##### Table of Contents



UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
 Washington, D.C. 20549
 FORM 10-Q
  þ
    
    Quarterly Report Pursuant to Section 13 or 15(d) of the Securities Exchange Act of 1934
 For the quarterly period ended: September 30, 2007
 o
    
    Transition Report Pursuant to Section 13 or 15(d) of the Securities Exchange Act of 1934
 For the transition period from to
 Commission File Number: 0-26001
 Hudson City Bancorp, Inc.
  Delaware
    
    22-3640393(State or other jurisdiction of 
incorporation or organization)
    
    (I.R.S. Employer
Identification No.)West 80 Century RoadParamus, New Jersey
    
    07652(Address of Principal Executive Offices)
    
    (Zip Code)
 (201) 967-1900
  þ o
  þ o o
  o þ




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##### 



PageNumberPART I  FINANCIAL INFORMATIONItem 1.  Financial StatementsConsolidated Statements of Financial Condition  September
30, 2007 (Unaudited) and December 31, 2006
    
    
    4Consolidated Statements of Income (Unaudited)  For the
three and nine months ended September 30, 2007 and 2006
    
    
    5Consolidated Statements of Changes in Stockholders Equity
(Unaudited)  For the nine months ended September 30, 2007 and 2006
    
    
    6Consolidated Statements of Cash Flows (Unaudited)  For
the nine months ended September 30, 2007 and 2006
    
    
    7Notes to Unaudited Consolidated Financial Statements
    
    
    8Item 2.  Managements Discussion and Analysis of Financial Condition and Results of
Operations
    
    
    15Item 3.  Quantitative and Qualitative Disclosures About Market Risk
    
    
    36Item 4.  Controls and Procedures
    
    
    41PART II  OTHER INFORMATIONItem 1.  Legal Proceedings
    
    
    41Item 1A.  Risk Factors
    
    
    41Item 2.  Unregistered Sales of Equity Securities and Use of Proceeds
    
    
    41Item 3.  Defaults Upon Senior Securities
    
    
    42Item 4.  Submission of Matters to a Vote of Security Holders
    
    
    42Item 5.  Other Information
    
    
    42Item 6.  Exhibits
    
    
    42SIGNATURES
    
    
    43EX-31.1: CERTIFICATIONEX-31.2: CERTIFICATIONEX-32.1: CERTIFICATION
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##### Table of Contents



Forward-Looking Statements
  
    
    the timing and occurrence or non-occurrence of events may be subject to circumstances
beyond our control;
    
    increases in competitive pressure among the financial institutions or from non-financial
institutions;
    
    changes in the interest rate environment may reduce interest margins or affect the value
of our investments;
    
    changes in deposit flows, loan demand or real estate values may adversely affect our
business;
    
    changes in accounting principles, policies or guidelines may cause our financial
condition to be perceived differently;
    
    general economic conditions, either nationally or locally in some or all of the areas in
which we do business, or conditions in the securities markets or the banking industry may
be less favorable than we currently anticipate;
    
    legislative or regulatory changes that may adversely affect our business;
    
    applicable technological changes that may be more difficult or expensive than we
anticipate;
    
    success or consummation of new business initiatives that may be more difficult or
expensive than we anticipate;
    
    litigation or matters before regulatory agencies, whether currently existing or
commencing in the future, that may delay the occurrence or non-occurrence of events longer
than we anticipate;
    
    the risks associated with continued diversification of assets and adverse changes to
credit quality;
    
    difficulties associated with achieving expected future financial results; and
    
    the risk of an economic slowdown that would adversely affect credit quality and loan
originations.
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##### Table of Contents



PART I  FINANCIAL INFORMATION
 
 Item 1.  Financial Statements
 Hudson City Bancorp, Inc. and Subsidiary
 
 Consolidated Statements of Financial Condition
 September 30,
    
    
    December 31,(In thousands, except share and per share amounts)
    
    2007
    
    
    2006(Unaudited)Assets:Cash and due from banks
    
    $
    107,893
    
    
    $
    125,630Federal funds sold
    
    
    202,458
    
    
    
    56,616Total cash and cash equivalents
    
    
    310,351
    
    
    
    182,246Securities available for sale:Mortgage-backed securities
    
    
    2,683,594
    
    
    
    2,404,421Investment securities
    
    
    3,663,715
    
    
    
    4,379,615Securities held to maturity:Mortgage-backed securities (fair value of $9,752,408 at September 30, 2007
and $6,804,598 at December 31, 2006)
    
    
    9,837,898
    
    
    
    6,925,210Investment securities (fair value of $1,528,801 at September 30, 2007
and $1,502,934 at December 31, 2006)
    
    
    1,533,982
    
    
    
    1,533,969Total securities
    
    
    17,719,189
    
    
    
    15,243,215Loans
    
    
    23,030,345
    
    
    
    19,083,617Deferred loan costs
    
    
    33,920
    
    
    
    16,159Allowance for loan losses
    
    
    (32,850
    )
    
    
    (30,625
    )Net loans
    
    
    23,031,415
    
    
    
    19,069,151Federal Home Loan Bank of New York stock
    
    
    657,101
    
    
    
    445,006Foreclosed real estate, net
    
    
    3,405
    
    
    
    3,161Accrued interest receivable
    
    
    253,199
    
    
    
    194,229Banking premises and equipment, net
    
    
    76,224
    
    
    
    73,929Goodwill
    
    
    152,109
    
    
    
    150,831Other assets
    
    
    113,801
    
    
    
    144,813Total Assets
    
    $
    42,316,794
    
    
    $
    35,506,581Liabilities and Stockholders Equity:Deposits:Interest-bearing
    
    $
    14,105,685
    
    
    $
    12,917,286Noninterest-bearing
    
    
    520,041
    
    
    
    498,301Total deposits
    
    
    14,625,726
    
    
    
    13,415,587Repurchase agreements
    
    
    11,616,000
    
    
    
    8,923,000Federal Home Loan Bank of New York advances
    
    
    11,275,000
    
    
    
    8,050,000Total borrowed funds
    
    
    22,891,000
    
    
    
