PARAMUS, N.J., Jan. 25, 2012 /PRNewswire/ -- Hudson City
Bancorp, Inc. (NASDAQ: HCBK), the holding company for Hudson City
Savings Bank, reported a net loss of $360.5
million or $0.73 per share for
the quarter ended December 31, 2011
as compared to net income of $121.2
million or $0.25 per diluted
share for the quarter ended December 31,
2010. This loss was due to the previously announced
debt extinguishments which resulted in an after-tax charge of
$416.8 million. Operating
earnings and diluted operating earnings per share (non-GAAP
measures) were $58.6 million and
$0.12, respectively, for the fourth
quarter of 2011. Operating earnings were adversely affected
during the fourth quarter by the elevated levels of liquidity that
were held in overnight funds with an average yield of 0.28%.
These funds were used to fund the debt extinguishments in
December 2011. Please see the
attached Reconciliation of GAAP and Operating Earnings for a
reconciliation of operating earnings to the Company's earnings
reported in accordance with U.S. generally accepted accounting
principles.
Financial highlights for the fourth quarter of 2011 are as
follows:
- The Board of Directors declared a quarterly cash dividend of
$0.08 per share payable on
February 28, 2012 to shareholders of
record on February 10, 2012.
- The Bank extinguished $4.3
billion of structured putable borrowings with a weighted
average cost of 4.21%. The extinguishment of the borrowings was
funded primarily by the Company's existing cash position.
This cash position was the result of the calls of investment
securities and, to a lesser extent, prepayments on mortgage-related
assets. The debt extinguishment reduced after-tax earnings by
approximately $416.8 million for the
fourth quarter of 2011.
- Our net interest rate spread and net interest margin were 1.51%
and 1.73%, respectively, for the fourth quarter of 2011 as compared
to 1.76% and 1.97%, respectively, for the linked third quarter of
2011. Net interest income, the interest rate spread and net
interest margin were adversely affected during the fourth quarter
by the elevated levels of liquidity that were held in overnight
funds with an average yield of 0.28%. These funds were used
to fund the debt extinguishments in December
2011.
- For the year ended December 31,
2011 we had a net loss of $736.0
million as compared to net income of $537.2 million for 2010. Operating earnings
amounted to $332.5 million, or
$0.67 per diluted share, for 2011 as
compared to $537.2 million, or
$1.09 per diluted share, for 2010.
Please see the attached Reconciliation of GAAP and Operating
Earnings for a reconciliation of operating earnings to the
Company's earnings reported in accordance with U.S. generally
accepted accounting principles.
- The provision for loan losses amounted to $25.0 million for the fourth quarter of 2011,
unchanged from the linked third quarter of 2011. Charge-offs
amounted to $20.0 million for the
fourth quarter of 2011 and $18.6
million for the linked third quarter of 2011.
- Borrowings amounted to $15.08
billion at December 31, 2011,
a decrease of $5.15 billion from
September 30, 2011 and a decrease of
$14.6 billion from December 31, 2010. At December 31, 2011, structured borrowings amounted
to $7.93 billion and fixed-rate,
fixed-maturity borrowings amounted to $7.15
billion. Structured borrowings amounted to
$29.08 billion at December 31, 2010.
- The Bank's Tier 1 leverage capital ratio increased to 8.83% at
December 31, 2011 from 8.77% at
September 30, 2011. The ratio
of shareholders' equity to total assets was 10.05% at December 31, 2011 as compared to 9.01% at
December 31, 2010.
Ronald E. Hermance, Jr., Chairman
and Chief Executive Officer commented, "Our net loss for the
quarter was a result of the previously announced extinguishment of
structured borrowings. During the past year, the low interest
rate environment resulted in elevated levels of liquidity as
borrowers prepaid or refinanced their mortgage loans and we
experienced a significant increase in the calls of our investment
securities. Our options for reinvesting this excess liquidity
were limited since the yields available on mortgage-related assets
remained at or near historical low levels and we did not believe it
would be prudent to put such long-term assets on our balance sheet.
As we considered our options for this excess liquidity, we
decided that the best long-term solution would be to reduce the
amount of borrowings on our balance sheet and therefore we repaid
$4.3 billion of structured
borrowings. This reduced our total assets to $45.36 billion and reduced the amount of interest
rate risk inherent in our balance sheet while having no significant
effect on our regulatory capital ratios. The considerable
difference in the interest rates we previously earned on the loans
and securities that were prepaid compared to Federal funds and
other overnight deposits that we held during the quarter and that
were used to extinguish the borrowings in December 2011, also contributed to the decline in
our operating earnings."
Mr. Hermance continued, "This extinguishment of debt in the
fourth quarter and the restructuring transaction in the first
quarter of 2011 were designed to strengthen our balance sheet for
the future and improve our net interest margin. To that end,
we made great strides in 2011 to meet the future head-on by
shrinking our balance sheet, reducing our levels of interest rate
risk, increasing our Tier 1 leverage capital ratio and increasing
staffing levels in critical areas. We believe it is now
critical for Hudson City to focus
on the longer-term opportunities that will be available when
economic conditions normalize. Patience will be rewarded.
Our focus will remain on positioning our balance sheet and
adjusting our business model for future growth. In the short
term, the announced increase in government-sponsored enterprise
("GSE") fees in the second quarter of 2012 should make portfolio
lenders more competitive in the marketplace. Longer term, an
improved economy and a sensible resolution of the GSEs will provide
Hudson City with significant
opportunities to grow our residential business."
For the year ended December 31,
2011, the Bank reported a net loss of $736.0 million as compared to net income of
$537.2 million for the year ended
December 31, 2010. Net loss per
share was $1.49 for the year ended
December 31, 2011 as compared to
diluted earnings per share of $1.09
for the same period in 2010. In addition to the debt
extinguishments in the fourth quarter of 2011, the Bank completed a
restructuring of its balance sheet (the "Restructuring
Transaction") in the first quarter of 2011 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 in the Restructuring
Transaction was funded by the sale of $8.66
billion of securities with an average yield of 3.20% and
re-borrowing $5.00 billion of
short-term fixed-maturity borrowings with an average cost of 0.66%.
The Restructuring Transaction and the extinguishment of debt
during the fourth quarter of 2011, (collectively referred to as the
"Transactions"), reduced after-tax earnings by $1.07 billion. Operating earnings and
diluted operating earnings per share were $332.5 million and $0.67, respectively, for the year ended
December 31, 2011 as compared to
$537.2 million and $1.09, respectively, for the same period in 2010.
Please see the attached Reconciliation of GAAP and Operating
Earnings for a reconciliation of operating earnings to the
Company's earnings reported in accordance with U.S. generally
accepted accounting principles.
Statement of Financial Condition Summary
Total assets decreased $15.81
billion, or 25.8%, to $45.36
billion at December 31, 2011
from $61.17 billion at December 31, 2010. The decrease in total assets
reflected a $10.75 billion decrease
in total mortgage-backed securities, a $3.48
billion decrease in total investment securities, a
$1.64 billion decrease in net loans
and a $454.9 million increase in
other assets. The increase in other assets is due primarily
to an increase in current and deferred tax assets related to tax
benefits from the loss on the Transactions.
Our net loans decreased $1.64
billion during the year ended December 31, 2011 to $29.14 billion. The decrease in loans primarily
reflects reduced levels of loan originations and purchases as well
as elevated levels of loan repayments during 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. During 2011, we originated
$4.93 billion and purchased
$344.8 million of loans, compared to
originations of $5.83 billion and
purchases of $764.3 million for 2010.
The originations and purchases of loans were offset by
principal repayments of $6.71 billion
in 2011, as compared to $7.26 billion
for 2010.
Loan originations declined for the year ended December 31, 2011 as compared to the same period
in 2010, reflecting reduced demand for mortgage loans as a result
of the conditions in the housing market and the general economy.
In addition, elevated levels of refinancing activity caused
by low market interest rates have caused increased levels of
repayments to continue during 2011. Our loan purchase activity has
also declined as sellers from whom we have historically purchased
loans are either retaining these loans in their own portfolios or
selling them to the GSEs.
Total mortgage-backed securities decreased $10.75 billion during the year ended December 31, 2011 to $13.29 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
$4.71 billion which were partially
offset by purchases of $3.05 billion
of mortgage-backed securities issued by GSEs.
Investment securities decreased $3.48
billion due to the calls of these securities during 2011.
The proceeds from the calls were invested in Federal funds
and other overnight deposits until they were used in December 2011 as part of our extinguishment
transaction.
Total liabilities decreased $14.86
billion, or 26.7%, to $40.80
billion at December 31, 2011
from $55.66 billion at December 31, 2010. The decrease in total
liabilities primarily reflected a $14.6
billion decrease in borrowed funds.
Borrowings amounted to $15.08
billion at December 31, 2011
as compared to $29.68 billion at
December 31, 2010. The decrease
in borrowed funds was primarily a result of the Transactions. As
part of the Transactions, we paid off $16.8
billion of structured putable borrowings and re-borrowed
$5.0 billion of new short-term
fixed-maturity borrowings. In addition, approximately
$4.20 billion of borrowings matured
during 2011 and were repaid. The extinguishment of structured
putable borrowings was a necessary step in our efforts to reduce
our interest rate risk and eliminate some of the liquidity
uncertainties of borrowings that are putable at the discretion of
the lender.
