265,596
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Income before income tax
expense
|
|
200,206
|
|
226,050
|
|
892,433
|
|
873,966
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Income tax expense
|
|
79,045
|
|
89,474
|
|
355,227
|
|
346,722
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Net income
|
|
$
121,161
|
|
$
136,576
|
|
$
537,206
|
|
$
527,244
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Basic earnings per
share
|
|
$
0.25
|
|
$
0.28
|
|
$
1.09
|
|
$
1.08
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Diluted earnings per
share
|
|
$
0.25
|
|
$
0.28
|
|
$
1.09
|
|
$
1.07
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Weighted Average Number of
Common Shares Outstanding:
|
|
|
|
|
|
|
|
|
|
|
|
Basic
|
|
|
|
493,505,586
|
|
491,439,292
|
|
493,032,873
|
|
488,908,260
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Diluted
|
|
|
|
494,146,907
|
|
492,231,761
|
|
494,314,390
|
|
491,295,511
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Hudson City
Bancorp, Inc. and Subsidiary
Consolidated
Average Balance Sheets
(Unaudited)
|
|
|
|
|
|
|
|
|
|
|
For the
Three Months Ended December 31,
|
|
|
|
|
|
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)
|
$ 30,913,700
|
|
$ 395,551
|
|
5.12
|
%
|
$ 30,997,843
|
|
$ 426,778
|
|
5.51
|
%
|
|
|
Consumer and other
loans
|
334,216
|
|
4,471
|
|
5.35
|
|
366,953
|
|
5,047
|
|
5.50
|
|
|
|
Federal funds sold and other
overnight deposits
|
1,620,716
|
|
985
|
|
0.24
|
|
880,067
|
|
479
|
|
0.22
|
|
|
|
Mortgage-backed securities at
amortized cost (4)
|
20,988,617
|
|
191,144
|
|
3.64
|
|
19,693,013
|
|
240,451
|
|
4.88
|
|
|
|
Federal Home Loan Bank
stock
|
875,682
|
|
14,439
|
|
6.60
|
|
876,626
|
|
12,405
|
|
5.66
|
|
|
|
Investment securities, at
amortized cost
|
4,368,329
|
|
36,646
|
|
3.36
|
|
5,415,707
|
|
61,380
|
|
4.53
|
|
|
|
|
Total interest-earning
assets
|
59,101,260
|
|
643,236
|
|
4.35
|
|
58,230,209
|
|
746,540
|
|
5.13
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Noninterest-earnings
assets
|
1,541,372
|
|
|
|
|
|
1,346,298
|
|
|
|
|
|
|
|
|
Total Assets
|
$ 60,642,632
|
|
|
|
|
|
$ 59,576,507
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Liabilities and Shareholders’
Equity:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Interest-bearing
liabilities:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Savings accounts
|
$
862,473
|
|
1,407
|
|
0.65
|
|
$
774,812
|
|
1,460
|
|
0.75
|
|
|
|
Interest-bearing transaction
accounts
|
2,283,511
|
|
4,547
|
|
0.79
|
|
1,958,061
|
|
7,444
|
|
1.51
|
|
|
|
Money market accounts
|
5,498,997
|
|
13,573
|
|
0.98
|
|
4,905,054
|
|
18,445
|
|
1.49
|
|
|
|
Time deposits
|
15,677,530
|
|
66,705
|
|
1.69
|
|
15,680,966
|
|
81,116
|
|
2.05
|
|
|
|
|
Total interest-bearing
deposits
|
24,322,511
|
|
86,232
|
|
1.41
|
|
23,318,893
|
|
108,465
|
|
1.85
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Repurchase agreements
|
14,880,978
|
|
153,458
|
|
4.09
|
|
