PARAMUS, N.J., April 20, 2011 /PRNewswire/ -- Hudson City
Bancorp, Inc. (NASDAQ: HCBK), the holding company for Hudson City
Savings Bank, reported today a net loss of $555.7 million for the quarter ended March 31, 2011 as compared to net income of
$148.9 million for the quarter ended
March 31, 2010. Diluted loss per
share amounted to $1.13 during the
first quarter of 2011 as compared to diluted earnings per share of
$0.30 for the first quarter of 2010.
During the first quarter of 2011, the Bank completed a
restructuring of its balance sheet which resulted in the
extinguishment of $12.5 billion of
structured putable borrowings with an average cost of 3.56%. The
extinguishment of the borrowings was funded by the sale of
$8.66 billion of securities with an
average yield of 3.20% and $5.00
billion of new short-term fixed-maturity borrowings with an
average cost of 0.66%. The balance sheet restructuring (the
"Restructuring Transaction") reduced after-tax earnings by
$649.3 million. Operating
earnings and diluted operating earnings per share were $93.7 million and $0.19, respectively for the first quarter of
2011. Please see page 11 of this press release for a
reconciliation of operating earnings to the Company's earnings
reported in accordance with generally accepted accounting
principles. The Board of Directors declared a quarterly cash
dividend of $0.08 per share payable
on May 27, 2011 to shareholders of
record on May 5, 2011.
Ronald E. Hermance, Jr., Chairman
and Chief Executive Officer commented, "As we announced in March,
we completed a restructuring of our balance sheet in the first
quarter of 2011 which resulted in an after-tax charge to earnings
of $649.3 million. We believe
that the restructuring transaction mitigates our interest rate
risk, realigns our funding mix and positions us to eventually
return to our core strategy of loan portfolio growth. In addition,
our Tier 1 leverage capital ratio increased to 8.12% at
March 31, 2011 from 7.95% at
December 31, 2010."
Mr. Hermance continued, "The Board of Directors considered the
level of operating earnings in declaring a dividend of $0.08 per share. While we recognize that
this is lower than our recent dividend levels, it represents a
dividend yield of 3.30% as compared to an average dividend yield of
1.24% for all financial institutions in the S&P 500 as of
April 13, 2011. We believe that
paying a dividend yield that is competitive with comparable
companies in the marketplace is important and is a primary focus
for us. We are committed to shareholder value and believe
that the current dividend level represents a prudent capital
management decision."
Mr. Hermance further commented, "Our non-performing loans
increased by only 1.8% in the first quarter – the smallest increase
in almost three years. Charge-offs also declined to
$21.3 million from $24.7 million for the linked 2010 fourth quarter.
As a result of this and other credit metrics, we reduced our
provision for loan losses to $40.0
million for 2011 first quarter as compared to $45.0 million for the fourth quarter of 2010 and
$50.0 million for the 2010 first
quarter."
Mr. Hermance concluded, "We believe that Hudson City is now better positioned for
future opportunities than we were before the restructuring and that
our projected net income for the remaining three quarters of 2011
will partially offset the loss from the restructuring transaction.
Our core banking operations are performing in accordance with
our expectations and should continue to do so for the rest of
2011."
Financial highlights for the first quarter of 2011 are as
follows:
- Diluted loss per share was $1.13
for the first quarter of 2011 as compared to diluted earnings per
share of $0.30 for the first quarter
of 2010. During the first quarter of 2011 we had a net loss
of $555.7 million as compared to net
income of $148.9 million for the
first quarter of 2010. Operating earnings amounted to
$93.7 million or $0.19 per diluted share for the first quarter of
2011 as compared to $148.9 million or
$0.30 per diluted share for the first
quarter of 2010. Please see page 11 of this press release for
a reconciliation of operating earnings to the Company's earnings
reported in accordance with generally accepted accounting
principles.
- Net interest income decreased 22.6% to $256.4 million for the first quarter of 2011 as
compared to $331.1 million for the
first quarter of 2010.
- Our net interest rate spread and net interest margin were 1.50%
and 1.72%, respectively, for the first quarter of 2011 as compared
to 1.48% and 1.73%, respectively for the linked fourth quarter of
2010 and 1.97% and 2.20%, respectively, for the first quarter of
2010.
- The provision for loan losses amounted to $40.0 million for the first quarter of 2011 as
compared to $45.0 million for the
linked fourth quarter of 2010 and $50.0
million for the first quarter of 2010.
- Our annualized return on average assets and annualized return
on average shareholders' equity for the first quarter of 2011 were
(3.73)% and (41.49)% respectively, as compared to 0.98% and 10.96%,
respectively, for the first quarter of 2010. Our annualized
ratio of operating earnings to average assets and annualized ratio
of operating earnings to average shareholders' equity, excluding
the transaction, were 0.63% and 6.99%, respectively for the first
quarter of 2011. Please see page 11 of this press release for
a reconciliation of operating earnings to the Company's earnings
reported in accordance with generally accepted accounting
principles.
- Non-interest income amounted to $105.2
million for the first quarter of 2011 as compared to
$33.0 million for the first quarter
of 2010. Included in non-interest income were net realized
securities gains of $102.5 million
and $30.8 million for the quarters
ended March 31, 2011 and March 31, 2010, respectively.
- Deposits increased $288.0
million, or 1.1%, to $25.46
billion at March 31, 2011 from
$25.17 billion at December 31, 2010.
- Borrowings decreased $7.65 billion to
$22.03 billion at March 31,
2011 from $29.68 billion at
December 31, 2010. As part of
the Restructuring Transaction, we paid off $12.5 billion of structured putable borrowings
and re-borrowed $5.0 billion of new
short-term fixed-maturity borrowings.
- The Bank's Tier 1 leverage capital increased to 8.12% at
March 31, 2011 as compared to 7.95%
at December 31, 2010.
Statement of Financial Condition Summary
Total assets decreased $8.74
billion, or 14.3%, to $52.43
billion at March 31, 2011 from
$61.17 billion at December 31, 2010. The decrease in total assets
reflected an $8.19 billion decrease
in total mortgage-backed securities, a $591.6 million decrease in net loans and a
$231.4 million decrease in cash and
cash equivalents.
Our net loans decreased $591.6
million during the first quarter of 2011 to $30.18 billion. The decrease in loans primarily
reflects the elevated levels of loan repayments during the first
three months of 2011 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. For the first three months of
2011, we originated $1.40 billion and
purchased $147.2 million of loans,
compared to originations of $1.40
billion and purchases of $404.2
million for the first three months of 2010. The
originations and purchases of loans were offset by principal
repayments of $2.08 billion for the
first quarter of 2011, as compared to $1.45
billion for the first quarter of 2010.
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 to continue during the first three months of
2011 as some of our customers refinanced with other banks. Our loan
purchase activity has significantly declined as the
government-sponsored entities ("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. We expect that the amount of loan purchases will
continue to be at reduced levels for the near-term.
