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Hudson City 1Q Profit Rises 44 Percent

The Associated Press

PARAMUS, N.J. (AP) — Hudson City Bancorp Inc. said Tuesday its first-quarter profit rose 44 percent, slightly beating Wall Street's forecast, and the regional thrift slightly increased its dividend.

Hudson City said it posted net income for the three months ended March 31 of $127.7 million, or 26 cents per share, up from a profit of $88.7 million, or 18 cents per share, in the year-ago quarter.

Analysts surveyed by Thomson Reuters had forecast a profit of 25 cents per share, on average, for the latest quarter.

Hudson City's board approved an increase in the company's quarterly cash dividend from 14 cents per common share to 15 cents, payable on May 30 to shareholders of record at the close of business May 8.

Ronald Hermance Jr., chairman, president and chief executive, said the bank posted "record levels of earnings, loan production and deposit growth" in the first quarter despite the recession.

Paramus-based Hudson City reported a nearly 11 percent, $1.98 billion increase in deposits during the quarter.

Hudson City also recorded a nearly 47 percent first-quarter increase in net interest income, the difference between how much it costs a bank to borrow money and how much it receives from lending money to customers. Net interest income grew to $283.8 million from $193.8 million in the year-ago period.

However, Hudson City boosted its first-quarter loan-loss provision to $20 million from $9 million in the fourth quarter, and non-performing loans rose to $320.2 million as of March 31, up from $217.6 million as of Dec. 31.

Nearly all banks have been forced to increase their loan-loss reserves over the past year and a half as customers increasingly default on their loans, especially mortgages and other residential real estate-related loans.

Hudson City's net charge-offs, or loans written off as unpaid, soared to nearly $4.7 million, compared with $469,000 in the year-ago quarter.

Hudson City, which owns 130 Hudson City Savings branches in the New York metropolitan area, reported earnings after its shares rose 80 cents, or about 6.8 percent, to close at $12.53. In after-hours trading, the stock added another 10 cents, to $12.63.