    16,973,000Accrued expenses and other liabilities
    
    
    210,558
    
    
    
    187,738Total liabilities
    
    
    37,727,284
    
    
    
    30,576,325Common stock, $0.01 par value, 3,200,000,000 shares authorized;741,466,555 shares issued; 522,375,189 shares outstanding
at September 30, 2007 and 557,787,921 shares outstanding
at December 31, 2006
    
    
    7,415
    
    
    
    7,415Additional paid-in capital
    
    
    4,572,582
    
    
    
    4,553,614Retained earnings
    
    
    1,966,167
    
    
    
    1,877,840Treasury stock, at cost; 219,091,366 shares at September 30, 2007 and
183,678,634 shares at December 31, 2006
    
    
    (1,712,914
    )
    
    
    (1,230,793
    )Unallocated common stock held by the employee stock ownership plan
    
    
    (223,752
    )
    
    
    (228,257
    )Accumulated other comprehensive loss, net of tax
    
    
    (19,988
    )
    
    
    (49,563
    )Total stockholders equity
    
    
    4,589,510
    
    
    
    4,930,256Total Liabilities and Stockholders Equity
    
    $
    42,316,794
    
    
    $
    35,506,581
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Hudson City Bancorp, Inc. and Subsidiary
 
 Consolidated Statements of Income
 (Unaudited)
 For the Three Months
    
    
    For the Nine MonthsEnded September 30,
    
    
    Ended September 30,2007
    
    
    2006
    
    
    2007
    
    
    2006(In thousands, except share and per share data)Interest and Dividend Income:First mortgage loans
    
    $
    313,943
    
    
    $
    246,230
    
    
    $
    873,397
    
    
    $
    679,049Consumer and other loans
    
    
    7,107
    
    
    
    5,425
    
    
    
    21,077
    
    
    
    12,822Mortgage-backed securities held to maturity
    
    
    124,524
    
    
    
    68,249
    
    
    
    329,604
    
    
    
    182,034Mortgage-backed securities available for sale
    
    
    26,620
    
    
    
    31,372
    
    
    
    81,716
    
    
    
    89,788Investment securities held to maturity
    
    
    18,620
    
    
    
    18,673
    
    
    
    55,863
    
    
    
    55,936Investment securities available for sale
    
    
    43,391
    
    
    
    45,233
    
    
    
    142,577
    
    
    
    130,631Dividends on Federal Home Loan Bank of New York stock
    
    
    10,616
    
    
    
    4,640
    
    
    
    26,835
    
    
    
    10,357Federal funds sold
    
    
    3,382
    
    
    
    2,223
    
    
    
    8,275
    
    
    
    5,256Total interest and dividend income
    
    
    548,203
    
    
    
    422,045
    
    
    
    1,539,344
    
    
    
    1,165,873Interest Expense:Deposits
    
    
    155,055
    
    
    
    115,894
    
    
    
    443,450
    
    
    
    303,666Borrowed funds
    
    
    230,932
    
    
    
    153,023
    
    
    
    619,566
    
    
    
    397,811Total interest expense
    
    
    385,987
    
    
    
    268,917
    
    
    
    1,063,016
    
    
    
    701,477Net interest income
    
    
    162,216
    
    
    
    153,128
    
    
    
    476,328
    
    
    
    464,396Provision for Loan Losses
    
    
    2,000
    
    
    
    
    
    
    
    2,800
    
    
    
    Net interest income after
provision for loan losses
    
    
    160,216
    
    
    
    153,128
    
    
    
    473,528
    
    
    
    464,396Non-Interest Income:Service charges and other income
    
    
    2,049
    
    
    
    1,669
    
    
    
    5,422
    
    
    
    4,384Gains on securities transactions, net
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    4Total non-interest income
    
    
    2,049
    
    
    
    1,669
    
    
    
    5,422
    
    
    
    4,388Non-Interest Expense:Compensation and employee benefits
    
    
    26,554
    
    
    
    26,633
    
    
    
    78,114
    
    
    
    78,376Net occupancy expense
    
    
    7,718
    
    
    
    6,519
    
    
    
    21,997
    
    
    
    17,629Federal deposit insurance assessment
    
    
    405
    
    
    
    431
    
    
    
    1,293
    
    
    
    1,257Computer and related services
    
    
    633
    
    
    
    779
    
    
    
    2,014
    
    
    
    2,078Other expense
    
    
    5,878
    
    
    
    6,226
    
    
    
    19,734
    
    
    
    18,048Total non-interest expense
    
    
    41,188
    
    
    
    40,588
    
    
    
    123,152
    
    
    
    117,388Income before income tax expense
    
    
    121,077
    
    
    
    114,209
    
    
    
    355,798
    
    
    
    351,396Income Tax Expense
    
    
    46,634
    
    
    
    43,238
    
    
    
    137,448
    
    
    
    132,029Net income
    
    $
    74,443
    
    
    $
    70,971
    
    
    $
    218,350
    
    
    $
    219,367Basic Earnings Per Share
    
    $
    0.15
    
    
    $
    0.13
    
    
    $
    0.43
    
    
    $
    0.41Diluted Earnings Per Share
    
    $
    0.15
    
    
    $
    0.13
    
    
    $
    0.42
    
    
    $
    0.40Weighted Average Number of Common Shares Outstanding:Basic
    
    
    491,331,210
    
    
    
    531,129,380
    
    
    
    504,784,333
    
    
    
    539,843,240Diluted
    
    
    500,861,222
    
    
    
    540,969,501
    
    
    
    514,734,542
    
    
    
    550,497,527
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Hudson City Bancorp, Inc. and Subsidiary
 
 Consolidated Statements of Changes in Stockholders Equity
 (Unaudited
 For the Nine Months Ended September 30,2007
    
    
    2006(In thousands, except per share data)Common Stock
    
    $
    7,415
    
    
    $
    7,415Additional paid-in capital:Balance at beginning of year
    
    
    4,553,614
    
    
    
    4,533,329Unvested RRP awards reclassified as additonal paid-in-capital
    
    
    