At December 31, 2011 and 2010,
borrowings consisted of the following:
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December 31,
2011
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December 31,
2010
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Weighted
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Weighted
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Average
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Average
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Principal
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Rate
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Principal
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Rate
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(Dollars in
thousands)
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Structured
borrowings:
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Quarterly put option
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$
3,325,000
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4.40
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%
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$
24,125,000
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3.94
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%
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One-time put option
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4,600,000
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4.52
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4,950,000
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4.44
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7,925,000
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4.47
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29,075,000
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4.03
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Fixed-rate/fixed-maturity
borrowings
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7,150,000
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3.21
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600,000
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3.47
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Total borrowed
funds
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$
15,075,000
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3.87
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%
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$
29,675,000
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4.02
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%
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The Company had two collateralized borrowings in the form of
repurchase agreements totaling $100.0
million with Lehman Brothers, Inc. Lehman Brothers,
Inc. is currently in liquidation under the Securities Industry
Protection Act ("SIPA"). Mortgage-backed securities with an
amortized cost of approximately $114.1
million were pledged as collateral for these borrowings and
we demanded the return of this collateral. The trustee for
the SIPA liquidation of Lehman Brothers, Inc. (the "Trustee")
notified the Company in the fourth quarter of 2011 that it no
longer holds these securities and considers our claim to be
approximately $13.9 million
representing the excess of the market value of the collateral over
the $100 million repurchase price.
While we dispute the Trustee's calculation of the claim, as a
result of the Trustee's position, we removed the mortgage-backed
securities and the borrowings from our balance sheet and recorded
the net amount as a receivable included in other assets (the "Net
Claim"). While we intend to pursue full recovery of our Net
Claim, we established a reserve of $3.9
million against the receivable balance at December 31, 2011. There can be no
assurances as to the amount of the final settlement of this
transaction.
Total shareholders' equity decreased $949.8 million to $4.56
billion at December 31, 2011
from $5.51 billion at December 31, 2010. The decrease was primarily due
to the net loss of $736.0 million for
the year ended December 31, 2011. The
decrease was also due to cash dividends paid to common shareholders
of $192.7 million and a $45.7 million decrease in accumulated other
comprehensive income to $39.7
million. At December 31,
2011, our shareholders' equity to asset ratio was 10.05% and
our book value per share was $9.20.
The accumulated other comprehensive income of $39.7 million at December
31, 2011 included an $89.3
million after-tax net unrealized gain on securities
available for sale ($150.9 million
pre-tax) and a $49.6 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.
Statement of Income Summary
The Federal Open Market Committee of the Board of Governors of
the Federal Reserve System (the "FOMC") noted that the economy
expanded moderately in 2011. The FOMC noted that recent indicators
point to some improvement in overall labor market conditions,
although the unemployment rate remains at elevated levels.
The national unemployment rate decreased to 8.5% in December 2011 from 9.1% in September 2011 and from 9.4% in December 2010. The FOMC noted that household
spending has continued to advance, but business fixed investment
appears to be increasing at a slower pace and the housing sector
continues to be depressed. As a result, the FOMC decided to
continue its program to extend the average maturity of its holdings
of securities as announced in September. The FOMC also indicated in
September 2011, that the overnight
lending rate would remain at zero to 0.25% through at least
mid-2013. The decision to leave the overnight lending rate
unchanged has kept short-term market interest rates at low levels
during 2011. The yields on mortgage-related assets have also
remained at low levels during the same period. The actions
commenced by the FOMC have placed additional downward pressure on
our net interest margin as our interest-earning assets continue to
re-price.
Net interest income decreased $44.8
million, or 17.8%, to $207.0
million for the fourth quarter of 2011 as compared to
$251.8 million for the fourth quarter
of 2010. Our net interest rate spread increased to 1.51% for
the fourth quarter of 2011 as compared to 1.48% for the fourth
quarter of 2010 but decreased 25 basis points from the linked third
quarter of 2011. Our net interest margin remained unchanged
at 1.73% for the both the fourth quarter of 2011 and 2010,
respectively, but decreased 24 basis points from the linked third
quarter of 2011.
Net interest income decreased $209.9
million, or 17.6%, to $980.9
million for 2011 as compared to $1.19
billion for 2010. During 2011, our net interest rate
spread decreased 10 basis points to 1.67% and our net interest
margin decreased 12 basis points to 1.89% as compared to 2010.
The decrease in our net interest margin during the fourth
quarter of 2011 from the linked third quarter reflected the
elevated levels of liquidity provided by the calls of investment
securities and repayments of mortgage-related assets. These
funds were invested in Federal funds and other overnight deposits
with an average yield of 0.28% until they were used to extinguish
borrowings with an average cost of 4.21% in December 2011. The average balance of
Federal funds sold and other overnight deposits amounted to
$3.44 billion during the fourth
quarter of 2011 as compared to $1.20
billion for the linked third quarter. Our net interest
margin decreased for the year ended 2011 as compared to the same
period in 2010. This decrease was due primarily 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 89.0% of our average
interest-earning assets during the 2011 fourth quarter.
Total interest and dividend income for the fourth quarter of
2011 decreased $170.4 million, or
26.5%, to $472.8 million from
$643.2 million for the fourth quarter
of 2010. The decrease in total interest and dividend income was due
to a decrease in the average balance of total interest-earning
assets of $10.87 billion, or 18.4%,
to $48.23 billion for the fourth
quarter of 2011 from $59.10 billion
for the fourth quarter of 2010. The decrease in total
interest and dividend income was also due to a decrease of 43 basis
points in the annualized weighted-average yield on total
interest-earning assets to 3.92% for the fourth quarter of 2011
from 4.35% for the quarter ended December
31, 2010, reflecting lower market interest rates. The
decrease in the average balance of total interest-earning assets
was due primarily to the Transactions.
Total interest and dividend income for the year ended
December 31, 2011 decreased
$616.9 million, or 22.2%, to
$2.17 billion from $2.78 billion for the year ended December 31, 2010. The decrease in total interest
and dividend income was primarily due to a decrease in the average
balance of total interest-earning assets of $7.47 billion, or 12.6%, to $51.80 billion for the year ended December 31, 2011 from $59.27 billion for the same period in 2010. The
decrease in total interest and dividend income was also due to a
decrease of 52 basis points in the weighted-average yield on total
interest-earning assets to 4.18% for the year ended December 31, 2011 from 4.70% for the year ended
December 31, 2010. The decrease
in the average balance of total interest-earning assets was due
primarily to the effects of the Transactions.
Interest on first mortgage loans decreased $41.6 million to $354.0
million for the fourth quarter of 2011 from $395.6 million for the fourth quarter of 2010.
This decrease was primarily due to a 28 basis point decrease in the
weighted-average yield to 4.84% for the quarter ended December 31, 2011 from 5.12% for the quarter
ended December 31, 2010. The
decrease in interest income on mortgage loans was also due to a
$1.67 billion decrease in the average
balance of first mortgage loans to $29.24
billion for the fourth quarter of 2011 from $30.91 billion for the same quarter in 2010. 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. During the fourth quarter of 2011,
existing mortgage customers refinanced or recast approximately
$1.43 billion in mortgage loans with
a weighted average rate of 5.19% to a new weighted average rate of
4.07%.
For the year ended December 31,
2011, interest on first mortgage loans decreased
$174.0 million, or 10.4%, to
$1.49 billion from $1.67 billion for the year ended December 31, 2010. This was primarily due to a 29
basis point decrease in the weighted-average yield to 5.02% for the
year ended December 31, 2011 from
5.31% for the year ended December 31,
2010. The decrease in interest income on mortgage
loans was also due to a $1.68 billion
decrease in the average balance of first mortgage loans to
$29.72 billion for the year ended
December 31, 2011 from $31.40 billion for the same period in 2010.
Refinancing activity, which resulted in continued elevated
levels of loan repayments, also had an impact on the average
balance of our first mortgage loans during the year ended
December 31, 2011. During the
year ended December 31, 2011,
existing mortgage customers refinanced or recast approximately
$3.52 billion in mortgage loans with
a weighted average rate of 5.33% to a new weighted average rate of
4.25%.
Interest on mortgage-backed securities decreased $93.2 million to $97.9
million for the fourth quarter of 2011 from $191.1 million for the fourth quarter of 2010.
This decrease was due to a $7.31
billion decrease in the average balance of mortgage-backed
securities to $13.68 billion during
the fourth quarter of 2011 from $20.99
billion during the fourth quarter of 2010. The decrease in
interest on mortgage-backed securities was also due to a 78 basis
point decrease in the weighted-average yield to 2.86% for the
fourth quarter of 2011 from 3.64% for the fourth quarter of 2010.
The decrease in the average balance of mortgage-backed
securities was due primarily to the effects of the Restructuring
Transaction as well as continued elevated levels of principal
prepayments as market interest rates remained low.
