7. Hudson City Bancorp Company Profile Shares of Hudson City Bancorp ( HCBK) of Paramus, N.J. closed at $12.87 Monday, down 2% year-to-date. Based on a quarterly payout of 15 cents, the shares have a dividend yield of 4.66%. On December 17, Hudson City withdrew its application with the Office of the Comptroller of the Currency to convert its main thrift subsidiary - Hudson City Savings Bank - into a nationally chartered commercial bank. The thrift will still come under the supervision of the OCC, as its current regulator, the Office of Thrift Supervision, is scheduled to be merged with the OCC in July. Income Statement Third-quarter net income was $124.6 million, or 25 cents a share, down from $135.1 million, or 27 cents a share, during the third quarter of 2009, mainly because the net interest margin declined to 1.97% from 2.31%, as earnings suffered in the low-rate environment. CEO Ronald Hermance said that further "quantitative easing by the Federal Reserve Board will continue to place pressure on our net interest margin for the remainder of 2010," and also said that pursuing further asset growth in such a low-rate environment wouldn't be prudent. The third-quarter ROA was 0.82%, declining from 0.93% a year earlier. Despite the decline in the margin, the ROA held up decently because of the company's high operating efficiency. SNL Financial defines a bank's efficiency ratio as its noninterest expense (before expenses on foreclosed property, amortization of intangibles and goodwill impairments) divided by its revenue (excluding securities gains and nonrecurring items). Lower is better, and Hudson City's third-quarter efficiency ratio of 22.55 was the lowest among nearly 1,000 publicly traded banks and thrifts. The third-quarter dividend payout ratio was 60%. Balance Sheet Total assets were $60.6 billion as of September 30. For Hudson City Savings Bank, the NPA ratio was 1.35%. The thrift's net charge-off ratio during the third quarter was 0.33% and reserves covered 0.66% of total loans as of September 30. The holding company's tangible common equity ratio was 9.04% as of September 30. Stock Ratios The shares trade for a low 1.2 times tangible book value according to SNL and 14 times the 2011 consensus earnings estimate of 92 cents a share. Analyst Ratings Hudson City remains a low-risk dividend play for patient income-seeking investors who can wait until the company benefits from an eventual rise in interest rates. Out of 16 analysts covering the shares, only one has a buy rating, while 13 have hold ratings and two recommend selling the shares.