Total mortgage-backed securities decreased $8.19 billion during the first three months of
2011 to $15.84 billion. The
decrease was due primarily to the sale of $8.96 billion of securities, substantially all of
which were sold as part of the Restructuring Transaction. The
decrease in mortgage-backed securities also reflected repayments of
$1.63 billion which were offset by
purchases of $2.70 billion of
mortgage-backed securities issued by GSEs.
Total liabilities decreased $7.96
billion, or 14.3%, to $47.70
billion at March 31, 2011 from
$55.66 billion at December 31, 2010. The decrease in total
liabilities primarily reflected a $7.65
billion decrease in borrowed funds as a result of the
Restructuring Transaction. Borrowings amounted to
$22.03 billion at March 31, 2011 as compared to $29.68 billion at December
31, 2010. The decrease in borrowed funds was partially
offset by a $288.0 million increase
total deposits.
Total shareholders' equity decreased $781.4 million to $4.73 billion at March 31, 2011 from $5.51
billion at December 31, 2010.
The decrease was primarily due to a net loss of $555.7 million for the quarter ended March 31, 2011. The decrease was also due to cash
dividends paid to common shareholders of $74.1 million and a $157.5
million decrease in accumulated other comprehensive income.
At March 31, 2011, our
shareholders' equity to asset ratio was 9.02% and our tangible book
value per share was $9.26.
The accumulated other comprehensive loss of $72.0 million at March 31,
2011 included a $40.7 million
after-tax net unrealized loss on securities available for sale
($68.9 million pre-tax) and a
$31.3 million after-tax accumulated
other comprehensive loss related to the funded status of our
employee benefit plans. The accumulated other comprehensive
income of $85.4 million at
December 31, 2010 included 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. The change in the unrealized loss on
securities available-for sale was due primarily to the sale of
securities in the first quarter of 2011 which resulted in pre-tax
realized gains of $102.5 million.
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 on firmer footing and overall conditions in the labor
market appear to be improving gradually. Household spending
and business investment in equipment and software continue to
expand. The national unemployment rate decreased to 8.8% in
March 2011 as compared to 9.4% in
December 2010. The FOMC decided
to maintain the overnight lending rate at zero to 0.25% during the
first quarter of 2011. As a result, short-term market interest
rates have remained at low levels during the first quarter of 2011.
The yields on mortgage-related assets have also remained at
low levels during that same quarter.
Net interest income decreased $74.7
million, or 22.6%, to $256.4
million for the first quarter of 2011 as compared to
$331.1 million for the first quarter
of 2010. Our net interest rate spread increased to 1.50% for
the first quarter of 2011 as compared to 1.48% for the linked
fourth quarter of 2010 and decreased from 1.97% for the first
quarter of 2010. Our net interest margin decreased to 1.72%
for the first quarter of 2011 as compared to 1.73% for the linked
fourth quarter of 2010 and 2.20% for the first quarter of 2010.
The decrease in net interest margin during the first quarter
of 2011 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 88.5% of
our average interest-earning assets during the 2011 first quarter.
As part of the Restructuring Transaction, we extinguished
liabilities and sold securities at different times during
March 2011. The timing of these
transactions, as well as the effect of short-term borrowings (less
than one month) used to facilitate the settlement of debt
extinguishments, provided a slight benefit to our net interest
margin in the first quarter of 2011. We expect that the
Restructuring Transaction will result in as much as a 40 basis
point improvement in our net interest margin in the second quarter
of 2011.
Total interest and dividend income for the first quarter of 2011
decreased $117.4 million, or 16.0%,
to $617.5 million from $734.9 million for the first quarter of 2010. The
decrease in total interest and dividend income was primarily due to
a decrease of 74 basis points in the annualized weighted-average
yield on total interest-earning assets to 4.24% for the first
quarter of 2011 from 4.98% for the same quarter in 2010. The
decrease in total interest and dividend income was also due to a
decrease in the average balance of total interest-earning assets of
$787.6 million, or 1.3%, to
$58.30 billion for the first quarter
of 2011 as compared to $59.08 billion
for the first quarter of 2010. This decrease was due
primarily to the Restructuring Transaction.
Interest on first mortgage loans decreased $45.2 million to $383.0 million for the first
quarter of 2011 as compared to $428.2
million for the first quarter of 2010. This was primarily
due to a 34 basis point decrease in the weighted-average yield to
5.10% for the 2011 first quarter from 5.44% for the 2010 first
quarter. The decrease in interest income on mortgage loans was also
due to a $1.45 billion decrease in
the average balance of first mortgage loans to $30.05 billion. The decrease in the average yield
earned was due to lower market interest rates on mortgage products
and also due to the continued mortgage refinancing activity.
Refinancing activity also had an impact on the average balance of
our first mortgage loans during the first quarter of 2011.
Interest on mortgage-backed securities decreased $48.4 million to $183.3 million for the first
quarter of 2011 as compared to $231.7
million for the first quarter of 2010. This decrease
was due primarily to a 116 basis point decrease in the
weighted-average yield to 3.41% for the first quarter of 2011 from
4.57% for the first quarter of 2010. The effect of the decrease in
the weighted-average yield was partially offset by a $1.26 billion increase in the average balance of
mortgage-backed securities to $21.52
billion during the first quarter of 2011 as compared to
$20.26 billion for the first quarter
of 2010. While the average balance of mortgage-backed
securities increased in the first quarter of 2011 as compared to
the first quarter of 2010, the carrying value of mortgage-backed
securities decreased $8.19 billion to $15.84
billion at March 31, 2011 as
compared to $24.03 billion at
December 31, 2010 as a result of the
Restructuring Transaction.
Interest on investment securities decreased $23.8 million to $33.6 million for the first
quarter of 2011 as compared to $57.4
million for the first quarter of 2010. This decrease
was due primarily to a $1.30 billion
decrease in the average balance of investment securities to
$4.00 billion for the first quarter
of 2011 from $5.30 billion for the
first quarter of 2010. In addition, the average yield of
investment securities decreased 97 basis points to 3.36% for the
first quarter of 2011 as compared to 4.33% for the first quarter of
2010.
Dividends on Federal Home Loan Bank of New York stock increased $428,000, or 3.5%, to $12.8 million for the first quarter of 2011 as
compared to $12.4 million for the
first quarter of 2010. This increase was due primarily to a
23 basis point increase in the average dividend yield earned to
5.89% as compared to 5.66% for the first quarter of 2010. The
increase in the average dividend yield was partially offset by a
$6.2 million decrease in the average
balance to $868.6 million for the
first quarter of 2011 as compared to $874.8
million for the first quarter of 2010.
Interest on Federal funds sold amounted to $711,000 for the first quarter of 2011 as
compared to $449,000 for the first
quarter of 2010. The average balance of Federal funds sold
amounted to $1.54 billion for the
first quarter of 2011 as compared to $789.3
million for the first quarter of 2010. The yield
earned on Federal funds sold was 0.19% for the 2011 first quarter
and 0.23% for the 2010 first quarter. The increase in the
average balance of Federal funds sold is primarily a result of the
timing of the debt extinguishments and the proceeds from securities
sales and new borrowings in the Restructuring Transaction.