Interest on mortgage-backed securities decreased $337.0 million to $514.6
million for the year ended December
31, 2011 from $851.6 million
for the year ended December 31, 2010.
This decrease was due primarily to a 98 basis point decrease
in the weighted-average yield to 3.16% during 2011 from 4.14% for
2010. The decrease in interest income on mortgage-backed securities
was also due to a $4.26 billion
decrease in the average balance of mortgage-backed securities to
$16.30 billion during 2011 from
$20.56 billion for the same period in
2010. The decrease in the average balance of mortgage-backed
securities was due primarily to the effects of the Restructuring
Transaction as well as elevated levels of principal prepayments as
market interest rates remained low.
The decrease in the weighted average yield on mortgage-backed
securities is a result of lower yields on securities purchased
during 2010 when market interest rates were lower than the yield
earned on the existing portfolio.
Interest on investment securities decreased $29.4 million to $7.2
million for the fourth quarter of 2011 as compared to
$36.6 million for the fourth quarter
of 2010. This decrease was due to a $3.47 billion decrease in the average balance of
investment securities to $894.4
million for the fourth quarter of 2011 from $4.37 billion for the fourth quarter of 2010.
The decrease in the average balance was due to the calls of
$3.4 billion of investment securities
during 2011. In addition, the average yield earned on investment
securities decreased 12 basis points to 3.24% for the fourth
quarter of 2011 as compared to 3.36% for the fourth quarter of 2010
as the higher-yielding securities were called first.
For the year ended December 31,
2011, interest on investment securities decreased
$97.6 million to $101.1 million as compared to $198.7 million for the year ended December 31, 2010. This decrease was due to
a $1.97 billion decrease in the
average balance of investment securities to $3.02 billion for 2011 from $4.99 billion for 2010. In addition, the
average yield of investment securities decreased 63 basis points to
3.35% for 2011 as compared to 3.98% for the same period in 2010 as
the higher-yielding securities were called first.
Dividends on FHLB stock decreased $6.9
million, or 47.9%, to $7.5
million for the fourth quarter of 2011 as compared to
$14.4 million for the fourth quarter
of 2010. This decrease was due primarily to a 215 basis point
decrease in the average dividend yield earned to 4.45% as compared
to 6.60% for the fourth quarter of 2010. The decrease in the
dividends on FHLB stock was also due to a $198.0 million decrease in the average balance of
FHLB stock to $677.7 million for the
fourth quarter of 2011 from $875.7
million for the fourth quarter of 2010.
Dividends on FHLB stock decreased $7.3
million, or 15.8%, to $38.8
million for the year ended December
31, 2011 as compared to $46.1
million for the comparable period in 2010. This
decrease was due primarily to a $108.4
million decrease in the average balance of FHLB stock to
$770.3 million for 2011 from
$878.7 million for the same period in
2010. In addition, the average dividend yield earned decreased to
5.04% for 2011 from 5.25% for 2010.
Interest on Federal funds sold amounted to $2.5 million for the fourth quarter of 2011 as
compared to $985,000 for the fourth
quarter of 2010. The average balance of Federal funds sold
amounted to $3.44 billion for the
fourth quarter of 2011 as compared to $1.62
billion for the fourth quarter of 2010. The yield
earned on Federal funds sold was 0.28% for the 2011 fourth quarter
and 0.24% for the 2010 fourth quarter.
Interest on Federal funds sold amounted to $4.4 million for the year ended December 31, 2011 as compared to $2.6 million for the year ended December 31, 2010. The average balance of
Federal funds sold amounted to $1.67
billion for 2011 as compared to $1.10
billion for the same period in 2010. The yield earned
on Federal funds sold was 0.26% for the year ended December 31, 2011 and 0.24% for the year ended
December 31, 2010.
The increase in the average balance of Federal funds sold for
the fourth quarter of 2011 and the year ended December 31, 2011 is primarily due to the timing
of the extinguishment of borrowings in the Transactions relative to
the timing of the receipt of the proceeds from securities sales,
calls of investment securities and payments received on
mortgage-related assets that were used to fund the
extinguishments.
Total interest expense for the quarter ended December 31, 2011 decreased $125.5 million, or 32.1%, to $265.9 million from $391.4
million for the quarter ended December 31, 2010. This decrease was
primarily due to a $10.25 billion, or
19.0%, decrease in the average balance of total interest-bearing
liabilities to $43.83 billion for the
quarter ended December 31, 2011 as
compared with $54.08 billion for the
quarter ended December 31, 2010. The
decrease in the average balance of total interest-bearing
liabilities was due to the reduction of total borrowings as part of
the Transactions. The decrease in total interest expense was also
due to a 46 basis point decrease in the weighted-average cost of
total interest-bearing liabilities to 2.41% for the quarter ended
December 31, 2011 compared with 2.87%
for the quarter ended December 31,
2010.
For the year ended December 31,
2011, total interest expense decreased $407.0 million, or 25.5%, to $1.19 billion from $1.59
billion for the year ended December
31, 2010. This decrease was primarily due to a
$7.06 billion, or 13.0%, decrease in
the average balance of total interest-bearing liabilities to
$47.34 billion for the year ended
December 31, 2011 from $54.40 billion for the year ended December 31, 2010. The decrease in the
average balance of total interest-bearing liabilities was primarily
due to the reduction of total borrowings as part of the
Transactions. The decrease in total interest expense was also due
to a 42 basis point decrease in the weighted-average cost of total
interest-bearing liabilities to 2.51% for the year ended
December 31, 2011 compared with 2.93%
for the year ended December 31,
2010.
Interest expense on deposits decreased $7.9 million, or 9.2%, to $78.3 million for the fourth quarter of 2011 from
$86.2 million for the fourth quarter
of 2010. This decrease is due to a decrease in the average
cost of interest-bearing deposits of 16 basis points to 1.25% for
the fourth quarter of 2011 as compared to 1.41% for the fourth
quarter of 2010. The effect of the decrease in the average
cost of deposits was partially offset by a $499.8 million increase in the average balance of
interest-bearing deposits to $24.82
billion during the fourth quarter of 2011 as compared to
$24.32 billion for the fourth quarter
of 2010.
For the year ended December 31,
2011, interest expense on deposits decreased $47.8 million, or 12.7%, to $328.5 million from $376.3
million for the year ended December
31, 2010. This decrease is due to a decrease in the
average cost of interest-bearing deposits of 22 basis points to
1.32% for the year ended December 31,
2011 as compared to 1.54% for 2010. The effect of the
decrease in the average cost of deposits was partially offset by a
$372.1 million increase in the
average balance of interest-bearing deposits to $24.86 billion during 2011 as compared to
$24.49 billion for 2010.
The decrease in the average cost of deposits during 2011
reflected lower market interest rates. At December 31, 2011, time deposits scheduled to
mature within one year totaled $8.85
billion with an average cost of 1.24%. These time
deposits are scheduled to mature as follows: $3.69 billion with an average cost of 1.15% in
the first quarter of 2012, $2.10
billion with an average cost of 1.03% in the second quarter
of 2012, $1.46 billion with an
average cost of 1.39% in the third quarter of 2012 and $1.60 billion with an average cost of 1.55% in
the fourth 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 $117.6 million to $187.6
million for the fourth quarter of 2011 from $305.2 million for the fourth quarter of 2010.
This decrease was primarily due to a $10.75
billion decrease in the average balance of borrowed funds to
$19.01 billion for the fourth quarter
of 2011 as compared to $29.76 billion
for the fourth quarter of 2010. This decrease was also due to
a 15 basis point decrease in the weighted-average cost of borrowed
funds to 3.92% for the fourth quarter of 2011 as compared to 4.07%
for the fourth quarter of 2010. The decrease in the average
balance and cost of our borrowings is due to the effects of the
Transactions.
For the year ended December 31,
2011 interest expense on borrowed funds decreased
$359.1 million to $858.2 million as compared to $1.22 billion for the year ended December 31, 2010. This decrease was primarily
due to a $7.43 billion decrease in
the average balance of borrowed funds to $22.48 billion for 2011 from $29.91 billion for 2010. This decrease was
also due to a 25 basis point decrease in the weighted-average cost
of borrowed funds to 3.82% for 2011 as compared to 4.07% for 2010.
The decrease in the average balance and cost of our
borrowings is due to the effects of the Transactions.
Borrowings amounted to $15.08
billion at December 31, 2011
with an average cost of 3.87%. Borrowings scheduled to mature
over the next 12 months are as follows: $900.0 million with an average cost of 0.98% in
the first quarter of 2012, $750.0
million with an average cost of 0.74% in the second quarter
of 2012 and $750.0 million with an
average cost of 0.85% in the third quarter of 2012 and $500.0 million with an average cost of 0.98% in
the fourth quarter of 2012.