15,100,000
|
|
154,524
|
|
4.06
|
|
|
|
Federal Home Loan Bank of New
York advances
|
14,875,000
|
|
151,712
|
|
4.05
|
|
14,915,761
|
|
151,758
|
|
4.04
|
|
|
|
|
Total borrowed funds
|
29,755,978
|
|
305,170
|
|
4.07
|
|
30,015,761
|
|
306,282
|
|
4.05
|
|
|
|
|
Total interest-bearing
liabilities
|
54,078,489
|
|
391,402
|
|
2.87
|
|
53,334,654
|
|
414,747
|
|
3.09
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Noninterest-bearing
liabilities:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Noninterest-bearing
deposits
|
593,393
|
|
|
|
|
|
573,011
|
|
|
|
|
|
|
|
Other noninterest-bearing
liabilities
|
268,040
|
|
|
|
|
|
319,989
|
|
|
|
|
|
|
|
|
Total noninterest-bearing
liabilities
|
861,433
|
|
|
|
|
|
893,000
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Total liabilities
|
54,939,922
|
|
|
|
|
|
54,227,654
|
|
|
|
|
|
|
Shareholders’ equity
|
5,702,710
|
|
|
|
|
|
5,348,853
|
|
|
|
|
|
|
|
|
Total Liabilities and
Shareholders’ Equity
|
$ 60,642,632
|
|
|
|
|
|
$ 59,576,507
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Net interest income/net interest
rate spread (2)
|
|
|
$ 251,834
|
|
1.48
|
|
|
|
$ 331,793
|
|
2.04
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Net interest-earning assets/net
interest margin (3)
|
$
5,022,771
|
|
|
|
1.73
|
%
|
$
4,895,555
|
|
|
|
2.30
|
%
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
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
$218.0 million and $167.1 million for the quarters ended December
31, 2010 and 2009, respectively.
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Hudson City
Bancorp, Inc. and Subsidiary
Consolidated
Average Balance Sheets
(Unaudited)
|
|
|
|
|
|
|
|
|
|
|
For the
Years Ended December 31,
|
|
|
|
|
|
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)
|
$ 31,395,378
|
|
$1,667,027
|
|
5.31
|
%
|
$ 30,126,469
|
|
$1,678,789
|
|
5.57
|
%
|
|
|
Consumer and other
loans
|
346,166
|
|
18,409
|
|
5.32
|
|
381,029
|
|
21,676
|
|
5.69
|
|
|
|
Federal funds sold and other
overnight deposits
|
1,102,575
|
|
2,614
|
|
0.24
|
|
566,079
|
|
1,186
|
|
0.21
|
|
|
|
Mortgage-backed securities at
amortized cost (4)
|
20,557,582
|
|
851,595
|
|
4.14
|
|
19,604,600
|
|
983,658
|
|
5.02
|
|
|
|
Federal Home Loan Bank
stock
|
878,672
|
|
46,107
|
|
5.25
|
|
876,736
|
|
43,103
|
|
4.92
|
|
|
|
Investment securities, at
amortized cost
|
4,992,249
|
|
198,744
|
|
3.98
|
|
4,577,148
|
|
213,374
|
|
4.66
|
|
|
|
|
Total interest-earning
assets
|
59,272,622
|
|
2,784,496
|
|
4.70
|
|
56,132,061
|
|
2,941,786
|
|
5.24
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Noninterest-earnings
assets
|
1,560,439
|
|
|
|
|
|
1,209,257
|
|
|
|
|
|
|
|
|
Total Assets
|
$ 60,833,061
|
|
|
|
|
|
$ 57,341,318
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Liabilities and Shareholders’
Equity:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Interest-bearing
liabilities:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Savings accounts
|