Federal funds sold amounted to $289.7
million at March 31, 2011.
Total interest expense for the quarter ended March 31, 2011 decreased $42.6 million, or 10.6%, to $361.1 million from $403.7
million for the quarter ended March
31, 2010. This decrease was primarily due to a 27
basis point decrease in the weighted-average cost of total
interest-bearing liabilities to 2.74% for the quarter ended
March 31, 2011 compared with 3.01%
for the quarter ended March 31, 2010.
The decrease was also due to a $950.3
million, or 1.8%, decrease in the average balance of total
interest-bearing liabilities to $53.44
billion for the quarter ended March
31, 2011 compared with $54.39
billion for the first quarter of 2010. The decrease in
the average balance of total interest-bearing liabilities was due
to the Restructuring Transaction.
Interest expense on deposits decreased $19.6 million, or 18.9%, to $84.3 million for the first quarter of 2011 from
$103.9 million for the first quarter
of 2010. This decrease is due primarily to a decrease in the
average cost of interest-bearing deposits of 35 basis points to
1.38% for the first quarter of 2011 as compared to 1.73% for the
first quarter of 2010. The decrease was partially offset by a
$317.7 million increase in the
average balance of interest-bearing deposits to $24.73 billion during the first quarter of 2011
as compared to $24.41 billion for the
first quarter of 2010.
The decrease in the average cost of deposits for the first three
months of 2011 reflected lower market interest rates and our
decision to lower deposit rates to slow deposit growth in 2010.
At March 31, 2011, time
deposits scheduled to mature within one year totaled $10.15 billion with an average cost of 1.29%.
These time deposits are scheduled to mature as follows:
$4.29 billion with an average cost of
1.05% in the second quarter of 2011, $2.42
billion with an average cost of 1.15% in the third quarter
of 2011, $1.73 billion with an
average cost of 1.77% in the fourth quarter of 2011 and
$1.71 billion with an average cost of
1.62% in the first quarter of 2012. Based on our deposit
retention experience and current pricing strategy, we anticipate
that a significant portion of these time deposits will remain with
us as renewed time deposits or as transfers to other deposit
products at the prevailing rate.
Interest expense on borrowed funds decreased $23.0 million to $276.8 million for the first
quarter of 2011 as compared to $299.8
million for the first quarter of 2010. This decrease was
primarily due to a $1.27 billion
decrease in the average balance of borrowed funds to $28.71 billion for the first quarter of 2011 as
compared to $29.98 billion for the
first quarter of 2010. This decrease was also due to a 15
basis point decrease in the weighted-average cost of borrowed funds
to 3.91% for the first quarter of 2011 as compared to 4.06% for the
first quarter of 2010. The decrease in the average balance
and cost of our borrowings is due to the Restructuring Transaction.
However, the average balance of borrowings during the first
quarter of 2011 does not reflect the full effect of the debt
extinguishments which took place in March
2011 as part of the Restructuring Transaction.
Borrowings amounted to $22.03
billion at March 31, 2011 with
an average cost of 3.52%. Borrowings scheduled to mature over
the next 12 months are as follows: $900.0
million with an average cost of 1.17% in the second quarter
of 2011, $900.0 million with an
average cost of 0.94% in the third quarter of 2011, $750.0 million with an average cost of 0.55% in
the fourth quarter of 2011 and $900.0
million with an average cost of 0.98% in the first quarter
of 2012.
The provision for loan losses amounted to $40.0 million for the quarter ended March 31, 2011 as compared to $50.0 million for the quarter ended March 31, 2010. For the linked fourth
quarter of 2010, the provision for loan losses amounted to
$45.0 million. The decrease in
our provision for loan losses during the first quarter of 2011 as
compared to the same period in 2010 was a result of the decrease in
the growth rate of non-performing loans, improvement in the
unemployment rate and a decrease in charge-offs.
Non-performing loans, defined as non-accruing loans and
accruing loans delinquent 90 days or more, amounted to $886.5 million at March
31, 2011 compared with $871.3
million at December 31, 2010.
The ratio of non-performing loans to total loans was 2.92% at
March 31, 2011 compared with 2.82% at
December 31, 2010. The highly
publicized foreclosure issues that have recently affected the
nation's largest mortgage loan servicers have resulted in greater
bank regulatory, court and state attorney general scrutiny.
As a result, our foreclosure process and the time to complete
a foreclosure have been delayed. We are now experiencing a
time frame to repayment or foreclosure ranging from 30 to 36 months
from the initial non-performing period. This protracted
foreclosure process delays our ability to resolve non-performing
loans through the sale of the underlying collateral and our ability
to maximize any recoveries.
Loans delinquent 30 to 59 days amounted to $380.0 million at March
31, 2011 as compared to $418.9
million at December 31, 2010.
Loans delinquent 60 to 89 days amounted to $174.3 million at March
31, 2011 as compared to $193.2
million at December 31, 2010.
The allowance for loans losses amounted to $255.3 million at March
31, 2011 as compared to $236.6
million at December 31, 2010.
The allowance for loan losses as a percent of total loans and
as a percent of non-performing loans was 0.84% and 28.80%,
respectively at March 31, 2011, as
compared to 0.77% and 27.15%, respectively at December 31, 2010. The increases in these
ratios were due to our consideration of the weak economic
conditions during 2010 and the first quarter of 2011, 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 $21.3
million for the quarter ended March
31, 2011 as compared to net charge-offs of $24.2 million for the same quarter in 2010.
The ratio of net charge-offs to average loans was 0.28% for
the three months ended March 31, 2011
as compared to 0.30% for the same periods in 2010.
Total non-interest income was $105.2
million for the first quarter 2011 as compared to
$33.0 million for the same quarter in
2010. Included in non-interest income for the three month period
ended March 31, 2011 were net gains
on securities transactions of $102.5
million which resulted from the sale of $8.97 billion of mortgage-backed securities
available-for-sale. Substantially all of the proceeds from
the sale of securities were used to pay off borrowings in the
Restructuring Transaction. Included in non-interest income
for the first quarter 2010 were net gains on securities
transactions of $30.8 million which
resulted from the sale of $573.7
million of mortgage-backed securities
available-for-sale.
Total non-interest expense amounted to $1.24 billion for the first quarter of 2011 as
compared to $66.5 million for the
first quarter of 2010. Included in total non-interest expense
for the 2011 first quarter was a $1.17
billion loss on the extinguishment of debt related to the
Restructuring Transaction. Excluding the extinguishment
loss, non-interest expenses amounted to $68.5 million for the first quarter of 2011, an
increase of $2.0 million from the
first quarter of 2010. Compensation and employee benefit
costs decreased $3.3 million, or
9.6%, to $30.9 million for the first
quarter of 2011 as compared to $34.2
million for the same period in 2010. The decrease in
compensation costs is primarily due to a $5.8 million decrease in expense related to our
stock benefit plans. This decrease was partially offset by an
increase in medical expenses of $1.6
million and a $917,000
increase in compensation costs due primarily to normal increases in
salary as well as additional full time employees. At March 31, 2011, we had 1,569 full-time equivalent
employees as compared to 1,562 at December
31, 2010 and 1,500 at March 31,
2010.
