##### 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: June 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
  Hudson City Bancorp, Inc.
  Delaware
    
    22-3640393(State or other jurisdiction of
    
    (I.R.S. Employerincorporation or organization)
    
    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
 June 30, 2007
(Unaudited) and
December 31,
2006
    
    
    4Consolidated
Statements of
Income (Unaudited)
 For the three and
six months ended
June 30, 2007 and
2006
    
    
    5Consolidated
Statements of
Changes in
Stockholders
Equity (Unaudited)
 For the six
months ended June
30, 2007 and 2006
    
    
    6Consolidated
Statements of Cash
Flows (Unaudited) 
For the six months
ended June 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
    
    
    34Item 4.  Controls and
Procedures
    
    
    37PART II  OTHER INFORMATIONItem 1.  Legal
Proceedings
    
    
    38Item 1A.  Risk
Factors
    
    
    38Item 2.  Unregistered Sales of Equity
Securities and Use of Proceeds
    
    
    38Item 3.  Defaults Upon Senior
Securities
    
    
    38Item 4.  Submission of Matters to a
Vote of Security Holders
    
    
    39Item 5.  Other
Information
    
    
    39Item 6.  Exhibits
    
    
    39SIGNATURES
    
    
    41EX-3.1: AMENDED BYLAWSEX-10.1: AGREEMENT BETWEEN HUDSON CITY BANCORP, INC. AND JOHN M. TASSILLOEX-31.1: CERTIFICATIONEX-31.2: CERTIFICATIONEX-32.1: CERTIFICATION
  Page 2




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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
 June 30,
    
    
    December 31,2007
    
    
    2006(In thousands, except share and per share amounts)
    
    (Unaudited)Assets:Cash and due from banks
    
    $
    119,530
    
    
    $
    125,630Federal funds sold
    
    
    84,077
    
    
    
    56,616Total cash and cash equivalents
    
    
    203,607
    
    
    
    182,246Securities available for sale:Mortgage-backed securities
    
    
    2,071,133
    
    
    
    2,404,421Investment securities
    
    
    3,782,151
    
    
    
    4,379,615Securities held to maturity:Mortgage-backed securities (fair value of $8,802,134 at June 30, 2007
and $6,804,598 at December 31, 2006)
    
    
    9,028,614
    
    
    
    6,925,210Investment securities (fair value of $1,501,054 at June 30, 2007
and $1,502,934 at December 31, 2006)
    
    
    1,533,978
    
    
    
    1,533,969Total securities
    
    
    16,415,876
    
    
    
    15,243,215Loans
    
    
    21,894,961
    
    
    
    19,083,617Deferred loan costs
    
    
    24,622
    
    
    
    16,159Allowance for loan losses
    
    
    (31,457
    )
    
    
    (30,625
    )Net loans
    
    
    21,888,126
    
    
    
    19,069,151Federal Home Loan Bank of New York stock
    
    
    601,976
    
    
    
    445,006Foreclosed real estate, net
    
    
    3,699
    
    
    
    3,161Accrued interest receivable
    
    
    222,480
    
    
    
    194,229Banking premises and equipment, net
    
    
    76,209
    
    
    
    73,929Goodwill
    
    
    151,972
    
    
    
    150,831Other assets
    
    
    127,490
    
    
    
    144,813Total Assets
    
    $
    39,691,435
    
    
    $
    35,506,581Liabilities and Stockholders Equity:Deposits:Interest-bearing
    
    $
    13,609,629
    
    
    $
    12,917,286Noninterest-bearing
    
    
    580,881
    
    
    
    498,301Total deposits
    
    
    14,190,510
    
    
    
    13,415,587Repurchase agreements
    
    
    10,516,000
    
    
    
    8,923,000Federal Home Loan Bank of New York advances
    
    
    10,150,000
    
    
    
    8,050,000Total borrowed funds
    
    
    20,666,000
    
    
    
