Hudson City Bancorp, Inc. Reports Quarterly Earnings Of $55.9
Million
PARAMUS, N.J., Oct. 24, 2012 /PRNewswire/ -- Hudson City
Bancorp, Inc. (NASDAQ: HCBK) (the "Company"), the holding company
for Hudson City Savings Bank (the "Bank"), reported today net
income of $55.9 million for the
quarter ended September 30, 2012 as
compared to net income of $84.2
million for the quarter ended September 30, 2011. Diluted earnings per share
amounted to $0.11 for the third
quarter of 2012 as compared to diluted earnings per share of
$0.17 for the third quarter of 2011.
Included in the 2012 third quarter earnings was $6.1 million of expenses related to the
previously announced merger with M&T Bank Corporation
("M&T"). Operating earnings for the third quarter of
2012, which excludes merger-related expenses, amounted to
$59.6 million or $0.12 per diluted share (non-GAAP measures).
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.
For the nine months ended September 30,
2012, the Company reported net income of $201.2 million as compared to a net loss of
$375.5 million for the same period in
2011. Diluted earnings per share was $0.41 for the nine months ended September 30, 2012 as compared to a net loss per
share of $0.76 for the same period in
2011. The net loss for the first nine months of 2011 was
driven by the results of a restructuring of the Company's balance
sheet in the first quarter of 2011 (the "Restructuring
Transaction"). Operating earnings for the nine months ended
September 30, 2012 amounted to
$204.9 million or $0.42 per diluted share as compared to operating
earnings of $273.9 million or
$0.55 per diluted share for the same
period in 2011 (non-GAAP measures). 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 Company also reported today that the Board of Directors
declared a quarterly cash dividend of $0.08 per share payable on November 30, 2012 to shareholders of record on
November 9, 2012.
Financial highlights for the third quarter of 2012 are as
follows:
- As previously announced, on August 27,
2012, the Company entered into a definitive agreement with
M&T and Wilmington Trust Corporation ("Merger Sub"), a wholly
owned subsidiary of M&T, providing for the merger of the
Company with and into Merger Sub (the "Merger"), with Merger Sub as
the surviving entity. As part of the Merger, the Bank will merge
with and into Manufacturers and Traders Trust Company. Based
on the average closing price of M&T common stock on the New
York Stock Exchange for the ten trading days ending October 19, 2012, the implied value of the
consideration to be received by the Company's shareholders in the
Merger was approximately $8.71 per
share of the Company's common stock. However, the value of the
consideration that a shareholder of the Company will receive in the
Merger for each share of the Company's common stock will depend on
the average closing price of M&T common stock for the ten
trading days immediately preceding the completion of the
Merger. In connection with the Merger, M&T has filed a
registration statement on Form S-4 with the Securities and Exchange
Commission (the "SEC") that includes a joint proxy statement of the
Company and M&T and a prospectus of M&T, as well as other
relevant documents concerning the Merger. The Registration
Statement is subject to completion and has not yet become
effective. The Merger is subject to shareholder and regulatory
approvals and the satisfaction of other customary conditions.
The Company anticipates that the closing of the Merger will take
place in the second quarter of 2013.
- Our interest rate spread and net interest margin were 1.80% and
2.02%, respectively, for the third quarter of 2012 as compared to
1.76% and 1.97%, respectively, for the third quarter of 2011.
For the linked second quarter of 2012, our interest rate
spread and net interest margin were 1.91% and 2.12%,
respectively. Our interest rate spread and net interest
margin were 1.91% and 2.11%, respectively, for the first nine
months of 2012 as compared to 1.73% and 1.94% for the same period
in 2011.
- The provision for loan losses decreased to $20.0 million for the third quarter of 2012 as
compared to $25.0 million for the
third quarter of 2011. Net charge-offs decreased to
$16.3 million for the third quarter
of 2012 as compared to $18.6 million
for the third quarter of 2011.
- Total assets decreased 7.6% to $41.90
billion at September 30, 2012
from $45.36 billion at December 31, 2011 primarily due to repayments of
mortgage-related assets.
- Borrowings decreased $2.15
billion or 14.3% to $12.93
billion at September 30, 2012
from $15.08 billion at December 31, 2011 due to maturities of short-term
borrowings.
- The Bank's Tier 1 leverage capital increased to 9.75% at
September 30, 2012 as compared to
8.83% at December 31, 2011.
Ronald E. Hermance, Jr., the
Company's Chairman and Chief Executive Officer commented, "This
quarter's net income is reflective of the conditions affecting
residential portfolio lenders. Our net interest margin
decreased 10 basis points to 2.02% in the third quarter of 2012
from the linked quarter as yields on our mortgage related assets
declined due to record low market interest rates. The
decision by the Federal Reserve to continue to purchase
mortgage-backed securities will likely keep rates low for the
foreseeable future."
Mr. Hermance continued, "Since our initial public offering in
1999, we pursued initiatives that we believed would build
shareholder value. The merger with M&T is a continuation
of that philosophy and reflects a thorough evaluation of our
strategic alternatives, including the strategic plan adopted in the
first half of 2012. We are pleased to partner with M&T
whose balance sheet structure, geographic markets and business
strategies complement those of Hudson City and we believe that our
shareholders, customers and communities will benefit from this
merger. We have begun the process of obtaining regulatory and
shareholder approvals for the merger which we expect to complete in
the second quarter of 2013."
Statement of Financial Condition Summary
Total assets decreased $3.46
billion, or 7.6%, to $41.90
billion at September 30, 2012
from $45.36 billion at December 31, 2011. The decrease in total assets
reflected a $1.61 billion decrease in
net loans, a $1.26 billion decrease
in total mortgage-backed securities, a $328.2 million decrease in cash and cash
equivalents and a $120.4 million
decrease in Federal Home Loan Bank ("FHLB") stock.
Net loans amounted to $27.53
billion at September 30, 2012
as compared to $29.14 billion at
December 31, 2011. During the
first nine months of 2012, our loan production amounted to
$3.92 billion as compared to
$4.09 billion for the same period in
2011. Loan production was offset by principal repayments of
$5.38 billion in the first nine
months of 2012, as compared to principal repayments of $4.85 billion for the first nine months of
2011. Loan production declined during the first nine months
of 2012 due to a decline in loan originations which reflects our
low appetite for adding long-term fixed rate loans in the current
low market interest rate environment. The decrease in net
loans was also due to continued elevated levels of refinancing
activity caused by low market interest rates.
Total mortgage-backed securities decreased $1.26 billion to $12.03
billion at September 30, 2012
from $13.29 billion at December 31, 2011. The decrease in
mortgage-backed securities reflected repayments of $2.73 billion, partially offset by purchases of
$1.47 billion of mortgage-backed
securities issued by government-sponsored entities ("GSEs").
Total liabilities decreased $3.61
billion, or 8.9%, to $37.19
billion at September 30, 2012
from $40.80 billion at December 31, 2011. The decrease in total
liabilities primarily reflected a $2.15
billion decrease in borrowed funds and a decrease in total
deposits of $1.49 billion.
Borrowings amounted to $12.93
billion at September 30, 2012
as compared to $15.08 billion at
December 31, 2011. The decrease
in borrowed funds is a result of the maturity of short-term
borrowings during the first nine months of 2012. The decrease in
deposits is primarily due to planned reductions in our deposit
rates to curtail deposit growth at this time of limited investment
opportunities.
Total shareholders' equity increased $151.6 million to $4.71
billion at September 30, 2012
from $4.56 billion at December 31, 2011. The increase was primarily due
to net income of $201.2 million for
the nine months ended September 30,
2012 and an increase in accumulated other comprehensive
income of $54.7 million. The increase
was partially offset by cash dividends paid to common shareholders
of $119.1 million. At
September 30, 2012, our consolidated
shareholders' equity to asset ratio was 11.25% and our tangible
book value per share was $9.17.
Accumulated other comprehensive income amounted to $94.4 million at September
30, 2012 and included a $141.6
million after-tax net unrealized gain on securities
available for sale ($239.3 million
pre-tax) partially offset by a $47.2
million after-tax accumulated other comprehensive loss
related to the funded status of our employee benefit plans.
Accumulated other comprehensive income amounted to $39.7 million at December
31, 2011 and included an $89.3
million after-tax net unrealized gain on securities
available for sale ($150.9 million
pre-tax) partially offset by a $49.6
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 has
continued to expand at a moderate pace in recent months.
Growth in employment has slowed in recent months, and the
unemployment rate remains elevated. The FOMC noted that while
the housing sector has showed signs of improvement and household
spending continues to advance, growth in business fixed investment
has slowed. The national unemployment rate was 7.8% during
September 2012 representing a decline
from 8.5% in December 2011. The FOMC decided to maintain the
overnight lending rate at zero to 0.25% during the third quarter of
2012 and stated that exceptionally low levels for the federal funds
rate are likely to be warranted at least through mid-2015. As
a result, market interest rates have remained at low levels, and
consequently, the yields on our mortgage-related assets have
continued to decrease during the first nine months of 2012.