Federal deposit insurance expense increased $3.7 million, or 29.3%, to $16.3 million for the first quarter of 2011 as
compared to $12.6 million for the
first quarter of 2010. The increase in Federal deposit
insurance expense is due primarily to an increase in total deposits
and an increase in our deposit insurance assessment rate. In
February 2011, the Federal Deposit
Insurance Corporation adopted a final rule that became effective on
April 1, 2011, that redefines the
assessment base for deposit insurance assessments as average
consolidated total assets minus average tangible equity, rather
than on the amount of deposits as under the previous rule. The
final rule also revises the assessment rate schedule. We
estimate that our Federal deposit insurance expense, calculated
under the new assessment rule, will amount to approximately
$33.9 million for the second quarter
of 2011.
Included in other expense for the first quarter of 2011 were
write-downs on foreclosed real estate and net losses on the sale of
foreclosed real estate of $776,000 as
compared to $1.4 million for the
first quarter of 2010.
Our efficiency ratio was 26.0% for the 2011 first quarter as
compared to 18.27% for the 2010 first quarter. The efficiency
ratio is calculated by dividing non-interest expense, excluding the
loss on the extinguishment of debt, by the sum of net interest
income and non-interest income, excluding net securities gains from
the Restructuring Transaction. Our annualized ratio of
non-interest expense to average total assets for the first quarter
of 2011 was 8.44% as compared to 0.44% for the first quarter of
2010. Excluding the loss on the extinguishment of debt, our
annualized ratio of operating non-interest expense to average total
assets was 0.46% for the first quarter of 2011. Please see page 11
of this press release for a reconciliation of operating earnings to
the Company's earnings reported in accordance with generally
accepted accounting principles and a calculation of the efficiency
ratio.
Income tax benefit amounted to $363.3
million for the first quarter of 2011 compared with income
tax expense $98.7 million for the
same quarter in 2010. Our effective tax rate for the first
quarter of 2011 was 39.53% compared with 39.87% for the first
quarter of 2010.
Hudson City Bancorp, Inc. 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, that are based on certain assumptions and describe future
plans, strategies and expectations of Hudson City Bancorp, Inc.
Such forward-looking statements 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, Inc., the characterization of the future effects of the
Restructuring Transaction on balance sheet strength, capital
ratios, net interest margin and earnings prospects, and Hudson City
Bancorp, Inc.'s plans, objectives, expectations and intentions, and
other statements contained in this release that are not historical
facts. Hudson City Bancorp, Inc.'s ability to predict results
or the actual effect of future plans or strategies is inherently
uncertain and actual results and performance could differ
materially from those contemplated or implied by these
forward-looking statements. They can be affected by inaccurate
assumptions Hudson City Bancorp, Inc. might make or by known or
unknown risks and uncertainties. Factors that could cause
assumptions to be incorrect include, but are not limited to,
changes in interest rates, general economic conditions, and
legislative, regulatory and public policy changes. These risks and
uncertainties should be considered in evaluating forward-looking
statements and undue reliance should not be placed on such
statements. For a summary of important factors that could
affect Hudson City's
forward-looking statements, please refer to Hudson City's filings with the Securities and
Exchange Commission available at www.sec.gov. 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
|
|
|
|
|
March
31,
|
|
December
31,
|
|
|
2011
|
|
2010
|
|
(In thousands, except share and
per share amounts)
|
(unaudited)
|
|
|
|
|
|
|
|
|
Assets:
|
|
|
|
|
Cash and due from
banks
|
$
148,276
|
|
$
175,769
|
|
Federal funds sold and other
overnight deposits
|
289,719
|
|
493,628
|
|
Total cash and cash equivalents
|
437,995
|
|
669,397
|
|
|
|
|
|
|
Securities available for
sale:
|
|
|
|
|
Mortgage-backed
securities
|
10,540,674
|
|
18,120,537
|
|
Investment
securities
|
7,122
|
|
89,795
|
|
Securities held to
maturity:
|
|
|
|
|
Mortgage-backed
securities
|
5,304,263
|
|
5,914,372
|
|
Investment
securities
|
3,938,950
|
|
3,939,006
|
|
|
Total securities
|
19,791,009
|
|
28,063,710
|
|
|
|
|
|
|
Loans
|
|
30,351,370
|
|
30,923,897
|
|
Net deferred loan
costs
|
86,293
|
|
86,633
|
|
Allowance for loan
losses
|
(255,283)
|
|
(236,574)
|
|
|
Net loans
|
30,182,380
|
|
30,773,956
|
|
|
|
|
|
|
|
Federal Home Loan Bank of New
York stock
|
804,440
|
|
871,940
|
|
Foreclosed real estate,
net
|
44,011
|
|
45,693
|
|
Accrued interest
receivable
|
201,730
|
|
245,546
|
|
Banking premises and equipment,
net
|
69,712
|
|
69,444
|
|
Goodwill
|
152,109
|
|
152,109
|
|
Other assets
|
745,680
|
|
274,238
|
|
|
Total Assets
|
$
52,429,066
|
|
$
61,166,033
|
|
|
|
|
|
|
|
Liabilities and Shareholders’
Equity:
|
|
|
|
|
Deposits:
|
|
|
|
|
Interest-bearing
|
$
24,868,905
|
|
$
24,605,896
|
|
Noninterest-bearing
|
592,174
|
|
567,230
|
|
|
Total deposits
|
25,461,079
|
|
25,173,126
|
|
|
|
|
|
|
|
Repurchase agreements
|
7,850,000
|
|
14,800,000
|
|
Federal Home Loan Bank of New
York advances
|
14,175,000
|
|
14,875,000
|
|
|
Total borrowed funds
|
22,025,000
|
|
29,675,000
|
|
|
|
|
|
|
|
Due to brokers
|
-
|
|
538,200
|
|
Accrued expenses and other
liabilities
|
214,140
|
|
269,469
|
|
|
Total liabilities
|
47,700,219
|
|
55,655,795
|
|
|
|
|
|
|
|
Common stock, $0.01 par value,
3,200,000,000 shares authorized;
|
|
|
|
|
|
741,466,555 shares issued;
526,718,310 shares outstanding
|
|
|
|
|
|
at March 31, 2011 and December
31, 2010
|
7,415
|
|
7,415
|
|
Additional paid-in
capital
|
4,709,574
|
|
4,705,255
|
|
Retained earnings
|
2,012,579
|
|
2,642,338
|
|
Treasury stock, at cost;
214,748,245 shares at March 31, 2011 and