    16,973,000Accrued expenses and other liabilities
    
    
    181,778
    
    
    
    187,738Total liabilities
    
    
    35,038,288
    
    
    
    30,576,325Common stock, $0.01 par value,
3,200,000,000 shares
authorized;
741,466,555 shares issued; 531,829,695 shares outstanding
at June 30, 2007 and 557,787,921 shares outstanding
at December 31, 2006
    
    
    7,415
    
    
    
    7,415Additional paid-in capital
    
    
    4,566,324
    
    
    
    4,553,614Retained earnings
    
    
    1,935,611
    
    
    
    1,877,840Treasury stock, at cost; 209,636,860 shares at June 30, 2007 and
183,678,634 shares at December 31, 2006
    
    
    (1,582,271
    )
    
    
    (1,230,793
    )Unallocated common stock held by the employee stock ownership plan
    
    
    (225,254
    )
    
    
    (228,257
    )Accumulated other comprehensive loss, net of tax
    
    
    (48,678
    )
    
    
    (49,563
    )Total stockholders equity
    
    
    4,653,147
    
    
    
    4,930,256Total Liabilities and Stockholders Equity
    
    $
    39,691,435
    
    
    $
    35,506,581
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Hudson City Bancorp, Inc. and Subsidiary
 
 Consolidated Statements of Income
 (Unaudited)
 For the Three Months
    
    
    For the Six MonthsEnded June 30,
    
    
    Ended June 30,2007
    
    
    2006
    
    
    2007
    
    
    2006(In thousands, except per share data)Interest and Dividend Income:First mortgage loans
    
    $
    289,772
    
    
    $
    223,632
    
    
    $
    559,454
    
    
    $
    432,819Consumer and other loans
    
    
    7,078
    
    
    
    3,883
    
    
    
    13,970
    
    
    
    7,397Mortgage-backed securities held to maturity
    
    
    109,563
    
    
    
    60,163
    
    
    
    205,080
    
    
    
    113,785Mortgage-backed securities available for sale
    
    
    26,805
    
    
    
    30,255
    
    
    
    55,096
    
    
    
    58,416Investment securities held to maturity
    
    
    18,630
    
    
    
    18,632
    
    
    
    37,243
    
    
    
    37,263Investment securities available for sale
    
    
    48,351
    
    
    
    42,841
    
    
    
    99,186
    
    
    
    85,398Dividends on Federal Home Loan Bank of New York stock
    
    
    8,747
    
    
    
    3,209
    
    
    
    16,219
    
    
    
    5,717Federal funds sold
    
    
    2,548
    
    
    
    1,525
    
    
    
    4,893
    
    
    
    3,033Total interest and dividend income
    
    
    511,494
    
    
    
    384,140
    
    
    
    991,141
    
    
    
    743,828Interest Expense:Deposits
    
    
    146,432
    
    
    
    98,408
    
    
    
    288,395
    
    
    
    187,772Borrowed funds
    
    
    207,404
    
    
    
    132,143
    
    
    
    388,634
    
    
    
    244,788Total interest expense
    
    
    353,836
    
    
    
    230,551
    
    
    
    677,029
    
    
    
    432,560Net interest income
    
    
    157,658
    
    
    
    153,589
    
    
    
    314,112
    
    
    
    311,268Provision for Loan Losses
    
    
    500
    
    
    
    
    
    
    
    800
    
    
    
    Net interest income after provision for loan losses
    
    
    157,158
    
    
    
    153,589
    
    
    
    313,312
    
    
    
    311,268Non-Interest Income:Service charges and other income
    
    
    1,823
    
    
    
    1,451
    
    
    
    3,373
    
    
    
    2,715Gains on securities transactions, net
    
    
    
    
    
    
    4
    
    
    
    
    
    
    
    4Total non-interest income
    
    
    1,823
    
    
    
    1,455
    
    
    
    3,373
    
    
    
    2,719Non-Interest Expense:Compensation and employee benefits
    
    
    25,812
    
    
    