The FOMC also decided to expand its accommodative monetary
policy by purchasing an additional $40
billion of agency mortgage-backed securities per month to
ensure that inflation is at the rate most consistent with its dual
mandate regarding both inflation and unemployment. The Federal
Reserve program "Operation Twist", which was set to expire at the
end of June, has been extended until the end of the year. This
program consists of the purchase of Treasury securities with
remaining maturities of 6 to 30 years funded by the sale of an
equal amount of Treasury securities with remaining maturities of 3
years or less. These programs will continue to put downward
pressure on longer-term interest rates.
Net interest income decreased $41.3
million, or 16.9%, to $203.3
million for the third quarter of 2012 as compared to
$244.6 million for the third quarter
of 2011. The decrease in net interest income reflects the
overall decrease in the average balance of interest-earning assets
and interest-bearing liabilities. Our interest rate spread
increased slightly to 1.80% for the third quarter of 2012 as
compared to 1.76% for the third quarter of 2011. Our net
interest margin was 2.02% for the third quarter of 2012 as compared
1.97% for the third quarter of 2011.
Net interest income decreased $112.3
million, or 14.5%, to $661.7
million for the first nine months of 2012 as compared to
$774.0 million for the first nine
months of 2011. Our interest rate spread increased 18 basis
points to 1.91% for the nine months ended September 30, 2012 as compared to 1.73% for the
nine months ended September 30,
2011. Our net interest margin increased 17 basis points to
2.11% as compared to 1.94% for the those same respective
periods. The increase in our interest rate spread and net
interest margin for the first nine months of 2012 is primarily due
to the effects of the extinguishment of $4.3
billion of borrowings during the fourth quarter of 2011 as
well as the Restructuring Transaction.
The Restructuring Transaction resulted in the extinguishment of
$12.5 billion of structured putable
borrowings with an average cost of 3.56%. The extinguishment
of borrowings was funded by the sale of $8.66 billion of securities and new short-term
borrowings of $5.0 billion. The
Restructuring Transaction reduced after-tax earnings by
$649.3 million. In addition to
the Restructuring Transaction, we extinguished $4.3 billion of structured borrowings during the
fourth quarter of 2011 using cash proceeds from the calls of
investment securities and repayments on mortgage-related assets
(the Restructuring Transaction and the extinguishment of debt in
the fourth quarter of 2011 are collectively referred to as the
"Transactions").
Total interest and dividend income for the third quarter of 2012
decreased $119.1 million, or 22.7%,
to $405.4 million from $524.5 million for the third quarter of 2011. The
decrease in total interest and dividend income was primarily due to
a decrease in the average balance of total interest-earning assets
of $9.00 billion, or 18.0%, to
$41.02 billion for the third quarter
of 2012 as compared to $50.02 billion
for the third quarter of 2011. The decrease in total interest
and dividend income was also due to a decrease of 24 basis points
in the annualized weighted-average yield on total interest-earning
assets to 3.95% for the third quarter of 2012 from 4.19% for the
third quarter in 2011. The decrease in the average balance of
total interest-earning assets was due primarily to the effects of
the debt extinguishments in the fourth quarter of 2011 and
repayments of mortgage-related assets during the first nine months
of 2012 due to the low interest rate environment.
Total interest and dividend income for the nine months ended
September 30, 2012 decreased
$409.9 million, or 24.2%, to
$1.28 billion from $1.69 billion for the nine months ended
September 30, 2011. The decrease in
total interest and dividend income was primarily due to a
$10.84 billion or 20.5% decrease in
the average balance of total interest-earning assets to
$42.16 billion for the first nine
months of 2012 from $53.00 billion
for the same period in 2011. The decrease in total interest
and dividend income was also due to a decrease of 20 basis points
in the annualized weighted-average yield on total interest-earning
assets to 4.06% for the nine months ended September 30, 2012 from 4.26% for the same period
in 2011. The decrease in the average balance of total
interest-earning assets was due primarily to the effects of the
Transactions and elevated levels of repayments of mortgage-related
assets during the first nine months of 2012 due to the low interest
rate environment.
Interest on first mortgage loans decreased $54.7 million, or 14.6%, to $321.0 million for the third quarter of 2012 as
compared to $375.7 million for the
third quarter of 2011. This was primarily due to a 38 basis
point decrease in the annualized weighted-average yield to 4.67%
for the third quarter of 2012 from 5.05% for the third quarter of
2011. The decrease in interest income on mortgage loans was
also due to a $2.24 billion decrease
in the average balance of first mortgage loans to $27.52 billion for the third quarter of 2012 from
$29.76 billion for the same quarter
in 2011.
For the nine months ended September 30,
2012, interest on first mortgage loans decreased
$139.3 million, or 12.2%, to
$999.7 million from $1.14 billion for the nine months ended
September 30, 2011. This was
primarily due to a 32 basis point decrease in the annualized
weighted-average yield to 4.76% for the nine months ended
September 30, 2012 from 5.08% for the
nine months ended September 30, 2011.
The decrease in interest income on mortgage loans was also
due to a$1.88 billion decrease in the
average balance of first mortgage loans to $28.00 billion for the nine months ended
September 30, 2012 from $29.88 billion for the nine months ended
September 30, 2011.
The decreases in the average yields earned during the three and
nine month periods ended September 30,
2012 were due to lower market interest rates on mortgage
products and also due to the continued mortgage refinancing
activity. Refinancing activity, which resulted in continued
elevated levels of loan repayments, also caused the average balance
of our first mortgage loans to decline for those same
periods.
Interest on mortgage-backed securities decreased $35.0 million to $73.2
million for the third quarter of 2012 from $108.2 million for the third quarter of
2011. This decrease was due primarily to a $2.67 billion decrease in the average balance of
mortgage-backed securities to $12.03
billion for the third quarter of 2012 from $14.70 billion for the third quarter of 2011. The
decrease in the average balance of mortgage-backed securities was
due primarily to elevated levels of principal repayments in the
current low interest rate environment. The decrease in
interest on mortgage-backed securities was also due to a 50 basis
point decrease in the annualized weighted-average yield to 2.44%
for the third quarter of 2012 from 2.94% for the third quarter of
2011. The decrease in the weighted-average yield is a result
of principal repayments on securities that have higher yields than
the existing portfolio as well as the re-pricing of variable rate
mortgage-backed securities in this continued low interest rate
environment.
Interest on mortgage-backed securities decreased $170.1 million to $246.6
million for the nine months ended September 30, 2012 from $416.7 million for the nine months ended
September 30, 2011. This
decrease was due primarily to a $4.84
billion decrease in the average balance of mortgage-backed
securities to $12.35 billion for the
first nine months of 2012 from $17.19
billion for the same period in 2011. The decrease in
interest income on mortgage-backed securities was also due to a 57
basis point decrease in the annualized weighted-average yield to
2.66% for the first nine months of 2012 from 3.23% for the first
nine months of 2011. The decrease in the average balance of
mortgage-backed securities was due primarily to the effects of the
Restructuring Transaction. The decrease in the weighted-average
yield is a result of principal repayments on securities that have
higher yields than the existing portfolio as well as the re-pricing
of variable rate mortgage-backed securities in this continued low
interest rate environment.
Interest on investment securities decreased $24.6 million to $2.9
million for the third quarter of 2012 from $27.5 million for the third quarter of
2011. This decrease was due primarily to a $2.85 billion decrease in the average balance of
investment securities to $453.1
million for the third quarter of 2012 from $3.30 billion for the third quarter of
2011. In addition, the average yield of investment securities
decreased 73 basis points to 2.60% for the third quarter of 2012
from 3.33% for the third quarter of 2011. The decrease in the
average balance is due primarily to calls of $3.1 billion of investment securities during the
second half of 2011.
For the nine months ended September 30,
2012, interest on investment securities decreased
$85.2 million to $8.7 million from $93.9
million for the nine months ended September 30, 2011. This decrease was due
primarily to a $3.32 billion decrease
in the average balance of investment securities to $423.3 million for the first nine months of 2012
from $3.74 billion for the first nine
months of 2011. The decrease in the average balance is due
primarily to calls of $3.4 billion of
investment securities during 2011. In addition, the average
yield of investment securities decreased 61 basis points to 2.74%
for the first nine months of 2012 from 3.35% for the same period in
2011. The decrease in the average yield earned reflects
current market interest rates.
Dividends on FHLB stock decreased $3.9
million, or 44.3%, to $4.9
million for the third quarter of 2012 from $8.8 million for the third quarter of 2011.
This decrease was due primarily to a $342.5
million decrease in the average balance of FHLB stock to
$406.3 million for the third quarter
of 2012 from $748.8 million for the
third quarter of 2011. The effect of the decrease was
partially offset by a 6 basis point increase in the average
dividend yield earned to 4.78% for the third quarter of 2012 as
compared to 4.72% for the third quarter of 2011. The decrease
in the average balance of FHLB stock was primarily due to mandatory
redemptions of stock due to a decrease in the amount of borrowings
outstanding with the FHLB.
