<PAGE> 1
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM 10-Q
QUARTERLY REPORT UNDER SECTION 13 OR 15(d)
OF THE SECURITIES EXCHANGE ACT OF 1934
(Mark One)
[ X ] QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES
EXCHANGE ACT OF 1934
For the quarterly period ended: JUNE 30, 2000
-------------
[ ] TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES
EXCHANGE ACT OF 1934
For the transition period from to
---------------------- ----------------------
Commission File Number: 0-26001
HUDSON CITY BANCORP, INC.
--------------------------
(Exact name of registrant as specified in its charter)
Delaware 22-3640393
-------- ----------
(State or other jurisdiction of (I.R.S. Employer
incorporation or organization) Identification No.)
West 80 Century Road
Paramus, New Jersey 07652
------------------- -----
(Address of Principal Executive Offices) (Zip Code)
(201) 967-1900
----------------
(Registrant's telephone number, including area code)
Indicate by check mark whether the registrant (1) has filed all
reports required to be filed by Section 13 or 15(d) of the Securities Exchange
Act of 1934 during the preceding 12 months (or for such shorter period that the
registrant was required to file such reports), and (2) has been subject to such
filing requirements for the past 90 days.
Yes [X] No [ ]
As of August 7, 2000, the registrant had 114,846,300 shares of common
stock, $0.01 par value, outstanding. Of such shares outstanding, 61,288,300
shares were held by Hudson City, MHC, the registrant's mutual holding company
and 53,558,000 shares were held by the public and directors, officers and
employees of the registrant.
<PAGE> 2
Hudson City Bancorp, Inc.
Form 10-Q
Contents of Report
<TABLE>
<CAPTION>
Page
PART I - FINANCIAL INFORMATION Number
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<S> <C>
Item 1. - Financial Statements
Consolidated Statements of Financial Condition -
June 30, 2000 (Unaudited) and December 31, 1999................ 3
Consolidated Statements of Income (Unaudited) - For the three and six
months ended June 30, 2000 and 1999............................ 4
Consolidated Statements of Cash Flows (Unaudited) - For the six months
ended June 30, 2000 and 1999................................... 5
Notes to Consolidated Financial Statements..................... 6
Item 2. - Management's Discussion and Analysis of Financial Condition and Results of
Operations.................................................... 10
Item 3. - Quantitative and Qualitative Disclosures About Market Risk.... 23
PART II - OTHER INFORMATION
Item 1. - Legal Proceedings............................................. 25
Item 2. - Changes in Securities and Use of Proceeds..................... 25
Item 3. - Defaults Upon Senior Securities............................... 25
Item 4. - Submission of Matters to a Vote of Security Holders........... 25
Item 5. - Other Information............................................. 25
Item 6. - Exhibits and Reports on Form 8-K.............................. 25
SIGNATURES....................................................................... 26
</TABLE>
Explanatory Note: This Form 10-Q contains certain "forward looking statements"
within the meaning of the Private Securities Litigation Reform Act of 1995, and
may be identified by the use of such words as "believe," "expect,"
"anticipate," "should," "planned," "estimated" and "potential." Examples of
forward looking statements include, but are not limited to, estimates with
respect to the financial condition, results of operations and business of
Hudson City Bancorp, Inc. that are subject to various factors which could cause
actual results to differ materially from these estimates. These factors
include: changes in general, economic and market conditions, legislative and
regulatory conditions, or the development of an interest rate environment that
adversely affects Hudson City Bancorp's interest rate spread or other income
anticipated from operations and investments. As used in this Form 10-Q, "we"
and "us" and "our" refer to Hudson City Bancorp, Inc. and its consolidated
subsidiary Hudson City Savings Bank, depending on the context.
Page 2
<PAGE> 3
PART I - FINANCIAL INFORMATION
Item 1. - Financial Statements
Hudson City Bancorp, Inc. and Subsidiary
Consolidated Statements of Financial Condition
<TABLE>
<CAPTION>
June 30, December 31,
2000 1999
--------------- ---------------
(Unaudited)
(In thousands)
<S> <C> <C>
Assets
------
Cash and due from banks.................................................. $ 70,308 $ 84,239
Federal funds sold....................................................... 25,100 116,600
--------------- ---------------
Total cash and cash equivalents.......................... 95,408 200,839
Investment securities held to maturity, market value of $1,457 at
June 30, 2000 and $1,348 at December 31, 1999..................... 1,481 1,379
Investment securities available for sale, at market value................ 840,032 812,058
Federal Home Loan Bank of New York stock................................ 20,000 -
Mortgage-backed securities held to maturity, market value of
$3,163,016 at June 30, 2000 and $3,085,596 at December 31, 1999... 3,174,521 3,097,072
Loans.................................................................... 4,645,751 4,305,875
Less:
Deferred loan fees............................................ 11,472 10,631
Allowance for loan losses..................................... 21,218 20,010
--------------- ---------------
Net loans................................................ 4,613,061 4,275,234
Foreclosed real estate, net.............................................. 669 367
Accrued interest receivable.............................................. 57,951 51,970
Banking premises and equipment, net...................................... 32,060 31,200
Other assets............................................................. 53,763 48,746
--------------- ---------------
Total Assets............................................. $ 8,888,946 $ 8,518,865
=============== ===============
Liabilities and Stockholders' Equity
------------------------------------
Deposits:
Interest-bearing...................................................... $ 6,281,987 $ 6,379,929
Noninterest-bearing................................................... 343,455 308,115
--------------- ---------------
Total deposits................................................ 6,625,442 6,688,044
Borrowed funds........................................................... 750,000 300,000
Accrued expenses and other liabilities................................... 56,899 51,781
--------------- ---------------
Total liabilities............................................. 7,432,341 7,039,825
Common stock, $0.01 par value, 800,000,000 shares authorized 115,638,300
shares issued, 115,161,300 shares outstanding at June 30, 2000,
115,638,300 shares outstanding at December 31, 1999................. 1,156 1,156
Additional paid-in capital............................................... 526,619 526,619
Retain earnings.......................................................... 1,044,739 1,001,337
Treasury stock, at cost(477,000 shares at June 30, 2000)................. (7,210) -
Unallocated common stock held by the employee stock
ownership plan....................................................... (56,377) (22,109)
Unearned common stock held by the recognition and
retention plan....................................................... (26,395) -
Accumulated other comprehensive loss, net of tax......................... (25,927) (27,963)
--------------- ---------------
Total stockholders' equity.................................... 1,456,605 1,479,040
--------------- ---------------
Total Liabilities and Stockholders' Equity.................... $ 8,888,946 $ 8,518,865
=============== ===============
</TABLE>
See accompanying notes to consolidated financial statements.
Page 3
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Hudson City Bancorp, Inc. and Subsidiary
Consolidated Statements of Income
(Unaudited)
<TABLE>
<CAPTION>
For the three months For the six months
ended June 30, ended June 30,
------------------------------- -------------------------------
2000 1999 2000 1999
------------ ------------ ------------ ------------
(Unaudited)
(In thousands, except share data)
<S> <C> <C> <C> <C>
Interest Income:
Interest and fees on first mortgage loans...... $ 79,950 $ 67,105 $ 156,763 $ 133,038
Interest and fees on consumer and other loans.. 2,544 1,765 4,810 3,490
Interest on mortgage-backed securities......... 52,962 47,642 103,012 95,876
Interest on investment securities held to maturity:
Taxable.................................... 18 15 34 30
Exempt from federal taxes.................. 6 7 13 14
Interest on investment securities available
for sale-taxable.......................... 13,698 13,667 27,354 27,156
Dividends on Federal Home Loan Bank
of New York stock......................... 94 - 94 -
Interest on federal funds sold................. 1,110 598 2,359 1,263
------------ ------------ ----------- -----------
Total interest income................... 150,382 130,799 294,439 260,867
------------ ------------ ----------- -----------
Interest Expense:
Interest on deposits........................... 76,718 74,911 151,025 149,701
Interest on borrowed funds..................... 10,180 - 16,558 -
------------ ------------ ----------- -----------
Total interest expense.................. 86,898 74,911 167,583 149,701
------------ ------------ ----------- -----------
Net interest income.................. 63,484 55,888 126,856 111,166
Provision for loan losses............................ 600 550 1,200 1,150
------------ ------------ ----------- -----------
Net interest income after provision
for loan losses................. 62,884 55,338 125,656 110,016
------------ ------------ ----------- -----------
Non-Interest Income:
Service charges and other income............... 1,186 1,141 2,286 2,347
Gains on securities transactions, net.......... - 1 - 1
------------ ------------ ----------- -----------
Total non-interest income............... 1,186 1,142 2,286 2,348
------------ ------------ ----------- -----------
Non-Interest Expense:
Salaries and employee benefits................. 12,165 10,807 24,057 21,722
Net occupancy expense.......................... 3,309 2,930 6,518 5,876
Federal deposit insurance assessment........... 355 197 721 397
Amortization of goodwill....................... - 360 - 720
Computer and related services.................. 194 319 414 606
Other expense.................................. 3,950 2,332 7,127 4,851
------------ ------------ ----------- -----------
Total non-interest expense.............. 19,973 16,945 38,837 34,172
------------ ------------ ----------- -----------
Income before income tax expense..... 44,097 39,535 89,105 78,192
Income tax expense................................... 15,149 14,600 31,851 29,000
------------ ------------ ----------- -----------
Net income........................... $ 28,948 $ 24,935 $ 57,254 $ 49,192
============ ============ =========== ===========
Basic earnings per share............................. $ 0.26 $ - $ 0.52 $ -
============ ============ =========== ===========
Diluted earnings per share........................... $ 0.26 $ - $ 0.52 $ -
============ ============ =========== ===========
</TABLE>
See accompanying notes to consolidated financial statements.
