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Hudson City Reports Rise In Q3 Earnings

Net income for the Q3 of 2009 increased 10.8% to $135.1m as compared to $121.9m for the Q3 of 2008

Hudson City Bancorp, the holding company for Hudson City Savings Bank, has reported that net income for the third quarter of 2009 increased 10.8% to $135.1m as compared to $121.9m for the third quarter of 2008.

Net interest income increased 27.6% to $325.5m for the third quarter of 2009 as compared to $255.1m for the third quarter of 2008 and 33.8% to $911.7m for the nine months ended September 30, 2009 as compared to $681.5m for the same period in 2008.

Annualised return on average assets and annualized return on average shareholders’ equity for the third quarter of 2009 were 0.93% and 10.34%, respectively. Annualised return on average assets and annualized return on average shareholders’ equity for the nine months ended September 30, 2009 were 0.92% and 10.17%, respectively.

Net interest rate spread and net interest margin were 2.02% and 2.30%, respectively. Loan production was $7.11 billion for the nine months ended September 30, 2009, which resulted in a net increase of $1.70 billion in total loans to $31.12 billion at September 30, 2009 from $29.42 billion at December 31, 2008. Deposits increased 25.2% to $23.11 billion at September 30, 2009 from $18.46 billion at December 31, 2008. Borrowed funds decreased $200m to $30.03 billion at September 30, 2009 from $30.23 billion at December 31, 2008.

Total assets increased 8.7%, to $58.88 billion at September 30, 2009 from $54.15 billion at December 31, 2008. The increase in total assets reflected a $1.65 billion increase in loans, a $1.89 billion increase in investment securities, and an $814.9m increase in total mortgage-backed securities.

Ronald Hermance, chairman, president and CEO of Hudson City Bancorp, said: “These results are remarkable considering the economic and regulatory turmoil surrounding us and the headwinds provided by an $82m increase in our provision for loan losses and a $21.1m FDIC special assessment for the first nine months of 2009. We have consistently achieved earnings growth every quarter since the fourth quarter of 2006.

“Our earnings growth was fueled by our net interest margin which expanded to 2.30% during the third quarter. Since short-term rates remained at very low levels, we were able to reprice our deposits to a lower cost. We grew our deposits 6.6% during the quarter which represents a 26% annualized growth rate. This growth is all in retail deposits as we do not accept brokered deposits or solicit municipal deposits.”