Dividends on FHLB stock decreased $12.4
million, or 39.6%, to $18.9
million for the nine months ended September 30, 2012 from $31.3 million for the comparable period in
2011. The decrease was primarily due to a $356.4 million decrease in the average balance of
FHLB stock to $445.1 million for the
first nine months of 2012 from $801.5
million for the same period in 2011. The effect of the
decrease was partially offset by a 46 basis point increase in the
average dividend yield earned to 5.66% as compared to 5.20% for the
first nine months of 2011.
Interest on Federal funds and other overnight deposits sold
amounted to $194,000 for the third
quarter of 2012 as compared to $519,000 for the third quarter of 2011. The
average balance of Federal funds sold amounted to $348.2 million for the third quarter of 2012 as
compared to $1.20 billion for the
third quarter of 2011. The yield earned on Federal funds sold
was 0.22% for the 2012 third quarter and 0.17% for the 2011 third
quarter.
Interest on Federal funds sold and other overnight deposits
amounted to $1.2 million for the nine
months ended September 30, 2012 as
compared to $1.9 million for the
first nine months of 2011. The average balance of Federal
funds sold amounted to $662.3 million
for the first nine months of 2012 as compared to $1.07 billion for the same period in 2011.
The yield earned on Federal funds sold was 0.24% for both the nine
months ended September 30, 2012 and
the nine months ended September 30,
2011. The decrease in the average balance of Federal
funds sold is primarily a result of the timing of the
Transactions.
Total interest expense for the quarter ended September 30, 2012 decreased $77.8 million, or 27.8%, to $202.1 million from $279.9
million for the quarter ended September 30, 2011. This decrease was
primarily due to an $8.70 billion, or
19.1%, decrease in the average balance of total interest-bearing
liabilities to $36.95 billion for the
quarter ended September 30, 2012
compared to $45.65 billion for the
third quarter of 2011. The decrease was also due to a 28 basis
point decrease in the annualized weighted-average cost of total
interest-bearing liabilities to 2.15% for the quarter ended
September 30, 2012 compared to 2.43%
for the quarter ended September 30,
2011. The decrease in the average balance of total
interest-bearing liabilities was due primarily to the effects of
the debt extinguishments in the fourth quarter of 2011 as well as
$8.75 billion of borrowings that
matured during the second half of 2011 and the first nine months of
2012.
For the nine months ended September 30,
2012 total interest expense decreased $297.6 million, or 32.3%, to $623.2 million from $920.8
million for the nine months ended September 30, 2011. This decrease was
primarily due to a $10.38 billion, or
21.4%, decrease in the average balance of total interest-bearing
liabilities to $38.20 billion for the
nine months ended September 30, 2012
from $48.58 billion for the nine
months ended September 30, 2011. The
decrease was also due to a 38 basis point decrease in the
annualized weighted-average cost of total interest-bearing
liabilities to 2.15% for the nine months ended September 30, 2012 from 2.53% for the nine months
ended September 30, 2011. The
decrease in the average balance of total interest-bearing
liabilities was due primarily to the reduction of total borrowings
as part of the Transactions.
Interest expense on deposits decreased $24.6 million, or 30.2%, to $56.9 million for the third quarter of 2012 from
$81.5 million for the third quarter
of 2011. This decrease is due primarily to a decrease in the
average cost of interest-bearing deposits of 34 basis points to
0.96% for the third quarter of 2012 from 1.30% for the third
quarter of 2011. The decrease is also due to a $1.26 billion decrease in the average balance of
interest-bearing deposits to $23.67
billion for the third quarter of 2012 from $24.93 billion for the third quarter of 2011.
For the nine months ended September 30,
2012, interest expense on deposits decreased $63.8 million, or 25.5%, to $186.4 million from $250.2
million for the nine months ended September 30, 2011. This decrease is due
primarily to a decrease in the average cost of interest-bearing
deposits of 31 basis points to 1.03% for the first nine months of
2012 from 1.34% for the first nine months of 2011. The
decrease is also due to a $681.3
million decrease in the average balance of interest-bearing
deposits to $24.25 billion for the
first nine months of 2012 from $24.93
billion for the first nine months of 2011.
The decrease in the average cost of deposits for the first nine
months of 2012 reflected lower market interest rates and our
decision to maintain lower deposit rates to slow deposit
growth. At September 30, 2012,
time deposits scheduled to mature within one year totaled
$7.94 billion with an average cost of
0.99%. These time deposits are scheduled to mature as
follows: $3.13 billion with an
average cost of 0.99% in the fourth quarter of 2012, $2.29 billion with an average cost of 0.94% in
the first quarter of 2013, $1.37
billion with an average cost of 1.11% in the second quarter
of 2013 and $1.15 billion with an
average cost of 0.96% in the third quarter of 2013. 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 $53.2 million to $145.2
million for the third quarter of 2012 from $198.4 million for the third quarter of 2011.
This decrease was due to a $7.44
billion decrease in the average balance of borrowed funds to
$13.28 billion for the third quarter
of 2012 from $20.72 billion for the
third quarter of 2011. This decrease was partially offset by
a 48 basis point increase in the annualized weighted-average cost
of borrowed funds to 4.28% for the third quarter of 2012 as
compared to 3.80% for the third quarter of 2011. The decrease
in the average balance of borrowed funds was primarily due to the
effects of the debt extinguishments in the fourth quarter of
2011. The increase in the weighted-average cost of borrowed
funds was due to the maturity of short-term borrowings that were
used to fund a portion of the debt extinguishments in the
Restructuring Transaction.
For the nine months ended September 30,
2012 interest expense on borrowed funds decreased
$233.8 million to $436.8 million from $670.6
million for the nine months ended September 30, 2011. This decrease was due to a
$9.70 billion decrease in the average
balance of borrowed funds to $13.95
billion for the first nine months of 2012 from $23.65 billion for the first nine months of
2011. This decrease was partially offset by a 32 basis point
increase in the weighted-average cost of borrowed funds to 4.11%
for the first nine months of 2012 as compared to 3.79% for the
first nine months of 2011. The decrease in the average
balance of borrowed funds is primarily due to the effects of the
Transactions. The increase in the weighted-average cost of
borrowed funds was due to the maturity of short-term borrowings
that were used to fund a portion of the debt extinguishments in the
Restructuring Transaction.
Borrowings amounted to $12.93
billion at September 30, 2012
with an average cost of 4.37%. Borrowings scheduled to mature
over the next 12 months are as follows: $750.0 million with an average cost of 0.80% in
the fourth quarter of 2012. There are no scheduled maturities
for the first, second or third quarters of 2013.
The provision for loan losses amounted to $20.0 million for the quarter ended September 30, 2012 as compared to $25.0 million for the quarter ended September 30, 2011. The decrease in our provision
for loan losses during the third quarter of 2012 as compared to the
same period in 2011 was due primarily to the overall declining
trend in net charge-offs and a decrease in the size of the loan
portfolio, yet resulted in an overall increase in our allowance for
loan losses as non-performing loans continued to increase.
Non-performing loans, defined as non-accruing loans and accruing
loans delinquent 90 days or more, amounted to $1.14 billion at September
30, 2012 compared with $1.02
billion at December 31, 2011.
The ratio of non-performing loans to total loans was 4.12% at
September 30, 2012 compared with
3.48% at December 31, 2011. The
highly publicized foreclosure issues that have 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 continue to be prolonged, especially in New York and New
Jersey where 72% of our non-performing loans are
located. 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 $413.2 million at September 30, 2012 as compared to $427.2 million at December
31, 2011. Loans delinquent 60 to 89 days amounted to
$212.1 million at September 30, 2012 as compared to $187.4 million at December
31, 2011. The allowance for loans losses amounted to
$291.6 million at September 30, 2012 as compared to $273.8 million at December
31, 2011. The allowance for loan losses as a percent
of total loans and as a percent of non-performing loans was 1.05%
and 25.51%, respectively at September 30,
2012, as compared to 0.93% and 26.77%, respectively at
December 31, 2011.
Net charge-offs amounted to $16.3
million for third quarter of 2012 as compared to
$18.6 million for the third quarter
of 2011. The ratio of net charge-offs to average loans was
0.24% for third quarter of 2012 as compared to 0.25% for the third
quarter of 2011. For the nine months ended September 30, 2012, net charge-offs amounted to
$52.2 million as compared to
$62.8 million of net charge-offs for
the same period in 2011.
Total non-interest income was $3.0
million for the third quarter of 2012 as compared to
$3.1 million for the same quarter in
2011. Non-interest income is primarily made up of service
fees and charges on deposit and loan accounts.
Total non-interest income was $8.7
million for the first nine months of 2012 as compared to
$111.0 million for the same period in
2011. Included in non-interest income for the first nine
months of 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 pay off
borrowings in the Restructuring Transaction. There were no
security sales for the nine months ended September 30, 2012.
Total non-interest expense amounted to $93.9 million for the third quarter of 2012 as
compared to $83.7 million for the
same period in 2011. This increase is due to increases of
$6.7 million in compensation and
employee benefit costs and $7.0
million in other expense (primarily merger related),
partially offset by a decrease of $3.6
million in Federal deposit insurance expense. The decrease
in Federal deposit insurance expense for the quarter ended
September 30, 2012 is primarily due
to the reduction in the size of our balance sheet as a result of
the Transactions.