Page 4
<PAGE> 5
Hudson City Bancorp, Inc. and Subsidiary
Consolidated Statements of Cash Flows
(Unaudited)
<TABLE>
<CAPTION>
For the six months ended
June 30,
----------------------------------
2000 1999
------------- --------------
(In thousands)
<S> <C> <C>
Cash Flows from Operating Activities:
Net income.................................................................... $ 57,254 $ 49,192
Adjustments to reconcile net income to net cash provided
by operating activities:
Depreciation, accretion and amortization expense........................ 4,133 4,084
Provision for loan losses............................................... 1,200 1,150
Gain on net securities transactions..................................... - (1)
Deferred tax expense.................................................... (2,350) (1,220)
Allocation of shares for employee benefit plans......................... 3,219 -
Net proceeds from sale of foreclosed real estate........................ 476 1,511
Increase in accrued interest receivables................................ (5,981) (3,451)
Increase in other assets................................................ (3,914) (2,586)
Increase (decrease) in accrued expenses and other liabilities........... 5,118 (313)
------------- --------------
Net Cash Provided by Operating Activities............................................ 59,155 48,366
------------- --------------
Cash Flows from Investing Activities:
Net increase in loans......................................................... (302,894) (139,566)
Purchases of loans............................................................ (35,854) (48,129)
Principal collection of mortgage-backed securities............................ 320,529 627,232
Purchases of mortgage-backed securities....................................... (401,514) (665,727)
Proceeds from maturities and calls of investment securities held to maturity.. 150 15
Purchases of investment securities held to maturity........................... (252) -
Proceeds from maturities and calls of investment securities available for
sale.......................................................................... 350 423,630
Purchases of investment securities available for sale......................... (25,000) (700,350)
Purchase of Federal Home Loan Bank of New York stock.......................... (20,000) -
Purchases of premises and equipment, net...................................... (2,555) (1,116)
------------- --------------
Net Cash Used in Investment Activities............................................... (467,040) (504,011)
------------- --------------
Cash Flows from Financing Activities:
Net (decrease) increase in deposits........................................... (62,602) 420,453
Proceeds from borrowed funds.................................................. 750,000 -
Principal payments on borrowed funds.......................................... (300,000) -
Dividends paid................................................................ (13,852) -
Purchases of stock by the employee stock ownership plan....................... (35,244) -
Purchases of stock by the recognition and retention plan...................... (28,638) -
Purchases of treasury stock................................................... (7,210) -
------------- --------------
Net Cash Provided by Financing Activities............................................ 302,454 420,453
------------- --------------
Net Decrease in Cash and Cash Equivalents............................................ (105,431) (35,192)
Cash and Cash Equivalents at Beginning of Period..................................... 200,839 156,875
------------- --------------
Cash and Cash Equivalents at End of Period........................................... $ 95,408 $ 121,683
============= ==============
Supplemental Disclosures:
Interest paid................................................................. $ 163,422 $ 149,414
============= ==============
Income taxes paid............................................................. $ 40,830 $ 31,796
============= ==============
</TABLE>
See accompanying notes to consolidated financial statements.
Page 5
<PAGE> 6
Hudson City Bancorp, Inc. and Subsidiary
Notes to Consolidated Financial Statements
1. - BASIS OF PRESENTATION
Hudson City Bancorp, Inc. is a Delaware corporation organized in March
1999 by Hudson City Savings Bank in connection with the conversion and
reorganization of Hudson City Savings from a New Jersey mutual savings bank
into a two-tiered mutual savings bank holding company structure, referred to as
the reorganization, as described more fully in Note 2. Prior to July 13, 1999,
Hudson City Bancorp had not issued any stock, had no assets and no liabilities
and had not conducted any business other than of an organizational nature.
Accordingly, the unaudited financial statements, notes to the financial
statements and the Management's Discussion and Analysis of Financial Condition
and Results of Operations presented for periods prior to July 13, 1999 are
solely for Hudson City Savings.
In our opinion, all the adjustments (consisting of normal and
recurring adjustments) necessary for a fair presentation of the financial
condition and results of operations for the unaudited periods presented have
been included. The results of operations and other data presented for the three
and six month periods ended June 30, 2000 are not necessarily indicative of the
results of operations that may be expected for the year ending December 31,
2000. Certain information and note disclosures usually included in financial
statements prepared in accordance with generally accepted accounting principles
have been condensed or omitted pursuant to the rules and regulations of the
Securities and Exchange Commission for the preparation of the Form 10-Q. The
consolidated financial statements presented should be read in conjunction with
Hudson City Bancorp's audited consolidated financial statements and notes to
consolidated financial statements included in Hudson City Bancorp's December
31, 1999 Annual Report on Form 10-K.
Statements of Cash Flow. For the purposes of reporting cash flows,
cash and cash equivalents includes cash on hand, amounts due from banks and
federal funds sold. Transfers of loans to foreclosed real estate of $766,000
and $1,070,000 for the six month periods ended June 30, 2000 and 1999,
respectively, did not result in cash receipts or cash payments.
2. - REORGANIZATION
On July 13, 1999, Hudson City Savings converted and reorganized from a
New Jersey-chartered mutual savings bank into a two-tiered mutual savings bank
holding company structure pursuant to a Plan of Reorganization and Stock
Issuance. Under the terms of the Plan, Hudson City Savings became a
wholly-owned subsidiary of Hudson City Bancorp and received 50% of the net
proceeds from the initial public offering of Hudson City Bancorp's common
stock. Hudson City Bancorp became a majority-owned subsidiary of Hudson City,
MHC, a New Jersey-chartered mutual savings bank holding company, referred to as
the MHC.
Hudson City Bancorp sold 54,350,000 shares of its common stock to the
public, representing 47% of the outstanding shares, at $10.00 per share. Hudson
City Bancorp received net proceeds of $527.6 million. An additional 61,288,300
shares, or 53% of the outstanding shares of Hudson City Bancorp, were issued to
Hudson City, MHC. Additionally, Hudson City Bancorp has 200,000,000 shares,
$0.01 par value, of preferred stock authorized but unissued.
Page 6
<PAGE> 7
Hudson City Bancorp, Inc. and Subsidiary
Notes to Consolidated Financial Statements
3. - COMPREHENSIVE INCOME
Comprehensive income is comprised of net income and other
comprehensive income. Other comprehensive income includes unrealized gains and
losses on securities available for sale.
Total comprehensive income during the periods indicated is as follows.
<TABLE>
<CAPTION>
For the three months For the six months
ended June 30, ended June 30,
2000 1999 2000 1999
--------------- -------------- --------------- --------------
<S> <C> <C> <C> <C>
Net income................................. $ 28,948 $ 24,935 $ 57,254 $ 49,192
Other comprehensive income:
Unrealized holding gain (loss)
on securities available for sale.. 743 (6,653) 2,036 (10,626)
--------------- -------------- --------------- --------------
Total comprehensive income................. $ 29,691 $ 18,282 $ 59,290 $ 38,566
=============== ============== =============== ==============
</TABLE>
4. - EARNINGS PER SHARE
Basic earnings per share is computed by dividing income available to
common stockholders by the weighted average number of shares outstanding for
the period. Diluted earnings per share reflects the potential dilution that
could occur if securities or other contracts to issue common stock (such as
stock options) were exercised or resulted in the issuance of common stock.
These potentially dilutive shares would then be included in the weighted
average number of shares outstanding for the period using the treasury stock
method. Shares issued and shares reacquired during any period are weighted for
the portion of the period that they were outstanding. In computing both basic
and diluted earnings per share, the weighted average number of common shares
outstanding includes all 61,288,300 shares issued to Hudson City, MHC.
Page 7
<PAGE> 8
Hudson City Bancorp, Inc. and Subsidiary
Notes to Consolidated Financial Statements
The following is a reconciliation of the numerators and denominators
of the basic and diluted earnings per share computations.
<TABLE>
<CAPTION>
For the three months ended June 30, 2000
----------------------------------------------------------
Income Shares Per Share
(Numerator) (Denominator) Amount
-------------- ---------------- -------------
(In thousands, except per share data)
<S> <C> <C> <C>
Net income........................................ $ 28,948
==============
Basic earnings per share:
Income available to common stockholders.... $ 28,948 109,415 $ 0.26
=============
Effect of dilutive common stock equivalents....... - 407
-------------- ----------------
Diluted earnings per share:
Income available to common stockholders.... $ 28,948 109,822 $ 0.26
============== ================ =============
</TABLE>
<TABLE>
<CAPTION>
For the six months ended June 30, 2000
----------------------------------------------------------
Income Shares Per Share
(Numerator) (Denominator) Amount
-------------- ---------------- -------------
(In thousands, except per share data)
<S> <C> <C> <C>
Net income........................................ $ 57,254
==============
Basic earnings per share:
Income available to common stockholders.... $ 57,254 110,839 $ 0.52
=============
Effect of dilutive common stock equivalents....... - 129
-------------- ----------------
Diluted earnings per share:
Income available to common stockholders.... $ 57,254 110,968 $ 0.52
============== ================ =============
</TABLE>
5. - EMPLOYEE STOCK BENEFIT PLANS
The ESOP is authorized to purchase up to 8%, or 4,348,000 shares, of
Hudson City Bancorp common stock that was sold in the reorganization. Through
June 30, 2000, the ESOP had purchased the entire amount of shares authorized at
an average cost of $13.53 per share.
