Profile: Hudson City Bancorp Inc (HCBK.O)
11 Mar 2014
Hudson City Bancorp, Inc. (Hudson City Bancorp), 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 United States government-sponsored enterprises (GSEs), as well as other investments permitted by applicable laws and regulations. It retains substantially all of the loans it originates in its portfolio. Its traditional consumer products, such as conforming one- to four-family residential mortgages, time deposits, checking and savings accounts appeal to a customer base. Its jumbo mortgage lending proficiency and its time deposit and money market products have allowed the Company to target higher-income customers.
Hudson City Bancorp 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). Hudson City Bancorp also operates nine branch offices in Fairfield County, Connecticut. It also opens deposit accounts through its Internet banking service.
The Company’s loan portfolio primarily consists of one- to four-family residential first mortgage loans, which represent 99% of total loans. The remaining loans in its portfolio include multi-family and commercial mortgage loans, construction loans and consumer loans, which primarily consist of fixed-rate second mortgage loans and home equity credit lines. At December 31, 2012, it had total loans of $27.09 billion, of which $26.84 billion, or 99.1%, were first mortgage loans. Of the first mortgage loans outstanding as of December 31, 2012, 61.1% were fixed-rate mortgage loans and 38.9% were adjustable-rate mortgage (ARM) loans. At December 31, 2012, multi-family and commercial mortgage loans totaled $32.3 million, construction loans totaled $4.7 million, and consumer and other loans, primarily fixed-rate second mortgage loans and home equity credit lines, amounted to $247.0 million, or 0.91%, of total loans.
The Company’s primary lending emphasis is 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 substantially all of its one- to four-family first mortgage loans. 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 extensive branch network is also a source of new loan generation. Originated loans represent 70.1% of its one- to four- family first mortgage loans. It offers loans that generally conform to underwriting standards specified by Fannie Mae (conforming loans), non-conforming loans and loans processed as limited documentation loans. These loans may be fixed-rate one- to four-family mortgage loans or adjustable-rate one- to four-family mortgage loans with maturities of up to 30 years. The average size of its one- to four-family mortgage loans originated during the year ended December 31, 2012, was approximately $ 641,000. The overall average size of its one- to four-family first mortgage loans held in portfolio was approximately $418,000 at December 31, 2012. Its originations of residential first mortgage loans amounted to $4.98 billion in 2012.
The Company offers a variety of adjustable-rate and fixed-rate one- to four-family mortgage loans with maximum loan to value (LTV) ratios that depend on the type of property and the size of loan involved. The Company 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. After the initial adjustment period, ARM loans adjust on an annual basis. These loans are originated in amounts generally up to $3 million. At December 31, 2012, $6.46 billion, or 24.1%, of our one- to four-family first mortgage loans were purchased loans.
At December 31, 2012, $32.3 million, or 0.12%, 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. Multi-family mortgage loans generally are secured by multi-family rental properties (including mixed-use buildings and walk-up apartments). Its construction loans are secured by residential and commercial properties located in its market area. At December 31, 2012, the Company had three construction loans totaling $4.7 million, or 0.02% of total loans. At December 31, 2012, consumer and other loans amounted to $247.0 million, or 0.91 %, of its total loans and consisted primarily of fixed-rate second mortgage loans and home equity credit lines. The Company offers fixed-rate second mortgage loans. Its home equity credit line loans totaled $119.9 million or 0.44% of total loans at December 31, 2012. These loans are either fixed-rate or adjustable-rate loans secured by a second mortgage on owner-occupied one- to four-family residences located in its market area. Other loans totaled $20.9 million at December 31, 2012, and consisted of collateralized passbook loans, overdraft protection loans, unsecured personal loans, and secured and unsecured commercial lines of credit.
The Company invests primarily in mortgage-backed securities issued by Ginnie Mae, Fannie Mae and Freddie Mac, as well as other securities issued by United States government-sponsored enterprises (GSEs). These securities account for substantially all of its securities. The Company has an investment in Federal Home Loan Bank of New York (FHLB) stock. At December 31, 2012, mortgage-backed securities classified as held to maturity totaled $2.98 billion, or 7.3% of total assets, while $8.04 billion, or 19.8% of total assets, were classified as available for sale. The Company had two collateralized borrowings in the form of repurchase agreements totaling $100 million with Lehman Brothers, Inc. Lehman Brothers, Inc. is in liquidation under the Securities Industry Protection Act (SIPA).
Sources of Funds
The Company’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 our operations. The Company offers a variety of deposit accounts having a range of interest rates and terms. The Company offers passbook and statement savings accounts, interest-bearing transaction accounts, checking accounts, money market accounts and time deposits. The Company also offers IRA accounts and qualified retirement plans. The Company also opens deposit accounts through the Internet for customers throughout the United States. The Company has entered into agreements with selected brokers and the FHLB to repurchase securities sold to these parties. The Bank completed the Restructuring Transaction in 2012, which resulted in the extinguishment of $12.5 billion of structured putable borrowings.
Hudson City Savings has two wholly owned and consolidated subsidiaries: HudCiti Service Corporation and HC Value Broker Services, Inc. HudCiti Service Corporation, which qualifies as 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 qualify as real estate investment trusts. HC Value Broker Services, Inc., whose primary operating activity is the referral of insurance applications, formed a strategic alliance that jointly markets insurance products with Savings Bank Life Insurance of Massachusetts.
Hudson City Bancorp Inc
WEST 80 CENTURY RD
PARAMUS NJ 07652