Compensation and employee benefit costs increased $6.7 million, or 24.6%, to $33.9 million for the third quarter of 2012 as
compared to $27.2 million for the
same period in 2011. The increase in compensation costs is
primarily due to increases of $2.3
million in expense related to our stock benefit plans,
$2.0 million in compensation costs,
$1.6 million in health plan expense
and $688,000 in pension
expense. The increase in stock benefit plans expense is
primarily due to the price of our common stock which increased
during the quarter primarily as a result of the announcement of the
Merger. The increase in compensation and health plan costs
was due primarily to additional full time equivalent employees as
well as normal salary increases. The increase in pension
expense is due primarily to the discount rate and other actuarial
assumptions used in determining pension expense. At
September 30, 2012, we had 1,608
full-time equivalent employees as compared to 1,586 at December 31, 2011 and 1,580 at September 30, 2011.
Included in other non-interest expense for the quarter ended
September 30, 2012 were $6.1 million of expenses related to the
Merger. Also included in other expense for the quarter
ended September 30, 2012 were
write-downs on foreclosed real estate and net losses and (gains) on
the sale of foreclosed real estate of ($13,000) as compared to $2.1 million for the third quarter of 2011.
We sold 46 properties during the third quarter of 2012 and had 134
properties in foreclosed real estate, 39 of which were under
contract to sell as of September 30,
2012. For the third quarter of 2011, we sold 39 properties
and had 130 properties in foreclosed real estate, of which 39 were
under contract to sell as of September 30,
2011.
Total non-interest expense amounted to $269.0 million for the nine months ended
September 30, 2012 as compared to
$1.41 billion for the nine months
ended September 30, 2011.
Included in total non-interest expense for the first nine months of
2011 was a $1.17 billion loss on the
extinguishment of debt related to the Restructuring
Transaction. Included in total non-interest expense for the
first nine months of 2012 was an increase of $8.4 million in compensation and employee benefit
costs, an increase of $11.4 million
in other expense, and an increase of $10.6
million in Federal deposit insurance expense.
Compensation and employee benefit costs increased $8.4 million, or 9.6%, to $96.4 million for the first nine months of 2012
as compared to $88.0 million for the
same period in 2011. The increase in compensation costs is
primarily due to increases of $3.6
million in compensation costs, $2.1
million in health plan expense, $2.0
million in pension expense and $615,000 in expense related to our stock benefit
plans. The increase in compensation and health plan costs was
due primarily to additional full time equivalent employees as well
as normal salary increases. The increase in pension expense
is due primarily to the discount rate and other actuarial
assumptions used in determining pension expense.
For the nine months ended September 30,
2012, Federal deposit insurance expense increased
$10.5 million, or 12.6%, to
$93.9 million from $83.4 million for the nine months ended
September 30, 2011. This
increase was due primarily to the new insurance 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 nine months ended September 30, 2012 were write-downs on foreclosed
real estate and net losses on the sale of foreclosed real estate of
$1.3 million as compared to
$4.9 million for the comparable
period in 2011. We sold 150 properties during the first nine
months of 2012 as compared to 113 properties for the same period in
2011.
Our efficiency ratio was 45.50% for the 2012 third quarter as
compared to 33.77% for the 2011 third quarter. Our operating
efficiency ratio (a non-GAAP measure) was 42.56% for the 2012 third
quarter as compared to 33.77% for the 2011 third quarter. For
the nine months ended September 30,
2012, our efficiency ratio was 40.13% compared to 159.3% for
the corresponding 2011 period, while our operating efficiency ratio
(a non-GAAP measure) was 39.23% for the nine months ended
September 30, 2012 as compared to
30.25% for the corresponding 2011 period. Our annualized
ratio of non-interest expense to average total assets for the third
quarter of 2012 was 0.88% as compared to 0.65% for the third
quarter of 2011. Our annualized ratio of non-interest expense to
average total assets for the nine months ended September 30, 2012 was 0.85% compared with 3.47%
for the corresponding period in 2011. Excluding the loss on the
extinguishment of debt and Merger related expenses, our annualized
ratio of operating non-interest expense to average total assets was
0.80% for the nine months ended September
30, 2012 as compared to 0.59% for the same period in
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 operating
efficiency ratio.
Income tax expense amounted to $36.5
million for the third quarter of 2012 compared with
$54.9 million for the same quarter in
2011. Our effective tax rate for the third quarter of 2012
was 39.49% compared with 39.46% for the third quarter of 2011.
Income tax expense amounted to $130.1
million for the nine months ended September 30, 2012 compared with an income tax
benefit of $244.6 million for the
nine months ended September 30,
2011.
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 banking offices in the
New York metropolitan and
surrounding areas.
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., and Hudson City Bancorp, Inc.'s strategies,
plans, objectives, expectations, and intentions, including the
Merger, 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,
including the Merger, 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,
legislative, regulatory and public policy changes, delays in
closing the Merger and the ability of Hudson City Bancorp, Inc. or
M&T to obtain regulatory approvals and meet other closing
conditions to the Merger, including receipt of shareholder
approval. 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 Bancorp, Inc.'s
forward-looking statements, please refer to Hudson City Bancorp,
Inc.'s filings with the Securities and Exchange Commission
available at www.sec.gov. Hudson City Bancorp, Inc. 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.
Important Additional Information
In connection with the Merger, M&T filed with the SEC a
Registration Statement on Form S-4 that includes a Joint Proxy
Statement of M&T and the Company and a Prospectus of M&T,
as well as other relevant documents concerning the Merger. The
Registration Statement is subject to completion and has not yet
become effective. SHAREHOLDERS OF THE COMPANY AND M&T ARE
URGED TO READ THE REGISTRATION STATEMENT AND THE JOINT PROXY
STATEMENT/PROSPECTUS REGARDING THE MERGER AND ANY OTHER RELEVANT
DOCUMENTS FILED WITH THE SEC, AS WELL AS ANY AMENDMENTS OR
SUPPLEMENTS TO THOSE DOCUMENTS, BECAUSE THEY CONTAIN AND WILL
CONTAIN IMPORTANT INFORMATION.
A free copy of the Joint Proxy Statement/Prospectus, as well as
other filings containing information about the Company and M&T,
may be obtained at the SEC's Internet site (http://www.sec.gov).
These documents may also be obtained, free of charge, from M&T
at www.mtb.com under the tab "About Us" and then under the heading
"Investor Relations" or from the Company by accessing the Company's
website at www.hcsbonline.com under the heading "Investor
Relations." Copies of the Joint Proxy Statement/Prospectus can also
be obtained, free of charge, by directing a request to Investor
Relations, One M&T Plaza, Buffalo,
New York 14203, (716) 842-5445.
The Company and M&T and certain of their directors and
executive officers may be deemed to be participants in the
solicitation of proxies from the shareholders of the Company and
M&T in connection with the Merger. Information about the
directors and executive officers of the Company and their ownership
of Company common stock is set forth in the proxy statement for the
Company's 2012 annual meeting of shareholders, as filed with the
SEC on a Schedule 14A on March 19,
2012. Information about the directors and executive officers
of M&T and their ownership of M&T common stock is set forth
in the proxy statement for M&T's 2012 annual meeting of
shareholders, as filed with the SEC on Schedule 14A on March 7, 2012. Additional information regarding
the interests of those participants and other persons who may be
deemed participants in the transaction may be obtained by reading
the Joint Proxy Statement/Prospectus regarding the Merger.
Free copies of this document may be obtained as described in the
preceding paragraph.
