Profile: Hudson City Bancorp Inc (HCBK.O)
27 Mar 2015
Hudson City Bancorp, Inc. incorporated on March 4, 1999, serves as the holding company of its subsidiary, Hudson City Savings Bank (the Bank). The Bank is a federal stock savings bank. The Company is a community and consumer-oriented retail savings bank offering traditional deposit products, residential real estate mortgage loans and consumer loans. In addition, it purchases mortgages and mortgage-backed securities and other securities issued by the United States government-sponsored enterprises (GSEs) as well as other investments permitted by applicable laws and regulations. It retains all of the loans it originates in its portfolio. The Company operates through 135 branches in the New York metropolitan area. It operates 97 branches located in 17 counties throughout the State of New Jersey. In New York State, it operates 10 branch offices in Westchester County, 12 branch offices in Suffolk County, one branch office each in Putnam and Rockland Counties and five branch offices in Richmond County (Staten Island). It also operates nine branch offices in Fairfield County, Connecticut. It also opens deposit accounts through its internet banking service.
Hudson City Savings has two wholly owned and consolidated subsidiaries, including HudCiti Service Corporation and HC Value Broker Services, Inc. HudCiti Service Corporation, is a New Jersey investment company, has two wholly owned and consolidated subsidiaries, Hudson City Preferred Funding Corporation and Sound REIT, Inc. Hudson City Preferred Funding and Sound REIT are real estate investment trusts. HC Value Broker Services, Inc., is engaged in the referral of insurance applications, formed a strategic alliance that jointly markets insurance products with Savings Bank Life Insurance of Massachusetts.
The Company’s loan portfolio consists of one- to four-family residential first mortgage loans. The remaining loans in its portfolio include multi-family and commercial mortgage loans, construction loans and consumer loans, which consist of fixed-rate second mortgage loans and home equity credit lines. As of December 31, 2013, it had total loans of $24.11 billion, of which $23.90 billion were first mortgage loans. Of the first mortgage loans outstanding 55.4% were fixed-rate mortgage loans and 44.6% were adjustable-rate mortgage (ARM) loans. As of December 31, 2013, multi-family and commercial mortgage loans totaled $25.7 million, construction loans totaled $294,000, and consumer and other loans, fixed-rate second mortgage loans and home equity credit lines, amounted to $214.7 million, or 0.89%, of total loans.
The Company’s lending emphasis has been the origination and purchase of first mortgage loans secured by one- to four-family properties that serve as the primary or secondary residence of the owner. It originates and purchases all of its one- to four-family first mortgage loans for retention in its portfolio. Its retail loan originations are from licensed mortgage bankers or brokers, existing or past customers, members of its local communities or referrals from local real estate agents, attorneys and builders. Its branch network is also a source of new loan generation. Originated loans represent 79.5% of its one- to four- family first mortgage loans. It offers loans that conform to underwriting standards specified by Fannie Mae (conforming loans) and non-conforming loans. The average size of its one- to four-family mortgage loans originated in 2013 was approximately $610,000. As of December 31, 2013 the overall average size of its one- to four-family first mortgage loans held in portfolio was approximately $413,000.
The Company offers a variety of adjustable-rate and fixed-rate one- to four-family mortgage loans with loan to value (LTV) ratios that depend on the type of property and the size of loan involved. It also offers a variety of ARM loans secured by one- to four-family residential properties with a fixed rate for initial terms of three years, five years, seven years or ten years. It originated $2.74 billion of one- to four-family ARM loans in 2013. As of December 31, 2013, 44.6% of its one- to four-family mortgage loans consisted of ARM loans. It purchases and originates interest-only mortgage loans. As of December 31, 2013, $25.7 million, or 0.11%, of the total loan portfolio consisted of multi-family and commercial mortgage loans. Commercial mortgage loans are secured by office buildings and other commercial properties. As of December 31, 2013, consumer and other loans amounted to $214.7 million, or 0.89%, of its total loans and consisted primarily of fixed-rate second mortgage loans and home equity credit lines. It offers fixed-rate second mortgage loans in amounts up to $250,000 secured by owner-occupied one- to four-family residences located in the State of New Jersey, and the portions of New York and Connecticut served by its first mortgage loan products, for terms of up to 20 years. As of December 31, 2013 these loans totaled $86.1 million, or 0.36% of total loans. Other loans totaled $20.1 million as of December 31, 2013 and consisted of collateralized passbook loans, overdraft protection loans, unsecured personal loans, and secured and unsecured commercial lines of credit.
The Company invests in mortgage-backed securities issued by Ginnie Mae, Fannie Mae and Freddie Mac, as well as other securities issued by GSEs. These securities account for all of its securities. As of December 31, 2013, it has an investment in Federal Home Loan Bank of New York (FHLB) stock for $347.1 million. During 2013, it sold held to maturity securities with a carrying value of $311.4 million. It has no securities classified as trading securities. As of December 31, 2013 investment securities classified as held to maturity had a carrying value of $39.0 million and investments classified as available for sale amounted to $297.3 million. During 2013 it purchased $298.0 million of investment securities all of which were issued by GSEs. Also, as of December 31, 2013, it had $347.1 million in FHLB stock. As of December 31, 2013, mortgage-backed securities classified as held to maturity totaled $1.78 billion, or 4.6% of total assets, while $7.17 billion, or 18.6% of total assets, were classified as available for sale. Of the mortgage-backed securities it held at December 31, 2013, $7.40 billion, or 82.7% of total mortgage-backed securities. Its mortgage-backed securities portfolio includes real estate mortgage investment conduits (REMICs). As of December 31, 2013, it held $234.0 million of fixed-rate REMICs, which constituted 2.6% of its mortgage-backed securities portfolio. The Company has two collateralized borrowings in the form of repurchase agreements totaling $100.0 million with Lehman Brothers, Inc. Lehman Brothers, Inc. is in liquidation under the Securities Industry Protection Act (SIPA).
Sources of Funds
The Bank’s primary sources of funds are customer deposits, borrowings, scheduled amortization and prepayments of mortgage loans and mortgage-backed securities, maturities and calls of investment securities and funds provided by its operations. It offers a variety of deposit accounts having a range of interest rates and terms. It offers passbook and statement savings accounts, interest-bearing transaction accounts, checking accounts, money market accounts and time deposits. It also offers IRA accounts and qualified retirement plans. As of December 31, 2013, it had $5.12 billion in time deposits with balances of $100,000.
Hudson City Bancorp Inc
WEST 80 CENTURY RD
PARAMUS NJ 07652