
Hudson City Meets Earnings Estimates
PARAMUS, N.J. (
) --
Hudson City Bancorp
(HCBK)
on Wednesday reported fourth-quarter net income of $137 million, or 28 cents a share, matching the consensus estimate of analysts polled by Thomson Reuters.
Hudson City earned $135 million, or 27 cents a share, the previous quarter and $124 million, or 25 cents a share, during the fourth quarter of 2008.
Earnings for all of 2009 were $527 million, or $1.07 a share, increasing from $446 million, or 90 cents a share, for 2008.
The 19% increase in year-over-year earnings per share was mainly attributed to a significant improvement in the company's net interest margin, which rose to 2.21% for 2009, from 1.96% the previous year, as Hudson City took advantage of historically-low short-term interest rates and grew its deposits 33% year-over-year, while the loan portfolio grew 8%.
Hudson City's return on average assets for 2009 was 0.92% and its return on average equity was 10.18%, increasing from 0.91% and 9.36% in 2008, according to SNL Financial.
Loan quality remained strong, especially considering the overall credit environment, with nonperforming assets, including nonperforming loans and repossessed real estate, comprising 1.07% of total assets as of Dec. 31, compared to 0.42% a year earlier.
Net loan charge-offs totaled $47 million during 2009, up from $4.4 million in 2008, and the company built reserves through the year, setting aside loan loss provisions of $138 million.
Main subsidiary
Hudson City Savings Bank
remained
, with a tier-1 leverage ratio of 7.59% and a total risk-based capital ratio of 21.02%, compared to 7.09% and 23.25% a year earlier.
CEO Ronald Hermance touted Hudson City's 11 consecutive years of earnings growth, attributing the company's success to its strategy of sticking with traditional banking. Hudson City's 2009 earnings improvement "came from making residential first mortgages, which we keep on our books, and funding our 2009 growth with deposits," he said.
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Written by Philip van Doorn in Jupiter Fla.
Philip W. van Doorn joined TheStreet.com Ratings., Inc., in February 2007. He is the senior analyst responsible for assigning financial strength ratings to banks and savings and loan institutions. He also comments on industry and regulatory trends. Mr. van Doorn has fifteen years experience, having served as a loan operations officer at Riverside National Bank in Fort Pierce, Florida, and as a credit analyst at the Federal Home Loan Bank of New York, where he monitored banks in New York, New Jersey and Puerto Rico. Mr. van Doorn has additional experience in the mutual fund and computer software industries. He holds a Bachelor of Science in business administration from Long Island University.