TABLES FOLLOW
Hudson
City Bancorp, Inc. and Subsidiary
Consolidated Statements of Financial
Condition
|
|
|
|
|
|
|
|
|
|
September 30,
|
|
December 31,
|
|
|
|
2012
|
2011
|
(In
thousands, except share and per share amounts)
|
(unaudited)
|
|
|
|
|
|
|
|
|
Assets:
|
|
|
|
|
Cash and
due from banks
|
|
$
112,157
|
|
$
194,029
|
Federal
funds sold and other overnight deposits
|
|
313,704
|
|
560,051
|
Total cash and cash equivalents
|
|
425,861
|
|
754,080
|
|
|
|
|
|
|
Securities
available for sale:
|
|
|
|
|
Mortgage-backed securities
|
|
8,772,353
|
|
9,170,390
|
Investment securities
|
|
428,407
|
|
7,368
|
Securities
held to maturity:
|
|
|
|
|
Mortgage-backed
securities
|
|
3,256,099
|
|
4,115,523
|
Investment securities
|
|
39,011
|
|
539,011
|
|
Total
securities
|
|
12,495,870
|
|
13,832,292
|
|
|
|
|
|
|
Loans
|
|
|
27,732,074
|
|
29,327,345
|
Net deferred loan costs
|
|
93,117
|
|
83,805
|
Allowance for loan losses
|
|
(291,573)
|
|
(273,791)
|
|
Net
loans
|
|
27,533,618
|
|
29,137,359
|
|
|
|
|
|
|
Federal
Home Loan Bank of New York stock
|
|
390,217
|
|
510,564
|
Foreclosed
real estate, net
|
|
45,336
|
|
40,619
|
Accrued
interest receivable
|
|
102,656
|
|
129,088
|
Banking
premises and equipment, net
|
|
75,468
|
|
70,610
|
Goodwill
|
|
152,109
|
|
152,109
|
Other
assets
|
|
677,458
|
|
729,164
|
|
Total Assets
|
|
$
41,898,593
|
|
$
45,355,885
|
|
|
|
|
|
|
Liabilities and Shareholders'
Equity:
|
|
|
|
|
Deposits:
|
|
|
|
|
Interest-bearing
|
|
$
23,403,258
|
|
$
24,903,311
|
Noninterest-bearing
|
|
618,923
|
|
604,449
|
|
Total
deposits
|
|
24,022,181
|
|
25,507,760
|
|
|
|
|
|
|
Repurchase
agreements
|
|
6,950,000
|
|
6,950,000
|
Federal
Home Loan Bank of New York advances
|
|
5,975,000
|
|
8,125,000
|
|
Total
borrowed funds
|
|
12,925,000
|
|
15,075,000
|
|
|
|
|
|
|
Accrued
expenses and other liabilities
|
|
239,327
|
|
212,685
|
|
Total
liabilities
|
|
37,186,508
|
|
40,795,445
|
|
|
|
|
|
|
Common
stock, $0.01 par value, 3,200,000,000 shares authorized;
|
|
|
|
|
|
741,466,555 shares issued; 528,193,889 and
527,571,496 shares
|
|
|
|
|
|
outstanding at September 30, 2012 and December 31,
2011
|
|
7,415
|
|
7,415
|
Additional
paid-in capital
|
|
4,727,763
|
|
4,720,890
|
Retained
earnings
|
|
1,790,232
|
|
1,709,821
|
Treasury
stock, at cost; 213,272,666 and 213,895,059 shares
at
|
|
|
|
|
|
September 30, 2012 and December 31,
2011
|
|
(1,714,036)
|
|
(1,719,114)
|
Unallocated common stock held by the employee stock
ownership plan
|
|
(193,718)
|
|
(198,223)
|
Accumulated other comprehensive income, net of
tax
|
|
94,429
|
|
39,651
|
|
Total
shareholders' equity
|
|
4,712,085
|
|
4,560,440
|
|
Total Liabilities and Shareholders' Equity
|
|
$
41,898,593
|
|
$
45,355,885
|
Hudson
City Bancorp, Inc. and Subsidiary
Consolidated Statements of Income
(Unaudited)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
For the
Three Months
|
|
For the
Nine Months
|
Ended
September 30,
|
|
Ended
September 30,
|
|
|
|
|
|
|
2012
|
|
2011
|
|
2012
|
|
2011
|
|
|
|
|
|
|
(In
thousands, except per share data)
|
Interest
and Dividend Income:
|
|
|
|
|
|
|
|
|
|
First
mortgage loans
|
|
$
320,994
|
|
$
375,672
|
|
$
999,745
|
|
$
1,139,000
|
|
Consumer
and other loans
|
|
3,207
|
|
3,792
|
|
9,810
|
|
12,017
|
|
Mortgage-backed securities held to
maturity
|
|
29,498
|
|
49,554
|
|
100,958
|
|
166,531
|
|
Mortgage-backed securities available for
sale
|
|
43,736
|
|
58,631
|
|
145,607
|
|
250,138
|
|
Investment
securities held to maturity
|
|
585
|
|
27,474
|
|
2,903
|
|
93,009
|
|
Investment
securities available for sale
|
|
2,362
|
|
55
|
|
5,780
|
|
887
|
|
Dividends
on Federal Home Loan Bank of New York stock
|
|
4,853
|
|
8,841
|
|
18,878
|
|
31,274
|
|
Federal
funds sold
|
|
194
|
|
519
|
|
1,200
|
|
1,937
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Total interest and dividend
income
|
|
405,429
|
|
524,538
|
|
1,284,881
|
|
1,694,793
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Interest
Expense:
|
|
|
|
|
|
|
|
|
|
Deposits
|
|
56,927
|
|
81,538
|
|
186,445
|
|
250,216
|
|
Borrowed
funds
|
|
145,214
|
|
198,357
|
|
436,777
|
|
670,624
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Total interest
expense
|
|
202,141
|
|
279,895
|
|
623,222
|
|
920,840
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Net
interest income
|
|
203,288
|
|
244,643
|
|
661,659
|
|
773,953
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Provision
for Loan Losses
|
|
20,000
|
|
25,000
|
|
70,000
|
|
95,000
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Net
interest income after provision for loan losses
|
|
183,288
|
|
219,643
|
|
591,659
|
|
678,953
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Non-Interest Income:
|
|
|
|
|
|
|
|
|
|
Service
charges and other income
|
|
3,017
|
|
3,094
|
|
8,728
|
|
8,565
|
|
Gain on
securities transactions, net
|
|
-
|
|
-
|
|
-
|
|
102,468
|
|
Total non-interest
income
|
|
3,017
|
|
3,094
|
|
8,728
|
|
111,033
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Non-Interest Expense:
|
|
|
|
|
|
|
|
|
|
Compensation and employee benefits
|
|
33,883
|
|
27,201
|
|
96,426
|
|
87,974
|
|
Net
occupancy expense
|
|
8,586
|
|
8,711
|
|
25,786
|
|
25,166
|
|
Federal
deposit insurance assessment
|
|
30,250
|
|
33,866
|
|
93,945
|
|
83,394
|
|
Loss on
extinguishment of debt
|
|
-
|
|
-
|
|
-
|
|
1,172,092
|
|
Other
expense
|
|
21,158
|
|
13,883
|
|
52,889
|
|
41,440
|
|
Total non-interest
expense
|
|
93,877
|
|
83,661
|
|
269,046
|
|
1,410,066
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Income
(loss) before income tax expense (benefit)
|
|
92,428
|
|
139,076
|
|
331,341
|
|
(620,080)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Income Tax
Expense (Benefit)
|
|
36,496
|
|
54,873
|
|
130,146
|
|
(244,627)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Net income
(loss)
|
|
$
55,932
|
|
$
84,203
|
|
$
201,195
|
|
$
(375,453)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Basic
Earnings (Loss) Per Share
|
|
$
0.11
|
|
$
0.17
|
|
$
0.41
|
|
$
(0.76)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Diluted
Earnings (Loss) Per Share
|
|
$
0.11
|
|
$
0.17
|
|
$
0.41
|
|
$
(0.76)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Weighted
Average Number of Common Shares Outstanding:
|
|
|
|
|
|
|
|
|
|
|
Basic
|
|
|
|
496,772,798
|
|
494,966,393
|
|
496,435,666
|
|
493,994,559
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Diluted
|
|
|
|
496,779,005
|
|
495,089,402
|
|
496,446,418
|
|
493,994,559
|
Hudson
City Bancorp, Inc. and Subsidiary
Reconciliation of GAAP and Operating
Earnings
(Unaudited)
|
This press
release includes non-GAAP financial measures of operating earnings.