    
    
    
    (2,815
    )Stock option plan expense
    
    
    9,258
    
    
    
    3,222Tax benefit from stock plans
    
    
    3,250
    
    
    
    7,135Allocation of ESOP stock
    
    
    5,183
    
    
    
    4,934Vesting of RRP stock
    
    
    1,277
    
    
    
    1,704Balance at end of period
    
    
    4,572,582
    
    
    
    4,547,509Retained Earnings:Balance at beginning of year
    
    
    1,877,840
    
    
    
    1,759,492Net Income
    
    
    218,350
    
    
    
    219,367Dividends paid on common stock ($0.245 and $0.225 per share,
respectively)
    
    
    (124,259
    )
    
    
    (121,870
    )Exercise of stock options
    
    
    (5,764
    )
    
    
    (7,143
    )Balance at end of period
    
    
    1,966,167
    
    
    
    1,849,846Treasury Stock:Balance at beginning of year
    
    
    (1,230,793
    )
    
    
    (798,232
    )Purchase of common stock
    
    
    (491,275
    )
    
    
    (335,161
    )Exercise of stock options
    
    
    9,154
    
    
    
    13,074Balance at end of period
    
    
    (1,712,914
    )
    
    
    (1,120,319
    )Unallocated common stock held by the ESOP:Balance at beginning of year
    
    
    (228,257
    )
    
    
    (234,264
    )Allocation of ESOP stock
    
    
    4,505
    
    
    
    4,505Balance at end of period
    
    
    (223,752
    )
    
    
    (229,759
    )Unallocated common stock held by the RRP:Balance at beginning of year
    
    
    
    
    
    
    (2,815
    )Unvested RRP awards reclassified as additonal paid-in-capital
    
    
    
    
    
    
    2,815Balance at end of period
    
    
    
    
    
    
    Accumulated other comprehensive loss:Balance at beginning of year
    
    
    (49,563
    )
    
    
    (63,449
    )Unrealized holding gains arising during period, net of tax expense
of $20,598 and $7,612 in 2007 and 2006, respectively
    
    
    29,827
    
    
    
    11,022Reclassification adjustment for gains in net income, net of tax of
$0 for 2007 and ($2) for 2006, respectively
    
    
    
    
    
    
    (2
    )Pension and other postretirement benefits adjustment
    
    
    (252
    )
    
    
    (21
    )Balance at end of period
    
    
    (19,988
    )
    
    
    (52,450
    )Total Stockholders Equity
    
    $
    4,589,510
    
    
    $
    5,002,242Summary of comprehensive incomeNet income
    
    $
    218,350
    
    
    $
    219,367Other comprehensive income, net of tax
    
    
    29,575
    
    
    
    10,999Total comprehensive income
    
    $
    247,925
    
    
    $
    230,366
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##### Table of Contents



Hudson City Bancorp, Inc. and Subsidiary
 
 Consolidated Statements of Cash Flows
 (Unaudited
 For the Nine MonthsEnded September 30,2007
    
    
    2006(In thousands)Cash Flows from Operating Activities:Net income
    
    $
    218,350
    
    
    $
    219,367Adjustments to reconcile net income to net cash provided
by operating activities:Depreciation, accretion and amortization expense
    
    
    17,600
    
    
    
    14,774Provision for loan losses
    
    
    2,800
    
    
    
    Gains on securities transactions, net
    
    
    
    
    
    
    (4
    )Share-based compensation, including committed ESOP shares
    
    
    20,223
    
    
    
    14,365Deferred tax benefit
    
    
    (3,426
    )
    
    
    (15,448
    )Increase in accrued interest receivable
    
    
    (58,970
    )
    
    
    (49,116
    )Decrease in other assets
    
    
    9,966
    
    
    
    6,476Increase in accrued expenses and other liabilities
    
    
    22,568
    
    
    
    41,582Net Cash Provided by Operating Activities
    
    
    229,111
    
    
    
    231,996Cash Flows from Investing Activities:Originations of loans
    
    
    (2,645,435
    )
    
    
    (1,818,189
    )Purchases of loans
    
    
    (3,057,075
    )
    
    
    (1,914,033
    )Principal payments on loans
    
    
    1,734,448
    
    
    
    1,267,806Principal collection of mortgage-backed securities held to maturity
    
    
    930,105
    
    
    
    549,796Purchases of mortgage-backed securities held to maturity
    
    
    (3,846,976
    )
    
    
    (2,037,697
    )Principal collection of mortgage-backed securities available for sale
    
    
    535,415
    
    
    
    545,152Proceeds from sales of mortgage-backed securities available for sale
    
    
    
    
    
    
    186,169Purchases of mortgage-backed securities available for sale
    
    
    (803,352
    )
    
    
    (593,161
    )Proceeds from maturities and calls of investment securities held to maturity
    
    
    
    
    
    
    251Proceeds from maturities and calls of investment securities available for sale
    
    
    1,650,054
    
    
    
    250,008Proceeds from sales of investment securities available for sale
    
    
    
    
    
    
    112,157Purchases of investment securities available for sale
    
    
    (898,705
    )
    
    
    (399,999
    )Purchases of Federal Home Loan Bank of New York stock
    
    
    (221,410
    )
    
    
    (187,111
    )Redemption of Federal Home Loan Bank of New York stock
    
    
    9,315
    
    
    
    4,500Cash paid in purchase acquisition, net of cash acquired
    
    
    
    
    
    
    (197,653
    )Purchases of premises and equipment, net
    
    
    (9,955
    )
    
    
    (19,898
    )Net proceeds from sale of foreclosed real estate
    
    
    3,320
    
    
    
    1,086Net Cash Used in Investing Activities
    
    
    (6,620,251
    )
    
    
    (4,250,816
    )Cash Flows from Financing Activities:Net increase in deposits
    
    
    1,210,139
    
    
    
    361,656Proceeds from borrowed funds
    
    
    9,025,000
    
    
    
    6,025,000Principal payments on borrowed funds
    
    
    (3,107,000
    )
    
    
    (1,750,000
    )Dividends paid
    
    
    (124,259
    )
    