$
839,029
|
|
5,952
|
|
0.71
|
|
$
749,439
|
|
5,640
|
|
0.75
|
|
|
|
Interest-bearing transaction
accounts
|
2,323,618
|
|
23,996
|
|
1.03
|
|
1,789,361
|
|
31,903
|
|
1.78
|
|
|
|
Money market accounts
|
5,217,815
|
|
54,949
|
|
1.05
|
|
3,823,116
|
|
69,008
|
|
1.81
|
|
|
|
Time deposits
|
16,111,567
|
|
291,450
|
|
1.81
|
|
14,771,051
|
|
376,917
|
|
2.55
|
|
|
|
|
Total interest-bearing
deposits
|
24,492,029
|
|
376,347
|
|
1.54
|
|
21,132,967
|
|
483,468
|
|
2.29
|
|
|
|
Repurchase agreements
|
15,034,110
|
|
616,488
|
|
4.10
|
|
15,100,221
|
|
611,776
|
|
4.05
|
|
|
|
Federal Home Loan Bank of New
York advances
|
14,875,000
|
|
600,834
|
|
4.04
|
|
15,035,798
|
|
603,064
|
|
4.01
|
|
|
|
|
Total borrowed funds
|
29,909,110
|
|
1,217,322
|
|
4.07
|
|
30,136,019
|
|
1,214,840
|
|
4.03
|
|
|
|
|
Total interest-bearing
liabilities
|
54,401,139
|
|
1,593,669
|
|
2.93
|
|
51,268,986
|
|
1,698,308
|
|
3.31
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Noninterest-bearing
liabilities:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Noninterest-bearing
deposits
|
588,150
|
|
|
|
|
|
576,575
|
|
|
|
|
|
|
|
Other noninterest-bearing
liabilities
|
284,335
|
|
|
|
|
|
317,972
|
|
|
|
|
|
|
|
|
Total noninterest-bearing
liabilities
|
872,485
|
|
|
|
|
|
894,547
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Total liabilities
|
55,273,624
|
|
|
|
|
|
52,163,533
|
|
|
|
|
|
|
Shareholders’ equity
|
5,559,437
|
|
|
|
|
|
5,177,785
|
|
|
|
|
|
|
|
|
Total Liabilities and
Shareholders’ Equity
|
$ 60,833,061
|
|
|
|
|
|
$ 57,341,318
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Net interest income/net interest
rate spread (2)
|
|
|
$1,190,827
|
|
1.77
|
|
|
|
$1,243,478
|
|
1.93
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Net interest-earning assets/net
interest margin (3)
|
$
4,871,483
|
|
|
|
2.01
|
%
|
$
4,863,075
|
|
|
|
2.22
|
%
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
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
$297.1 million and $164.3 million for the years ended December 31,
2010 and 2009, respectively.
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Hudson City
Bancorp, Inc. and Subsidiary
Book Value
Calculations
|
|
|
|
|
|
|
|
|
December
31,
|
|
|
|
|
2010
|
|
|
(In thousands, except share and
per share amounts)
|
|
|
|
|
|
|
|
|
|
Shareholders’ equity
|
|
$
5,510,238
|
|
|
Goodwill and other intangible
assets
|
|
(156,714)
|
|
|
Tangible Shareholders'
equity
|
|
$
5,353,524
|
|
|
|
|
|
|
|
Book Value Share
Computation:
|
|
|
|
|
Issued
|
|
741,466,555
|
|
|
Treasury
shares
|
|
(214,748,245)
|
|
|
Shares outstanding
|
|
526,718,310
|
|
|
Unallocated ESOP
shares
|
|
(32,714,280)
|
|
|
Unvested RRP
shares
|
|
(282,583)
|
|
|
Shares in
trust
|
|
(164,845)
|
|
|
Book value shares
|
|
493,556,602
|
|
|
|
|
|
|
|
Book value per share
|
|
$
11.16
|
|
|
|
|
|
|
|
Tangible book value per
share
|
|
$
10.85
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Hudson City
Bancorp, Inc.