    25,391
    
    
    
    51,560
    
    
    
    51,743Net occupancy expense
    
    
    7,070
    
    
    
    5,598
    
    
    
    14,279
    
    
    
    11,110Federal deposit insurance assessment
    
    
    447
    
    
    
    402
    
    
    
    888
    
    
    
    826Computer and related services
    
    
    715
    
    
    
    702
    
    
    
    1,381
    
    
    
    1,299Other expense
    
    
    6,823
    
    
    
    6,422
    
    
    
    13,856
    
    
    
    11,822Total non-interest expense
    
    
    40,867
    
    
    
    38,515
    
    
    
    81,964
    
    
    
    76,800Income before income tax expense
    
    
    118,114
    
    
    
    116,529
    
    
    
    234,721
    
    
    
    237,187Income Tax Expense
    
    
    45,450
    
    
    
    43,361
    
    
    
    90,814
    
    
    
    88,791Net income
    
    $
    72,664
    
    
    $
    73,168
    
    
    $
    143,907
    
    
    $
    148,396Basic Earnings Per Share
    
    $
    0.14
    
    
    $
    0.14
    
    
    $
    0.28
    
    
    $
    0.27Diluted Earnings Per Share
    
    $
    0.14
    
    
    $
    0.13
    
    
    $
    0.28
    
    
    $
    0.27Weighted Average Number of Common Shares Outstanding:Basic
    
    
    504,902,448
    
    
    
    539,678,609
    
    
    
    511,622,385
    
    
    
    544,292,209Diluted
    
    
    514,998,167
    
    
    
    552,077,216
    
    
    
    522,157,901
    
    
    
    556,622,424
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Hudson City Bancorp, Inc. and Subsidiary
 
 Consolidated Statements of Changes in Stockholders Equity
 (Unaudited
 For the Six Months Ended June 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
    
    
    6,275
    
    
    
    919Tax benefit from
stock plans
    
    
    2,057
    
    
    
    6,412Allocation of ESOP
stock
    
    
    3,471
    
    
    
    3,289Vesting of RRP stock
    
    
    907
    
    
    
    1,168Balance at end of
period
    
    
    4,566,324
    
    
    
    4,542,302Retained Earnings:Balance at beginning
of year
    
    
    1,877,840
    
    
    
    1,759,492Net Income
    
    
    143,907
    
    
    
    148,396Dividends paid on
common stock ($0.16
and $0.15 per
share,
respectively)
    
    
    (82,414
    )
    
    
    (81,989
    )Exercise of stock
options
    
    
    (3,722
    )
    
    
    (6,039
    )Balance at end of
period
    
    
    1,935,611
    
    
    
    1,819,860Treasury Stock:Balance at beginning
of year
    
    
    (1,230,793
    )
    
    
    (798,232
    )Purchase of common
stock
    
    
    (357,577
    )
    
    
    (255,930
    )Exercise of stock
options
    
    
    6,099
    
    
    
    11,236Balance at end of
period
    
    
    (1,582,271
    )
    
    
    (1,042,926
    )Unallocated common
stock held by the
ESOP:Balance at beginning
of year
    
    
    (228,257
    )
    
    
    (234,264
    )Allocation of ESOP
stock
    
    
    3,003
    
    
    
    3,003Balance at end of
period
    
    
    (225,254
    )
    
    
    (231,261
    )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(losses)
arising during
period, net of tax
expense (benefit)
of $727 and
($22,971) in
2007 and 2006,
respectively
    
    
    1,053
    
    
    
    (33,286
    )Pension and other
postretirement
benefits adjustment
    
    
    (168
    )
    
    
    Balance at end of
period
    
    
    (48,678
    )
    
    
    (96,735
    )Total Stockholders
Equity
    
    $
    4,653,147
    
    
    $
    4,998,655Summary of
comprehensive incomeNet income
    
    $
    143,907
    
    
    $
    148,396Other comprehensive
income(loss), net of
tax
    
    
    885
    
    
    