The provision for loan losses amounted to $25.0 million for the quarter ended December 31, 2011 as compared to $45.0 million for the quarter ended December 31, 2010. The decrease in our
provision for loan losses during the fourth quarter of 2011 as
compared to the same period in 2010 was a result of a stabilization
in both the level of charge-offs and the growth rate of
non-performing loans as well as a decrease in the size of the loan
portfolio. Non-performing loans, defined as non-accruing
loans and accruing loans delinquent 90 days or more, amounted to
$1.02 billion at December 31, 2011 compared with $871.3 million at December
31, 2010. The ratio of non-performing loans to total loans
was 3.48% at December 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 continued to be extended.
We continue to experience 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 $427.2 million at December
31, 2011 as compared to $418.9
million at December 31, 2010.
Loans delinquent 60 to 89 days amounted to $187.4 million at December
31, 2011 as compared to $193.2
million at December 31, 2010.
The allowance for loans losses amounted to $273.8 million at December
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 0.93% and 26.77%
respectively at December 31, 2011, as
compared to 0.77% and 27.15%, respectively at December 31, 2010.
Net charge-offs amounted to $20.0
million for the quarter ended December 31, 2011 as compared to net charge-offs
of $24.7 million for the same quarter
in 2010. The ratio of net charge-offs to average loans was
0.27% for the quarter ended December 31,
2011 as compared to 0.32% for the same period in 2010.
For the year ended December 31,
2011, net charge-offs amounted to $82.8 million as compared to $98.5 million of net charge-offs for the same
period in 2010.
Total non-interest income was $2.9
million for the fourth quarter 2011 as compared to
$62.9 million for the same quarter in
2010. Included in non-interest income for the fourth quarter of
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. There were no security sales
during the three months ended December 31,
2011.
Total non-interest income was $113.9
million for the year ended December
31, 2011 as compared to $163.0
million for the same period in 2010. Included in
non-interest income for the year ended December 31, 2011 were net gains on securities
transactions of $102.5 million which
resulted from the sale of $9.04
billion of securities available-for-sale.
Substantially all of the proceeds from the sale of securities
were used to repay borrowings as part of the Restructuring
Transaction. 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.
Total non-interest expense increased $750.5 million to $820.1
million for the fourth quarter of 2011 as compared to
$69.6 million for the fourth quarter
of 2010. Included in total non-interest expense for the
fourth quarter of 2011 was a $728.5
million loss on the extinguishment of debt completed in
December 2011. The increase in
total non-interest expense was also due to a $22.6 million increase in Federal deposit
insurance assessments and an $8.6
million increase in other non-interest expense, partially
offset by a $9.6 million decrease in
compensation and employee benefits.
Compensation and employee benefit costs decreased $9.6 million, or 27.7%, to $25.2 million for the fourth quarter of 2011 as
compared to $34.8 million for the
same period in 2010. This decrease was primarily due to a
$4.7 million decrease in expense
related to our stock benefit plans due primarily to decreases in
the market price of our common stock and a $4.3 million decrease in compensation costs.
The decrease in compensation costs is due primarily to a
decrease in incentive compensation expense for 2011. At
December 31, 2011, we had 1,586
full-time equivalent employees as compared to 1,562 at December 31, 2010.
Federal deposit insurance expense increased $22.6 million, or 150.1%, to $37.6 million for the fourth quarter of 2011 from
$15.0 million for the fourth quarter
of 2010. This increase was due primarily to the new deposit
assessment methodology adopted by the Federal Deposit Insurance
Corporation that became effective on April
1, 2011 and which redefined the assessment base as average
consolidated total assets minus average tangible equity.
Previously, deposit insurance assessments were based on the
amount of deposits.
Included in other expense for the fourth quarter of 2011 were
write-downs and net losses on the sale of foreclosed real estate of
$2.6 million as compared to
$1.6 million for the fourth quarter
of 2010. This increase was due primarily to increased
activity in foreclosed real estate. We sold 43 properties
during the fourth quarter of 2011 and had 134 properties in
foreclosed real estate, 55 of which were under contract to sell as
of December 31, 2011. For the
fourth quarter of 2010, we sold 13 properties and had 127
properties in foreclosed real estate, of which 44 were under
contract to sell as of December 31,
2010. Also included in other expense for the 2011
fourth quarter was a $3.9 million
write-down of our Net Claim related to the SIPA liquidation of
Lehman Brothers, Inc.
Total non-interest expense amounted to $2.23 billion for the year ended December 31, 2011 as compared to $266.4 million for the year ended December 31, 2010. Included in total
non-interest expense for the year ended December 31, 2011 was a $1.9 billion loss on the extinguishment of debt
related to the Transactions.
Compensation and employee benefit costs decreased $20.7 million, or 15.5%, to $113.1 million for 2011 as compared to
$133.8 million for the same period in
2010. This decrease is primarily due to a $21.5 million decrease in expense related to our
stock benefit plans primarily as a result of the decrease in the
market price of our common stock and a $929,000 decrease in compensation costs.
These decreases were partially offset by an increase of
$984,000 increase in medical plan
expense and an $872,000 increase in
pension costs. The decrease in compensation costs is due to a
decrease in incentive compensation expense for 2011.
For the year ended December 31,
2011 Federal deposit insurance increased $65.0 million, or 116.2%, to $121.0 million from $56.0
million for the year ended December
31, 2010.
Included in other non-interest expense for the year ended
December 31, 2011 were write-downs
and net losses on the sale of foreclosed real estate of
$7.5 million as compared to
$2.7 million for the comparable
period in 2010. We sold 156 properties during the year of
2011 as compared to 71 properties for the same period in 2010.
Our efficiency ratio was 41.79% for the 2011 fourth quarter as
compared to 22.10% for the 2010 fourth quarter. For the year
ended December 31, 2011, our
efficiency ratio was 32.68% compared with 19.68% for the year ended
December 31, 2010. The efficiency
ratio is calculated by dividing non-interest expense, excluding the
loss from the Transactions, 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 fourth quarter
of 2011 was 6.62% as compared to 0.46% for the fourth quarter of
2010. Excluding the loss on the extinguishment of debt in
December 2011, our annualized ratio
of operating non-interest expense to average total assets was 0.71%
for the quarter ended December 31,
2011. Our ratio of non-interest expense to average total
assets for the year ended December 31,
2011 was 4.20% compared with 0.44% for the corresponding
period in 2010. Excluding the loss on the Transactions, our ratio
of operating non-interest expense to average total assets was 0.61%
for the year ended December 31, 2011.
Please see the attached Reconciliation of GAAP and Operating
Earnings 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 $274.7
million for the fourth quarter of 2011 compared with income
tax expense $79.0 million for the
same quarter in 2010. Income tax benefit amounted to
$519.3 million for the year ended
December 31, 2011 compared with
income tax expense $355.2 million for
the year ended December 31, 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 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
Transactions 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
|
|
|
|
|
December
31,
|
|
December
31,
|
|
|
|
|
|
2011
|
2010
|
|
|
(In thousands, except share and
per share amounts)
|
(unaudited)
|
|
|
|
|
|
|
|
|
|
|
|
|
Assets:
|
|
|
|
|
|
|
Cash and due from
banks
|
|
$
194,029
|
|
$
175,769
|
|
|
Federal funds sold and other
overnight deposits
|
|
560,051
|
|
493,628
|
|
|
Total cash and cash equivalents
|
|
754,080
|
|
669,397
|
|
|
|
|
|
|
|
|
|
|
Securities available for
sale:
|
|
|
|
|
|
|
Mortgage-backed
securities
|
|
9,170,390
|
|
18,120,537
|
|
|
Investment
securities
|
|
7,368
|
|
89,795
|
|
|
Securities held to
maturity:
|
|
|
|
|
|
|
Mortgage-backed
securities
|
|
4,115,523
|
|
5,914,372
|
|
|
Investment
securities
|
|
539,011
|
|
3,939,006
|
|
|
|
Total securities
|
|
13,832,292
|
|
28,063,710
|
|
|
|
|
|
|
|
|
|
|
Loans
|
|
|
29,327,345
|
|
30,923,897
|
|
|
Net deferred loan
costs
|
|
83,805
|
|
86,633
|
|
|
Allowance for loan
losses
|
|
(273,791)
|
|
(236,574)
|
|
|
|
Net loans
|
|
29,137,359
|
|
30,773,956
|
|
|
|
|
|
|
|
|
|
|