Other
Financial Data
Securities Portfolio at December
31, 2010:
|
|
|
|
|
|
|
|
|
|
Amortized
|
|
Estimated
|
|
Unrealized
|
|
|
Cost
|
|
Fair
Value
|
|
Gain/(Loss)
|
|
|
|
|
(dollars in
thousands)
|
|
|
|
Held to Maturity:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Mortgage-backed
securities:
|
|
|
|
|
|
|
FHLMC
|
$
2,943,565
|
|
$
3,091,813
|
|
$
148,248
|
|
FNMA
|
1,622,994
|
|
1,710,265
|
|
87,271
|
|
FHLMC and FNMA
CMO's
|
1,248,926
|
|
1,295,740
|
|
46,814
|
|
GNMA
|
98,887
|
|
101,689
|
|
2,802
|
|
Total
mortgage-backed securities
|
5,914,372
|
|
6,199,507
|
|
285,135
|
|
|
|
|
|
|
|
|
Investment
securities:
|
|
|
|
|
|
|
United States GSE
debt
|
3,939,006
|
|
3,867,488
|
|
(71,518)
|
|
Total
investment securities
|
3,939,006
|
|
3,867,488
|
|
(71,518)
|
|
|
|
|
|
|
|
|
Total held to
maturity
|
$
9,853,378
|
|
$
10,066,995
|
|
$
213,617
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Available for
sale:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Mortgage-backed
securities:
|
|
|
|
|
|
|
FHLMC
|
$
5,521,741
|
|
$
5,619,172
|
|
$
97,431
|
|
FNMA
|
10,333,033
|
|
10,397,788
|
|
64,755
|
|
FHLMC and FNMA
CMO's
|
509,755
|
|
523,095
|
|
13,340
|
|
GNMA
|
1,560,755
|
|
1,580,482
|
|
19,727
|
|
Total
mortgage-backed securities
|
17,925,284
|
|
18,120,537
|
|
195,253
|
|
|
|
|
|
|
|
|
Investment
securities:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
United States GSE
debt
|
80,000
|
|
82,647
|
|
2,647
|
|
Equity
securities
|
6,767
|
|
7,148
|
|
381
|
|
Total
investment securities
|
86,767
|
|
89,795
|
|
3,028
|
|
|
|
|
|
|
|
|
Total available for
sale
|
$
18,012,051
|
|
$
18,210,332
|
|
$
198,281
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Hudson City
Bancorp, Inc.
Other
Financial Data
Loan Data at December 31,
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
|
|
$
787,572
|
|
2,121
|
|
2.55%
|
|
$
29,832,040
|
|
70,815
|
96.47%
|
|
FHA/VA
|
|
63,947
|
|
234
|
|
0.21%
|
|
499,724
|
|
2,273
|
1.62%
|
|
PMI
|
|
6,743
|
|
23
|
|
0.02%
|
|
217,358
|
|
681
|
0.70%
|
|
Construction
|
|
7,560
|
|
6
|
|
0.02%
|
|
9,081
|
|
7
|
0.03%
|
|
Commercial
|
|
1,117
|
|
4
|
|
0.00%
|
|
48,067
|
|
95
|
0.16%
|
|
Total mortgage
loans
|
|
866,939
|
|
2,388
|
|
2.80%
|
|
30,606,270
|
|
73,871
|
98.97%
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Home equity loans
|
|
3,289
|
|
34
|
|
0.01%
|
|
298,363
|
|
7,805
|
0.96%
|
|
Other loans
|
|
1,031
|
|
8
|
|
0.01%
|
|
19,264
|
|
2,253
|
0.06%
|
|
Total
|
|
$
871,259
|
|
2,430
|
|
2.82%
|
|
$
30,923,897
|
|
83,929
|
100.00%
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
- Charge-offs amounted to $24.7
million for the fourth quarter of 2010 and $98.5 million for the year ended December 31, 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 71.2% of our non-performing loans were located at
December 31, 2010, by approximately
21% from the peak of the market in 2006 through October 2010 and by 31% nationwide during that
period. For the first ten months of 2010, the house price
indices decreased by 0.8% in the New
York metropolitan area and 1.5% 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 December 31, 2010:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Carrying
|
|
|
Number
Under
|
|
|
|
|
Number
|
|
Value
|
|
|
Contract of
Sale
|
|
|
|
|
|
|
(dollars in
thousands)
|
|
|
|
|
|
Foreclosed real
estate
|
|
127
|
|
$
45,693
|
|
|
44
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
- During 2010, we sold 71 foreclosed properties. Write-downs on
foreclosed real estate and net losses on the sale of foreclosed
real estate amounted to $2.7 million
for 2010.