|
|
|
|
|
|
December 31, 2010
|
(1,725,946)
|
|
(1,725,946)
|
|
Unallocated common stock held by
the employee stock ownership plan
|
(202,729)
|
|
(204,230)
|
|
Accumulated other comprehensive
income, net of tax
|
(72,046)
|
|
85,406
|
|
|
Total shareholders’
equity
|
4,728,847
|
|
5,510,238
|
|
|
Total Liabilities and Shareholders’ Equity
|
$
52,429,066
|
|
$
61,166,033
|
|
|
|
|
|
|
|
|
|
|
|
Hudson City
Bancorp, Inc. and Subsidiary
Consolidated Statements of
Income
(Unaudited)
|
|
|
|
For the
Three Months
Ended March 31,
|
|
|
|
|
2011
|
|
2010
|
|
|
|
(In
thousands, except per share data)
|
|
Interest and Dividend
Income:
|
|
|
|
|
|
|
First mortgage loans
|
|
$
382,953
|
|
$
428,161
|
|
|
Consumer and other
loans
|
|
4,148
|
|
4,759
|
|
|
Mortgage-backed securities held
to maturity
|
|
61,216
|
|
110,126
|
|
|
Mortgage-backed securities
available for sale
|
|
122,092
|
|
121,592
|
|
|
Investment securities held to
maturity
|
|
32,827
|
|
47,064
|
|
|
Investment securities available
for sale
|
|
775
|
|
10,346
|
|
|
Dividends on Federal Home Loan
Bank of New York stock
|
|
12,801
|
|
12,373
|
|
|
Federal funds sold
|
|
711
|
|
449
|
|
|
|
|
|
|
|
|
Total interest and
dividend income
|
|
617,523
|
|
734,870
|
|
|
|
|
|
|
|
Interest Expense:
|
|
|
|
|
|
|
Deposits
|
|
84,318
|
|
103,919
|
|
|
Borrowed funds
|
|
276,804
|
|
299,806
|
|
|
|
|
|
|
|
|
Total interest
expense
|
|
361,122
|
|
403,725
|
|
|
|
|
|
|
|
|
|
Net interest income
|
|
256,401
|
|
331,145
|
|
|
|
|
|
|
|
Provision for Loan
Losses
|
|
40,000
|
|
50,000
|
|
|
|
|
|
|
|
|
|
Net interest income after
provision for loan losses
|
|
216,401
|
|
281,145
|
|
|
|
|
|
|
|
Non-Interest Income:
|
|
|
|
|
|
|
Service charges and other
income
|
|
2,739
|
|
2,230
|
|
|
Gain on securities transactions,
net
|
|
102,468
|
|
30,768
|
|
|
Total non-interest
income
|
|
105,207
|
|
32,998
|
|
|
|
|
|
|
|
Non-Interest Expense:
|
|
|
|
|
|
|
Compensation and employee
benefits
|
|
30,884
|
|
34,162
|
|
|
Net occupancy expense
|
|
8,425
|
|
8,347
|
|
|
Federal deposit insurance
assessment
|
|
16,330
|
|
12,627
|
|
|
Loss on extinguishment of
debt
|
|
1,172,092
|
|
-
|
|
|
Other expense
|
|
12,837
|
|
11,395
|
|
|
Total non-interest
expense
|
|
1,240,568
|
|
66,531
|
|
|
|
|
|
|
|
|
|
(Loss) income before income tax
(benefit) expense
|
|
(918,960)
|
|
247,612
|
|
|
|
|
|
|
|
Income Tax (Benefit)
Expense
|
|
(363,296)
|
|
98,727
|
|
|
|
|
|
|
|
|
|
Net (loss) income
|
|
$
(555,664)
|
|
$
148,885
|
|
|
|
|
|
|
|
Basic (Loss) Earnings Per
Share
|
|
$
(1.13)
|
|
$
0.30
|
|
|
|
|
|
|
|
Diluted (Loss) Earnings Per
Share
|
|
$
(1.13)
|
|
$
0.30
|
|
|
|
|
|
|
|
Weighted Average Number of
Common Shares Outstanding:
|
|
|
|
|
|
|
|
Basic
|
|
493,843,304
|
|
492,564,183
|
|
|
|
|
|
|
|
|
|
Diluted
|
|
493,843,304
|
|
493,694,756
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Hudson
City Bancorp, Inc. and Subsidiary
|
|
Reconciliation
of GAAP and Operating Earnings
|
|
(Unaudited)
|
|
|
|
|
Operating earnings are not a measure of performance calculated
in accordance with U.S. generally accepted accounting principles
("GAAP"). However, we believe that operating earnings are an
important indication of earnings from our core banking operations.
Operating earnings typically exclude the effects of certain
non-recurring or unusual transactions, such as the Restructuring
Transaction. We believe that our presentation of operating
earnings provides useful supplemental information to both
management and investors in evaluating the Company's financial
results.
Operating earnings should not be considered a substitute for net
income, earnings per share or any other data prepared in accordance
with GAAP. In addition, we may calculate operating earnings
differently from other companies reporting data with similar
names.
The following is a reconciliation of the Company's GAAP and
operating earnings for the three months ended March 31, 2011 and 2010 and December 31, 2010:
|
|
|
|
|
|
For the
Three Months Ended
|
|
|
|
March
31,
|
|
December
31,
|
|
|
|
2011
|
|
2010
|
|
2010
|
|
|
|
|
|
|
|
|
|
GAAP (Loss)
Earnings
|
$
|
(555,664)
|
$
|
148,885
|
$
|
121,161
|
|
Adjustments to GAAP (loss)
earnings:
|
|
|
|
|
|
|
|
Loss on extinguishment of
debt
|
|
1,172,092
|
|
-
|
|
-
|
|
Net gain on securities
sales related to
|
|
|
|
|
|
|
|
Restructuring
Transaction (5)
|
|
(98,278)
|
|
-
|
|
-
|
|
Income tax
effect
|
|
(424,479)
|
|
-
|
|
-
|
|
Operating
earnings
|
|
93,671
|
|
148,885
|
|
121,161
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Diluted GAAP (Loss) Earnings per
Share
|
$
|
(1.13)
|
$
|
0.30
|
$
|
0.25
|
|
Adjustments to GAAP (loss)
earnings:
|
|
|
|
|
|
|
|
Loss on extinguishment of
debt
|
|
2.37
|
|
-
|
|
-
|
|
Net gain on securities
sales related to
|
|
|
|
|
|
|
|
Restructuring
Transaction (5)
|
|
(0.20)
|
|
-
|
|
-
|
|
Income tax
effect
|
|
(0.85)
|
|
-
|
|
-
|
|
Diluted operating
earnings per share
|
$
|
0.19
|
$
|
0.30
|
$
|
0.25
|
|
Weighted average number of
common shares outstanding:
|
|
|
|
|
|
|
|
Basic
|
|
493,843,304
|
|
492,564,183
|
|
493,505,586
|
|
Diluted
|
|
494,502,987
|
|
493,694,756
|
|
494,146,907
|
|
|
|
|
|
|
|
|
|
Operating Efficiency
Ratio
|
|
|
|
|
|
|
|
Total non-interest
expense
|
$
|
1,240,568
|
$
|
66,531
|
$
|
69,555
|
|
Loss on extinguishment of
debt
|
|
(1,172,092)
|
|
-
|
|
-
|
|
Operating non-interest
expense
|
|
68,476
|
$
|
66,531
|
$
|
69,555
|
|
|
|
|
|
|
|
|
|
Net interest income
|
|
256,401
|
|
331,145
|
|
251,834
|
|
Total non-interest
income
|
|
105,207
|
|
32,998
|
|
62,927
|
|
Net gains on securities
transactions related to
|
|
|
|
-
|
|
-
|
|
Restructuring
Transaction (5)
|
|
(98,278)
|
|
|
|
|
|
Operating non-interest
income
|
|
6,929
|
|
32,998
|
|
62,927
|
|
Total operating
income
|
$
|
263,330
|
$
|
364,143
|
$
|
314,761
|
|
|
|
|
|
|
|
|
|
Operating efficiency
ratio (4)
|
|
26.00%
|
|
18.27%
|
|
22.10%
|
|
Ratio of operating earnings to
average assets (1) (2)
|
|
0.63%
|
|
0.98%
|
|
0.80%
|
|
Ratio of operating earnings to
average equity (1) (3)
|
|
6.99%
|
|
10.96%
|
|
8.50%
|
|
|
|
|
|
|
|
|
|
(1) Ratios are
annualized.
