S&P MAINTAINS BUY OPINION ON SHARES OF HUDSON CITY BANCORP
According to HCBK's 10-K filing, the company is not in compliance with the Board of Directors interest rate risk limits. HCBK's regulator, the Office of Thrift Supervision, could issue a memorandum of understanding requiring it to fix the issue. We believe HCBK will adjust its borrowings and/or improve its net interest margin to correct this issue. We keep our '11 EPS forecast of $0.93. However, we are lowering our 12-month target price by $2 to $12, on a revised historical discount tangible book value ratio of 1.09X our '11 tangible book value per share forecast of $11.05.