Hudson City
Bancorp, Inc. and Subsidiary
|
|
Other
Financial Data
|
|
(Unaudited)
|
|
|
At or for
the Quarter Ended
|
|
|
Dec. 31,
2010
|
|
Sept. 30,
2010
|
|
June 30,
2010
|
|
March 31,
2010
|
|
Dec. 31,
2009
|
|
|
(Dollars in
thousands, except per share data)
|
|
Net interest income
|
$
251,834
|
|
$
290,334
|
|
$
317,514
|
|
$
331,145
|
|
$
331,793
|
|
Provision for loan
losses
|
45,000
|
|
50,000
|
|
50,000
|
|
50,000
|
|
45,000
|
|
Non-interest income
|
62,927
|
|
33,859
|
|
33,210
|
|
32,998
|
|
2,192
|
|
Non-interest expense:
|
|
|
|
|
|
|
|
|
|
|
Compensation and employee
benefits
|
34,798
|
|
32,054
|
|
32,789
|
|
34,162
|
|
33,905
|
|
Other non-interest
expense
|
34,757
|
|
33,652
|
|
31,807
|
|
32,369
|
|
29,030
|
|
Total non-interest
expense
|
69,555
|
|
65,706
|
|
64,596
|
|
66,531
|
|
62,935
|
|
Income before income tax
expense
|
200,206
|
|
208,487
|
|
236,128
|
|
247,612
|
|
226,050
|
|
Income tax expense
|
79,045
|
|
83,918
|
|
93,537
|
|
98,727
|
|
89,474
|
|
Net income
|
$
121,161
|
|
$
124,569
|
|
$
142,591
|
|
$
148,885
|
|
$
136,576
|
|
Total assets
|
$
61,166,033
|
|
$
60,616,632
|
|
$
60,933,134
|
|
$
61,231,651
|
|
$
60,267,760
|
|
Loans, net
|
30,773,956
|
|
31,626,561
|
|
32,062,829
|
|
32,012,852
|
|
31,721,154
|
|
Mortgage-backed
securities
|
|
|
|
|
|
|
|
|
|
|
Available for
sale
|
18,120,537
|
|
14,961,441
|
|
13,825,644
|
|
12,662,490
|
|
11,116,531
|
|
Held to
maturity
|
5,914,372
|
|
6,777,579
|
|
7,619,996
|
|
9,110,956
|
|
9,963,554
|
|
Other securities
|
|
|
|
|
|
|
|
|
|
|
Available for
sale
|
89,795
|
|
90,797
|
|
366,937
|
|
457,538
|
|
1,095,240
|
|
Held to
maturity
|
3,939,006
|
|
4,939,922
|
|
5,139,794
|
|
4,887,949
|
|
4,187,704
|
|
Deposits
|
25,173,126
|
|
24,914,621
|
|
25,168,465
|
|
25,388,800
|
|
24,578,048
|
|
Borrowings
|
29,675,000
|
|
29,825,000
|
|
29,975,000
|
|
29,975,000
|
|
29,975,000
|
|
Shareholders’ equity
|
5,510,238
|
|
5,622,770
|
|
5,543,256
|
|
5,396,077
|
|
5,339,152
|
|
Performance Data:
|
|
|
|
|
|
|
|
|
|
|
Return on average assets
(1)
|
0.80%
|
|
0.82%
|
|
0.93%
|
|
0.98%
|
|
0.92%
|
|
Return on average equity
(1)
|
8.50%
|
|
8.86%
|
|
10.42%
|
|
10.96%
|
|
10.21%
|
|
Net interest rate spread
(1)
|
1.48%
|
|
1.73%
|
|
1.89%
|
|
1.97%
|
|
2.04%
|
|
Net interest margin
(1)
|
1.73%
|
|
1.97%
|
|
2.13%
|
|
2.20%
|
|
2.30%
|
|
Non-interest expense to average
assets (1) (4)
|
0.46%
|
|
0.43%
|
|
0.43%
|
|
0.44%
|
|
0.42%
|
|
Compensation and benefits to
total revenue (5)
|
11.06%
|