The stockholders of Hudson City Bancorp, at a Special Meeting of
Stockholders held on January 13, 2000, approved the adoption of the Hudson City
Bancorp, Inc. 2000 Stock Option Plan and the Hudson City Bancorp, Inc. 2000
Recognition and Retention Plan.
Under the Stock Option Plan, Hudson City Bancorp has reserved
5,435,000 shares of Hudson City Bancorp common stock for issuance upon the
exercise of options under the plan. As of June 30, 2000, total options of
4,497,000 had been granted under the plan, of which 13,000 shares have been
forfeited by employees. Options granted may be incentive stock options that
qualify for special federal income tax treatment or non-qualified stock options
that do not qualify for special federal income tax treatment. Incentive stock
options are subject to additional restrictions under the Internal Revenue Code
and the plan.
Each option granted entitles the holder to purchase one share of
Hudson City Bancorp's common stock at an exercise price of $13.875, equal to
the fair market value on January 13, 2000, the date of grant. We expect that
there will be no compensation cost attributable to these options as
Page 8
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Hudson City Bancorp, Inc. and Subsidiary
Notes To Consolidated Financial Statements
Hudson City uses the intrinsic value based method of accounting. These options
will vest primarily over a five year period and will expire no later than ten
years following the grant date.
Under the RRP, Hudson City Bancorp established a trust to which it
contributed certain amounts of money. The trustee invested the assets of the
trust primarily in shares of Hudson City Bancorp's common stock that were used
to make restricted stock awards. The stock purchases were made on the open
market. The trust is authorized to purchase not more than 2,174,000 shares of
Hudson City Bancorp common stock. As of June 30, 2000, the trust had purchased
and awarded 1,966,100 shares.
As a general rule, these restricted stock grants are held in trust for
the benefit of the award recipient until vested. Compensation cost attributable
to these restricted stock awards was determined on January 13, 2000, the grant
date of the awards. The compensation cost that was measured on the grant date
is being expensed ratably over the five year vesting period.
Any employee of Hudson City or any affiliate approved by the Board of
Directors may be selected to receive option grants and restricted stock awards.
Directors of Hudson City or any affiliate approved by the Board of Directors
who are not employees or officers may also be selected to receive option grants
and restricted stock awards. A committee of outside directors administers both
the stock option plan and the RRP.
6. - STOCKHOLDERS' EQUITY
On March 28, 2000, Hudson City Bancorp received the necessary
regulatory approval to repurchase up to 5,781,915 shares of its common stock.
This represents 5% of the total shares of common stock that were issued and
outstanding at that date. Under the approved stock repurchase program, Hudson
City Bancorp will purchase the shares of common stock in the open market and
other transactions from time-to-time, depending on market conditions. The
repurchased shares are expected to be held as treasury stock for general
corporate use. As of June 30, 2000, we had repurchased 477,000 shares under the
program at an average cost of $15.12 per share.
7. - SUBSEQUENT EVENTS
On July 13, 2000, the Board of Directors of Hudson City Bancorp
declared a quarterly cash dividend of eight cents ($0.08) per common share
outstanding. The dividend is payable on September 1, 2000 to stockholders of
record at the close of business on August 11, 2000.
At our first annual meeting of stockholders held on July 13, 2000, the
stockholders of Hudson City Bancorp approved the election of four incumbent
directors, approved amendments to two existing stock benefit plans, and
ratified the appointment of the independent auditors for the upcoming year.
Page 9
<PAGE> 10
Hudson City Bancorp, Inc.
Form 10-Q
Item 2. - Management's Discussion and Analysis of Financial Condition and
Results of Operations
Hudson City Savings completed the reorganization, as described in Note
2 to the unaudited financial statements, on July 13, 1999. Prior to July 13,
1999, Hudson City Bancorp had not yet issued any stock, had no assets and no
liabilities and had not conducted any business other than of an organizational
nature. Accordingly, comparative information prior to the reorganization
relates to the financial statements of Hudson City Savings included herein.
Effective upon the closing of the reorganization, Hudson City Bancorp acquired
all of the issued and outstanding capital stock of Hudson City Savings.
COMPARISON OF FINANCIAL CONDITION AT JUNE 30, 2000 AND DECEMBER 31, 1999
Our total assets increased $370.1 million, or 4.3%, to $8.89 billion
at June 30, 2000 from $8.52 billion at December 31, 1999. This increase, funded
by borrowed funds, was generally reflected in increases in mortgage loans and
mortgage-backed securities.
Loans increased $339.9 million, or 7.9%, to $4.65 billion at June 30,
2000 from $4.31 billion at December 31, 1999. For the three and six months
ended June 30, 2000, we originated and purchased first mortgage loans of
approximately $295.4 million and $538.1 million, respectively. These
originations and purchases were concentrated in one-to four-family residential
mortgage loans. Mortgage-backed securities increased $77.4 million, or 2.5%, to
$3.17 billion at June 30, 2000 from $3.10 billion at December 31, 1999.
Investment securities available for sale increased $27.9 million, or 3.4%, to
$840.0 million at June 30, 2000 from $812.1 million at December 31, 1999. These
increases continue to reflect our emphasis on the origination and purchase of
one-to four-family first mortgage loans supplemented by the purchase of
mortgage-backed securities and investment securities. Due to our recent
membership in the Federal Home Loan Bank of New York ("FHLB"), we purchased
FHLB stock of $20.0 million. We are currently required to purchase
approximately $54.0 million of additional FHLB stock by April 30, 2001.
These increases in interest-earning assets were partially offset by an
$105.4 million, or 52.5%, decrease in total cash and cash equivalents to $95.4
million at June 30, 2000 from $200.8 million at December 31, 1999. The decrease
in total cash and cash equivalents reflects the reduction from the higher level
of planned liquidity that was maintained at December 31, 1999 due to the
general public's concern over the Year 2000 computer issue. Banking premises
and equipment, net increased $0.9 million, or 2.9%, to $32.1 million at June
30, 2000 from $31.2 million at December 31, 1999 primarily due to capital
expenditures incurred for the expansion of our branch network. Other assets
increased $5.1 million, or 10.5%, to $53.8 million at June 30, 2000 from $48.7
million at December 31, 1999 primarily due to routine increases in prepaid
expenses.
At June 30, 2000, total liabilities were $7.43 billion, an increase of
5.6%, or $392.5 million, compared with $7.04 billion at December 31, 1999. This
increase reflects our increased borrowings offset in part by a decrease in
total deposits. Borrowed funds, consisting entirely of securities sold under
agreements to repurchase, increased $450.0 million to $750.0 million at June
30, 2000 from $300.0 million at December 31, 1999. These borrowed funds were
used to offset the decrease in total deposits as well as fund asset growth
consistent with our capital management strategy. This strategy generated
additional earnings through a positive interest rate spread on the borrowed
funds that were invested. Total deposits decreased $62.6 million, or 0.9%, to
$6.63 billion at June 30, 2000 from $6.69
Page 10
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Hudson City Bancorp, Inc.
Form 10-Q
billion at December 31, 1999. Interest-bearing deposits decreased $97.9
million, or 1.5%, to $6.28 billion at June 30, 2000 from $6.38 billion at
December 31, 1999. The decrease in interest-bearing deposits reflects a $54.7
million, or 1.1%, decrease in time deposits to $4.94 billion at June 30, 2000
from $4.99 billion at December 31, 1999, a $22.5 million, or 4.6%, decrease in
money market accounts to $464.3 million at June 30, 2000 from $486.8 million at
December 31, 1999, and an $18.2 million, or 2.3%, decrease in regular savings
deposits to $785.9 million at June 30, 2000 from $804.1 million at December 31,
1999. We believe the decrease in interest-bearing deposits is due in part to
the continued intense competition in the banking and financial services
industry. The decrease in interest-bearing deposits was partially offset by an
increase in noninterest-bearing deposits, particularly bank checks and demand
deposits, of $35.4 million, or 11.5%, to $343.5 million at June 30, 2000 from
$308.1 million at December 31, 1999. This increase is partially attributable to
the introduction of a free checking account product during the second quarter
of 2000.
Accrued expenses and other liabilities increased $5.1 million, or
9.8%, to $56.9 million at June 30, 2000 from $51.8 million at December 31,
1999. This increase is primarily due to an increase in accrued interest payable
on borrowed funds.
Total stockholders' equity decreased $22.4 million, or 1.5%, to $1.46
billion at June 30, 2000 from $1.48 billion at December 31, 1999. The decrease
was primarily due to purchases of common stock for employee stock benefit plans
and the implementation of our stock repurchase program. Unallocated common
stock held by the ESOP decreased stockholders' equity $34.3 million primarily
due to purchases of Hudson City Bancorp common stock by the plan. The balance
in unearned common stock held by the RRP was $26.4 million at June 30, 2000,
primarily due to purchases of Hudson City Bancorp common stock by the plan.
Treasury stock purchased during the second quarter of 2000 decreased
stockholders' equity by $7.2 million. Stockholders' equity also decreased $13.9
million due to the declaration of cash dividends to common stockholders during
the first six months of 2000. These decreases to stockholders' equity were
partially offset by net income of $57.3 million for the first six months of
2000 and a decrease of $2.1 million in accumulated other comprehensive loss due
to slight increases in the market values of our investment securities available
for sale.
At June 30, 2000, the ratio of total stockholders' equity to total
assets was 16.39% compared with 17.36% at December 31, 1999. For the six months
ended June 30, 2000, the ratio of average stockholders' equity to average
assets was 16.71% compared with 14.60% for the year ended December 31, 1999.
Stockholders' equity per common share was $13.34 at June 30, 2000 compared with
$12.99 at December 31, 1999.