|
|
(2) Calculated by dividing
annualized operating earnings by average assets
|
|
(3) Calculated by dividing
annualized operating earnings by average shareholders'
equity
|
|
(4) Calculated by dividing
operating non-interest expense by total operating income
|
|
(5) Total net securities gains
amounted to $102.5 million, $30.8 million and $60.2 million for the
three months ended March 31, 2010 and 2009 and December 31, 2010,
respectively.
|
|
|
|
|
|
|
|
|
|
|
|
Hudson City
Bancorp, Inc. and Subsidiary
Consolidated
Average Balance Sheets
(Unaudited)
|
|
|
For the
Three Months Ended March 31,
|
|
|
|
2011
|
|
2010
|
|
|
|
|
|
|
|
Average
|
|
|
|
|
|
Average
|
|
|
|
Average
|
|
|
|
Yield/
|
|
Average
|
|
|
|
Yield/
|
|
|
|
Balance
|
|
Interest
|
|
Cost
|
|
Balance
|
|
Interest
|
|
Cost
|
|
|
|
(Dollars in
thousands)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Assets:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Interest-earnings
assets:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
First mortgage loans, net
(1)
|
$ 30,051,014
|
|
$ 382,953
|
|
5.10
|
%
|
$ 31,496,413
|
|
$ 428,161
|
|
5.44
|
%
|
|
|
Consumer and other
loans
|
321,407
|
|
4,148
|
|
5.16
|
|
358,637
|
|
4,759
|
|
5.31
|
|
|
|
Federal funds sold and other
overnight deposits
|
1,540,837
|
|
711
|
|
0.19
|
|
789,310
|
|
449
|
|
0.23
|
|
|
|
Mortgage-backed securities at
amortized cost
|
21,516,223
|
|
183,308
|
|
3.41
|
|
20,261,865
|
|
231,718
|
|
4.57
|
|
|
|
Federal Home Loan Bank
stock
|
868,615
|
|
12,801
|
|
5.89
|
|
874,768
|
|
12,373
|
|
5.66
|
|
|
|
Investment securities, at
amortized cost
|
3,998,704
|
|
33,602
|
|
3.36
|
|
5,303,422
|
|
57,410
|
|
4.33
|
|
|
|
|
Total interest-earning
assets
|
58,296,800
|
|
617,523
|
|
4.24
|
|
59,084,415
|
|
734,870
|
|
4.98
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Noninterest-earnings assets
(4)
|
1,338,090
|
|
|
|
|
|
1,635,807
|
|
|
|
|
|
|
|
|
Total Assets
|
$ 59,634,890
|
|
|
|
|
|
$ 60,720,222
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Liabilities and Shareholders’
Equity:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Interest-bearing
liabilities:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Savings accounts
|
$
860,612
|
|
1,372
|
|
0.65
|
|
$
796,816
|
|
1,466
|
|
0.75
|
|
|
|
Interest-bearing transaction
accounts
|
2,112,630
|
|
4,146
|
|
0.80
|
|
2,204,513
|
|
7,510
|
|
1.38
|
|
|
|
Money market accounts
|
6,877,170
|
|
17,868
|
|
1.05
|
|
5,171,810
|
|
16,730
|
|
1.31
|
|
|
|
Time deposits
|
14,879,043
|
|
60,932
|
|
1.66
|
|
16,238,606
|
|
78,213
|
|
1.95
|
|
|
|
|
Total interest-bearing
deposits
|
24,729,455
|
|
84,318
|
|
1.38
|
|
24,411,745
|
|
103,919
|
|
1.73
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Repurchase agreements
|
13,687,190
|
|
139,693
|
|
4.14
|
|
15,100,000
|
|
151,429
|
|
4.07
|
|
|
|
Federal Home Loan Bank of New
York advances
|
15,019,833
|
|
137,111
|
|
3.70
|
|
14,875,000
|
|
148,377
|
|
4.05
|
|
|
|
|
Total borrowed funds
|
28,707,023
|
|
276,804
|
|
3.91
|
|
29,975,000
|
|
299,806
|
|
4.06
|
|
|
|
|
Total interest-bearing
liabilities
|
53,436,478
|
|
361,122
|
|
2.74
|
|
54,386,745
|
|
403,725
|
|
3.01
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Noninterest-bearing
liabilities:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Noninterest-bearing
deposits
|
564,045
|
|
|
|
|
|
572,030
|
|
|
|
|
|
|
|
Other noninterest-bearing
liabilities
|
276,891
|
|
|
|
|
|
330,127
|
|
|
|
|
|
|
|
|
Total noninterest-bearing
liabilities
|
840,936
|
|
|
|
|
|
902,157
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Total liabilities
|
54,277,414
|
|
|
|
|
|
55,288,902
|
|
|
|
|
|
|
Shareholders’ equity
|
5,357,476
|
|
|
|
|
|
5,431,320
|
|
|
|
|
|
|
|
|
Total Liabilities and
Shareholders’ Equity
|
$ 59,634,890
|
|
|
|
|
|
$ 60,720,222
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Net interest income/net interest
rate spread (2)
|
|
|
$ 256,401
|
|
1.50
|
|
|
|
$ 331,145
|
|
1.97
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Net interest-earning assets/net
interest margin (3)
|
$
4,860,322
|
|
|
|
1.72
|
%
|
$
4,697,670
|
|
|
|
2.20
|
%
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
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 $200.2 million and $365.5 million for the quarters
ended March 31, 2011 and 2010, respectively.