|
9.89%
|
|
9.35%
|
|
9.38%
|
|
10.15%
|
|
Efficiency ratio (2)
|
22.10%
|
|
20.27%
|
|
18.42%
|
|
18.27%
|
|
18.84%
|
|
Dividend payout ratio
|
60.00%
|
|
60.00%
|
|
51.72%
|
|
50.00%
|
|
53.57%
|
|
Per Common Share
Data:
|
|
|
|
|
|
|
|
|
|
|
Basic earnings per common
share
|
$0.25
|
|
$0.25
|
|
$0.29
|
|
$0.30
|
|
$0.28
|
|
Diluted earnings per common
share
|
$0.25
|
|
$0.25
|
|
$0.29
|
|
$0.30
|
|
$0.28
|
|
Book value per share
(3)
|
$11.16
|
|
$11.40
|
|
$11.25
|
|
$10.96
|
|
$10.85
|
|
Tangible book value per share
(3)
|
$10.85
|
|
$11.08
|
|
$10.93
|
|
$10.63
|
|
$10.53
|
|
Dividends per share
|
$0.15
|
|
$0.15
|
|
$0.15
|
|
$0.15
|
|
$0.15
|
|
Capital Ratios:
|
|
|
|
|
|
|
|
|
|
|
Equity to total assets
(consolidated)
|
9.01%
|
|
9.28%
|
|
9.10%
|
|
8.81%
|
|
8.86%
|
|
Tier 1 leverage capital
(Bank)
|
7.95%
|
|
7.91%
|
|
7.75%
|
|
7.60%
|
|
7.59%
|
|
Total risk-based capital
(Bank)
|
23.04%
|
|
22.42%
|
|
21.90%
|
|
21.24%
|
|
21.02%
|
|
Other Data:
|
|
|
|
|
|
|
|
|
|
|
Full-time equivalent
employees
|
1,562
|
|
1,573
|
|
1,557
|
|
1,500
|
|
1,482
|
|
Number of branch
offices
|
135
|
|
135
|
|
134
|
|
131
|
|
131
|
|
Asset Quality
Data:
|
|
|
|
|
|
|
|
|
|
|
Total non-performing
loans
|
$
871,259
|
|
$
837,469
|
|
$
790,137
|
|
$
744,872
|
|
$
627,695
|
|
Number of non-performing
loans
|
2,430
|
|
2,291
|
|
2,110
|
|
1,934
|
|
1,636
|
|
Total number of loans
|
83,929
|
|
85,953
|
|
87,041
|
|
86,863
|
|
86,433
|
|
Total non-performing
assets
|
$
916,952
|
|
$
877,745
|
|
$
811,827
|
|
$
764,435
|
|
$
644,431
|
|
Non-performing loans to total
loans
|
2.82%
|
|
2.64%
|
|
2.46%
|
|
2.32%
|
|
1.98%
|
|
Non-performing assets to total
assets
|
1.50%
|
|
1.45%
|
|
1.33%
|
|
1.25%
|
|
1.07%
|
|
Allowance for loan
losses
|
$
236,574
|
|
$
216,283
|
|
$
192,983
|
|
$
165,830
|
|
$
140,074
|
|
Allowance for loan losses to
non-performing loans
|
27.15%
|
|
25.83%
|
|
24.42%
|
|
22.26%
|
|
22.32%
|
|
Allowance for loan losses to
total loans
|
0.77%
|
|
0.68%
|
|
0.60%
|
|
0.52%
|
|
0.44%
|
|
Provision for loan
losses
|
$
45,000
|
|
$
50,000
|
|
$
50,000
|
|
$
50,000
|
|
$
45,000
|
|
Net charge-offs
|
$
24,709
|
|
$
26,701
|
|
$
22,846
|
|
$
24,245
|
|
$
19,758
|
|
Ratio of net charge-offs to
average loans (1)
|
0.32%
|
|
0.33%
|
|
0.29%
|
|
0.30%
|
|
0.25%
|
|
Write-downs and net losses
(gains) on foreclosed
|
|
|
|
|
|
|
|
|
|
|
real estate
|
$
1,585
|
|
$
(391)
|
|
$
173
|
|
$
1,372
|
|
$
325
|
|
(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.