Average Balance Sheets. The tables on the following pages present
certain information regarding Hudson City Bancorp's financial condition and net
interest income for the three and six month periods ended June 30, 2000 and
1999. The tables present the annualized average yield on interest-earning
assets and the annualized average cost of interest-bearing liabilities. We
derived the yields and costs by dividing annualized income or expense by the
average balance of interest-earning assets and interest-bearing liabilities,
respectively, for the periods shown. We derived average balances from daily
balances over the periods indicated. Interest income includes fees which we
considered adjustments to yields. Yields on tax-exempt obligations were not
computed on a tax equivalent basis.
Page 11
<PAGE> 12
Hudson City Bancorp, Inc.
Form 10-Q
<TABLE>
<CAPTION>
For the Three Months Ended June 30,
---------------------------------------------------
2000
------------------------------------------------
Average Average
Balance Interest Yield/Cost
------------- ---------- ------------
(Dollars in thousands)
<S> <C> <C> <C>
Assets:
Interest-earning assets:
First mortgage loans, net (1).................... $ 4,370,069 $ 79,950 7.32 %
Consumer and other loans......................... 126,396 2,544 8.05
Federal funds sold............................... 71,611 1,110 6.23
Mortgage-backed securities....................... 3,206,801 52,962 6.61
FHLB stock....................................... 5,495 94 6.84
Investment securities............................ 883,379 13,722 6.21
------------- ----------
Total interest-earning assets................. 8,663,751 150,382 6.94
----------
Noninterest-earning assets............................ 145,979
-------------
Total assets.................................. $ 8,809,730
=============
Liabilities and stockholders' equity:
Interest-bearing liabilities:
Savings accounts................................. $ 791,230 $ 4,982 2.53
Interest-bearing demand accounts................. 97,124 517 2.14
Money market accounts............................ 467,945 3,109 2.67
Time deposits.................................... 4,942,661 68,110 5.54
------------- ----------
Total deposits................................ 6,298,960 76,718 4.90
Borrowed funds................................... 670,330 10,180 6.11
------------- ----------
Total interest-bearing liabilities............ 6,969,290 86,898 5.01
------------- ----------
Noninterest-bearing liabilities:
Noninterest-bearing deposits..................... 321,791
Other noninterest-bearing liabilities............ 71,473
-------------
Total noninterest-bearing liabilities......... 393,264
-------------
Total liabilities................................ 7,362,554
Stockholders' equity............................. 1,447,176
-------------
Total liabilities and stockholders' equity.... $ 8,809,730
=============
Net interest income/net interest rate spread (2)...... $ 63,484 1.93 %
==========
Net interest-earning assets/net interest margin (3)... $ 1,694,461 2.91 %
=============
Ratio of interest-earning assets to interest-bearing
liabilities...................................... 1.24 X
</TABLE>
<TABLE>
<CAPTION>
For the Three Months Ended June 30,
----------------------------------------------------
1999
------------------------------------------------
Average Average
Balance Interest Yield/Cost
-------------- ---------- ------------
(Dollars in thousands)
<S> <C> <C> <C>
Assets:
Interest-earning assets:
First mortgage loans, net (1).................... $ 3,662,291 $ 67,105 7.33 %
Consumer and other loans......................... 88,089 1,765 8.01
Federal funds sold............................... 53,401 598 4.49
Mortgage-backed securities....................... 3,093,812 47,642 6.16
FHLB stock....................................... - - -
Investment securities............................ 879,829 13,689 6.22
-------------- ----------
Total interest-earning assets................. 7,777,422 130,799 6.73
----------
Noninterest-earning assets............................ 162,420
--------------
Total assets.................................. $ 7,939,842
==============
Liabilities and stockholders' equity:
Interest-bearing liabilities:
Savings accounts................................. $ 883,567 $ 5,800 2.63
Interest-bearing demand accounts................. 98,541 519 2.11
Money market accounts............................ 504,147 3,488 2.78
Time deposits.................................... 5,155,118 65,104 5.07
-------------- ----------
Total deposits................................ 6,641,373 74,911 4.53
Borrowed funds................................... - - -
-------------- ----------
Total interest-bearing liabilities............ 6,641,373 74,911 4.53
-------------- ----------
Noninterest-bearing liabilities:
Noninterest-bearing deposits..................... 308,203
Other noninterest-bearing liabilities............ 55,627
--------------
Total noninterest-bearing liabilities......... 363,830
--------------
Total liabilities................................ 7,005,203
Stockholders' equity............................. 934,639
--------------
Total liabilities and stockholders' equity.... $ 7,939,842
==============
Net interest income/net interest rate spread (2)...... $ 55,888 2.20 %
==========
Net interest-earning assets/net interest margin (3)... $ 1,136,049 2.86 %
==============
Ratio of interest-earning assets to interest-bearing
liabilities...................................... 1.17 X
</TABLE>
--------------------------------------------------------
(1) Amount is net of deferred loan fees and allowance for loan losses and
includes non-performing loans.
(2) We determined net interest spread by subtracting the annualized
weighted average cost of average interest-bearing liabilities from the
annualized weighted average yield on average interest-earning assets.
(3) We determined net interest margin by dividing annualized net interest
income by average interest-earning assets.
Page 12
<PAGE> 13
Hudson City Bancorp, Inc.
Form 10-Q
<TABLE>
<CAPTION>
For the Six Months Ended June 30,
---------------------------------------------------
2000
------------------------------------------------
Average Average
Balance Interest Yield/Cost
------------- ---------- ------------
(Dollars in thousands)
<S> <C> <C> <C>
Assets:
Interest-earning assets:
First mortgage loans, net(1)........................ $ 4,302,951 $ 156,763 7.29 %
Consumer and other loans............................ 120,322 4,810 8.00
Federal funds sold.................................. 80,851 2,359 5.87
Mortgage-backed securities.......................... 3,182,050 103,012 6.47
FHLB stock.......................................... 2,747 94 6.84
Investment securities............................... 881,104 27,401 6.22
------------- ----------
Total interest-earning assets.................... 8,570,025 294,439 6.87
----------
Noninterest-earning assets............................... 145,598
-------------
Total assets..................................... $ 8,715,623
=============
Liabilities and stockholders' equity:
Interest-bearing liabilities:
Savings accounts.................................... $ 795,383 $ 10,022 2.53
Interest-bearing demand accounts.................... 96,906 1,024 2.12
Money market accounts............................... 474,338 6,310 2.68
Time deposits....................................... 4,951,619 133,669 5.43
------------- ----------
Total deposits................................... 6,318,246 151,025 4.81
Borrowed funds...................................... 551,374 16,558 6.04
------------- ----------
Total interest-bearing liabilities............... 6,869,620 167,583 4.91
------------- ----------
Noninterest-bearing liabilities:
Noninterest-bearing deposits........................ 316,715
Other noninterest-bearing liabilities............... 72,479
-------------
Total noninterest-bearing liabilities............ 389,194
-------------
Total liabilities................................... 7,258,814
Stockholders' equity................................ 1,456,809
-------------
Total liabilities and stockholders' equity....... $ 8,715,623
=============
Net interest income/net interest rate spread (2)......... $ 126,856 1.96 %
==========
Net interest-earning assets/net interest margin (3)...... $ 1,700,405 2.94 %
=============
Ratio of interest-earning assets to
interest-bearing liabilities........................ 1.25 X
</TABLE>
<TABLE>
<CAPTION>
For the Six Months Ended June 30,
-------------------------------------------------------
1999
------------------------------------------------
Average Average
Balance Interest Yield/Cost
-------------- ---------- ------------
(Dollars in thousands)
<S> <C> <C> <C>
Assets:
Interest-earning assets:
First mortgage loans, net(1)........................ $ 3,616,558 $ 133,038 7.36 %
Consumer and other loans............................ 87,129 3,490 8.01
Federal funds sold.................................. 56,837 1,263 4.48
Mortgage-backed securities.......................... 3,080,449 95,876 6.22
FHLB stock.......................................... - - -
Investment securities............................... 866,177 27,200 6.28
-------------- ----------
Total interest-earning assets.................... 7,707,150 260,867 6.77
----------
Noninterest-earning assets............................... 164,727
--------------
Total assets..................................... $ 7,871,877
==============
Liabilities and stockholders' equity:
Interest-bearing liabilities:
Savings accounts.................................... $ 857,808 $ 11,191 2.63
Interest-bearing demand accounts.................... 97,800 1,025 2.11
Money market accounts............................... 503,190 6,927 2.78
Time deposits....................................... 5,128,284 130,558 5.13
-------------- ----------
Total deposits................................... 6,587,082 149,701 4.58
Borrowed funds...................................... - - -
-------------- ----------
Total interest-bearing liabilities............... 6,587,082 149,701 4.58
-------------- ----------
Noninterest-bearing liabilities:
Noninterest-bearing deposits........................ 303,676
Other noninterest-bearing liabilities............... 56,970
--------------
Total noninterest-bearing liabilities............ 360,646
--------------
Total liabilities................................... 6,947,728
Stockholders' equity................................ 924,149
--------------
Total liabilities and stockholders' equity....... $ 7,871,877
==============
Net interest income/net interest rate spread (2)......... $ 111,166 2.19 %
==========
Net interest-earning assets/net interest margin (3)...... $ 1,120,068 2.85 %
==============
Ratio of interest-earning assets to
interest-bearing liabilities........................ 1.17 X
</TABLE>
--------------------------------------------------------
(1) Amount is net of deferred loan fees and allowance for loan losses and
includes non-performing loans.
(2) We determined net interest spread by subtracting the annualized
weighted average cost of average interest-bearing liabilities from the
annualized weighted average yield on average interest-earning assets.
(3) We determined net interest margin by dividing annualized net interest
income by average interest-earning assets.
