Hudson City CEO Sticks to the Plan: Best in Class

Paramus, N.J. (TheStreet) -- Hudson City Bancorp (HCBK Quote) may not be in the same league as banking titans like JPMorgan Chase (JPM Quote) and Goldman Sachs (GS Quote) in terms of scale, but don't discount the $59 billion-asset company just because it's smaller in size.

Unlike other financial firms that limped through the financial crisis, if they survived at all, this thrift got it right. At the helm is Chairman and CEO Ron Hermance, who has been praised because Hudson City is the largest bank that did not take taxpayer money through the Troubled Asset Relief Program. A big reason for the bank's resilience is Hermance's focus on keeping the thrift as a banker's bank. Hudson City's business plan is simple -- it takes in deposits and makes loans to affluent customers. It does this while being arguably the most efficient bank in the industry.

Hermance says he was never interested in expanding into riskier businesses or loan products like many troubled banks did, partially because he didn't understand them. That cost him in return on assets, particularly in the housing heyday, but in hindsight it was probably one of the smartest moves he could have made. In an interview with TheStreet.com, the 62-year-old also says that, after being in the business for more than 30 years, he's seen enough credit cycles to smell a new one coming.

>>Photo Gallery: In His Own Words Ron Hermance, chairman and CEO of Hudson City Bancorp

"I've been around long enough to know what credit cycles look like. The further you get away from a bad one, the closer you are to the next one. More esoteric products come up. We all know that whenever there is a high yield over the norm, there is a higher degree of potential for it to go wrong," Hermance says.