Federal Home Loan Bank of New
York stock
|
|
510,564
|
|
871,940
|
|
|
Foreclosed real estate,
net
|
|
40,619
|
|
45,693
|
|
|
Accrued interest
receivable
|
|
129,088
|
|
245,546
|
|
|
Banking premises and equipment,
net
|
|
70,610
|
|
69,444
|
|
|
Goodwill
|
|
152,109
|
|
152,109
|
|
|
Other assets
|
|
729,164
|
|
274,238
|
|
|
|
Total Assets
|
|
45,355,885
|
|
$
61,166,033
|
|
|
|
|
|
|
|
|
|
|
Liabilities and Shareholders'
Equity:
|
|
|
|
|
|
|
Deposits:
|
|
|
|
|
|
|
Interest-bearing
|
|
$
24,903,311
|
|
$
24,605,896
|
|
|
Noninterest-bearing
|
|
604,449
|
|
567,230
|
|
|
|
Total deposits
|
|
25,507,760
|
|
25,173,126
|
|
|
|
|
|
|
|
|
|
|
Repurchase agreements
|
|
6,950,000
|
|
14,800,000
|
|
|
Federal Home Loan Bank of New
York advances
|
|
8,125,000
|
|
14,875,000
|
|
|
|
Total borrowed funds
|
|
15,075,000
|
|
29,675,000
|
|
|
|
|
|
|
|
|
|
|
Due to brokers
|
|
-
|
|
538,200
|
|
|
Accrued expenses and other
liabilities
|
|
212,685
|
|
269,469
|
|
|
|
Total liabilities
|
|
40,795,445
|
|
55,655,795
|
|
|
|
|
|
|
|
|
|
|
Common stock, $0.01 par value,
3,200,000,000 shares authorized;
|
|
|
|
|
|
|
|
741,466,555 shares issued;
527,571,496 and 526,718,310
|
|
|
|
|
|
|
|
shares outstanding at December
31, 2011 and 2010, respectively
|
|
7,415
|
|
7,415
|
|
|
Additional paid-in
capital
|
|
4,720,890
|
|
4,705,255
|
|
|
Retained earnings
|
|
1,709,821
|
|
2,642,338
|
|
|
Treasury stock, at cost;
213,895,059 and 214,748,245 shares at
|
|
|
|
|
|
|
|
December 31, 2011 and 2010,
respectively
|
|
(1,719,114)
|
|
(1,725,946)
|
|
|
Unallocated common stock held by
the employee stock ownership plan
|
|
(198,223)
|
|
(204,230)
|
|
|
Accumulated other comprehensive
income, net of tax
|
|
39,651
|
|
85,406
|
|
|
|
Total shareholders'
equity
|
|
4,560,440
|
|
5,510,238
|
|
|
|
Total Liabilities and Shareholders' Equity
|
|
$
45,355,885
|
|
$
61,166,033
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Hudson City
Bancorp, Inc. and Subsidiary
Consolidated
Statements of Operation
(Unaudited)
|
|
|
|
|
|
For the
Three Months
|
|
For the
Years
|
|
|
|
|
|
Ended
December 31,
|
|
Ended
December 31,
|
|
|
|
|
|
2011
|
|
2010
|
|
2011
|
|
2010
|
|
|
|
|
|
(In
thousands, except per share data)
|
|
Interest and Dividend
Income:
|
|
|
|
|
|
|
|
|
|
|
First mortgage loans
|
|
$
353,989
|
|
$
395,551
|
|
$ 1,492,989
|
|
$ 1,667,027
|
|
|
Consumer and other
loans
|
|
3,723
|
|
4,471
|
|
15,740
|
|
18,409
|
|
|
Mortgage-backed securities held
to maturity
|
|
46,680
|
|
70,795
|
|
213,211
|
|
356,023
|
|
|
Mortgage-backed securities
available for sale
|
|
51,211
|
|
120,349
|
|
301,349
|
|
495,572
|
|
|
Investment securities held to
maturity
|
|
7,187
|
|
35,526
|
|
100,196
|
|
179,632
|
|
|
Investment securities available
for sale
|
|
53
|
|
1,120
|
|
940
|
|
19,112
|
|
|
Dividends on Federal Home Loan
Bank of New York stock
|
|
7,546
|
|
14,439
|
|
38,820
|
|
46,107
|
|
|
Federal funds sold
|
|
2,455
|
|
985
|
|
4,392
|
|
2,614
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Total interest and
dividend income
|
|
472,844
|
|
643,236
|
|
2,167,637
|
|
2,784,496
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Interest Expense:
|
|
|
|
|
|
|
|
|
|
|
Deposits
|
|
78,298
|
|
86,232
|
|
328,514
|
|
376,347
|
|
|
Borrowed funds
|
|
187,565
|
|
305,170
|
|
858,189
|
|
1,217,322
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Total interest
expense
|
|
265,863
|
|
391,402
|
|
1,186,703
|
|
1,593,669
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Net interest income
|
|
206,981
|
|
251,834
|
|
980,934
|
|
1,190,827
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Provision for Loan
Losses
|
|
25,000
|
|
45,000
|
|
120,000
|
|
195,000
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Net interest income after
provision for loan losses
|
|
181,981
|
|
206,834
|
|
860,934
|
|
995,827
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Non-Interest Income:
|
|
|
|
|
|
|
|
|
|
|
Service charges and other
income
|
|
2,884
|
|
2,713
|
|
11,449
|
|
10,369
|
|
|
Gain on securities transactions,
net
|
|
-
|
|
60,214
|
|
102,468
|
|
152,625
|
|
|
Total non-interest
income
|
|
2,884
|
|
62,927
|
|
113,917
|
|
162,994
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Non-Interest Expense:
|
|
|
|
|
|
|
|
|
|
|
Compensation and employee
benefits
|
|
25,155
|
|
34,798
|
|
113,129
|
|
133,803
|
|
|
Net occupancy expense
|
|
8,664
|
|
8,143
|
|
33,830
|
|
32,689
|
|
|
Federal deposit insurance
assessment
|
|
37,587
|
|
15,030
|
|
120,981
|
|
55,957
|
|
|
Loss on extinguishment of
debt
|
|
728,499
|
|
-
|
|
1,900,591
|
|
-
|
|
|
Other expense
|
|
20,189
|
|
11,584
|
|
61,629
|
|
43,939
|
|
|
Total non-interest
expense
|
|
820,094
|
|
69,555
|
|
2,230,160
|
|
266,388
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
(Loss) income before income tax
(benefit) expense
|
|
(635,229)
|
|
200,206
|
|
(1,255,309)
|
|
892,433
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Income Tax (Benefit) Expense
|
|
(274,693)
|
|
79,045
|
|
(519,320)
|
|
355,227
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Net (loss) income
|
|
$
(360,536)
|
|
$
121,161
|
|
$
(735,989)
|
|
$
537,206
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Basic (Loss) Earnings Per
Share
|
|
$
(0.73)
|
|
$
0.25
|
|
$
(1.49)
|
|
$
1.09
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Diluted (Loss) Earnings Per
Share
|
|
$
(0.73)
|
|
$
0.25
|
|
$
(1.49)
|
|
$
1.09
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Weighted Average Number
of
Common Shares
Outstanding:
|
|
|
|
|
|
|
|
Basic
|
|
495,539,810
|
|
493,505,586
|
|
494,629,395
|
|
493,032,873
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Diluted
|
|
495,539,810
|
|
494,146,907
|
|
494,629,395
|
|
494,314,390
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
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 Transactions. 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
periods presented:
|
|
|
|
For the
Three Months Ended
|
|
For the
Years Ended
|
|
|
|
|
December
31,
|
|
March
31,
|
|
December
31,
|
|
|
|
|
2011
|
|
2010
|
|
2011
|
|
2011
|
|
2010
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
GAAP (Loss)
Earnings
|
|
$
(360,536)
|
|
$
121,161
|
|
$
(555,664)
|
|
$
(735,989)
|
|
$
537,206
|
|
|
Adjustments to GAAP (loss)
earnings:
|
|
|
|
|
|
|
|
|
|
|
|
|
Loss on extinguishment of
debt
|
|
728,499
|
|
-
|
|
1,172,092
|
|
1,900,591
|
|
-
|
|
|
Net gain on securities
sales related to
|
|
|
|
|
|
|
|
|
|
|
|
|
Restructuring
Transaction (5)
|
|
-
|
|
-
|
|
(98,278)
|
|
(98,278)
|
|
-
|
|
|
Valuation allowance
related to Lehman Brothers
|
|
3,900
|
|
-
|
|
|
|
3,900
|
|
|
|
|
Income tax
effect
|
|
(313,252)
|
|
-
|
|
(424,479)
|
|
(737,731)
|
|
-
|
|
|
Operating
earnings
|
|
58,611
|
|
121,161
|
|
93,671
|
|
332,493
|
|
537,206
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Diluted GAAP (Loss) Earnings per
Share
|
|
$
(0.73)
|
|
$
0.25
|
|
$
(1.13)
|
|
$
(1.49)
|
|
$
1.09
|
|
|
Adjustments to GAAP (loss)
earnings:
|
|
|
|
|
|
|
|
|
|
|
|
|
Loss on extinguishment of
debt
|
|
1.47
|
|
-
|
|
2.37
|
|
3.84
|
|
-
|
|
|
Net gain on securities
sales related to
|
|
|
|
|
|
|
|
|
|
|
|
|
Restructuring
Transaction (5)
|
|
-
|
|
-
|
|
(0.20)
|
|
(0.20)
|
|
-
|
|
|
Valuation allowance
related to Lehman Brothers
|
|
0.01
|
|
|
|
|
|
0.01
|
|
|
|
|
Income tax
effect
|
|
(0.63)
|
|
-
|
|
(0.85)
|
|
(1.49)
|
|
-
|
|
|
Diluted operating
earnings per share
|
|
$
0.12
|
|
$
0.25
|
|
$
0.19
|
|
$
0.67
|
|
$
1.09
|
|
|
Weighted average number of
common shares outstanding:
|
|
|
|
|
|
|
|
|
|
|
|
|
Basic
|
|
495,539,810
|
|
493,505,586
|
|
493,843,304
|
|
494,629,395
|
|
493,032,873
|
|
|
Diluted
|
|
495,539,810
|
|
494,146,907
|
|
494,502,987
|
|
495,036,221
|
|
494,314,390
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Operating Efficiency
Ratio
|
|
|
|
|
|
|
|
|
|
|
|
|
Total non-interest
expense
|
|
$
820,094
|
|
$
69,555
|
|
$ 1,240,568
|
|
$ 2,230,160
|
|
$
266,388
|
|
|
Loss on extinguishment of
debt
|
|
(728,499)
|
|
-
|
|
(1,172,092)
|
|
(1,900,591)
|
|
-
|
|
|
Valuation allowance
related to Lehman Brothers
|
|
(3,900)
|
|
-
|
|
-
|
|
(3,900)
|
|
-
|
|
|
Operating non-interest
expense
|
|
$
87,695
|
|
$
69,555
|
|
$
68,476
|
|
$
325,669
|
|
$
266,388
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Net interest income
|
|
206,981
|
|
251,834
|
|
256,401
|
|
980,934
|
|
1,190,827
|
|
|
Total non-interest
income
|
|
2,884
|
|
62,927
|
|
105,207
|
|
113,917
|
|
162,994
|
|
|
Net gains on securities
transactions related to
|
|
|
|
-
|
|
|
|
|
|
-
|
|
|
Restructuring Transaction
(5)
|
|
-
|
|
-
|
|
(98,278)
|
|
(98,278)
|
|
|
|
|
Operating non-interest
income
|
|
2,884
|
|
62,927
|
|
6,929
|
|
15,639
|
|
162,994
|
|
|
Total operating
income
|
|
$
209,865
|
|
$
314,761
|
|
$
263,330
|
|
$
996,573
|
|
$ 1,353,821
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Operating efficiency ratio
(4)
|
|
41.79%
|
|
22.10%
|
|
26.00%
|
|
32.68%
|
|
19.68%
|
|
|
Ratio of operating earnings to
average assets (1) (2)
|
|
0.47
|
|
0.80
|
|
0.63
|
|
0.63
|
|
0.88
|
|
|
Ratio of operating earnings to
average equity (1) (3)
|
|
4.79
|
|
8.50
|
|
6.99
|
|
6.65
|
|
9.66
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
(1) Ratios are
annualized.