Page 13
<PAGE> 14
Hudson City Bancorp, Inc.
Form 10-Q
COMPARISON OF OPERATING RESULTS FOR THE THREE MONTHS ENDED JUNE 30, 2000 AND
1999
General. Net income was $28.9 million for the three months ended June
30, 2000, an increase of $4.0 million, or 16.1%, from net income of $24.9
million for the three months ended June 30, 1999. Basic and diluted earnings
per common share were $0.26 for the three months ended June 30, 2000. The
increase in net income was attributable to an increase of $19.6 million in
interest income, offset in part by increases of $12.0 million in interest
expense and $3.1 million in non-interest expense. Our annualized return on
average assets for the three month period ended June 30, 2000 was 1.31%
compared with 1.26% for the three month period ended June 30, 1999. Our
annualized return on average equity for the second quarter of 2000 was 8.00%
compared with 10.67% for the second quarter of 1999. This decrease in the
annualized return on average equity was primarily due to the additional equity
received in connection with the reorganization.
Interest Income. Total interest income increased $19.6 million, or
15.0%, to $150.4 million for the three months ended June 30, 2000 compared with
$130.8 million for the three months ended June 30, 1999. Interest and fees on
first mortgage loans increased $12.9 million, or 19.2%, to $80.0 million for
the three months ended June 30, 2000 compared with $67.1 million for the three
months ended June 30, 1999. Interest on mortgage-backed securities increased
$5.4 million, or 11.3%, to $53.0 million for the three months ended June 30,
2000 compared with $47.6 million for the three months ended June 30, 1999.
The increase in total interest income was primarily due to the average
balance of total interest-earning assets increasing $886.3 million, or 11.4%,
to $8.66 billion for the three month period ended June 30, 2000 compared with
$7.78 billion for the three month period ended June 30, 1999. This increase was
primarily attributable to a $707.8 million, or 19.3%, increase in the average
balance of first mortgage loans, net to $4.37 billion for the three month
period ended June 30, 2000 compared with $3.66 billion for the three month
period ended June 30, 1999. The average balance of mortgage-backed securities
increased $113.0 million, or 3.7%, to $3.21 billion for the three month period
ended June 30, 2000 compared with $3.09 billion for the corresponding 1999
period. The average balance of consumer and other loans increased $38.3
million, or 43.5%, to $126.4 million for the three month period ended June 30,
2000 compared with $88.1 million for the three month period ended June 30,
1999. The average balance of investment securities for the three month period
ended June 30, 2000 was $883.4 million, an increase of $3.6 million, or 0.4%,
from the average balance of $879.8 million for the corresponding three month
period in 1999. The average balance of FHLB stock for the second quarter of
2000 was $5.5 million. We did not own FHLB stock in 1999. The increases in the
average balances of interest-earning assets reflect the use of the net new cash
received during the reorganization. In addition, we experienced a decline in
prepayment activity, year-to-year, primarily due to the increase in interest
rates experienced during 1999 and the first half of 2000. These increases in
the average balances also reflect internal growth that was financed by borrowed
funds and was consistent with our capital management strategy to originate and
purchase first mortgage loans and consumer and other loans, while purchasing
mortgage-backed securities to manage interest rate risk.
The increase in interest income was also attributable to an increase
in the annualized average yield on interest-earning assets to 6.94% for the
three month period ended June 30, 2000 compared with 6.73% for the
corresponding 1999 period. The annualized average yield on first mortgage
loans, net decreased slightly to 7.32% for the second quarter of 2000 compared
with 7.33% for the second quarter of 1999. The annualized average yield on
mortgage-backed securities increased 45 basis points to 6.61% for the three
month period ended June 30, 2000 compared with 6.16% for the three month
Page 14
<PAGE> 15
Hudson City Bancorp, Inc.
Form 10-Q
period ended June 30, 1999. The annualized average yield on investment
securities decreased slightly to 6.21% for the three month period ended June
30, 2000 compared with 6.22% for the corresponding 1999 period. The reason for
the relatively flat annualized average yield on first mortgage loans, net, in
this current rising interest rate environment, is due to the slow-down in
prepayment activity during the period, and a shift, year-to-year, in the
composition of our mortgage originations to a higher percentage of
adjustable-rate products, which have lower initial interest rates. The increase
in the annualized average yield on mortgage-backed securities reflects the
increases in market interest rates in the third and fourth quarters of 1999 and
the first and second quarters of 2000. The annualized average yield of
investment securities remained stable primarily due to the minimal amounts of
calls and maturities resulting from the increasing interest rate environment,
and our strategy of investing available funds in loans and mortgage-backed
securities, which currently generate higher yields than investment securities.
Interest Expense. Total interest expense increased $12.0 million, or
16.0%, to $86.9 million for the three month period ended June 30, 2000 compared
with $74.9 million for the three month period ended June 30, 1999. Interest
expense on deposits increased $1.8 million, or 2.4%, to $76.7 million for the
three months ended June 30, 2000 compared with $74.9 million for the three
months ended June 30, 1999. Interest expense on borrowed funds for the quarter
ended June 30, 2000 was $10.2 million. There were no borrowed funds during the
second quarter of 1999.
The increase in interest expense was attributable in part to an
increase in the average balance of interest-bearing liabilities of $327.9
million, or 4.9%, to $6.97 billion for the three months ended June 30, 2000
compared with $6.64 billion for the corresponding 1999 period. The increase in
the overall average balance of total interest-bearing liabilities resulted from
the $670.3 million increase in the average balance of borrowed funds for the
quarter ended June 30, 2000, as there were no borrowed funds outstanding during
the second quarter of 1999. Borrowed funds are being used to offset the
decrease in the average balance of interest-bearing deposits and to fund asset
growth consistent with our capital management strategy. We experienced a
decrease in the average balance of interest-bearing deposits of $342.4 million,
or 5.2%, to $6.30 billion for the three month period ended June 30, 2000
compared with $6.64 billion for the three month period ended June 30, 1999.
Within the interest-bearing deposit mix, the average balance of time deposits
decreased $212.5 million, or 4.1%, to $4.94 billion for the second quarter of
2000 compared with $5.16 billion for the second quarter of 1999. The average
balance of regular savings deposits decreased $92.4 million, or 10.5%, to
$791.2 million for the quarter ended June 30, 2000 compared with $883.6 million
for the quarter ended June 30, 1999. The decrease in the average balance of
interest-bearing deposits primarily reflects the use by our depositors of
approximately $110.0 million of funds on deposit with Hudson City Savings Bank
to fund their Hudson City Bancorp common stock purchases during the
reorganization, the inclusion in the average balance of regular savings
deposits, in the second quarter of 1999, of the cash received from the sale of
Hudson City Bancorp's common stock, and the continued intense competition in
the banking and financial services industry.
The increase in interest expense was also attributable to a 48 basis
point increase in the annualized average cost of interest-bearing liabilities
to 5.01% for the quarter ended June 30, 2000 from 4.53% for the corresponding
1999 quarter. The annualized average cost of interest-bearing deposits
increased 37 basis points to 4.90% for the three month period ended June 30,
2000 compared with 4.53% for the three month period ended June 30, 1999. Within
the interest-bearing deposit mix, the annualized average cost of time deposits
increased 47 basis points to 5.54% for the second quarter of 2000 compared with
5.07% for the corresponding 1999 quarter. The increase in the annualized
Page 15
<PAGE> 16
Hudson City Bancorp, Inc.
Form 10-Q
average cost of interest-bearing deposits reflects the rising market rate
environment during 1999 and the first half of 2000 and the fact that the
majority of our time deposits can reprice within one year. The annualized
average cost of borrowed funds for the second quarter of 2000 was 6.11%. Since
our borrowed funds had a higher average cost than our existing deposits, our
increase in borrowings added to the overall increase in our annualized average
cost of interest-bearing liabilities.
Net Interest Income. Net interest income increased $7.6 million, or
13.6%, to $63.5 million for the three month period ended June 30, 2000 compared
with $55.9 million for the three month period ended June 30, 1999. This
increase primarily reflects the increase in the average balance of first
mortgage loans, net and our other investments due to the use of the net
proceeds from the reorganization and the additional earnings generated on the
borrowed funds that were invested. Our net interest rate spread, the difference
between the annualized average yield on average total interest-earning assets
and the annualized average cost of average total interest-bearing liabilities,
decreased 27 basis points to 1.93% for the three month period ended June 30,
2000 compared with 2.20% for the corresponding 1999 period. Our net interest
margin, represented by net interest income divided by average total
interest-earning assets, increased 5 basis points to 2.91% for the second
quarter of 2000 compared with 2.86% for the second quarter of 1999. The
decrease in the net interest rate spread reflects the rising market rate
environment during 1999 and the first half of 2000 and the fact that our
interest-bearing liabilities repriced faster than our interest-earning assets
during that time. The increase in the net interest margin reflects the increase
in the average balance of interest-earning assets, primarily due to the
investment of the net cash proceeds from the reorganization.
Provision for Loan Losses. Our provision for loan losses for the
second quarter of 2000 was $600,000 compared with $550,000 for the second
quarter of 1999. The allowance for loan losses increased $1.2 million, or 6.0%,
to $21.2 million at June 30, 2000 from $20.0 million at December 31, 1999.
Non-performing loans, defined as non-accruing loans and accruing loans
delinquent 90 days or more, increased $0.1 million, or 0.7%, to $14.1 million
at June 30, 2000 from $14.0 million at December 31, 1999. There were no loan
charge-offs during the second quarter of 2000. The level of the current
provision for loan losses primarily reflects the growth of the loan portfolio.