A non-GAAP financial measure is a numerical measure of historical
or future financial performance, financial position or cash flows
that excludes or includes amounts that are required to be disclosed
by U.S. generally accepted accounting principles ("GAAP"). The
Company believes that operating earnings are an important
indication of earnings from our core banking operations. 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
expenses are calculated by subtracting merger-related expenses and
the loss on the extinguishment of debt from total operating
expenses. Calculation of operating expenses is not required by GAAP
or by applicable bank regulatory requirements. The presentation of
this additional information is not meant to be considered in
isolation or as 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
Nine Months Ended
|
|
|
September 30,
|
|
|
September 30,
|
|
|
2012
|
|
2011
|
|
|
2012
|
|
2011
|
|
|
(In
thousands, except share and per share data)
|
|
|
|
|
|
|
|
|
|
|
GAAP
(Loss) Earnings
|
|
$
55,932
|
|
$
84,203
|
|
|
$
201,195
|
|
$
(375,453)
|
Adjustments to GAAP earnings (loss) :
|
|
|
|
|
|
|
|
|
|
Loss on extinguishment of
debt
|
|
-
|
|
-
|
|
|
-
|
|
1,172,092
|
Merger related costs
|
|
6,073
|
|
-
|
|
|
6,073
|
|
-
|
Net gain on securities sales related
to
|
|
|
|
|
|
|
|
|
|
Restructuring Transaction
(5)
|
|
-
|
|
-
|
|
|
-
|
|
(98,278)
|
Income tax effect
|
|
(2,398)
|
|
-
|
|
|
(2,398)
|
|
(424,479)
|
Operating
earnings
|
|
59,607
|
|
84,203
|
|
|
204,870
|
|
273,882
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Diluted
GAAP (Loss) Earnings per Share
|
|
0.11
|
|
0.17
|
|
|
0.41
|
|
(0.76)
|
Adjustments to GAAP earnings (loss):
|
|
|
|
|
|
|
|
|
|
Loss on extinguishment of
debt
|
|
-
|
|
-
|
|
|
-
|
|
2.37
|
Merger related costs
|
|
0.01
|
|
-
|
|
|
0.01
|
|
-
|
Net gain on securities sales related
to
|
|
|
|
|
|
|
|
|
|
Restructuring Transaction
(5)
|
|
-
|
|
-
|
|
|
-
|
|
(0.20)
|
Income tax effect
|
|
-
|
|
-
|
|
|
-
|
|
(0.86)
|
Diluted operating earnings
per share
|
|
$
0.12
|
|
$
0.17
|
|
|
$
0.42
|
|
$
0.55
|
Weighted
average number of common shares outstanding:
|
|
|
|
|
|
|
|
|
|
Basic
|
|
496,772,798
|
|
494,966,393
|
|
|
496,435,666
|
|
493,994,559
|
Diluted
|
|
496,779,005
|
|
495,089,402
|
|
|
496,446,418
|
|
494,577,465
|
|
|
|
|
|
|
|
|
|
|
Operating Efficiency Ratio
|
|
|
|
|
|
|
|
|
|
Total
non-interest expense
|
|
$
93,877
|
|
$
83,661
|
|
|
$
269,046
|
|
$
1,410,066
|
Loss on
extinguishment of debt
|
|
-
|
|
-
|
|
|
-
|
|
(1,172,092)
|
Merger
related costs
|
|
(6,073)
|
|
-
|
|
|
(6,073)
|
|
-
|
Operating non-interest
expense
|
|
$
87,804
|
|
$
83,661
|
|
|
$
262,973
|
|
$
237,974
|
|
|
|
|
|
|
|
|
|
|
Net
interest income
|
|
203,288
|
|
244,643
|
|
|
661,659
|
|
773,953
|
Total
non-interest income
|
|
3,017
|
|
3,094
|
|
|
8,728
|
|
111,033
|
Net gains
on securities transactions related to
|
|
|
|
|
|
|
|
|
|
Restructuring Transaction (5)
|
|
-
|
|
-
|
|
|
-
|
|
(98,278)
|
Operating
non-interest income
|
|
3,017
|
|
3,094
|
|
|
8,728
|
|
12,755
|
Total operating income
|
|
$
206,305
|
|
$
247,737
|
|
|
$
670,387
|
|
$
786,708
|
|
|
|
|
|
|
|
|
|
|
Operating
efficiency ratio (4)
|
|
42.56%
|
|
33.77%
|
|
|
39.23%
|
|
30.25%
|
Ratio of
operating earnings to average assets (1) (2)
|
0.56%
|
|
0.65%
|
|
|
0.63%
|
|
0.67%
|
Ratio of
operating earnings to average equity (1) (3)
|
5.05%
|
|
6.80%
|
|
|
5.85%
|
|
7.28%
|
|
|
|
|
|
|
|
|
|
|
(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 for the nine months
ended September 30, 2011. There were no sales in
2012.
|
Hudson
City Bancorp, Inc. and Subsidiary
Consolidated Average Balance Sheets
(Unaudited)
|
|
|
|
|
|
|
|
|
For the
Three Months Ended September 30,
|
|
|
|
|
2012
|
|
2011
|
|
|
|
|
|
|
|
|
Average
|
|
|
|
|
|
Average
|
|
|
|
|
Average
|
|
|
|
Yield/
|
|
Average
|
|
|
|
Yield/
|
|
|
|
|
Balance
|
|
Interest
|
|
Cost
|
|
Balance
|
|
Interest
|
|
Cost
|
|
|
|
|
(Dollars in thousands)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Assets:
|
|
|
|
|
|
|
|
|
|
|
|
|
Interest-earnings assets:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
First
mortgage loans, net (1)
|
$
27,522,218
|
|
$
320,994
|
|
4.67
|
%
|
$
29,758,353
|
|
$
375,672
|
|
5.05
|
%
|
|
Consumer
and other loans
|
264,556
|
|
3,207
|
|
4.85
|
|
305,452
|
|
3,792
|
|
4.97
|
|
|
Federal
funds sold and other overnight deposits
|
348,170
|
|
194
|
|
0.22
|
|
1,201,323
|
|
519
|
|
0.17
|
|
|
Mortgage-backed securities at amortized
cost
|
12,029,553
|
|
73,234
|
|
2.44
|
|
14,702,692
|
|
108,185
|
|
2.94
|
|
|
Federal
Home Loan Bank stock
|
406,285
|
|
4,853
|
|
4.78
|
|
748,844
|
|
8,841
|
|
4.72
|
|
|
Investment
securities, at amortized cost
|
453,097
|
|
2,947
|
|
2.60
|
|
3,304,656
|
|
27,529
|
|
3.33
|
|
|
|
Total
interest-earning assets
|
41,023,879
|
|
405,429
|
|
3.95
|
|
50,021,320
|
|
524,538
|
|
4.19
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Noninterest-earnings assets (4)
|
1,503,166
|
|
|
|
|
|
1,402,284
|
|
|
|
|
|
|
|
Total
Assets
|
$
42,527,045
|
|
|
|
|
|
$
51,423,604
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Liabilities and Shareholders'
Equity:
|
|
|
|
|
|
|
|
|
|
|
|
|
Interest-bearing liabilities:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Savings
accounts
|
$
924,942
|
|
591
|
|
0.25
|
|
$
869,245
|
|
1,202
|
|
0.55
|
|
|
Interest-bearing transaction accounts
|
2,289,486
|
|
2,812
|
|
0.49
|
|
1,968,076
|
|
3,797
|
|
0.77
|
|
|
Money
market accounts
|
7,274,462
|
|
7,294
|
|
0.40
|
|
8,231,758
|
|
18,752
|
|
0.90
|
|
|
Time
deposits
|
13,184,609
|
|
46,230
|
|
1.39
|
|
13,865,635
|
|
57,787
|
|
1.65
|
|
|
|
Total
interest-bearing deposits
|
23,673,499
|
|
56,927
|
|
0.96
|
|
24,934,714
|
|
81,538
|
|
1.30
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Repurchase
agreements
|
6,950,000
|
|
79,151
|
|
4.46
|
|
7,656,522
|
|
86,741
|
|
4.49
|
|
|
Federal
Home Loan Bank of New York advances
|
6,327,717
|
|
66,063
|
|
4.09
|
|
13,062,500
|
|
111,616
|
|
3.39
|
|
|
|
Total
borrowed funds
|
13,277,717
|
|
145,214
|
|
4.28
|
|
20,719,022
|
|
198,357
|
|
3.80
|
|
|
|
Total
interest-bearing liabilities
|
36,951,216
|
|
202,141
|
|
2.15
|
|
45,653,736
|
|
279,895
|
|
2.43
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Noninterest-bearing liabilities:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Noninterest-bearing deposits
|
614,343
|
|
|
|
|
|
592,614
|
|
|
|
|
|
|
Other
noninterest-bearing liabilities
|
244,554
|
|
|
|
|
|
223,090
|
|
|
|
|
|
|
|
Total
noninterest-bearing liabilities
|
858,897
|
|
|
|
|
|
815,704
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Total
liabilities
|
37,810,113
|
|
|
|
|
|
46,469,440
|
|
|
|
|
|
Shareholders' equity
|
4,716,932
|
|
|
|
|
|
4,954,164
|
|
|
|
|
|
|
|
Total
Liabilities and Shareholders' Equity
|
$
42,527,045
|
|
|
|
|
|
$
51,423,604
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Net
interest income/net interest rate spread (2)
|
|
|
$
203,288
|
|
1.80
|
|
|
|
$
244,643
|
|
1.76
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Net
interest-earning assets/net interest margin (3)
|
$
4,072,663
|
|
|
|
2.02
|
%
|
$
4,367,584
|
|
|
|
1.97
|
%
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Ratio of
interest-earning assets to
|
|
|
|
|
|
|
|
|
|
|
|
|
|
interest-bearing liabilities
|
|
|
|
|
1.11
|
x
|
|
|
|
|
1.10
|
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 $133.9 million and $155.6
million
|
|
|
for the
quarters ended September 30, 2012 and 2011,
respectively.