    
    (121,870
    )Purchases of treasury stock
    
    
    (491,275
    )
    
    
    (335,161
    )Exercise of stock options
    
    
    3,390
    
    
    
    5,931Tax benefit from stock plans
    
    
    3,250
    
    
    
    7,135Net Cash Provided by Financing Activities
    
    
    6,519,245
    
    
    
    4,192,691Net Increase in Cash and Cash Equivalents
    
    
    128,105
    
    
    
    173,871Cash and Cash Equivalents at Beginning of Year
    
    
    182,246
    
    
    
    102,259Cash and Cash Equivalents at End of Period
    
    $
    310,351
    
    
    $
    276,130Supplemental Disclosures:Interest paid
    
    $
    1,032,914
    
    
    $
    677,034Loans transferred to foreclosed real estate
    
    $
    3,667
    
    
    $
    1,782Income tax payments
    
    $
    123,841
    
    
    $
    90,194
  Page 7




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##### Table of Contents



1. Organization
  Plan of Conversion and Reorganization
  Acquisition of Sound Federal
   2. Basis of Presentation
  Page 8




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3. Earnings Per Share
  For the Three Months Ended September 30,2007
    
    
    2006Per
    
    
    
    
    
    
    
    
    
    
    PerAverage
    
    
    Share
    
    
    
    
    
    
    Average
    
    
    ShareIncome
    
    
    Shares
    
    
    Amount
    
    
    Income
    
    
    Shares
    
    
    Amount(In thousands, except per share data)Net income
    
    $
    74,443
    
    
    
    
    
    
    
    
    
    
    $
    70,971Basic earnings per share:Income available to
common stockholders
    
    $
    74,443
    
    
    
    491,331
    
    
    $
    0.15
    
    
    $
    70,971
    
    
    
    531,129
    
    
    $
    0.13Effect of dilutive common
stock equivalents
    
    
    
    
    
    
    9,530
    
    
    
    
    
    
    
    
    
    
    
    9,841Diluted earnings per share:Income available to
common stockholders
    
    $
    74,443
    
    
    
    500,861
    
    
    $
    0.15
    
    
    $
    70,971
    
    
    
    540,970
    
    
    $
    0.13
 For the Nine Months Ended September 30,2007
    
    
    2006Per
    
    
    
    
    
    
    
    
    
    
    PerShare
    
    
    
    
    
    
    
    
    
    
    ShareIncome
    
    
    Shares
    
    
    Amount
    
    
    Income
    
    
    Shares
    
    
    Amount(In thousands, except per share data)Net income
    
    $
    218,350
    
    
    
    
    
    
    
    
    
    
    $
    219,367Basic earnings per share:Income available to
common stockholders
    
    $
    218,350
    
    
    
    504,784
    
    
    $
    0.43
    
    
    $
    219,367
    
    
    
    539,843
    
    
    $
    0.41Effect of dilutive common
stock equivalents
    
    
    
    
    
    
    9,951
    
    
    
    
    
    
    
    
    
    
    
    10,655Diluted earnings per share:Income available to
common stockholders
    
    $
    218,350
    
    
    
    514,735
    
    
    $
    0.42
    
    
    $
    219,367
    
    
    
    550,498
    
    
    $
    0.40
 Page 9




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##### Table of Contents



4. Stock Repurchase Programs
  5. Postretirement Plans
   Page 10




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##### Table of Contents



For the Three Months Ended September 30,Retirement Plans
    
    
    Other Benefits2007
    
    
    2006
    
    
    2007
    
    
    2006(In thousands)Service cost
    
    $
    810
    
    
    $
    802
    
    
    $
    268
    
    
    $
    269Interest cost
    
    
    1,569
    
    
    
    1,269
    
    
    
    525
    
    
    
    510Expected return on assets
    
    
    (2,034
    )
    
    
    (1,718
    )
    
    
    
    
    
    
    Amortization of:Net loss
    
    
    37
    
    
    
    130
    
    
    
    144
    
    
    
    167Unrecognized
prior service cost
    
    
    69
    
    
    
    35
    
    
    
    (391
    )
    
    
    (391
    )Net periodic
benefit cost
    
    $
    451
    
    
    $
    518
    
    
    $
    546
    
    
    $
    555
 For the Nine Months Ended September 30,Retirement Plans
    
    
    Other Benefits2007
    
    
    2006
    
    
    2007
    
    
    2006(In thousands)Service cost
    
    $
    2,430
    
    
    $
    2,406
    
    
    $
    804
    
    
    $
    807Interest cost
    
    
    4,707
    
    
    
    3,808
    
    
    
    1,575
    
    
    
    1,530Expected return on assets
    
    
    (6,102
    )
    
    
    (5,154
    )
    
    
    
    
    
    
    Amortization of:Net loss
    
    
    111
    
    
    
    389
    
    
    
    432
    
    
    
    500Unrecognized
prior service cost
    
    
    207
    
    
    
    105
    
    
    
    (1,173
    )
    
    
    (1,174
    )Net periodic
benefit cost
    
    $
    1,353
    
    
    $
    1,554
    
    
    $
    1,638
    
    
    $
    1,663
  6. Stock Option Plans
  For the Nine Months Ended September 30,2007
    
    2006Number of
    
    Weighted
    
    Number of
    
    WeightedStock
    
    Average
    
    Stock
    
    AverageOptions
    
    Exercise Price
    
    Options
    
    Exercise PriceOutstanding at beginning of
period
    
    
    26,979,989
    
    
    $
    6.89
    
    
    
    21,659,869
    
    
    $
    4.21Granted
    
    
    3,527,500
    
    
    
    13.74
    
    
    
    7,960,000
    
    
    
    12.76Exercised
    
    
    (1,266,222
    )
    
    
    2.68
    
    
    
    (2,241,263
    )
    
    
    2.65Forfeited
    
    
    (66,740
    )
    
    
    10.03
    
    
    
    (8,336
    )
    
    
    4.21Outstanding at end of period
    
    
    29,174,527
    
    
    
    7.71
    
    
    
