Hudson City Bancorp profit up 60 percent
NEW YORK (Reuters) - Hudson City Bancorp Inc (HCBK.O), one of the nation's largest savings and loans, said fourth-quarter profit increased 60 percent to a record as it largely avoided the credit pitfalls that have hit most rivals.
Net income for the Paramus, New Jersey-based parent of Hudson City Savings Bank rose to $124.3 million, or 25 cents per share, from $77.5 million, or 16 cents, a year earlier.
Analysts on average expected profit of 27 cents per share, according to Reuters Estimates.
Hudson City also raised its quarterly dividend to 14 cents per share from 13 cents.
Hudson City specializes in mortgage lending but has never offered riskier home loans such as subprime mortgages and "option" adjustable-rate mortgages. It has instead focused on larger loans to borrowers who intend to live in their homes and can put 20 percent down.
While the lender boosted the amount set aside for loan losses to $9 million from $2 million, and net charge-offs rose to $1.83 million from $109,000, its results suggest Hudson City is avoiding the serious credit problems afflicting many lenders.
It uses what it calls a strong capital base and low operating costs to attract lower-risk customers who want higher-yielding deposits and want to borrow money to take out or refinance home loans.
Hudson City operates 127 branches and ended the year with $54.2 billion of assets and $18.5 billion of deposits.
Shares of Hudson City closed Tuesday at $12.24 on the Nasdaq. Through Tuesday, they had fallen 15 percent in the last year, compared with a 63 percent decline in the KBW Mortgage Finance Index .MFX.
(Reporting by Jonathan Stempel; editing by John Wallace)