Future provisions for loan losses will continue to be based upon our
assessment of the overall loan portfolio and the underlying collateral, trends
in non-performing loans, current economic conditions and other relevant factors
in order to maintain the allowance for loan losses at adequate levels to
provide for estimated losses.
At June 30, 2000, the ratio of non-performing loans to total loans was
0.30% compared with 0.33% at December 31, 1999. The ratio of the allowance for
loan losses to non-performing loans was 150.95% at June 30, 2000 compared with
142.65% at December 31, 1999. The ratio of non-performing assets to total
assets was 0.17% at June 30, 2000 and December 31, 1999. The ratio of the
allowance for loan losses to total loans was 0.46% at June 30, 2000 and
December 31, 1999.
Non-Interest Income. Total non-interest income, consisting primarily
of service fees and other income, increased $0.1 million, or 9.1%, to $1.2
million for the three month period ended June 30, 2000 compared with $1.1
million for the corresponding 1999 period.
Non-Interest Expense. Total non-interest expense increased $3.1
million, or 18.3%, to $20.0 million for the three months ended June 30, 2000
compared with $16.9 million for the three months ended June 30, 1999. Salaries
and employee benefits increased $1.4 million, or 13.0%, to
Page 16
<PAGE> 17
Hudson City Bancorp, Inc.
Form 10-Q
$12.2 million for the quarter ended June 30, 2000 compared with $10.8 million
for the quarter ended June 30, 1999, primarily due to expense recognized in
2000 for the ESOP and RRP. There was no comparable expense recognized in the
second quarter of 1999.
Net occupancy expense increased $0.4 million, or 13.8%, to $3.3
million for the quarter ended June 30, 2000 compared with $2.9 million for the
corresponding 1999 quarter. The increase is primarily due to increases in
maintenance and repairs of banking premises and equipment and increases in
rental expense. Federal deposit insurance expense increased primarily due to an
industry wide increase in the assessment charged by the FDIC. Goodwill was
fully amortized as of December 31, 1999, resulting in no amortization expense
for the quarter ended June 30, 2000.
Other expenses increased $1.7 million, or 73.9%, to $4.0 million for
the quarter ended June 30, 2000 compared with $2.3 million for the
corresponding 1999 quarter. The increase in other expenses was primarily due to
operating expenses incurred in the second quarter of 2000 related to our
existence as a public company, such as increased fees for professional services
and expense related to the RRP allocation of common stock to non-officer
directors. There were no comparable expenses in the second quarter of 1999.
Our efficiency ratio, which we determined by dividing non-interest
expense by the sum of net interest income and non-interest income, excluding
net gains on securities transactions, was 30.9% for the second quarter of 2000
compared with 29.7% for the second quarter of 1999. Our ratio of non-interest
expense to average assets was 0.91% for the second quarter of 2000 compared
with 0.85% for the second quarter of 1999. The increases in these ratios
reflect the increases, quarter-to-quarter, in non-interest expense discussed
above.
Income Taxes. Income tax expense increased $0.5 million, or 3.4%, to
$15.1 million for the three month period ended June 30, 2000 compared with
$14.6 million for the three month period ended June 30, 1999. The effective tax
rate for the second quarter of 2000 was 34.4% compared with an effective tax
rate of 36.9% for the second quarter of 1999. The increase in income tax
expense is primarily due to an increase in income before income tax expense of
$4.6 million. The decrease in the effective tax rate was due to a realignment
of corporate entities.
COMPARISON OF OPERATING RESULTS FOR THE SIX MONTHS ENDED JUNE 30, 2000 AND 1999
General. Net income was $57.3 million for the six months ended June
30, 2000, an increase of $8.1 million, or 16.5%, from net income of $49.2
million for the six months ended June 30, 1999. Basic and diluted earnings per
common share were $0.52 for the six months ended June 30, 2000. The increase in
net income was attributable to an increase of $33.5 million in interest income,
offset in part by increases of $17.9 million in interest expense, $4.6 million
in non-interest expense and $2.9 million in income tax expense. Our annualized
return on average assets for the six month period ended June 30, 2000 was 1.31%
compared with 1.25% for the six month period ended June 30, 1999. Our
annualized return on average equity for the first six months of 2000 was 7.86%
compared with 10.65% for the first six months of 1999. This decrease in the
annualized return on average equity was primarily due to the additional equity
received in connection with the reorganization.
Interest Income. Total interest income increased $33.5 million, or
12.8%, to $294.4 million for the six months ended June 30, 2000 compared with
$260.9 million for the six months ended June
Page 17
<PAGE> 18
Hudson City Bancorp, Inc.
Form 10-Q
30, 1999. Interest and fees on first mortgage loans increased $23.8 million, or
17.9%, to $156.8 million for the six months ended June 30, 2000 compared with
$133.0 million for the six months ended June 30, 1999. Interest on
mortgage-backed securities increased $7.1 million, or 7.4%, to $103.0 million
for the six months ended June 30, 2000 compared with $95.9 million for the six
months ended June 30, 1999.
The increase in total interest income was primarily due to the average
balance of total interest-earning assets increasing $862.9 million, or 11.2%,
to $8.57 billion for the six month period ended June 30, 2000 compared with
$7.71 billion for the six month period ended June 30, 1999. This increase was
primarily attributable to a $686.4 million, or 19.0%, increase in the average
balance of first mortgage loans, net to $4.30 billion for the six month period
ended June 30, 2000 compared with $3.62 billion for the six month period ended
June 30, 1999. The average balance of mortgage-backed securities increased
$101.6 million, or 3.3%, to $3.18 billion for the six month period ended June
30, 2000 compared with $3.08 billion for the corresponding 1999 period. The
average balance of consumer and other loans increased $33.2 million, or 38.1%,
to $120.3 million for the six month period ended June 30, 2000 compared with
$87.1 million for the six month period ended June 30, 1999. The average balance
of investment securities for the six month period ended June 30, 2000 was
$881.1 million, an increase of $14.9 million, or 1.7%, from the average balance
of $866.2 million for the corresponding six month period in 1999. The average
balance of FHLB stock purchased was $2.7 million for the first six months of
2000. We did not own FHLB stock in 1999. The increases in the average balances
of interest-earning assets reflect the use of the net new cash received during
the reorganization. In addition, we experienced a decline in prepayment
activity, year-to-year, primarily due to the increase in interest rates
experienced during 1999 and the first half of 2000. These increases in the
average balances also reflect internal growth that was financed by borrowed
funds and was consistent with our capital management strategy to originate and
purchase first mortgage loans and consumer and other loans, while purchasing
mortgage-backed securities to manage interest rate risk.
The increase in interest income was also attributable to an increase
in the annualized average yield on interest-earning assets to 6.87% for the six
month period ended June 30, 2000 compared with 6.77% for the corresponding 1999
period. The annualized average yield on first mortgage loans, net decreased 7
basis points to 7.29% for the first six months of 2000 compared with 7.36% for
the first six months of 1999. The annualized average yield on mortgage-backed
securities increased 25 basis points to 6.47% for the six month period ended
June 30, 2000 compared with 6.22% for the six month period ended June 30, 1999.
The annualized average yield on investment securities decreased 6 basis points
to 6.22% for the six month period ended June 30, 2000 compared with 6.28% for
the corresponding 1999 period. The reason for the slight decrease in the
annualized average yield on first mortgage loans, net, in the current rising
interest rate environment, is due to the slow-down in prepayment activity
during the period, and a shift, year-to-year, in the composition of our
mortgage originations to a higher percentage of adjustable-rate products, which
have lower initial interest rates. It also reflects the origination of
primarily fixed rate mortgages in 1999 and the inability to reset these rates
during a rising interest rate environment. The increase in the annualized
average yield on mortgage-backed securities reflects the increase in market
interest rates in the third and fourth quarters of 1999 and the first and
second quarters of 2000. The decrease in the annualized average yield of
investment securities, period-to-period, was primarily due to the reinvestment,
at lower market interest rates, of the proceeds resulting from the significant
amount of calls and maturities of such securities during the first half of
1999.
Page 18
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Hudson City Bancorp, Inc.
Form 10-Q
Interest Expense. Total interest expense increased $17.9 million, or
12.0%, to $167.6 million for the six month period ended June 30, 2000 compared
with $149.7 million for the six month period ended June 30, 1999. Interest
expense on deposits increased $1.3 million, or 0.9%, to $151.0 million for the
six months ended June 30, 2000 compared with $149.7 million for the six months
ended June 30, 1999. Interest expense on borrowed funds for the six month
period ended June 30, 2000 was $16.6 million. There were no borrowed funds
during the first six months of 1999.
The increase in interest expense was attributable in part to an
increase in the average balance of interest-bearing liabilities of $282.6
million, or 4.3%, to $6.87 billion for the six months ended June 30, 2000
compared with $6.59 billion for the corresponding 1999 period. The increase in
the overall average balance of total interest-bearing liabilities resulted from
the $551.4 million increase in the average balance of borrowed funds for the
six months ended June 30, 2000, as there were no borrowed funds outstanding
during the first six months of 1999. Borrowed funds are being used to offset
the decrease in the average balance of interest-bearing deposits and to fund
asset growth consistent with our capital management strategy. We experienced a
decrease in the average balance of interest-bearing deposits of $268.8 million,
or 4.1%, to $6.32 billion for the six months ending June 30, 2000 compared with
$6.59 billion for the six months ending June 30, 1999. Within the
interest-bearing deposit mix, the average balance of time deposits decreased
$176.7 million, or 3.4%, to $4.95 billion for the first six months of 2000
compared with $5.13 billion for the first six months of 1999. The average
balance of regular savings deposits decreased $62.4 million, or 7.3%, to $795.4
million for the six months ending June 30, 2000 compared with $857.8 million
for the six months ending June 30, 1999. The decrease in the average balance of
interest-bearing deposits primarily reflects the use by our depositors of
approximately $110.0 million of funds on deposit with Hudson City Savings Bank
to fund their Hudson City Bancorp common stock purchases during the
reorganization, the inclusion in the six month period ending June 30, 1999 in
the average balance of regular savings deposits of cash received from the sale
of the Bancorp common stock, and the continued intense competition in the
banking and financial services industry.