|
|
|
|
|
|
|
|
|
|
|
|
|
(2) Calculated by dividing
operating earnings by average assets
|
|
|
(3) Calculated by dividing
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 and $152.6 million for the years ended
December 31, 2011 and 2010, respectively
|
|
|
Total net
securities gains amounted to $102.5 million for the three months
ended March 31, 2011.
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Hudson City
Bancorp, Inc. and Subsidiary
Consolidated
Average Balance Sheets
(Unaudited)
|
|
|
|
|
For the
Three Months Ended December 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)
|
$
29,244,286
|
|
$ 353,989
|
|
4.84
|
%
|
$ 30,913,700
|
|
$ 395,551
|
|
5.12
|
%
|
|
|
Consumer and other
loans
|
297,289
|
|
3,723
|
|
5.01
|
|
334,216
|
|
4,471
|
|
5.35
|
|
|
|
Federal funds sold and other
overnight deposits
|
3,435,110
|
|
2,455
|
|
0.28
|
|
1,620,716
|
|
985
|
|
0.24
|
|
|
|
Mortgage-backed securities at
amortized cost
|
13,678,456
|
|
97,891
|
|
2.86
|
|
20,988,617
|
|
191,144
|
|
3.64
|
|
|
|
Federal Home Loan Bank
stock
|
677,724
|
|
7,546
|
|
4.45
|
|
875,682
|
|
14,439
|
|
6.60
|
|
|
|
Investment securities, at
amortized cost
|
894,352
|
|
7,240
|
|
3.24
|
|
4,368,329
|
|
36,646
|
|
3.36
|
|
|
|
|
Total interest-earning
assets
|
48,227,217
|
|
472,844
|
|
3.92
|
|
59,101,260
|
|
643,236
|
|
4.35
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Noninterest-earnings assets
(4)
|
1,319,350
|
|
|
|
|
|
1,541,372
|
|
|
|
|
|
|
|
|
Total Assets
|
$
49,546,567
|
|
|
|
|
|
$ 60,642,632
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Liabilities and Shareholders'
Equity:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Interest-bearing
liabilities:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Savings accounts
|
$
867,011
|
|
1,098
|
|
0.50
|
|
$
862,473
|
|
1,407
|
|
0.65
|
|
|
|
Interest-bearing transaction
accounts
|
1,964,963
|
|
3,742
|
|
0.76
|
|
2,283,511
|
|
4,547
|
|
0.79
|
|
|
|
Money market accounts
|
8,325,595
|
|
18,198
|
|
0.87
|
|
5,498,997
|
|
13,573
|
|
0.98
|
|
|
|
Time deposits
|
13,664,784
|
|
55,260
|
|
1.60
|
|
15,677,530
|
|
66,705
|
|
1.69
|
|
|
|
|
Total interest-bearing
deposits
|
24,822,353
|
|
78,298
|
|
1.25
|
|
24,322,511
|
|
86,232
|
|
1.41
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Repurchase agreements
|
7,530,978
|
|
85,699
|
|
4.51
|
|
14,880,978
|
|
153,458
|
|
4.09
|
|
|
|
Federal Home Loan Bank of New
York advances
|
11,476,087
|
|
101,866
|
|
3.52
|
|
14,875,000
|
|
151,712
|
|
4.05
|
|
|
|
|
Total borrowed funds
|
19,007,065
|
|
187,565
|
|
3.92
|
|
29,755,978
|
|
305,170
|
|
4.07
|
|
|
|
|
Total interest-bearing
liabilities
|
43,829,418
|
|
265,863
|
|
2.41
|
|
54,078,489
|
|
391,402
|
|
2.87
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Noninterest-bearing
liabilities:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Noninterest-bearing
deposits
|
598,832
|
|
|
|
|
|
593,393
|
|
|
|
|
|
|
|
Other noninterest-bearing
liabilities
|
228,889
|
|
|
|
|
|
268,040
|
|
|
|
|
|
|
|
|
Total noninterest-bearing
liabilities
|
827,721
|
|
|
|
|
|
861,433
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Total liabilities
|
44,657,139
|
|
|
|
|
|
54,939,922
|
|
|
|
|
|
|
Shareholders' equity
|
4,889,428
|
|
|
|
|
|
5,702,710
|
|
|
|
|
|
|
|
|
Total Liabilities and
Shareholders' Equity
|
$
49,546,567
|
|
|
|
|
|
$ 60,642,632
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Net interest income/net interest
rate spread (2)
|
|
|
206,981
|
|
1.51
|
|
|
|
$ 251,834
|
|
1.48
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Net interest-earning assets/net
interest margin (3)
|
$
4,397,799
|
|
|
|
1.73
|
%
|
$
5,022,771
|
|
|
|
1.73
|
%
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Ratio of interest-earning assets
to
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
interest-bearing
liabilities
|
|
|
|
|
1.10
|
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
$135.6 million and $218.0 million for the quarters ended December
31, 2011 and 2010, respectively.