|
Hudson
City Bancorp, Inc. and Subsidiary
Consolidated Average Balance Sheets
(Unaudited)
|
|
|
|
|
|
|
|
|
For the
Nine Months Ended September 30,
|
|
|
|
|
2012
|
|
2011
|
|
|
|
|
|
|
|
|
Average
|
|
|
|
|
|
Average
|
|
|
|
|
Average
|
|
|
|
Yield/
|
|
Average
|
|
|
|
Yield/
|
|
|
|
|
Balance
|
|
Interest
|
|
Cost
|
|
Balance
|
|
Interest
|
|
Cost
|
|
|
|
|
(Dollars in thousands)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Assets:
|
|
|
|
|
|
|
|
|
|
|
|
|
Interest-earnings assets:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
First
mortgage loans, net (1)
|
$28,004,580
|
|
$
999,745
|
|
4.76
|
%
|
$
29,883,894
|
|
$
1,139,000
|
|
5.08
|
%
|
|
Consumer
and other loans
|
275,725
|
|
9,810
|
|
4.74
|
|
313,275
|
|
12,017
|
|
5.11
|
|
|
Federal
funds sold and other overnight deposits
|
662,282
|
|
1,200
|
|
0.24
|
|
1,072,936
|
|
1,937
|
|
0.24
|
|
|
Mortgage-backed securities at amortized
cost
|
12,346,343
|
|
246,565
|
|
2.66
|
|
17,189,990
|
|
416,669
|
|
3.23
|
|
|
Federal
Home Loan Bank stock
|
445,063
|
|
18,878
|
|
5.66
|
|
801,516
|
|
31,274
|
|
5.20
|
|
|
Investment
securities, at amortized cost
|
423,305
|
|
8,683
|
|
2.74
|
|
3,738,439
|
|
93,896
|
|
3.35
|
|
|
|
Total
interest-earning assets
|
42,157,298
|
|
1,284,881
|
|
4.06
|
|
53,000,050
|
|
1,694,793
|
|
4.26
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Noninterest-earnings assets (4)
|
1,504,426
|
|
|
|
|
|
1,374,551
|
|
|
|
|
|
|
|
Total
Assets
|
$43,661,724
|
|
|
|
|
|
$
54,374,601
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Liabilities and Shareholders'
Equity:
|
|
|
|
|
|
|
|
|
|
|
|
|
Interest-bearing liabilities:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Savings
accounts
|
$
904,911
|
|
2,164
|
|
0.32
|
|
$
865,698
|
|
3,974
|
|
0.61
|
|
|
Interest-bearing transaction accounts
|
2,154,919
|
|
9,401
|
|
0.58
|
|
2,031,889
|
|
11,956
|
|
0.79
|
|
|
Money
market accounts
|
7,853,938
|
|
29,129
|
|
0.50
|
|
7,732,915
|
|
57,308
|
|
0.99
|
|
|
Time
deposits
|
13,336,544
|
|
145,751
|
|
1.46
|
|
14,301,066
|
|
176,978
|
|
1.65
|
|
|
|
Total
interest-bearing deposits
|
24,250,312
|
|
186,445
|
|
1.03
|
|
24,931,568
|
|
250,216
|
|
1.34
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Repurchase
agreements
|
6,950,000
|
|
235,349
|
|
4.45
|
|
9,665,923
|
|
313,230
|
|
4.33
|
|
|
Federal
Home Loan Bank of New York advances
|
7,002,024
|
|
201,428
|
|
3.78
|
|
13,980,622
|
|
357,394
|
|
3.42
|
|
|
|
Total
borrowed funds
|
13,952,024
|
|
436,777
|
|
4.11
|
|
23,646,545
|
|
670,624
|
|
3.79
|
|
|
|
Total
interest-bearing liabilities
|
38,202,336
|
|
623,222
|
|
2.15
|
|
48,578,113
|
|
920,840
|
|
2.53
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Noninterest-bearing liabilities:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Noninterest-bearing deposits
|
547,318
|
|
|
|
|
|
524,676
|
|
|
|
|
|
|
Other
noninterest-bearing liabilities
|
246,064
|
|
|
|
|
|
235,526
|
|
|
|
|
|
|
|
Total
noninterest-bearing liabilities
|
793,382
|
|
|
|
|
|
760,202
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Total
liabilities
|
38,995,718
|
|
|
|
|
|
49,338,315
|
|
|
|
|
|
Shareholders' equity
|
4,666,006
|
|
|
|
|
|
5,036,286
|
|
|
|
|
|
|
|
Total
Liabilities and Shareholders' Equity
|
$
43,661,724
|
|
|
|
|
|
$
54,374,601
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Net
interest income/net interest rate spread (2)
|
|
|
$
661,659
|
|
1.91
|
|
|
|
$
773,953
|
|
1.73
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Net
interest-earning assets/net interest margin (3)
|
$
3,954,962
|
|
|
|
2.11
|
%
|
$
4,421,937
|
|
|
|
1.94
|
%
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
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 $121.9 million and $163.4
million
|
|
for the
nine months ended September 30, 2012 and 2011,
respectively.
|
Hudson
City Bancorp, Inc. and Subsidiary
Book
Value Calculations
|
|
|
|
|
|
|
|
|
September 30, 2012
|
(In
thousands, except share and per share data)
|
|
|
|
|
|
Shareholders' equity
|
|
$
4,712,085
|
Goodwill
and other intangible assets
|
|
(154,094)
|
Tangible
Shareholders' equity
|
|
$
4,557,991
|
|
|
|
Book Value
Share Computation:
|
|
|
Issued
|
|
741,466,555
|
Treasury
shares
|
|
(213,272,666)
|
Shares
outstanding
|
|
528,193,889
|
Unallocated ESOP shares
|
|
(31,030,455)
|
Shares in
trust
|
|
(361,251)
|
Book value
shares
|
|
496,802,183
|
|
|
|
Book value
per share
|
|
$
9.48
|
|
|
|
Tangible
book value per share
|
|
$
9.17
|
|
|
|
|
|
|
Hudson
City Bancorp, Inc.
Other
Financial Data
|
Securities Portfolio at September 30,
2012
|
|
|
|
|
|
|
|
Amortized
|
|
Estimated
|
|
Unrealized
|
|
Cost
|
|
Fair
Value
|
|
Gain/(Loss)
|
|
|
|
(Dollars
in thousands)
|
|
|
Held to
Maturity:
|
|
|
|
|
|
|
|
|
|
|
|
Mortgage-backed securities:
|
|
|
|
|
|
FHLMC
|
$
1,750,892
|
|
$
1,870,173
|
|
$
119,281
|
FNMA
|
928,496
|
|
1,001,064
|
|
72,568
|
FHLMC and FNMA CMO's
|
500,657
|
|
532,667
|
|
32,010
|
GNMA
|
76,054
|
|
78,997
|
|
2,943
|
Total
mortgage-backed securities
|
3,256,099
|
|
3,482,901
|
|
226,802
|
|
|
|
|
|
|
Investment securities:
|
|
|
|
|
|
United States GSE
debt
|
39,011
|
|
45,577
|
|
6,566
|
Total investment
securities
|
39,011
|
|
45,577
|
|
6,566
|
|
|
|
|
|
|
Total
held to maturity
|
$
3,295,110
|
|
$
3,528,478
|
|
$
233,368
|
|
|
|
|
|
|
|
|
|
|
|
|
Available for sale:
|
|
|
|
|
|
|
|
|
|
|
|
Mortgage-backed securities:
|
|
|
|
|
|
FHLMC
|
$
3,015,523
|
|
$
3,097,200
|
|
$
81,677
|
FNMA
|
4,421,561
|
|
4,522,180
|
|
100,619
|
FHLMC and FNMA CMO's
|
63,534
|
|
65,908
|
|
2,374
|
GNMA
|
1,047,199
|
|
1,087,065
|
|
39,866
|
Total
mortgage-backed securities
|
8,547,817
|
|
8,772,353
|
|
224,536
|
|
|
|
|
|
|
Investment securities:
|
|
|
|
|
|
Corporate debt
|
406,785
|
|
420,853
|
|
14,068
|
Equity securities
|
6,812
|
|
7,554
|
|
742
|
Total investment
securities
|
413,597
|
|
428,407
|
|
14,810
|
|
|
|
|
|
|
Total available for
sale
|
$
8,961,414
|
|
$
9,200,760
|
|
$
239,346
|
|
|
|
|
|
|
Hudson
City Bancorp, Inc.
Other
Financial Data
|
Loan
Data at September 30, 2012:
|
|
|
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
|
|
$
996,814
|
|
2,744
|
|
3.59%
|
|
$
26,585,709
|
|
63,639
|
95.86%
|
FHA/VA
|
|
122,630
|
|
490
|
|
0.44%
|
|
693,486
|
|
3,532
|
2.50%
|
PMI
|
|
8,747
|
|
28
|
|
0.03%
|
|
154,240
|
|
504
|
0.56%
|
Construction
|
|
4,619
|
|
4
|
|
0.02%
|
|
4,619
|
|
4
|
0.02%
|
Commercial
|
|
2,081
|
|
6
|
|
0.01%
|
|
37,384
|
|
81
|
0.13%
|
Total mortgage loans
|
|
1,134,891
|
|
3,272
|
|
4.09%
|
|
27,475,438
|
|
67,760
|
99.07%
|
|
|
|
|
|
|
|
|
|
|
|
|
Home
equity loans
|
|
5,790
|
|
61
|
|
0.02%
|
|
234,537
|
|
6,386
|
0.85%
|
Other
loans
|
|
2,444
|
|
6
|
|
0.01%
|
|
22,099
|
|
2,095
|
0.08%
|
Total
|
|
$
1,143,125
|
|
3,339
|
|
4.12%
|
|
$
27,732,074
|
|
76,241
|
100.00%
|
- Net charge-offs amounted to $16.3
million for the third quarter of 2012.