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Hudson City
Bancorp, Inc. and Subsidiary
Book Value
Calculations
|
|
|
|
|
|
|
|
March
31,
|
|
|
|
2011
|
|
(In
thousands, except share and per share amounts)
|
|
|
|
|
|
|
|
Shareholders’ equity
|
|
$
4,728,847
|
|
Goodwill and other intangible
assets
|
|
(156,345)
|
|
Tangible Shareholders'
equity
|
|
$
4,572,502
|
|
|
|
|
|
Book Value Share
Computation:
|
|
|
|
Issued
|
|
741,466,555
|
|
Treasury
shares
|
|
(214,748,245)
|
|
Shares outstanding
|
|
526,718,310
|
|
Unallocated ESOP
shares
|
|
(32,473,734)
|
|
Unvested RRP
shares
|
|
(222,438)
|
|
Shares in
trust
|
|
(183,741)
|
|
Book value shares
|
|
493,838,397
|
|
|
|
|
|
Book value per share
|
|
$
9.58
|
|
|
|
|
|
Tangible book value per
share
|
|
$
9.26
|
|
|
|
|
Hudson City
Bancorp, Inc.
Other
Financial Data
Securities Portfolio at March
31, 2011
|
|
|
Amortized
|
|
Estimated
|
|
Unrealized
|
|
|
Cost
|
|
Fair
Value
|
|
Gain/(Loss)
|
|
|
|
|
(dollars in
thousands)
|
|
|
|
Held to Maturity:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Mortgage-backed
securities:
|
|
|
|
|
|
|
FHLMC
|
$
2,678,434
|
|
$
2,817,033
|
|
$
138,599
|
|
FNMA
|
1,482,969
|
|
1,567,377
|
|
84,408
|
|
FHLMC and FNMA
CMO's
|
1,046,545
|
|
1,080,694
|
|
34,149
|
|
GNMA
|
96,315
|
|
99,840
|
|
3,525
|
|
Total
mortgage-backed securities
|
5,304,263
|
|
5,564,944
|
|
260,681
|
|
|
|
|
|
|
|
|
Investment
securities:
|
|
|
|
|
|
|
United States GSE
debt
|
3,938,950
|
|
3,843,386
|
|
(95,564)
|
|
Total
investment securities
|
3,938,950
|
|
3,843,386
|
|
(95,564)
|
|
|
|
|
|
|
|
|
Total held to
maturity
|
$
9,243,213
|
|
$
9,408,330
|
|
$
165,117
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Available for
sale:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Mortgage-backed
securities:
|
|
|
|
|
|
|
FHLMC
|
$
4,091,728
|
|
$
4,077,993
|
|
$
(13,735)
|
|
FNMA
|
5,354,770
|
|
5,301,981
|
|
(52,789)
|
|
FHLMC and FNMA
CMO's
|
94,436
|
|
94,626
|
|
190
|
|
GNMA
|
1,068,976
|
|
1,066,074
|
|
(2,902)
|
|
Total
mortgage-backed securities
|
10,609,910
|
|
10,540,674
|
|
(69,236)
|
|
|
|
|
|
|
|
|
Investment
securities:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Equity
securities
|
6,767
|
|
7,122
|
|
355
|
|
Total
investment securities
|
6,767
|
|
7,122
|
|
355
|
|
|
|
|
|
|
|
|
Total available for
sale
|
$
10,616,677
|
|
$
10,547,796
|
|
$
(68,881)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Hudson City
Bancorp, Inc.
Other
Financial Data
Loan Data at March 31,
2011:
|
|
|
|
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
|
|
$
798,047
|
|
2,191
|
|
2.63%
|
|
$
29,174,793
|
|
69,510
|
96.12%
|
|
FHA/VA
|
|
69,704
|
|
260
|
|
0.23%
|
|
608,216
|
|
2,855
|
2.00%
|
|
PMI
|
|
7,398
|
|
25
|
|
0.02%
|
|
208,686
|
|
653
|
0.69%
|
|
Construction
|
|
7,165
|
|
6
|
|
0.02%
|
|
8,595
|
|
7
|
0.03%
|
|
Commercial
|
|
946
|
|
3
|
|
0.01%
|
|
44,466
|
|
93
|
0.15%
|
|
Total mortgage
loans
|
|
883,260
|
|
2,485
|
|
2.91%
|
|
30,044,756
|
|
73,118
|
98.99%
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Home equity loans
|
|
2,714
|
|
33
|
|
0.01%
|
|
286,953
|
|
7,619
|
0.95%
|
|
Other loans
|
|
556
|
|
6
|
|
0.00%
|
|
19,661
|
|
2,239
|
0.06%
|
|
Total
|
|
$
886,530
|
|
2,524
|
|
2.92%
|
|
$
30,351,370
|
|
82,976
|
100.00%
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
- Net charge-offs amounted to $21.3
million for the first quarter of 2011.
- 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
March 31, 2011, by approximately 23%
from the peak of the market in 2006 through January 2011 and by 31% nationwide during that
period. From January 2010 to
January 2011, the house price indices
decreased by approximately 3% in the New
York metropolitan area and 3% 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 March 31,
2011:
|
|
|
|
Carrying
|
|
|
Number
Under
|
|
|
|
|
Number
|
|
Value
|
|
|
Contract of
Sale
|
|
|
|
|
|
|
(dollars in
thousands)
|
|
|
|
|
|
Foreclosed real
estate
|
|
139
|
|
$
44,011
|
|
|
60
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
- During the first three months of 2011, we sold 29 foreclosed
properties. Write-downs on foreclosed real estate and net losses on
the sale of foreclosed real estate amounted to $776,000 for the first three months of 2011.