    27,370,270
    
    
    
    6.82
  Page 11




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2007Expected dividend yield
    
    
    2.32
    %Expected volatility
    
    
    19.11
    %Risk-free interest rate
    
    
    4.87
    %Expected option life
    
    5.2
    years
  7. Income Taxes
  Page 12




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8. Recent Accounting Pronouncements
   Page 13




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Item 2.  Managements Discussion and Analysis of Financial Condition and Results of Operations
 Executive Summary
     Page 15




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Page 16




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Comparison of Financial Condition at September 30, 2007 and December 31, 2006
      Page 17




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Page 18




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Page 19




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Comparison of Operating Results for the Three Months Ended September 30, 2007 and 2006
 Average Balance Sheet.
 For the Three Months Ended September 30,2007
    
    
    2006Average
    
    
    
    
    
    
    
    
    
    
    AverageAverage
    
    
    
    
    
    
    Yield/
    
    
    Average
    
    
    
    
    
    
    Yield/Balance
    
    Interest
    
    Cost
    
    Balance
    
    Interest
    
    Cost(Dollars in thousands)Assets:Interest-earnings assets:First mortgage loans, net (1)
    
    $
    21,990,493
    
    
    $
    313,943
    
    
    
    5.71
    %
    
    $
    17,355,122
    
    
    $
    246,230
    
    
    
    5.68
    %Consumer and other loans
    
    
    432,061
    
    
    
    7,107
    
    
    
    6.58
    
    
    
    341,875
    
    
    
    5,425
    
    
    
    6.35Federal funds sold
    
    
    271,404
    
    
    
    3,382
    
    
    
    4.94
    
    
    
    166,404
    
    
    
    2,223
    
    
    
    5.30Mortgage-backed securities at amortized cost
    
    
    11,617,722
    
    
    
    151,144
    
    
    
    5.20
    
    
    
    8,257,035
    
    
    
    99,621
    
    
    
    4.83Federal Home Loan Bank stock
    
    
    623,693
    
    
    
    10,616
    
    
    
    6.81
    
    
    
    388,951
    
    
    
    4,640
    
    
    
    4.77Investment securities, at amortized cost
    
    
    5,179,482
    
    
    
    62,011
    
    
    
    4.79
    
    
    
    5,675,493
    
    
    
    63,906
    
    
    
    4.50Total
interest-earning assets
    
    
    40,114,855
    
    
    
    548,203
    
    
    
    5.47
    
    
    
    32,184,880
    
    
    
    422,045
    
    
    
    5.25Noninterest-earnings assets
    
    
    617,794
    
    
    
    
    
    
    
    
    
    
    
    458,055Total Assets
    
    $
    40,732,649
    
    
    
    
    
    
    
    
    
    
    $
    32,642,935Liabilities and Stockholders Equity:Interest-bearing liabilities:Savings accounts
    
    $
    766,928
    
    
    
    1,457
    
    
    
    0.75
    
    
    $
    809,278
    
    
    
    1,989
    
    
    
    0.98Interest-bearing transaction accounts
    
    
    1,715,934
    
    
    
    14,538
    
    
    
    3.36
    
    
    
    2,468,022
    
    
    
    20,651
    
    
    
    3.32Money market accounts
    
    
    1,264,556
    
    
    
    13,436
    
    
    
    4.22
    
    
    
    805,105
    
    
    
    6,592
    
    
    
    3.25Time deposits
    
    
    10,099,706
    
    
    
    125,624
    
    
    
    4.93
    
    
    
    7,742,845
    
    
    
    86,662
    
    
    
    4.44Total
interest-bearing deposits
    
    
    13,847,124
    
    
    
    155,055
    
    
    
    4.44
    
    
    
    11,825,250
    
    
    
    115,894
    
    
    
    3.89Repurchase agreements
    
    
    10,948,609
    
    
    
    116,888
    
    
    
    4.24
    
    
    
    8,250,500
    
    
    
    79,856
    
    
    
    3.84Federal Home Loan Bank of New York advances
    
    
    10,547,826
    
    
    
    114,044
    
    
    
    4.29
    
    
    
    6,901,240
    
    
    
    73,167
    
    
    
    4.21Total
borrowed funds
    
    
    21,496,435
    
    
    
    230,932
    
    
    
    4.26
    
    
    
    15,151,740
    
    
    
    153,023
    
    
    
    4.01Total
interest-bearing liabilities
    
    
    35,343,559
    
    
    
    385,987
    
    
    
    4.33
    
    
    
    26,976,990
    
    
    
    268,917
    
    
    
    3.95Noninterest-bearing liabilities:Noninterest-bearing deposits
    
    
    529,775
    
    
    
    
    
    
    
    
    
    
    
    466,906Other noninterest-bearing liabilities
    
    
    214,543
    
    
    
    
    
    
    
    
    
    
    
    207,744Total
noninterest-bearing liabilities
    
    
    744,318
    
    
    
    
    
    
    
    
    
    
    
    674,650Total liabilities
    
    
    36,087,877
    
    
    
    
    
    
    
    
    
    
    
    27,651,640Stockholders equity
    
    
    4,644,772
    
    
    
    
    
    
    
    
    
    
    
    4,991,295Total
Liabilities and Stockholders Equity
    
    $
    40,732,649
    
    
    
    
    
    
    
    
    
    
    $
    32,642,935Net interest income/net interest rate spread (2)
    
    
    
    
    
    $
    162,216
    
    
    
    1.14
    %
    
    
    
    
    
    $
    153,128
    
    
    
    1.30
    %Net interest-earning assets/net interest margin (3)
    
    $
    4,771,296
    
    
    
    
    
    
    
    1.65
    %
    
    $
    5,207,890
    
    
    
    
    
    
    
    1.93
    %Ratio of interest-earning assets to
interest-bearing liabilities
    
    
    
    
    
    
    
    
    
    
    1.13
    x
    
    
    
    
    
    
    
    
    
    
    1.19
    x
 
 (1)
    
    Amount includes deferred loan costs and non-performing loans and is net of the allowance for loan losses.(2)
    
