Hudson City Bancorp Inc. (HCBK) said it has restructured its
balance sheet, which the regional bank said will help it increase
its net interest income in the future--though it noted that it
would book a hefty first-quarter charge because of the move.
Shares were up 1.3% to $9.99 in after-hours trading. As of the
close, the stock had fallen 23% so far this year.
The New Jersey-based bank said that in a series of transactions
this month, it paid off $12.5 billion in borrowings, funded by the
sale of $8.66 billion of securities and $5 billion of new
shorter-term fixed-maturity borrowings.
Hudson City said the transactions to reshuffle the balance sheet
would hurt first-quarter earnings by about $644 million, or $1.30 a
share.
The company has continued to struggle with nonperforming loans
and historically low interest rates. Unlike many banks, it hasn't
been able to improve results by setting aside less to cover
potential credit losses. In January, Hudson City said its
fourth-quarter profit fell 11% as net interest income declined and
its loan book showed signs of further deterioration.
-By Nathan Becker, Dow Jones Newswires; 212-416-2855;
nathan.becker@dowjones.com