Hudson City
Bancorp, Inc. and Subsidiary
|
|
Other
Financial Data
|
|
(Unaudited)
|
|
|
At or for
the Quarter Ended
|
|
|
March 31,
2011
|
|
Dec. 31,
2010
|
|
Sept. 30,
2010
|
|
June 30,
2010
|
|
March 31,
2010
|
|
|
(Dollars in
thousands, except per share data)
|
|
Net interest income
|
$
256,401
|
|
$
251,834
|
|
$
290,334
|
|
$
317,514
|
|
$
331,145
|
|
Provision for loan
losses
|
40,000
|
|
45,000
|
|
50,000
|
|
50,000
|
|
50,000
|
|
Non-interest income
|
105,207
|
|
62,927
|
|
33,859
|
|
33,210
|
|
32,998
|
|
Non-interest expense:
|
|
|
|
|
|
|
|
|
|
|
Compensation and employee
benefits
|
30,884
|
|
34,798
|
|
32,054
|
|
32,789
|
|
34,162
|
|
Other non-interest
expense
|
1,209,684
|
|
34,757
|
|
33,652
|
|
31,807
|
|
32,369
|
|
Total non-interest
expense
|
1,240,568
|
|
69,555
|
|
65,706
|
|
64,596
|
|
66,531
|
|
Income (loss) before income tax
(benefit) expense
|
(918,960)
|
|
200,206
|
|
208,487
|
|
236,128
|
|
247,612
|
|
Income tax (benefit)
expense
|
(363,296)
|
|
79,045
|
|
83,918
|
|
93,537
|
|
98,727
|
|
Net (loss) income
|
$
(555,664)
|
|
$
121,161
|
|
$
124,569
|
|
$
142,591
|
|
$
148,885
|
|
Total assets
|
$
52,429,066
|
|
$
61,166,033
|
|
$
60,616,632
|
|
$
60,933,134
|
|
$
61,231,651
|
|
Loans, net
|
30,182,380
|
|
30,773,956
|
|
31,626,561
|
|
32,062,829
|
|
32,012,852
|
|
Mortgage-backed
securities
|
|
|
|
|
|
|
|
|
|
|
Available for
sale
|
10,540,674
|
|
18,120,537
|
|
14,961,441
|
|
13,825,644
|
|
12,662,490
|
|
Held to
maturity
|
5,304,263
|
|
5,914,372
|
|
6,777,579
|
|
7,619,996
|
|
9,110,956
|
|
Other securities
|
|
|
|
|
|
|
|
|
|
|
Available for
sale
|
7,122
|
|
89,795
|
|
90,797
|
|
366,937
|
|
457,538
|
|
Held to
maturity
|
3,938,950
|
|
3,939,006
|
|
4,939,922
|
|
5,139,794
|
|
4,887,949
|
|
Deposits
|
25,461,079
|
|
25,173,126
|
|
24,914,621
|
|
25,168,465
|
|
25,388,800
|
|
Borrowings
|
22,025,000
|
|
29,675,000
|
|
29,825,000
|
|
29,975,000
|
|
29,975,000
|
|
Shareholders’ equity
|
4,728,847
|
|
5,510,238
|
|
5,622,770
|
|
5,543,256
|
|
5,396,077
|
|
Performance Data:
|
|
|
|
|
|
|
|
|
|
|
Return on average assets
(1)
|
-3.73%
|
|
0.80%
|
|
0.82%
|
|
0.93%
|
|
0.98%
|
|
Return on average equity
(1)
|
-41.49%
|
|
8.50%
|
|
8.86%
|
|
10.42%
|
|
10.96%
|
|
Net interest rate spread
(1)
|
1.50%
|
|
1.48%
|
|
1.73%
|
|
1.89%
|
|
1.97%
|
|
Net interest margin
(1)
|
1.72%
|
|
1.73%
|
|
1.97%
|
|
2.13%
|
|
2.20%
|
|
Non-interest expense to average
assets (1) (4)
|
8.44%
|
|
0.46%
|
|
0.43%
|
|
0.43%
|
|
0.44%
|
|
Compensation and benefits to
total revenue (5)
|
8.54%
|
|
11.06%
|
|
9.89%
|
|
9.35%
|
|
9.38%
|
|
Efficiency ratio (2)
|
26.00%
|
|
22.10%
|
|
20.27%
|
|
18.42%
|
|
18.27%
|
|
Dividend payout ratio
|
NM
|
|
60.00%
|
|
60.00%
|
|
51.72%
|
|
50.00%
|
|
Per Common Share
Data:
|
|
|
|
|
|
|
|
|
|
|
Basic (loss) earnings per common
share
|
($1.13)
|
|
$0.25
|
|
$0.25
|
|
$0.29
|
|
$0.30
|
|
Diluted (loss) earnings per
common share
|
($1.13)
|
|
$0.25
|
|
$0.25
|
|
$0.29
|
|
$0.30
|
|
Book value per share
(3)
|
$9.58
|
|
$11.16
|
|
$11.40
|
|
$11.25
|
|
$10.96
|
|
Tangible book value per share
(3)
|
$9.26
|
|
$10.85
|
|
$11.08
|
|
$10.93
|
|
$10.63
|
|
Dividends per share
|
$0.15
|
|
$0.15
|
|
$0.15
|
|
$0.15
|
|
$0.15
|
|
Capital Ratios:
|
|
|
|
|
|
|
|
|
|
|
Equity to total assets
(consolidated)
|
9.02%
|
|
9.01%
|
|
9.28%
|
|
9.10%
|
|
8.81%
|
|
Tier 1 leverage capital
(Bank)
|
8.12%
|
|
7.95%
|
|
7.91%
|
|
7.75%
|
|
7.60%
|
|
Total risk-based capital
(Bank)
|
19.66%
|
|
23.04%
|
|
22.42%
|
|
21.90%
|
|
21.24%
|
|
Other Data:
|
|
|
|
|
|
|
|
|
|
|
Full-time equivalent
employees
|
1,569
|
|
1,562
|
|
1,573
|
|
1,557
|
|
1,500
|
|
Number of branch
offices
|
135
|
|
135
|
|
135
|
|
134
|
|
131
|
|
Asset Quality
Data:
|
|
|
|
|
|
|
|
|
|
|
Total non-performing
loans
|
$
886,530
|
|
$
871,259
|
|
$
837,469
|
|
$
790,137
|
|
$
744,872
|
|
Number of non-performing
loans
|
2,524
|
|
2,430
|
|
2,291
|
|
2,110
|
|
1,934
|
|
Total number of loans
|
82,976
|
|
83,929
|
|
85,953
|
|
87,041
|
|
86,863
|
|
Total non-performing
assets
|
$
930,541
|
|
$
916,952
|
|
$
877,745
|
|
$
811,827
|
|
$
764,435
|
|
Non-performing loans to total
loans
|
2.92%
|
|
2.82%
|
|
2.64%
|
|
2.46%
|
|
2.32%
|
|
Non-performing assets to total
assets
|
1.77%
|
|
1.50%
|
|
1.45%
|
|
1.33%
|
|
1.25%
|
|
Allowance for loan
losses
|
$
255,283
|
|
$
236,574
|
|
$
216,283
|
|
$
192,983
|
|
$
165,830
|
|
Allowance for loan losses to
non-performing loans
|
28.80%
|
|
27.15%
|
|
25.83%
|
|
24.42%
|
|
22.26%
|
|
Allowance for loan losses to
total loans
|
0.84%
|
|
0.77%
|
|
0.68%
|
|
0.60%
|
|
0.52%
|
|
Provision for loan
losses
|
$
40,000
|
|
$
45,000
|
|
$
50,000
|
|
$
50,000
|
|
$
50,000
|
|
Net charge-offs
|
$
21,290
|
|
$
24,709
|
|
$
26,701
|
|
$
22,846
|
|
$
24,245
|
|
Ratio of net charge-offs to
average loans (1)
|
0.28%
|
|
0.32%
|
|
0.33%
|
|
0.29%
|
|
0.30%
|
|
Net losses (gains) on foreclosed
real estate
|
$
776
|
|
$
1,585
|
|
$
(391)
|
|
$
173
|
|
$
1,372
|
|
(1) Ratios are annualized.
|
|
(2) Computed by dividing
non-interest expense by the sum of net interest income and
non-interest income. For the quarter
ended March 31, 2011, non-interest expense excludes the loss on
debt extinguishments and non-interest income excludes securities
gains from the Restructuring Transaction. See page 11 for a
calculation of the efficiency ratio.
|
|
(3) Please see page 13 for a
calculation of book value per share and tangible book value per
share.
|
|
(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.
|
|
NM - not meaningful
|
|
|
|
|
|
|
|
|
|
|
|
SOURCE Hudson City Bancorp, Inc.