Hudson City Bancorp Inc. Earnings Cheat Sheet: Net Income Sinks

S&P 500 (NYSE:SPY) component Hudson City Bancorp, Inc. (NASDAQ:HCBK) reported its results for the third quarter. 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 Third Quarter

Results: Net income for the savings and loan company fell to $84.2 million (17 cents per share) vs. $124.6 million (25 cents per share) a year earlier. This is a decline of 32.4% from the year earlier quarter.

Actual vs. Wall St. Expectations: HCBK fell short of the mean analyst estimate of 18 cents per share.

Quoting Management: Ronald E. Hermance, Jr., Chairman and Chief Executive Officer commented, “Our net income was $84.2 million for the third quarter in what continues to be a difficult environment facing portfolio lenders. With mortgage rates hitting all-time lows and reinvestment rates for mortgage securities below 3.0%, we believe balance sheet growth does not make sense in this environment. We anticipate continuing to restrain our balance sheet growth while the Federal Reserve and U.S. Treasury department continue their on-going attempts to spur economic growth by, among other things, keeping interest rates at historical lows. This quarter, the rate on ten year treasury notes fell below 2% – a rate even lower than during the Great Depression. As a result of the decrease in rates during the quarter, we had $2.0 billion of investment securities called during the third quarter, including $1.2 billion during the month of September. This resulted in a large cash balance at September 30, 2011 which will be redeployed during the fourth quarter.”

Key Stats:

The company fell short of forecasts after beating estimates in the previous two quarters. In the second quarter, it topped the mark by one cent, and in the first quarter, it was ahead by one cent.

Looking Forward: Analysts appear increasingly negative about the company’s results for the next quarter. The average estimate for the fourth quarter has moved down from 19 cents a share to 18 cents over the last ninety days. The average estimate for the fiscal year has reached a loss of 57 cents per share, down from a loss of 56 cents ninety days ago.

Competitors to Watch: New York Community Bancorp, Inc. (NYSE:NYB), Kearny Financial Corp. (NASDAQ:KRNY), OceanFirst Financial Corp. (NASDAQ:OCFC), Ocean Shore Holding Co. (NASDAQ:OSHC), Northwest Bancshares, Inc. (NASDAQ:NWBI), Provident New York Bancorp (NASDAQ:PBNY), Rockville Financial New Inc (RCKBD), Oritani Financial Corp. (NASDAQ:ORIT), Magyar Bancorp, Inc. (NASDAQ:MGYR), and Roma Financial Corporation (NASDAQ:ROMA).

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(Source: Xignite Financials)