    Determined by subtracting the annualized weighted average cost of total interest-bearing liabilities
from the annualized weighted average yield on total interest-earning assets.(3)
    
    Determined by dividing annualized net interest income by total average interest-earning assets. Page 20




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General.
 Interest and Dividend Income .
     Page 21




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Interest Expense.
   Net Interest Income.
 Page 22




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Provision for Loan Losses.
   Page 23




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Page 24




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Non-Interest Income.
 Non-Interest Expense.
  Income Taxes.
 Page 25




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Comparison of Operating Results for the Nine Months Ended September 30, 2007 and 2006
 Average Balance Sheet.
 For the Nine Months Ended September 30,2007
    
    
    2006Average
    
    
    
    
    
    
    
    
    
    
    AverageAverage
    
    
    
    
    
    
    Yield/
    
    
    Average
    
    
    
    
    
    
    Yield/Balance
    
    Interest
    
    Cost
    
    Balance
    
    Interest
    
    Cost(Dollars in thousands)Assets:Interest-earnings assets:First mortgage loans, net (1)
    
    $
    20,492,465
    
    
    $
    873,397
    
    
    
    5.68
    %
    
    $
    16,220,800
    
    
    $
    679,049
    
    
    
    5.58
    %Consumer and other loans
    
    
    428,054
    
    
    
    21,077
    
    
    
    6.57
    
    
    
    282,499
    
    
    
    12,822
    
    
    
    6.05Federal funds sold
    
    
    215,706
    
    
    
    8,275
    
    
    
    5.13
    
    
    
    145,306
    
    
    
    5,256
    
    
    
    4.84Mortgage-backed securities at amortized cost
    
    
    10,704,116
    
    
    
    411,320
    
    
    
    5.12
    
    
    
    7,730,646
    
    
    
    271,822
    
    
    
    4.69Federal Home Loan Bank stock
    
    
    555,343
    
    
    
    26,835
    
    
    
    6.44
    
    
    
    319,715
    
    
    
    10,357
    
    
    
    4.32Investment securities, at amortized cost
    
    
    5,567,410
    
    
    
    198,440
    
    
    
    4.75
    
    
    
    5,624,061
    
    
    
    186,567
    
    
    
    4.42Total interest-earning assets
    
    
    37,963,094
    
    
    
    1,539,344
    
    
    
    5.41
    
    
    
    30,323,027
    
    
    
    1,165,873
    
    
    
    5.13Noninterest-earnings assets
    
    
    603,535
    
    
    
    
    
    
    
    
    
    
    
    358,978Total Assets
    
    $
    38,566,629
    
    
    
    
    
    
    
    
    
    
    $
    30,682,005Liabilities and Stockholders Equity:Interest-bearing liabilities:Savings accounts
    
    $
    785,015
    
    
    
    4,925
    
    
    
    0.84
    
    
    $
    791,382
    
    
    
    5,826
    
    
    
    0.98Interest-bearing transaction accounts
    
    
    1,868,032
    
    
    
    47,054
    
    
    
    3.37
    
    
    
    2,923,558
    
    
    
    73,095
    
    
    
    3.34Money market accounts
    
    
    1,074,245
    
    
    
    31,428
    
    
    
    3.91
    
    
    
    624,568
    
    
    
    13,043
    
    
    
    2.79Time deposits
    
    
    9,758,275
    
    
    
    360,043
    
    
    
    4.93
    
    
    
    6,964,262
    
    
    
    211,702
    
    
    
    4.06Total interest-bearing deposits
    
    
    13,485,567
    
    
    
    443,450
    
    
    
    4.40
    
    
    
    11,303,770
    
    
    
    303,666
    
    
    
    3.59Repurchase agreements
    
    
    9,758,275
    
    
    
    304,505
    
    
    
    4.17
    
    
    
    8,220,132
    
    
    
    230,258
    
    
    
    3.75Federal Home Loan Bank of New York advances
    
    
    9,811,172
    
    
    
    315,061
    
    
    
    4.29
    
    
    
    5,423,550
    
    
    
    167,553
    
    
    
    4.13Total borrowed funds
    
    
    19,569,447
    
    
    
    619,566
    
    
    
    4.23
    
    
    
    13,643,682
    
    
    
    397,811
    
    
    
    3.90Total interest-bearing liabilities
    
    
    33,055,014
    
    
    
    1,063,016
    
    
    
    4.30
    
    
    
    24,947,452
    
    
    
    701,477
    
    
    
    3.76Noninterest-bearing liabilities:Noninterest-bearing deposits
    
    
    514,903
    
    
    
    
    
    
    
    
    
    
    
    454,587Other noninterest-bearing liabilities
    
    
    213,546
    
    
    
    
    
    
    
    
    
    
    
    192,587Total noninterest-bearing liabilities
    
    
    728,449
    
    
    
    
    
    
    
    
    
    
    
    647,174Total liabilities
    
    
    33,783,463
    
    
    
    
    
    
    
    
    
    
    
    25,594,626Stockholders equity
    
    
    4,783,166
    
    
    
    
    
    
    
    
    
    
    
    5,087,379Total Liabilities and Stockholders
Equity
    
    $
    38,566,629
    
    
    
    
    
    
    
    
    
    
    $
    30,682,005Net interest income/net interest rate spread (2)
    
    
    
    
    
    $
    476,328
    
    
    
    1.11
    %
    
    
    
    
    
    $
    464,396
    
    
    
    1.37
    %Net interest-earning assets/net interest margin (3)
    
    $
    4,908,080
    
    
    
    
    
    
    
    1.66
    %
    
    $
    5,375,575
    
    
    
    
    
    
    
    2.03
    %Ratio of interest-earning assets to
interest-bearing liabilities
    
    
    
    
    
    
    
    
    
    
    1.15
    x
    
    
    
    
    
    
    
    
    
    
    1.22
    x
 
 (1)
    
    Amount includes deferred loan costs and non-performing loans and is net of the allowance for loan losses.(2)
    
    Determined by subtracting the annualized weighted average cost of total interest-bearing liabilities
from the annualized weighted average yield on total interest-earning assets.(3)
    