    (33,286
    )Total comprehensive
income
    
    $
    144,792
    
    
    $
    115,110
 
 Page 6




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##### Table of Contents



Hudson City Bancorp, Inc. and Subsidiary
 
 Consolidated Statements of Cash Flows
 (Unaudited
 For the Six MonthsEnded June 30,2007
    
    
    2006(In thousands)Cash Flows from Operating Activities:Net income
    
    $
    143,907
    
    
    $
    148,396Adjustments to reconcile net income to net cash provided
by operating activities:Depreciation, accretion and amortization expense
    
    
    11,227
    
    
    
    8,925Provision for loan losses
    
    
    800
    
    
    
    Gains on securities transactions, net
    
    
    
    
    
    
    (4
    )Share-based compensation, including committed ESOP shares
    
    
    13,656
    
    
    
    8,379Deferred tax benefit (expense)
    
    
    3,787
    
    
    
    (11,122
    )Increase in accrued interest receivable
    
    
    (28,251
    )
    
    
    (17,225
    )Decrease (increase) in other assets
    
    
    10,301
    
    
    
    (98,986
    )(Decrease) increase in accrued expenses and other liabilities
    
    
    (6,243
    )
    
    
    26,240Net Cash Provided by Operating Activities
    
    
    149,184
    
    
    
    64,603Cash Flows from Investing Activities:Originations of loans
    
    
    (1,598,789
    )
    
    
    (1,245,606
    )Purchases of loans
    
    
    (2,369,034
    )
    
    
    (1,494,597
    )Principal payments on loans
    
    
    1,146,056
    
    
    
    821,498Principal collection of mortgage-backed securities held to maturity
    
    
    596,980
    
    
    
    338,119Purchases of mortgage-backed securities held to maturity
    
    
    (2,703,101
    )
    
    
    (1,191,893
    )Principal collection of mortgage-backed securities available for sale
    
    
    368,108
    
    
    
    343,610Purchases of mortgage-backed securities available for sale
    
    
    (38,261
    )
    
    
    (552,007
    )Proceeds from maturities and calls of investment securities held to maturity
    
    
    
    
    
    
    251Proceeds from maturities and calls of investment securities available for sale
    
    
    1,100,054
    
    
    
    100,004Purchases of investment securities available for sale
    
    
    (500,000
    )
    
    
    (150,000
    )Purchases of Federal Home Loan Bank of New York stock
    
    
    (166,285
    )
    
    
    (129,736
    )Redemption of Federal Home Loan Bank of New York stock
    
    
    9,315
    
    
    
    Purchases of premises and equipment, net
    
    
    (7,327
    )
    
    
    (9,045
    )Net proceeds from sale of foreclosed real estate
    
    
    2,095
    
    
    
    745Net Cash Used in Investment Activities
    
    
    (4,160,189
    )
    
    
    (3,168,657
    )Cash Flows from Financing Activities:Net increase in deposits
    
    
    774,923
    
    
    
    230,529Proceeds from borrowed funds
    
    
    6,000,000
    
    
    
    4,100,000Principal payments on borrowed funds
    
    
    (2,307,000
    )
    
    
    (900,000
    )Dividends paid
    
    
    (82,414
    )
    
    
    (81,989
    )Purchases of treasury stock
    
    
    (357,577
    )
    
    
    (255,930
    )Exercise of stock options
    
    
    2,377
    
    
    
    5,197Tax benefit from stock plans
    
    
    2,057
    
    
    
    6,412Net Cash Provided by Financing Activities
    
    
    4,032,366
    
    
    
    3,104,219Net Increase in Cash and Cash Equivalents
    
    
    21,361
    
    
    
    165Cash and Cash Equivalents at Beginning of Year
    
    
    182,246
    
    
    