- 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 78.6% of our non-performing loans were located at
September 30, 2012, by approximately
25% from the peak of the market in 2006 through July 2012 and by 31% nationwide during that
period. From July 2011 to
July 2012, the house price indices
increased approximately 1% in the New
York metropolitan area and 2% 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 September
30, 2012:
|
|
|
|
Carrying
|
|
|
Number
Under
|
|
|
|
Number
|
|
Value
|
|
|
Contract of Sale
|
|
|
|
|
|
(Dollars
in thousands)
|
|
|
|
|
Foreclosed
real estate
|
|
134
|
|
$
45,336
|
|
|
39
|
|
|
|
|
|
|
|
|
|
|
- During the first nine months of 2012, we sold 150 foreclosed
properties. Write-downs on foreclosed real estate and net losses on
the sale of foreclosed real estate amounted to $1.3 million for the first nine months of
2012.
Hudson
City Bancorp, Inc. and Subsidiary
|
Other
Financial Data
|
(Unaudited)
|
|
|
|
|
At or
for the Quarter Ended
|
|
|
|
Sept.
30, 2012
|
|
June
30, 2012
|
|
March
31, 2012
|
|
Dec.
31, 2011
|
|
Sept.
30, 2011
|
|
(Dollars in thousands, except per share
data)
|
Net
interest income
|
$
203,288
|
|
$
224,253
|
|
$
234,118
|
|
$
206,981
|
|
$
244,643
|
Provision
for loan losses
|
20,000
|
|
25,000
|
|
25,000
|
|
25,000
|
|
25,000
|
Non-interest income
|
3,017
|
|
2,924
|
|
2,787
|
|
2,884
|
|
3,094
|
Non-interest expense:
|
|
|
|
|
|
|
|
|
|
Compensation and employee
benefits
|
33,883
|
|
30,401
|
|
32,142
|
|
25,155
|
|
27,201
|
FDIC insurance assessment
|
30,250
|
|
27,695
|
|
36,000
|
|
37,587
|
|
33,866
|
Other non-interest
expense
|
29,744
|
|
25,475
|
|
23,456
|
|
757,352
|
|
22,594
|
Total non-interest expense
|
93,877
|
|
83,571
|
|
91,598
|
|
820,094
|
|
83,661
|
Income
(loss) before income tax expense (benefit)
|
92,428
|
|
118,606
|
|
120,307
|
|
(635,229)
|
|
139,076
|
Income tax
expense (benefit)
|
36,496
|
|
46,330
|
|
47,320
|
|
(274,693)
|
|
54,873
|
Net income
(loss)
|
$
55,932
|
|
$
72,276
|
|
$
72,987
|
|
$
(360,536)
|
|
$
84,203
|
Total
assets
|
$
41,898,593
|
|
$
43,590,185
|
|
$
44,138,584
|
|
$
45,355,885
|
|
$
50,850,815
|
Loans,
net
|
27,533,618
|
|
27,983,559
|
|
28,534,080
|
|
29,137,359
|
|
29,870,173
|
Mortgage-backed securities
|
12,028,452
|
|
12,866,850
|
|
12,893,495
|
|
13,285,913
|
|
14,439,298
|
Other
securities
|
467,418
|
|
456,601
|
|
357,619
|
|
546,379
|
|
1,646,362
|
Deposits
|
24,022,181
|
|
24,644,548
|
|
25,121,541
|
|
25,507,760
|
|
25,421,419
|
Borrowings
|
12,925,000
|
|
13,425,000
|
|
14,175,000
|
|
15,075,000
|
|
20,225,000
|
Shareholders' equity
|
4,712,085
|
|
4,663,442
|
|
4,617,509
|
|
4,560,440
|
|
4,979,469
|
Performance Data:
|
|
|
|
|
|
|
|
|
|
Return on
average assets (1)
|
0.53%
|
|
0.66%
|
|
0.65%
|
|
-2.91%
|
|
0.65%
|
Return on
average equity (1)
|
4.74%
|
|
6.19%
|
|
6.33%
|
|
-29.50%
|
|
6.80%
|
Net
interest rate spread(1)
|
1.80%
|
|
1.91%
|
|
1.95%
|
|
1.51%
|
|
1.76%
|
Net
interest margin (1)
|
2.02%
|
|
2.12%
|
|
2.15%
|
|
1.73%
|
|
1.97%
|
Non-interest expense to average assets (1)
(4)
|
0.88%
|
|
0.77%
|
|
0.82%
|
|
6.62%
|
|
0.65%
|
Compensation and benefits to total revenue
(5)
|
16.42%
|
|
13.38%
|
|
13.57%
|
|
11.99%
|
|
10.98%
|
Operating
Efficiency ratio (2)
|
42.56%
|
|
36.79%
|
|
38.66%
|
|
41.79%
|
|
33.77%
|
Dividend
payout ratio
|
72.73%
|
|
53.33%
|
|
53.33%
|
|
NM
|
|
47.06%
|
Per
Common Share Data:
|
|
|
|
|
|
|
|
|
|
Basic
earnings (loss) per common share
|
$0.11
|
|
$0.15
|
|
$0.15
|
|
($0.73)
|
|
$0.17
|
Diluted
earnings (loss) per common share
|
$0.11
|
|
$0.15
|
|
$0.15
|
|
($0.73)
|
|
$0.17
|
Book value
per share (3)
|
$9.48
|
|
$9.39
|
|
$9.30
|
|
$9.20
|
|
$10.05
|
Tangible
book value per share (3)
|
$9.17
|
|
$9.08
|
|
$8.99
|
|
$8.89
|
|
$9.74
|
Dividends
per share
|
$0.08
|
|
$0.08
|
|
$0.08
|
|
$0.08
|
|
$0.08
|
Capital
Ratios:
|
|
|
|
|
|
|
|
|
|
Equity to
total assets (consolidated)
|
11.25%
|
|
10.70%
|
|
10.46%
|
|
10.05%
|
|
9.79%
|
Tier 1
leverage capital (Bank)
|
9.75%
|
|
9.44%
|
|
9.17%
|
|
8.83%
|
|
8.77%
|
Total
risk-based capital (Bank)
|
21.02%
|
|
20.66%
|
|
20.39%
|
|
20.00%
|
|
21.57%
|
Other
Data:
|
|
|
|
|
|
|
|
|
|
Full-time
equivalent employees
|
1,608
|
|
1,599
|
|
1,604
|
|
1,586
|
|
1,580
|
Number of
banking offices
|
135
|
|
135
|
|
135
|
|
135
|
|
135
|
Asset
Quality Data:
|
|
|
|
|
|
|
|
|
|
Total
non-performing loans
|
$
1,143,125
|
|
$
1,093,876
|
|
$
1,064,585
|
|
$
1,022,687
|
|
$
948,706
|
Number of
non-performing loans
|
3,339
|
|
3,206
|
|
3,109
|
|
2,987
|
|
2,759
|
Total
number of loans
|
76,241
|
|
77,636
|
|
79,303
|
|
80,823
|
|
82,662
|
Total
non-performing assets
|
$
1,188,461
|
|
$
1,134,444
|
|
$
1,099,355
|
|
$
1,063,306
|
|
$
989,682
|
Non-performing loans to total loans
|
4.12%
|
|
3.88%
|
|
3.71%
|
|
3.48%
|
|
3.16%
|
Non-performing assets to total assets
|
2.84%
|
|
2.60%
|
|
2.49%
|
|
2.34%
|
|
1.95%
|
Allowance
for loan losses
|
$
291,573
|
|
$
287,901
|
|
$
280,713
|
|
$
273,791
|
|
$
268,754
|
Allowance
for loan losses to non-performing loans
|
25.51%
|
|
26.32%
|
|
26.37%
|
|
26.77%
|
|
28.33%
|
Allowance
for loan losses to total loans
|
1.05%
|
|
1.02%
|
|
0.98%
|
|
0.93%
|
|
0.89%
|
Provision
for loan losses
|
$
20,000
|
|
$
25,000
|
|
$
25,000
|
|
$
25,000
|
|
$
25,000
|
Net
charge-offs
|
$
16,328
|
|
$
17,812
|
|
$
18,078
|
|
$
19,963
|
|
$
18,552
|
Ratio of
net charge-offs to average loans (1)
|
0.24%
|
|
0.25%
|
|
0.25%
|
|
0.27%
|
|
0.25%
|
Net losses
on foreclosed real estate
|
$
(13)
|
|
$
202
|
|
$
1,128
|
|
$
2,552
|
|
$
2,080
|
(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
|
|
(5)
Computed by dividing compensation and benefits by the sum
of
|
December 31, 2011
quarter, non-interest expense excludes the loss on debt
extinguishments and non-interest
|
|
net interest income and
non-interest income
|
income excludes
securities gains from the Transactions. For the September 30,
2012 quarter, non-interest expense
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|
|
|
|
|
|
excludes merger
related expense. See the attached Reconciliation of GAAP and
Operating Earnings for a calculation
|
|
NM - not
meaningful
|
of the operating
efficiency ratio.
|
|
|
|
|
|
|
|
|
|
(3) See
page 17 for the Book Value Calculations for book value per share
and tangible book value per share.
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SOURCE Hudson City Bancorp, Inc.