    Determined by dividing annualized net interest income by total average interest-earning assets. Page 26




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General.
 Interest and Dividend Income .
     Page 27




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Interest Expense.
   Page 28




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Net Interest Income.
  Provision for Loan Losses. .
 Non-Interest Income.
 Non-Interest Expense.
 Income Taxes.
 Page 29




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Liquidity and Capital Resources
      Page 30




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Off-Balance Sheet Arrangements and Contractual Obligations
  Page 31




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Payments Due By PeriodLess Than
    
    
    1 Year to
    
    
    3 Years to
    
    
    More ThanContractual Obligation
    
    Total
    
    
    1 Year
    
    
    3 Years
    
    
    5 Years
    
    
    5 Years(In thousands)First mortgage loan originations
    
    $
    339,296
    
    
    $
    339,296
    
    
    
    
    
    
    
    
    
    
    
    Mortgage loan purchases
    
    
    771,769
    
    
    
    771,769
    
    
    
    
    
    
    
    
    
    
    
    Mortgage-backed security purchases
    
    
    1,147,238
    
    
    
    1,147,238
    
    
    
    
    
    
    
    
    
    
    
    Operating leases
    
    
    126,849
    
    
    
    7,364
    
    
    
    14,832
    
    
    
    14,019
    
    
    
    90,634Total
    
    $
    2,385,152
    
    
    $
    2,265,667
    
    
    $
    14,832
    
    
    $
    14,019
    
    
    $
    90,634
  Critical Accounting Policies
  Allowance for Loan Losses
   Page 32




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Asset Impairment Judgments
      Stock-Based Compensation
   Page 34




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Goodwill
   Pension and Other Postretirement Benefit Assumptions
   Page 35




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Item 3.  Quantitative and Qualitative Disclosures About Market Risk
  General
    Page 36




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Assumption Changes.
 
    
    for savings accounts that had no stated maturity, we used decay rates (the assumed rate
at which the balance of existing accounts would decline) of: 7.5% in less than six months,
7.5% in six months to one year, 10.0% in one year to two years, 10.0% in two years to three
years, 25.0% in three years to five years, and 40.0% in more than five years;
    
    for our High Value Checking product, which is included in interest-bearing transaction
accounts, we used decay rates of : 10.0% in less than six months, 10.0% in six months to one
year, 15% in one to two years, 15% in two to three years, 25% in three to five years, and
25% in more than five years;
    
    for other interest-bearing transaction accounts that had no stated maturity, we used
decay rates of : 7.5% in less than six months, 7.5% in six months to one year, 10.0% in one
to two years, 10.0% in two to three years, 25.0% in three years to five years, and 40.0% in
more than five years; and
    
    for money market accounts that had no stated maturity, we used decay rates of: 10.0% in
less than six months, 10.0% in six months to one year, 20.0% in one to two years, 20.0% in
two to three years, 35.0% in three years to five years, and 5.0% in more than five years.
  Page 37




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Simulation Model.
 Change in
    
    Percent Change inInterest Rates
    
    Net Interest Income(Basis points)200
    
    (16.46)%100
    
    (6.01)50
    
    (1.61)
    
    (50)
    
    0.22(100)
    
    (1.11)(200)
    
    (8.53)
   Page 38




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Present Value of Equity
    
    Value of AssetsBasisChange in
    
    Dollar
    
    Dollar
    
    Percent
    
    Present
    
    PointsInterest Rates
    
    Amount
    
    Change
    
    Change
    
    Value Ratio
    
    Change(Basis points)
    
    (Dollars in thousands)200
    
    $
    2,370,097
    
    
    $
    (1,844,480
    )
    
    
    (43.76)
    %
    
    
    6.08
    %
    
    
    (396
    )100
    
    
    3,500,872
    
    
    
    (713,705
    )
    
    
    (16.93
    )
    
    
    8.65
    
    
    
    (139
    )50
    
    
    4,055,296
    
    
    
    (159,281
    )
    
    
    (3.78
    )
    
    
    9.83
    
    
    
    (21
    )
    
    
    4,214,577
    
    
    
    
    
    
    
    
    
    
    
    10.04
    
    
    
    (50
    )
    
    3,943,152
    
    
    
    (271,425
    )
    
    
    (6.44
    )
    
    
    9.26
    
    
    
    (78
    )(100
    )
    
    3,295,021
    
    
    
    (919,556
    )
    
    
    (21.82
    )
    
    
    7.68
    
    
    
    (236
    )(200
    )
    
    1,256,187
    
    
    
    (2,958,390
    )
    
    
    (70.19
    )
    
    
    2.92
    
    
    
    (712
    )
    GAP Analysis.
 Page 39




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September 30, 2007More than
    
    
    More thanMore than
    
    
    More than
    
    
    two years
    
    
    three yearsSix months
    
    
    six months
    
    
    one year to
    
    
    to three
    
    
    to five
    
    
    More thanor less
    
    
    to one year
    
    
    two years
    
    
    years
    
    
    years
    
    
    five years
    
    
    Total(Dollars in thousands)Interest-earning assets:First mortgage loans
    
    $
    1,418,118
    
    
    $
    1,475,579
    
    
    $
    2,574,536
    
    
    $
    2,880,400
    
    
    $
    2,740,967
    
    
    $
    11,483,729
    
    
    $
    22,573,329Consumer and other loans
    
    
    103,277
    
    
    
    1,026
    
    
    
    10,273
    
    
    
    5,119
    
    
    
    16,302
    
    
    
    265,983
    
    
    
    401,980Federal funds sold
    
    
    202,458
    
    
    
    0
    
    
    
    0
    
    
    
    0
    
    
    
    0
    
    
    
    0
    
    
    
    202,458Mortgage-backed securities
    
    
    1,347,258
    
    
    
    1,721,892
    
    
    
    1,565,362
    
    
    
    2,284,510
    
    
    
    3,976,486
    
    
    
    1,625,984
    
    
    
    12,521,492FHLB stock
    
    
    657,101
    
    
    
    0
    
    
    