    102,259Cash and Cash Equivalents at End of Period
    
    $
    203,607
    
    
    $
    102,424Supplemental Disclosures:Interest paid
    
    $
    658,500
    
    
    $
    442,722Loans transferred to foreclosed real estate
    
    $
    2,633
    
    
    $
    1,390Income tax payments
    
    $
    83,720
    
    
    $
    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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##### Table of Contents



3. Earnings Per Share
  For the Three Months Ended June 30,2007
    
    
    2006Per
    
    
    
    
    
    
    
    
    
    
    PerAverage
    
    
    Share
    
    
    
    
    
    
    Average
    
    
    ShareIncome
    
    
    Shares
    
    
    Amount
    
    
    Income
    
    
    Shares
    
    
    Amount(In thousands, except per share data)Net income
    
    $
    72,664
    
    
    
    
    
    
    
    
    
    
    $
    73,168Basic earnings per share:Income available to
common stockholders
    
    $
    72,664
    
    
    
    504,902
    
    
    $
    0.14
    
    
    $
    73,168
    
    
    
    539,679
    
    
    $
    0.14Effect of dilutive common
stock equivalents
    
    
    
    
    
    
    10,096
    
    
    
    
    
    
    
    
    
    
    
    12,398Diluted earnings per share:Income available to
common stockholders
    
    $
    72,664
    
    
    
    514,998
    
    
    $
    0.14
    
    
    $
    73,168
    
    
    
    552,077
    
    
    $
    0.13
 For the Six Months Ended June 30,2007
    
    
    2006Per
    
    
    
    
    
    
    
    
    
    
    PerShare
    
    
    
    
    
    
    
    
    
    
    ShareIncome
    
    
    Shares
    
    
    Amount
    
    
    Income
    
    
    Shares
    
    
    Amount(In thousands, except per share data)Net income
    
    $
    143,907
    
    
    
    
    
    
    
    
    
    
    $
    148,396Basic earnings per share:Income available to
common stockholders
    
    $
    143,907
    
    
    
    511,622
    
    
    $
    0.28
    
    
    $
    148,396
    
    
    
    544,292
    
    
    $
    0.27Effect of dilutive common
stock equivalents
    
    
    
    
    
    
    10,536
    
    
    
    
    
    
    
    
    
    
    
    12,330Diluted earnings per share:Income available to
common stockholders
    
    $
    143,907
    
    
    
    522,158
    
    
    $
    0.28
    
    
    $
    148,396
    
    
    
    556,622
    
    
    $
    0.27
 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 June 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 Six Months Ended June 30,Retirement Plans
    
    Other Benefits2007
    
    2006
    
    2007
    
    2006(In thousands)Service cost
    
    
    1,620
    
    
    
    1,604
    
    
    
    536
    
    
    
    538Interest cost
    
    
    3,138
    
    
    
    2,538
    
    
    
    1,050
    
    
    
    1,020Expected return on assets
    
    
    (4,068
    )
    
    
    (3,436
    )
    
    
    
    
    
    
    Amortization of:Net loss
    
    
    74
    
    
    
    260
    
    
    
    288
    
    
    
    333Unrecognized prior service cost
    
    
    138
    
    
    
    70
    
    
    
    (782
    )
    
    
    (783
    )Net periodic benefit cost
    
    
    902
    
    
    
    1,036
    
    
    
    1,092
    
    
    
    1,108
  6. Stock Option Plans
  For the Six Months Ended June 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
    
    
    3,477,500
    
    
    
    13.74
    
    
    
    
    
    
    
    Exercised
    
    
    (870,728
    )
    
    
    2.73
    
    
    
    (1,952,644
    )
    
    
    2.66Forfeited
    
    
    (66,740
    )
    
    
    10.03
    
    
    
    (8,336
    )
    
    
    4.21Outstanding at end of period
    
    
    29,520,021
    
    
    
    7.65
    
    
    
    19,698,889
    
    
    
    4.36
 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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Page 14




