("Hudson City Bancorp Swings To 1Q Loss, Cuts Dividend 47%" at
1244 GMT, misstated the change direction of nonperforming loans in
the seventh paragraph. The correct version follows:)
Hudson City Bancorp Inc. (HCBK) swung to a first-quarter loss on
a 23% drop in net interest income as it cut its quarterly dividend
by 47%.
The bank holding company lowered its quarterly dividend to 8
cents a share from 15 cents, which will save the company about
$138.4 million a year, based on the quarter-end shares
outstanding.
"We are committed to shareholder value and believe that the
current dividend level represents a prudent capital management
decision," said Chairman and Chief Executive Ronald E. Hermance
Jr.
Hudson City has continued to struggle with nonperforming loans
and historically low interest rates. Unlike many banks, it hasn't
been able to improve year-on-year results by setting aside less to
cover potential credit losses.
The company reported a loss of $555.7 million, or $1.13 a share,
compared with a profit of $148.9 million, or 30 cents, a year
earlier. Analysts polled by Thomson Reuters had most recently
forecast a loss of $1.14 a share.
Net interest income dropped to $256.4 million, primarily due to
the low market-interest rates that resulted in lower yields on
mortgage-related interest-earning assets as customers refinanced to
lower mortgage rates and new loans and asset purchases were at the
current low market interest rates.
The provision for loan losses was $40 million, down from $50
million a year earlier and $45 million in the prior quarter. Net
charge-offs, loans on which banks don't expect to collect, were
0.28% of average loans, compared with 0.3% in the 2010 periods.
Nonperforming loans, those expected to go bad, were 2.92% of total
loans, up from 2.82% at Dec. 31.
Shares closed at $9.56 and were inactive premarket. As of the
close, the stock had fallen 34% over the past year.
-By Melodie Warner, Dow Jones Newswires; 212-416-2283;
melodie.warner@dowjones.com