    0
    
    
    
    0
    
    
    
    0
    
    
    
    0
    
    
    
    657,101Investment securities
    
    
    2,231,172
    
    
    
    203
    
    
    
    1,008,586
    
    
    
    496,284
    
    
    
    1,271,814
    
    
    
    189,638
    
    
    
    5,197,697Total interest-earning assets
    
    
    5,959,384
    
    
    
    3,198,700
    
    
    
    5,158,757
    
    
    
    5,666,313
    
    
    
    8,005,569
    
    
    
    13,565,334
    
    
    
    41,554,057Interest-bearing liabilities:Savings accounts
    
    
    62,025
    
    
    
    56,414
    
    
    
    74,532
    
    
    
    74,532
    
    
    
    186,330
    
    
    
    298,127
    
    
    
    751,960Interest-bearing demand accounts
    
    
    160,069
    
    
    
    160,069
    
    
    
    238,449
    
    
    
    238,449
    
    
    
    408,444
    
    
    
    428,296
    
    
    
    1,633,776Money market accounts
    
    
    135,259
    
    
    
    135,259
    
    
    
    270,518
    
    
    
    270,518
    
    
    
    473,406
    
    
    
    67,628
    
    
    
    1,352,588Time deposits
    
    
    9,226,736
    
    
    
    614,824
    
    
    
    371,661
    
    
    
    119,680
    
    
    
    34,460
    
    
    
    
    
    
    
    10,367,361Borrowed funds
    
    
    766,000
    
    
    
    600,000
    
    
    
    
    
    
    
    150,000
    
    
    
    400,000
    
    
    
    20,975,000
    
    
    
    22,891,000Total interest-bearing liabilities
    
    
    10,350,089
    
    
    
    1,566,566
    
    
    
    955,160
    
    
    
    853,179
    
    
    
    1,502,640
    
    
    
    21,769,051
    
    
    
    36,996,685Interest rate sensitivity gap
    
    $
    (4,390,705
    )
    
    $
    1,632,134
    
    
    $
    4,203,597
    
    
    $
    4,813,134
    
    
    $
    6,502,929
    
    
    $
    (8,203,717
    )
    
    $
    4,557,372Cumulative interest rate sensitivity gap
    
    $
    (4,390,705
    )
    
    $
    (2,758,571
    )
    
    $
    1,445,026
    
    
    $
    6,258,160
    
    
    $
    12,761,089
    
    
    $
    4,557,372Cumulative interest rate sensitivity gap
as a percent of total assets
    
    
    (10.38
    )%
    
    
    (6.52
    )%
    
    
    3.41
    %
    
    
    14.79
    %
    
    
    30.16
    %
    
    
    10.77
    %Cumulative interest-earning assets
as a percent of interest-bearing
liabilities
    
    
    57.58
    %
    
    
    76.85
    %
    
    
    111.23
    %
    
    
    145.60
    %
    
    
    183.80
    %
    
    
    112.32
    %
  Page 40




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##### Table of Contents



Item 4.  Controls and Procedures
   
 PART II  OTHER INFORMATION
 
 Item 1.  Legal Proceedings
  
 Item 1A.  Risk Factors
 The Geographic Concentration Of Our Loan Portfolio And Lending Activities Makes Us Vulnerable
To A Downturn In The Local Economy.
     
 Item 2.  Unregistered Sales of Equity Securities and Use of Proceeds
  MaximumTotal Number of
    
    
    Number of SharesTotal
    
    
    
    
    
    
    Shares Purchased
    
    
    that May Yet BeNumber of
    
    
    Average
    
    
    as Part of Publicly
    
    
    Purchased UnderShares
    
    
    Price Paid
    
    
    Announced Plans
    
    
    the Plans orPeriod
    
    Purchased
    
    
    per Share
    
    
    or Programs
    
    
    Programs (1)July 1-July 31, 2007
    
    
    1,750,000
    
    
    $
    12.34
    
    
    
    1,750,000
    
    
    
    67,173,550August 1-August 31, 2007
    
    
    4,350,000
    
    
    
    13.22
    
    
    
    4,350,000
    
    
    
    62,823,550September 1-September 30, 2007
    
    
    3,750,000
    
    
    
    14.56
    
    
    
    3,750,000
    
    
    
    59,073,550Total
    
    
    9,850,000
    
    
    
    13.57
    
    
    
    9,850,000
 
 (1)
    
    On September 20, 2006, Hudson City Bancorp announced the adoption of its seventh Stock Repurchase Program, which authorized the repurchase of up to
56,975,000 shares of common stock. This program has no expiration date and has 7,673,550 shares yet to be purchased as of September 30, 2007.
On July 25, 2007, Hudson City Bancorp announced the adoption of its eighth Stock repurchase Program, which authorized the repurchase of up to
51,400,000 shares of common stock. This program has no expiration date and no shares have been purchased pursuant to this program. Page 41




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##### Table of Contents



Item 3.  Defaults Upon Senior Securities
  
 Item 4.  Submission of Matters to a Vote of Security Holders
  
 Item 5.  Other Information
  
 Item 6.  Exhibits
 Exhibit Number
    
    Exhibit31.1
    
    Certification of Chief Executive Officer31.2
    
    Certification of Chief Financial Officer32.1
    
    Written Statement of Chief Executive Officer and
Chief Financial Officer furnished pursuant to
Section 906 of the Sarbanes-Oxley Act of 2002,
18 U.S.C. Section 1350. *
 
 *
    
    Pursuant to SEC rules, this exhibit will not be deemed filed for purposes of Section 18
of the Exchange Act or otherwise subject to the liability of that section. Page 42




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##### Table of Contents



SIGNATURES
  Hudson City Bancorp, Inc.Date:    November 9, 2007
    By:
    /s/ Ronald E. Hermance, Jr.Ronald E. Hermance, Jr.Chairman, President and Chief Executive
Officer
(Principal Executive Officer)Date:    November 9, 2007
    By:
    /s/ James C. KranzJames C. KranzExecutive Vice President and
Chief Financial Officer

(Principal Financial Officer) Page 43