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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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Comparison of Financial Condition at June 30, 2007 and December 31, 2006
   Page 16




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Page 17




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Page 18




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Comparison of Operating Results for the Three Months Ended June 30, 2007 and 2006
 Average Balance Sheet.
 For the Three Months Ended June 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)
    
    $
    20,437,687
    
    
    $
    289,772
    
    
    
    5.67
    %
    
    $
    16,120,819
    
    
    $
    223,632
    
    
    
    5.55
    %Consumer and other loans
    
    
    428,474
    
    
    
    7,078
    
    
    
    6.61
    
    
    
    261,948
    
    
    
    3,883
    
    
    
    5.93Federal funds sold
    
    
    195,085
    
    
    
    2,548
    
    
    
    5.24
    
    
    
    129,132
    
    
    
    1,525
    
    
    
    4.74Mortgage-backed securities at amortized cost
    
    
    10,673,572
    
    
    
    136,368
    
    
    
    5.11
    
    
    
    7,764,976
    
    
    
    90,418
    
    
    
    4.66Federal Home Loan Bank stock
    
    
    567,694
    
    
    
    8,747
    
    
    
    6.16
    
    
    
    320,724
    
    
    
    3,209
    
    
    
    4.00Investment securities, at amortized cost
    
    
    5,615,664
    
    
    
    66,981
    
    
    
    4.77
    
    
    
    5,602,907
    
    
    
    61,473
    
    
    
    4.39Total interest-earning assets
    
    
    37,918,176
    
    
    
    511,494
    
    
    
    5.40
    
    
    
    30,200,506
    
    
    
    384,140
    
    
    
    5.09Noninterest-earnings assets
    
    
    607,385
    
    
    
    
    
    
    
    
    
    
    
    309,918Total Assets
    
    $
    38,525,561
    
    
    
    
    
    
    
    
    
    
    $
    30,510,424Liabilities and Stockholders Equity:Interest-bearing liabilities:Savings accounts
    
    $
    790,499
    
    
    
    1,639
    
    
    
    0.83
    
    
    $
    768,446
    
    
    
    1,894
    
    
    
    0.99Interest-bearing transaction accounts
    
    
    1,878,714
    
    
    
    15,799
    
    
    
    3.37
    
    
    
    2,908,015
    
    
    
    24,363
    
    
    
    3.36Money market accounts
    
    
    1,019,661
    
    
    
    9,836
    
    
    
    3.87
    
    
    
    637,811
    
    
    
    4,458
    
    
    
    2.80Time deposits
    
    
    9,736,187
    
    
    
    119,158
    
    
    
    4.91
    
    
    
    6,789,930
    
    
    
    67,693
    
    
    
    4.00Total interest-bearing deposits
    
    
    13,425,061
    
    
    
    146,432
    
    
    
    4.37
    
    
    
    11,104,202
    
    
    
    98,408
    
    
    
    3.55Repurchase agreements
    
    
    9,383,033
    
    
    
    98,186
    
    
    
    4.20
    
    
    
    8,259,341
    
    
    
    76,574
    
    
    
    3.72Federal Home Loan Bank of New York advances
    
    
    10,191,209
    
    
    
    109,218
    
    
    
    4.30
    
    
    
    5,414,286
    
    
    
    55,569
    
    
    
    4.12Total borrowed funds
    
    
    19,574,242
    
    
    
    207,404
    
    
    
    4.25
    
    
    
    13,673,627
    
    
    
    132,143
    
    
    
    3.88Total interest-bearing liabilities
    
    
    32,999,303
    
    
    
    353,836
    
    
    
    4.30
    
    
    
    24,777,829
    
    
    
    230,551
    
    
    
    3.73Noninterest-bearing liabilities:Noninterest-bearing deposits
    
    
    527,819
    
    
    
    
    
    
    
    
    
    
    
    458,355Other noninterest-bearing liabilities
    
    
    205,159
    
    
    
    
    