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Hudson City
Bancorp, Inc. and Subsidiary
Consolidated
Average Balance Sheets
(Unaudited)
|
|
|
|
|
For the
Years Ended December 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)
|
$ 29,722,678
|
|
$ 1,492,989
|
|
5.02
|
%
|
$ 31,395,378
|
|
$ 1,667,027
|
|
5.31
|
%
|
|
|
Consumer and other
loans
|
309,245
|
|
15,740
|
|
5.09
|
|
346,166
|
|
18,409
|
|
5.32
|
|
|
|
Federal funds sold and other
overnight deposits
|
1,668,333
|
|
4,392
|
|
0.26
|
|
1,102,575
|
|
2,614
|
|
0.24
|
|
|
|
Mortgage-backed securities at
amortized cost
|
16,304,890
|
|
514,560
|
|
3.16
|
|
20,557,582
|
|
851,595
|
|
4.14
|
|
|
|
Federal Home Loan Bank
stock
|
770,314
|
|
38,820
|
|
5.04
|
|
878,672
|
|
46,107
|
|
5.25
|
|
|
|
Investment securities, at
amortized cost
|
3,021,573
|
|
101,136
|
|
3.35
|
|
4,992,249
|
|
198,744
|
|
3.98
|
|
|
|
|
Total interest-earning
assets
|
51,797,033
|
|
2,167,637
|
|
4.18
|
|
59,272,622
|
|
2,784,496
|
|
4.70
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Noninterest-earnings assets
(4)
|
1,361,057
|
|
|
|
|
|
1,560,439
|
|
|
|
|
|
|
|
|
Total Assets
|
$ 53,158,090
|
|
|
|
|
|
$ 60,833,061
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Liabilities and Shareholders'
Equity:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Interest-bearing
liabilities:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Savings accounts
|
$
866,029
|
|
5,071
|
|
0.59
|
|
$
839,029
|
|
5,952
|
|
0.71
|
|
|
|
Interest-bearing transaction
accounts
|
2,015,019
|
|
15,698
|
|
0.78
|
|
2,323,618
|
|
23,996
|
|
1.03
|
|
|
|
Money market accounts
|
7,842,413
|
|
75,506
|
|
0.96
|
|
5,217,815
|
|
54,949
|
|
1.05
|
|
|
|
Time deposits
|
14,140,688
|
|
232,239
|
|
1.64
|
|
16,111,567
|
|
291,450
|
|
1.81
|
|
|
|
|
Total interest-bearing
deposits
|
24,864,149
|
|
328,514
|
|
1.32
|
|
24,492,029
|
|
376,347
|
|
1.54
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Repurchase agreements
|
9,127,800
|
|
398,929
|
|
4.37
|
|
15,034,110
|
|
616,488
|
|
4.10
|
|
|
|
Federal Home Loan Bank of New
York advances
|
13,349,342
|
|
459,260
|
|
3.44
|
|
14,875,000
|
|
600,834
|
|
4.04
|
|
|
|
|
Total borrowed funds
|
22,477,142
|
|
858,189
|
|
3.82
|
|
29,909,110
|
|
1,217,322
|
|
4.07
|
|
|
|
|
Total interest-bearing
liabilities
|
47,341,291
|
|
1,186,703
|
|
2.51
|
|
54,401,139
|
|
1,593,669
|
|
2.93
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Noninterest-bearing
liabilities:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Noninterest-bearing
deposits
|
583,257
|
|
|
|
|
|
588,150
|
|
|
|
|
|
|
|
Other noninterest-bearing
liabilities
|
232,617
|
|
|
|
|
|
284,335
|
|
|
|
|
|
|
|
|
Total noninterest-bearing
liabilities
|
815,874
|
|
|
|
|
|
872,485
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Total liabilities
|
48,157,165
|
|
|
|
|
|
55,273,624
|
|
|
|
|
|
|
Shareholders' equity
|
5,000,925
|
|
|
|
|
|
5,559,437
|
|
|
|
|
|
|
|
|
Total Liabilities and
Shareholders' Equity
|
$ 53,158,090
|
|
|
|
|
|
$ 60,833,061
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Net interest income/net interest
rate spread (2)
|
|
|
$
980,934
|
|
1.67
|
|
|
|
$ 1,190,827
|
|
1.77
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Net interest-earning assets/net
interest margin (3)
|
$
4,455,742
|
|
|
|
1.89
|
%
|
$
4,871,483
|
|
|
|
2.01
|
%
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
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
weighted average cost of total interest-bearing liabilities from
the annualized weighted average yield on total interest-earning
assets.
|
|
|
(3)
|
Determined by dividing net
interest income by total average interest-earning
assets.
|
|
|
(4)
|
Includes the average balance of
principal receivable related to FHLMC mortgage-backed securities of
$156.4 million and $297.1 million for the years ended December 30,
2011 and 2010, respectively.
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Hudson City
Bancorp, Inc. and Subsidiary
Book Value
Calculations
|
|
|
|
|
|
|
|
December
31,
|
|
|
|
2011
|
|
(In
thousands, except share and per share amounts)
|
|
|
|
|
|
|
|
Shareholders' equity
|
|
$
4,560,440
|
|
Goodwill and other intangible
assets
|
|
(155,217)
|
|
Tangible shareholders
equity
|
|
$
4,405,223
|
|
|
|
|
|
Book Value Share
Computation:
|
|
|
|
Issued
|
|
741,466,555
|
|
Treasury
shares
|
|
(213,895,059)
|
|
Shares outstanding
|
|
527,571,496
|
|
Unallocated ESOP
shares
|
|
(31,752,096)
|
|
Unvested RRP
shares
|
|
(6,000)
|
|
Shares in
trust
|
|
(269,325)
|
|
Book value shares
|
|
495,544,075
|
|
|
|
|
|
Book value per share
|
|
$
9.20
|
|
|
|
|
|
|
|
|
|
Tangible book value per
share
|
|
$
8.89
|
|
|
|
|
|
|
|
|
|
|
|
|
Hudson City
Bancorp, Inc.
Other
Financial Data
Securities Portfolio at December
31, 2011
|
|
|
|
|
|
|
|
|
|
Amortized
|
|
Estimated
|
|
Unrealized
|
|
|
Cost
|
|
Fair
Value
|
|
Gain/(Loss)
|
|
|
|
|
(Dollars in
thousands)
|
|
|
|
Held to Maturity:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Mortgage-backed
securities:
|
|
|
|
|
|
|
FHLMC
|
$
2,132,408
|
|
$
2,257,772
|
|
$
125,364
|
|
FNMA
|
1,154,638
|
|
1,233,237
|
|
78,599
|
|
FHLMC and FNMA
CMO's
|
744,890
|
|
791,225
|
|
46,335
|
|
GNMA
|
83,587
|
|
86,189
|
|
2,602
|
|
Total
mortgage-backed securities
|
4,115,523
|
|
4,368,423
|
|
252,900
|
|
|
|
|
|
|
|
|
Investment
securities:
|
|
|
|
|
|
|
United States GSE
debt
|
539,011
|
|
545,761
|
|
6,750
|
|
Total
investment securities
|
539,011
|
|
545,761
|
|
6,750
|
|
|
|
|
|
|
|
|
Total held to
maturity
|
$
4,654,534
|
|
$
4,914,184
|
|
$
259,650
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Available for
sale:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Mortgage-backed
securities:
|
|
|
|
|
|
|
FHLMC
|
$
3,390,467
|
|
$
3,452,156
|
|
$
61,689
|
|
FNMA
|
4,407,970
|
|
4,468,029
|
|
60,059
|
|
FHLMC and FNMA
CMO's
|
81,768
|
|
83,977
|
|
2,209
|
|
GNMA
|
1,139,894
|
|
1,166,228
|
|
26,334
|
|
Total
mortgage-backed securities
|
9,020,099
|
|
9,170,390
|
|
150,291
|
|
|
|
|
|
|
|
|
Investment
securities:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Equity
securities
|
6,767
|
|
7,368
|
|
601
|
|
Total
investment securities
|
6,767
|
|
7,368
|
|
601
|
|
|
|
|
|
|
|
|
Total available for
sale
|
$
9,026,866
|
|
$
9,177,758
|
|
$
150,892
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Hudson City
Bancorp, Inc.
Other
Financial Data
Loan Data at December 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
|
|
$
903,019
|
|
2,516
|
|
3.08%
|
|
$
28,075,478
|
|
67,346
|
95.72%
|
|
FHA/VA
|
|
97,476
|
|
377
|
|
0.33%
|
|
734,781
|
|
3,608
|
2.51%
|
|
PMI
|
|
11,272
|
|
37
|
|
0.04%
|
|
185,294
|
|
592
|
0.63%
|
|
Construction
|
|
4,344
|
|
4
|
|
0.01%
|
|
4,929
|
|
5
|
0.02%
|
|
Commercial
|
|
2,223
|
|
4
|
|
0.01%
|
|
39,634
|
|
86
|
0.14%
|
|
Total mortgage
loans
|
|
1,018,334
|
|
2,938
|
|
3.47%
|
|
29,040,116
|
|
71,637
|
99.02%
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Home equity loans
|
|
4,333
|
|
46
|
|
0.01%
|
|
266,099
|
|
7,031
|
0.91%
|
|
Other loans
|
|
20
|
|
3
|
|
-
|
|
21,130
|
|
2,155
|
0.07%
|
|
Total
|
|
$
1,022,687
|
|
2,987
|
|
3.48%
|
|
$
29,327,345
|
|
80,823
|
100.00%
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
- Net charge-offs amounted to $20.0
million for the fourth quarter of 2011 and $82.8 million for the year ended December 31, 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 77.6% of our non-performing loans were located at
December 31, 2011, by approximately
23% from the peak of the market in 2006 through October 2011 and by 33% nationwide during that
period. From October 2010 to
October 2011, the house price indices
decreased by approximately 3% in the New
York metropolitan area and 4% nationwide.
- Our quantitative and qualitative analysis of the allowance for
loan losses considers the results of the reappraisal process as
well as the results of our foreclosed property transactions which
includes a further evaluation of economic factors, such as trends
in the unemployment rate, ratio analysis to evaluate the overall
measurement of the allowance for loan losses, 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,
2011:
|
|
|
|
|
|
Carrying
|
|
|
Number
Under
|
|
|
|
|
Number
|
|
Value
|
|
|
Contract of
Sale
|
|
|
|
|
|
|
(dollars in
thousands)
|
|
|
|
|
|
Foreclosed real
estate
|
|
134
|
|
$
40,619
|
|
|
55
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
- During the year ended 2011, we sold 156 foreclosed properties.
