DOW JONES NEWSWIRES

Hudson City Bancorp Inc.'s (HCBK) fourth-quarter net income jumped 60% on a sharp rise in net interest income even as the company had to more than quadruple its loan-loss provisions.

The New Jersey regional bank reported net income of $124.3 million, or 25 cents a share, up from $77.5 million, or 16 cents a share, a year earlier. Analysts surveyed by Thomson Reuters projected 27 cents.

Chief Executive Ronald E. Hermance Jr. said the net income was a record for the company despite the "unprecedented turmoil" in the markets.

The earnings growth was led by a 52% surge in net-interest income. Return on equity, a key profitability measure, rose to 10.2% from 9.4%.

Total assets climbed 22% to $54.16 billion, with mortgage originations up 50% in 2008.

Loan-loss provisions more than quadrupled in the quarter to $9 million due to an increase in nonperforming loans and growth in its loan portfolio. Net charge-offs rose to $1.8 million in the quarter from $109,000 a year earlier as a result of declines in the value of residential mortgage loans. But the figures pale in comparison to the major losses being recorded by bigger banks, which in general loosened lending standards much more than Hudson City.

The company didn't join most other lenders in chasing every possible borrower, instead staying away from the problem loans at the heart of the financial crisis. That has kept its loan losses at much lower levels than other banks.

Hudson City also doesn't repackage its mortgages for sale as securities.

Hermance said Wednesday the company introduced an Internet deposit product last month and has already taken in more than $52 million in deposits through it. The Internet deposit capability will allow the bank to reach customers around the country.

Hudson City said in November it wouldn't participate in the federal government's capital purchase program because it doesn't need the money.

Hudson City's shares closed Tuesday at $12.24 and haven't traded premarket. The stock is down 12% in the past year, a much better performance than the drubbing many financial shares have received.

-By Kerry E. Grace, Dow Jones Newswires; 201-938-5089; kerry.grace@dowjones.com

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