The increase in interest expense was also attributable to a 33 basis
point increase in the annualized average cost of interest-bearing liabilities
to 4.91% for the six months ended June 30, 2000 from 4.58% for the
corresponding 1999 period. The annualized average cost of interest-bearing
deposits increased 23 basis points to 4.81% for the six month period ended June
30, 2000 compared with 4.58% for the six month period ended June 30, 1999.
Within the interest-bearing deposit mix, the annualized average cost of time
deposits increased 30 basis points to 5.43% for the first six months of 2000
compared with 5.13% for the corresponding 1999 period. The increase in the
annualized average cost of interest-bearing deposits reflects the rising market
rate environment during 1999 and the first six months of 2000 and the fact that
the majority of our time deposits can reprice within one year. The annualized
average cost of borrowed funds for the first six months of 2000 was 6.04%.
Since our borrowed funds had a higher average cost than our existing deposits,
our increase in borrowings added to the overall increase in our annualized
average cost of interest-bearing liabilities.
Net Interest Income. Net interest income increased $15.7 million, or
14.1%, to $126.9 million for the six month period ended June 30, 2000 compared
with $111.2 million for the six month period ended June 30, 1999. This increase
primarily reflects the increase in the average balance of first mortgage loans,
net and our other investments due to the use of the net proceeds from the
reorganization and the additional earnings generated on the borrowed funds that
were invested. Our net interest rate spread, the difference between the
annualized average yield on average total interest-earning assets and the
annualized average cost of average total interest-bearing liabilities,
decreased 23
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Hudson City Bancorp, Inc.
Form 10-Q
basis points to 1.96% for the six month period ended June 30, 2000 compared
with 2.19% for the corresponding 1999 period. Our net interest margin,
represented by net interest income divided by average total interest-earning
assets, increased 9 basis points to 2.94% for the first six months of 2000
compared with 2.85% for the first six months of 1999. The decrease in the net
interest rate spread reflects the rising market rate environment during 1999
and the first six months of 2000 and the fact that our interest-bearing
liabilities repriced faster than our interest-earning assets during that time.
The increase in the net interest margin reflects the increase in the average
balance of interest-earning assets, primarily due to the investment of the net
cash proceeds from the reorganization.
Provision for Loan Losses. Our provision for loan losses for the first
six months of 2000 was $1.20 million, an increase of $50,000, or 4.3%, compared
with $1.15 million for the corresponding 1999 period. There were no loan
charge-offs during the first six months of 2000. The current level of the
provision for loan losses primarily reflects the growth of the loan portfolio.
Future provisions for loan losses will continue to be based upon our
assessment of the overall loan portfolio and the underlying collateral, trends
in non-performing loans, current economic conditions and other relevant factors
in order to maintain the allowance for loan losses at adequate levels to
provide for estimated losses.
Non-Interest Income. Total non-interest income, consisting primarily
of service fees and other income, was $2.3 million for both the six month
periods ending June 30, 2000 and 1999.
Non-Interest Expense. Total non-interest expense increased $4.6
million, or 13.5%, to $38.8 million for the six months ended June 30, 2000
compared with $34.2 million for the six months ended June 30, 1999. Salaries
and employee benefits increased $2.4 million, or 11.1%, to $24.1 million for
the six months ended June 30, 2000 compared with $21.7 million for the six
months ended June 30, 1999, primarily due to expense recognized in 2000 for the
ESOP and RRP. There was no comparable expense recognized in the first six
months of 1999.
Net occupancy expense increased $0.6 million, or 10.2%, to $6.5
million for the six months ended June 30, 2000 compared with $5.9 million for
the corresponding 1999 period. The increase is primarily due to increases in
maintenance and repairs of banking premises and equipment and increases in
rental expense. Federal deposit insurance expense increased primarily due to an
industry wide increase in the assessment charged by the FDIC. Goodwill was
fully amortized as of December 31, 1999, resulting in no amortization expense
for the six month period ended June 30, 2000.
Other expenses increased $2.2 million, or 44.9%, to $7.1 million for
the six months ended June 30, 2000 compared with $4.9 million for the
corresponding 1999 period. The increase in other expenses was primarily due to
operating expenses incurred in the first six months of 2000 related to our
existence as a public company, such as increased fees for professional services
and expense related to the RRP allocation of common stock to non-officer
directors. There were no comparable expenses in the first six months of 1999.
Our efficiency ratio, which we determined by dividing non-interest
expense by the sum of net interest income and non-interest income, excluding
net gains on securities transactions, was 30.1% for each of the first six
months of 2000 and 1999. Our ratio of non-interest expense to average assets
was
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Hudson City Bancorp,Inc.
Form 10-Q
0.89% for the first six months of 2000 compared with 0.87% for the
corresponding period in 1999. These favorable ratios reflect our continuing
efforts to control operating costs.
Income Taxes. Income tax expense increased $2.9 million, or 10.0%, to
$31.9 million for the six month period ended June 30, 2000 compared with $29.0
million for the six month period ended June 30, 1999. Our effective tax rate for
the six month period ended June 30, 2000 was 35.7% compared with 37.1% for the
six month period ended June 30, 1999. The increase in the tax expense is
primarily due to an increase in income before income tax expense of $10.9
million. The decrease in the effective tax rate was due to a
realignment of corporate entities.
LIQUIDITY AND CAPITAL RESOURCES
The term "liquidity" refers to our ability to generate adequate
amounts of cash to fund loan originations, loan purchases, deposit withdrawals
and operating expenses. Our primary sources of funds are deposits, scheduled
amortization and prepayments of loan principal and mortgage-backed securities,
maturities and calls of investment securities, borrowed funds and funds
provided by our operations. We also have a written agreement that allows us to
borrow up to $25.0 million in federal funds from a correspondent bank. We have
recently been approved for membership in the FHLB, which provides us access to
additional sources of borrowed funds.
Scheduled loan repayments and maturing investment securities are a
relatively predictable source of funds. However, deposit flows, calls of
investment securities and borrowed funds, and prepayments of loans and
mortgage-backed securities are strongly influenced by interest rates, general
and local economic conditions and competition in the marketplace. These factors
reduce the predictability of the timing of these sources of funds.
Our primary investing activities are the origination and purchase of
one-to four-family real estate loans, the purchase of mortgage-backed
securities, and to a lesser extent, the purchase of investment securities. We
originated and purchased loans of approximately $575.8 million during the first
six months of 2000 compared with $647.4 million during the first six months of
1999. The decrease is primarily due to the increasing interest rate environment
which caused a decrease in prepayments and refinancings. Purchases of
mortgage-backed securities during the first six months of 2000 were $401.5
million compared with $665.7 million for the first six months of 1999.
Purchases of investment securities were $25.3 million and $700.4, respectively,
for the first six months of 2000 and 1999. During the first six months of 1999,
the high volume of calls of investment securities due to the lower interest
rate environment experienced at that time, necessitated the reinvestment of the
proceeds, which resulted in the high level of purchases during the period. As
part of the membership requirements in the FHLB, we are required to purchase a
certain dollar amount of FHLB common stock. During the first six months of
2000, we purchased $20.0 million of FHLB common stock. We are currently
required to purchase approximately $54.0 million of additional FHLB stock by
April 30, 2001.
Our investing activities are generally funded by principal payments on
mortgage loans and mortgage-backed securities, calls and maturities on
investment securities, funds provided by our operating activities, borrowings
and deposits. Principal repayments on loans and mortgage-backed securities
totaled $555.7 million during the first six months of 2000 compared to $1.09
billion during the first six months of 1999. The low interest rate environment
in the first six months of 1999 caused
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Hudson City Bancorp, Inc.
Form 10-Q
an increase in prepayment activity for both our mortgage loans and
mortgage-backed securities. Maturities and calls of investment securities
totaled $0.5 million during the first six months of 2000 compared with $423.6
million during the first six months of 1999 due to the lower interest rate
environment during the first six months of 1999. During the first six months of
2000, we borrowed funds of $750.0 million through the use of securities sold
under agreements to repurchase. This $750.0 million in borrowings was used to
offset the decrease in deposits and to fund asset growth through our capital
management strategy.
Total deposits decreased $62.6 million during the first six months of
2000 compared with an increase of $420.5 million during the corresponding 1999
period. A significant portion of the 1999 increase in total deposits was cash
received to purchase Hudson City Bancorp common stock during the
reorganization. Deposit flows are affected by the level of interest rates, the
interest rates and products offered by competitors, including equity markets,
and other factors. Time deposit accounts scheduled to mature within one year
were $4.46 billion at June 30, 2000. Based on our deposit retention experience
and current pricing strategy, we anticipate that a significant portion of these
time deposits will remain with Hudson City Savings. We are committed to
maintaining a strong liquidity position; therefore, we monitor our liquidity
position on a daily basis. We anticipate that we will have sufficient funds to
meet our current funding commitments.