Write-downs and net losses on the sale of foreclosed real estate
amounted to $7.5 million for the year
ended December 31, 2011.
|
|
Hudson City
Bancorp, Inc. and Subsidiary
|
|
Other
Financial Data
|
|
(Unaudited)
|
|
|
At or for
the Quarter Ended
|
|
|
Dec. 31, 2011
|
|
Sept. 30, 2011
|
|
June 30, 2011
|
|
March 31, 2011
|
|
Dec. 31. 2010
|
|
|
(Dollars in
thousands, except per share data)
|
|
Net interest income
|
$
206,981
|
|
$
244,643
|
|
$
272,909
|
|
$
256,401
|
|
$
251,834
|
|
Provision for loan
losses
|
25,000
|
|
25,000
|
|
30,000
|
|
40,000
|
|
45,000
|
|
Non-interest income
|
2,884
|
|
3,094
|
|
2,732
|
|
105,207
|
|
62,927
|
|
Non-interest expense:
|
|
|
|
|
|
|
|
|
|
|
Compensation and employee
benefits
|
25,155
|
|
27,201
|
|
29,889
|
|
30,884
|
|
34,798
|
|
Other non-interest
expense
|
794,939
|
|
56,460
|
|
55,948
|
|
1,209,684
|
|
34,757
|
|
Total non-interest
expense
|
820,094
|
|
83,661
|
|
85,837
|
|
1,240,568
|
|
69,555
|
|
Income (loss) before income tax
(benefit) expense
|
(635,229)
|
|
139,076
|
|
159,804
|
|
(918,960)
|
|
200,206
|
|
Income tax (benefit) expense
|
(274,693)
|
|
54,873
|
|
63,796
|
|
(363,296)
|
|
79,045
|
|
Net (loss) income
|
$
(360,536)
|
|
$
84,203
|
|
$
96,008
|
|
$
(555,664)
|
|
$
121,161
|
|
Total assets
|
$
45,355,885
|
|
$
50,850,815
|
|
$
51,778,639
|
|
$
52,429,066
|
|
$
61,166,033
|
|
Loans, net
|
29,137,359
|
|
29,870,173
|
|
30,203,196
|
|
30,182,380
|
|
30,773,956
|
|
Mortgage-backed
securities
|
|
|
|
|
|
|
|
|
|
|
Available for
sale
|
9,170,390
|
|
9,905,741
|
|
10,484,264
|
|
10,540,674
|
|
18,120,537
|
|
Held to
maturity
|
4,115,523
|
|
4,533,557
|
|
4,896,216
|
|
5,304,263
|
|
5,914,372
|
|
Other securities
|
|
|
|
|
|
|
|
|
|
|
Available for
sale
|
7,368
|
|
7,408
|
|
7,221
|
|
7,122
|
|
89,795
|
|
Held to
maturity
|
539,011
|
|
1,638,954
|
|
3,638,950
|
|
3,938,950
|
|
3,939,006
|
|
Deposits
|
25,507,760
|
|
25,421,419
|
|
25,554,601
|
|
25,461,079
|
|
25,173,126
|
|
Borrowings
|
15,075,000
|
|
20,225,000
|
|
21,125,000
|
|
22,025,000
|
|
29,675,000
|
|
Shareholders' equity
|
4,560,440
|
|
4,979,469
|
|
4,887,959
|
|
4,728,847
|
|
5,510,238
|
|
Performance Data:
|
|
|
|
|
|
|
|
|
|
|
Return on average assets
(1)
|
-2.91%
|
|
0.65%
|
|
0.74%
|
|
-3.73%
|
|
0.80%
|
|
Return on average equity
(1)
|
-29.50%
|
|
6.80%
|
|
8.00%
|
|
-41.49%
|
|
8.50%
|
|
Net interest rate spread
(1)
|
1.51%
|
|
1.76%
|
|
1.94%
|
|
1.50%
|
|
1.48%
|
|
Net interest margin
(1)
|
1.73%
|
|
1.97%
|
|
2.14%
|
|
1.72%
|
|
1.73%
|
|
Non-interest expense to average
assets (1) (4)
|
6.62%
|
|
0.65%
|
|
0.67%
|
|
8.44%
|
|
0.46%
|
|
Compensation and benefits to
total revenue (5)
|
11.99%
|
|
10.98%
|
|
10.84%
|
|
8.54%
|
|
11.06%
|
|
Efficiency ratio (2)
|
41.79%
|
|
33.77%
|
|
31.14%
|
|
26.00%
|
|
22.10%
|
|
Dividend payout ratio
|
NM
|
|
47.06%
|
|
42.11%
|
|
NM
|
|
60.00%
|
|
Per Common Share
Data:
|
|
|
|
|
|
|
|
|
|
|
Basic (loss) earnings per common
share
|
($0.73)
|
|
$0.17
|
|
$0.19
|
|
($1.13)
|
|
$0.25
|
|
Diluted (loss) earnings per
common share
|
($0.73)
|
|
$0.17
|
|
$0.19
|
|
($1.13)
|
|
$0.25
|
|
Book value per share
(3)
|
$9.20
|
|
$10.05
|
|
$9.89
|
|
$9.58
|
|
$11.16
|
|
Tangible book value per share
(3)
|
$8.89
|
|
$9.74
|
|
$9.58
|
|
$9.26
|
|
$10.85
|
|
Dividends per share
|
$0.08
|
|
$0.08
|
|
$0.08
|
|
$0.15
|
|
$0.15
|
|
Capital Ratios:
|
|
|
|
|
|
|
|
|
|
|
Equity to total assets
(consolidated)
|
10.05%
|
|
9.79%
|
|
9.44%
|
|
9.02%
|
|
9.01%
|
|
Tier 1 leverage capital
(Bank)
|
8.83%
|
|
8.77%
|
|
8.44%
|
|
8.12%
|
|
7.95%
|
|
Total risk-based capital
(Bank)
|
20.00%
|
|
21.57%
|
|
20.27%
|
|
19.66%
|
|
23.04%
|
|
Other Data:
|
|
|
|
|
|
|
|
|
|
|
Full-time equivalent
employees
|
1,586
|
|
1,580
|
|
1,577
|
|
1,569
|
|
1,562
|
|
Number of branch
offices
|
135
|
|
135
|
|
135
|
|
135
|
|
135
|
|
Asset Quality Data:
|
|
|
|
|
|
|
|
|
|
|
Total non-performing
loans
|
$
1,022,687
|
|
$
948,706
|
|
$
914,239
|
|
$
886,530
|
|
$
871,259
|
|
Number of non-performing
loans
|
2,987
|
|
2,759
|
|
2,627
|
|
2,524
|
|
2,430
|
|
Total number of loans
|
80,823
|
|
82,662
|
|
83,332
|
|
82,976
|
|
83,929
|
|
Total non-performing
assets
|
$
1,063,306
|
|
$
989,682
|
|
$
952,603
|
|
$
930,541
|
|
$
916,952
|
|
Non-performing loans to total
loans
|
3.48%
|
|
3.16%
|
|
3.01%
|
|
2.92%
|
|
2.82%
|
|
Non-performing assets to total
assets
|
2.34%
|
|
1.95%
|
|
1.84%
|
|
1.77%
|
|
1.50%
|
|
Allowance for loan
losses
|
$
273,791
|
|
$
268,754
|
|
$
262,306
|
|
$
255,283
|
|
$
236,574
|
|
Allowance for loan losses to
non-performing loans
|
26.77%
|
|
28.33%
|
|
28.69%
|
|
28.80%
|
|
27.15%
|
|
Allowance for loan losses to
total loans
|
0.93%
|
|
0.89%
|
|
0.86%
|
|
0.84%
|
|
0.77%
|
|
Provision for loan
losses
|
$
25,000
|
|
$
25,000
|
|
$
30,000
|
|
$
40,000
|
|
$
45,000
|
|
Net charge-offs
|
$
19,963
|
|
$
18,552
|
|
$
22,977
|
|
$
21,290
|
|
$
24,709
|
|
Ratio of net charge-offs to
average loans (1)
|
0.27%
|
|
0.25%
|
|
0.30%
|
|
0.28%
|
|
0.32%
|
|
Net losses (gains) on foreclosed
real estate
|
$
2,552
|
|
$
2,080
|
|
$
2,053
|
|
$
776
|
|
$
1,585
|
|
(1) Ratios are
annualized.
|
|
(4) Computed by dividing
non-interest expense by average assets.
|
|
(2) Computed by dividing
non-interest expense by the sum of net interest income and
non-interest income. For the March 31, 2011 and December 31,
2011 quarters, non-interest expense excludes the loss on debt
extinguishments and non-interest income excludes securities gains
from the Transactions. See the Reconciliation of GAAP
and Operating Earnings for a calculation of the
efficiency ratio.
|
|
(5) Computed by dividing
compensation and benefits by the sum of net interest income and
non-interest income
|
|
(3) Please see the attached Book
Value Calculations for a calculation of book value per share and
tangible book value per share.
|
|
NM - not meaningful
|
|
|
|
|
|
|
|
|
|
|
|
|
|
SOURCE Hudson City Bancorp, Inc.