Hudson City Bancorp Inc. Earnings: Swinging to a Loss but Better than Expected

The Cheat Sheet

S&P 500 component Hudson City Bancorp Inc.

dropped to a fourth quarter loss, but results topped expectations. Hudson City Bancorp is a holding company for Hudson City Savings Bank, which is a retail savings bank offering traditional deposit products, consumer loans and residential real estate mortgage loans.

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Hudson City Bancorp Earnings Cheat Sheet for the Fourth Quarter

Results: Reported a loss of $360.5 million (73 cents per diluted share) in the quarter. The savings and loan company had net income of $121.2 million or 25 cents per share in the year earlier quarter.

Actual vs. Wall St. Expectations: HCBK beat the mean analyst estimate of a loss of 74 cents per share.

Quoting Management: Ronald E. Hermance, Jr., Chairman and Chief Executive Officer commented, “Our net loss for the quarter was a result of the previously announced extinguishment of structured borrowings. During the past year, the low interest rate environment resulted in elevated levels of liquidity as borrowers prepaid or refinanced their mortgage loans and we experienced a significant increase in the calls of our investment securities. Our options for reinvesting this excess liquidity were limited since the yields available on mortgage-related assets remained at or near historical low levels and we did not believe it would be prudent to put such long-term assets on our balance sheet.”

Key Stats:

The company topped expectations last quarter after falling short of forecasts in the third quarter with net income of 17 cents versus a mean estimate of net income of 18 cents per share.

Looking Forward: Analysts appear increasingly optimistic about the company’s results for the next quarter. The average estimate for the first quarter of the next fiscal year has moved up from 16 cents a share to 17 cents over the last sixty days. For the fiscal year, the average estimate has moved from a loss of 57 cents a share to a loss of $1.51 over the last ninety days.

Competitors to Watch: New York Community Bancorp, Inc. , Kearny Financial Corp. , OceanFirst Financial Corp. , Ocean Shore Holding Co. , Northwest Bancshares, Inc. , Provident New York Bancorp , Rockville Financial New Inc (RCKBD), Oritani Financial Corp. , Magyar Bancorp, Inc. , and Roma Financial Corporation .

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(Company fundamentals provided by Xignite Financials. Earnings estimates provided by Zacks)

To contact the reporter on this story: Derek Hoffman at staff.writers@wallstcheatsheet.com

To contact the editor responsible for this story: Damien Hoffman at editors@wallstcheatsheet.com

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