During the first six months of 2000, purchases of common stock by the
ESOP and the RRP were $35.2 million and $28.6 million, respectively. As of June
30, 2000, the ESOP had purchased the entire amount of shares authorized, or
4,348,000 shares. The RRP is authorized to purchase not more than 2,174,000
shares of Hudson City Bancorp common stock. As of June 30, 2000, the RRP had
purchased and awarded 1,966,100 shares. Additional awards may require the
purchase of additional shares of stock. These plans were not in existence in
the first six months of 1999.
At June 30, 2000, Hudson City Savings had outstanding loan commitments
to borrowers of approximately $210.6 million, and available home equity and
overdraft lines of credit of approximately $61.7 million. There were
commitments to purchase mortgage-backed securities at June 30, 2000 of $31.1
million. In addition, we have $450.0 million of borrowed funds maturing in the
next three months.
On April 13, 2000, the Board of Directors declared a quarterly cash
dividend of seven cents ($0.07) per common share outstanding for a dividend
pay-out ratio for the second quarter of 2000 of 26.9%. The dividend was paid on
June 1, 2000 to stockholders of record at the close of business on May 12,
2000. On July 13, 2000, the Board of Directors declared a quarterly cash
dividend of eight cents ($0.08) per common share. The dividend is payable on
September 1, 2000 to stockholders of record at the close of business on August
11, 2000.
During the first six months of 2000, we opened four new branch
locations, one in Atlantic County, one in Bergen County and two in Ocean
County. The expenditures related to their establishment are not expected to
have a material impact on our liquidity, financial position or results of
operations. We do not anticipate any material capital expenditures nor do we
have any balloon or other payments due on any long-term obligations or any
off-balance sheet items other than the commitments and unused lines of credit
noted above.
On March 28, 2000, we received the necessary regulatory approval to
repurchase up to 5,781,915 shares of our common stock. This represents 5% of
the total shares of common stock that
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Hudson City Bancorp, Inc.
Form 10-Q
were issued and outstanding at that time. Under the approved stock repurchase
program, shares of common stock are purchased in the open market and through
other transactions from time-to-time, depending on market conditions. The
repurchased shares are held as treasury stock for general corporate use. During
the first six months of 2000, we purchased 477,000 shares of common stock at a
cost of $7.2 million.
At June 30, 2000, we exceeded each of the applicable regulatory
capital requirements of the FRB and the FDIC. Hudson City Bancorp's leverage
(Tier 1) capital was $1.48 billion, or 17.01%, at June 30, 2000, its risk-based
Tier 1 capital ratio was 51.86%, and its risk-based total capital ratio was
52.60%. In addition, Hudson City Savings' leverage (Tier 1) capital was $1.22
billion, or 14.03%, its risk-based Tier 1 capital ratio was 42.76%, and its
risk-based total capital ratio was 43.50% at June 30, 2000. In order to be
classified as "well-capitalized" by the FDIC, we were required to have leverage
(Tier 1) capital of $435.8 million, or 5.00%. To be classified as a
well-capitalized bank by the FDIC and as a well-capitalized bank holding
company by the FRB, we must also have a Tier 1 risk-based capital ratio of
6.00% and a risk-based total capital ratio of 10.00%.
Item 3. - Quantitative and Qualitative Disclosures About Market Risk
Quantitative and qualitative disclosure about market risk is presented
as of December 31, 1999 in Hudson City Bancorp's Annual Report on Form 10-K.
The following is an update of the discussion provided therein.
General. As a financial institution, our primary component of market
risk is interest rate volatility. Due to the nature of our operations, we are
not subject to foreign currency exchange or commodity price risk. Our real
estate loan portfolio, concentrated in New Jersey, is subject to risks
associated with the local economy. We do not own any trading assets. We did not
engage in any hedging transactions that use derivative instruments (such as
interest rate swaps and caps) during the first six months of 2000 and did not
have any such hedging transactions in place at June 30, 2000. In the future, we
may, with approval of our Board of Directors, engage in hedging transactions
utilizing derivative instruments.
Interest Rate Risk Compliance. Hudson City Bancorp continues to
monitor the impact of interest rate volatility upon the present value of equity
in the same manner as at December 31, 1999. Assuming a 100 basis point interest
rate increase, the present value of equity would decrease $196.2 million, or
13.48%, at June 30, 2000 relative to the base (no rate change) scenario,
compared with a $146.0 million, or 9.33%, decrease at December 31, 1999
relative to the base scenario. Assuming a 100 basis point interest rate
decrease, the present value of equity would increase $187.3 million, or 12.87%,
at June 30, 2000 relative to the base scenario, compared with a $131.2 million,
or 8.38%, decrease at December 31, 1999 relative to the base scenario.
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Hudson City Bancorp, Inc.
Form 10-Q
GAP Analysis. The following table presents the amounts of our interest-earning
assets and interest-bearing liabilities outstanding at June 30, 2000 which we
anticipate to reprice or mature in each of the future time periods shown. We
have excluded non-accrual loans from the table.
<TABLE>
<CAPTION>
At June 30, 2000
--------------------------------------------------------------------------
More than
More than More than two years
Six months six months one year to to three
or less to one year two years years
------------- -------------- ------------- -------------
(Dollars in thousands)
<S> <C> <C> <C> <C>
Interest-earning assets:
First mortgage loans.................. $ 394,541 $ 404,919 $ 506,562 $ 444,811
Consumer and other loans.............. 27,982 780 1,609 3,106
Federal funds sold.................... 25,100 - - -
Mortgage-backed securities............ 1,208,997 1,146,663 194,667 100,307
FHLB stock............................ 20,000 - - -
Investment securities................. 174 300 712 5,078
------------- -------------- ------------- -------------
Total interest-earning assets...... 1,676,794 1,552,662 703,550 553,302
------------- -------------- ------------- -------------
Interest-bearing liabilities:
Savings accounts...................... 24,119 19,759 195,281 234,337
Interest-bearing demand accounts...... 2,355 2,355 23,551 28,261
Money market accounts................. 113,838 113,839 116,080 116,576
Time deposits......................... 2,893,847 1,566,474 419,120 40,273
Borrowed funds........................ 500,000 - - -
------------- -------------- ------------- -------------
Total interest-bearing liabilities. 3,534,159 1,702,427 754,032 419,447
------------- -------------- ------------- -------------
Interest rate sensitivity gap............... $ (1,857,365) $ (149,765) $ (50,482) $ 133,855
============= ============== ============= =============
Cumulative interest rate sensitivity
gap................................... $ (1,857,365) $ (2,007,130) $ (2,057,612) $ (1,923,757)
============= ============== ============= =============
Cumulative interest rate sensitivity gap
as a percent of total assets.......... (20.90)% (22.58) % (23.15)% (21.64) %
Cumulative interest-earning assets
as a percent of interest-bearing
liabilities........................... 47.45 % 61.67 % 65.65 % 69.99 %
</TABLE>
<TABLE>
<CAPTION>
At June 30, 2000
------------------------------------------------------
More than
three years More than
to five years five years Total
-------------- ------------- -------------
(Dollars in thousands)
<S> <C> <C> <C>
Interest-earning assets:
First mortgage loans.................. $ 587,744 $ 2,163,796 $ 4,502,373
Consumer and other loans.............. 20,199 78,564 132,240
Federal funds sold.................... - - 25,100
Mortgage-backed securities............ 86,476 437,411 3,174,521
FHLB stock............................ - - 20,000
Investment securities................. 464,543 370,706 841,513
-------------- ------------- -------------
Total interest-earning assets...... 1,158,962 3,050,477 8,695,747
-------------- ------------- -------------
Interest-bearing liabilities:
Savings accounts...................... 156,225 156,225 785,946
Interest-bearing demand accounts...... 18,841 18,841 94,204
Money market accounts................. 1,991 1,991 464,315
Time deposits......................... 17,808 - 4,937,522
Borrowed funds........................ - 250,000 750,000
-------------- ------------- -------------
Total interest-bearing liabilities. 194,865 427,057 7,031,987
-------------- ------------- -------------
Interest rate sensitivity gap............... $ 964,097 $ 2,623,420 $ 1,663,760
============== ============= =============
Cumulative interest rate sensitivity
gap................................... $ (959,660) $ 1,663,760
============== =============
Cumulative interest rate sensitivity gap
as a percent of total assets.......... (10.80) % 18.72 %
Cumulative interest-earning assets
as a percent of interest-bearing
liabilities........................... 85.47 % 123.66 %
</TABLE>
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Hudson City Bancorp, Inc.
Form 10-Q
PART II - OTHER INFORMATION
Item 1. - Legal Proceedings
We are not involved in any pending legal proceedings other than
routine legal proceedings occurring in the ordinary course of business. We
believe that these routine legal proceedings, in the aggregate, are immaterial
to our financial condition and results of operations.
Item 2. - Changes in Securities and Use of Proceeds
Not applicable.
Item 3. - Defaults Upon Senior Securities
Not applicable.
Item 4. - Submission of Matters to a Vote of Security Holders
Not applicable.
Item 5. - Other Information
Not applicable.
Item 6. - Exhibits and Reports on Form 8-K
(a) Exhibit Number 27 - Financial Data Schedule
(b) No reports on Form 8-K were filed during the quarter
ended June 30, 2000.
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Hudson City Bancorp, Inc.
Form 10-Q
SIGNATURES
Pursuant to the requirements of the Securities Exchange Act of 1934,
the registrant has duly caused this report to be signed on its behalf by the
undersigned thereunto duly authorized.
Hudson City Bancorp, Inc.
Date: August 11, 2000 By: /s/ Leonard S. Gudelski
-----------------------------------------
Leonard S. Gudelski
Chairman and Chief Executive Officer
Date: August 11, 2000 By: /s/ Ronald E. Hermance, Jr.
-----------------------------------------
Ronald E. Hermance, Jr.
President and Chief Operating Officer
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