    
    
    
    
    
    
    190,545Total noninterest-bearing liabilities
    
    
    732,978
    
    
    
    
    
    
    
    
    
    
    
    648,900Total liabilities
    
    
    33,732,281
    
    
    
    
    
    
    
    
    
    
    
    25,426,729Stockholders equity
    
    
    4,793,280
    
    
    
    
    
    
    
    
    
    
    
    5,083,695Total Liabilities and Stockholders Equity
    
    $
    38,525,561
    
    
    
    
    
    
    
    
    
    
    $
    30,510,424Net interest income/net interest rate spread (2)
    
    
    
    
    
    $
    157,658
    
    
    
    1.10
    %
    
    
    
    
    
    $
    153,589
    
    
    
    1.36
    %Net interest-earning assets/net interest margin (3)
    
    $
    4,918,873
    
    
    
    
    
    
    
    1.65
    %
    
    $
    5,422,677
    
    
    
    
    
    
    
    2.03
    %Ratio of interest-earning assets to
interest-bearing liabilities
    
    
    
    
    
    
    
    
    
    
    1.15
    x
    
    
    
    
    
    
    
    
    
    
    1.22
    x
 
 (1)
    
    Average balance 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 19




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General.
 Interest and Dividend Income .
     Page 20




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##### Table of Contents



Interest Expense.
   Net Interest Income.
  Page 21




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Provision for Loan Losses.
     Page 22




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##### Table of Contents



Non-Interest Income.
 Non-Interest Expense.
 Income Taxes.
 Page 23




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Comparison of Operating Results for the Six Months Ended June 30, 2007 and 2006
 Average Balance Sheet.
 For the Six Months Ended June 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)
    
    $
    19,731,035
    
    
    $
    559,454
    
    
    
    5.67
    %
    
    $
    15,644,241
    
    
    $
    432,819
    
    
    
    5.53
    %Consumer and other loans
    
    
    426,018
    
    
    
    13,970
    
    
    
    6.56
    
    
    
    252,321
    
    
    
    7,397
    
    
    
    5.86Federal funds sold
    
    
    187,396
    
    
    
    4,893
    
    
    
    5.27
    
    
    
    134,582
    
    
    
    3,033
    
    
    
    4.54Mortgage-backed securities at amortized cost
    
    
    10,239,739
    
    
    
    260,176
    
    
    
    5.08
    
    
    
    7,463,089
    
    
    
    172,201
    
    
    
    4.61Federal Home Loan Bank stock
    
    
    520,601
    
    
    
    16,219
    
    
    
    6.23
    
    
    
    284,523
    
    
    
    5,717
    
    
    
    4.02Investment securities, at amortized cost
    
    
    5,764,587
    
    
    
    136,429
    
    
    
    4.73
    
    
    
    5,597,919
    
    
    
    122,661
    
    
    
    4.38Total interest-earning assets
    
    
    36,869,376
    
    
    
    991,141
    
    
    
    5.38
    
    
    
    29,376,675
    
    
    
    743,828
    
    
    
    5.06Noninterest-earnings assets
    
    
    596,273
    
    
    
    
    
    
    
    
    
    
    
    308,618Total Assets
    
    $
    37,465,649
    
    
    
    
    
    
    
    
    
    
    $
    29,685,293Liabilities and Stockholders Equity:Interest-bearing liabilities:Savings accounts
    
    $
    794,209
    
    
    
    3,468
    
    
    
    0.88
    
    
    $
    782,286
    
    
    
    3,837
    
    
    
    0.99Interest-bearing transaction accounts
    
    
    1,945,341
    
    
    
    32,516
    
    
    
    3.37
    
    
    
    3,155,099
    
    
    
    52,444
    
    
    
    3.35Money market accounts
    
    
    977,515
    
    
    
    17,992
    
    
    
    3.71
    
    
    
    532,804
    
    
    
    6,451
    
    
    
    2.44Time deposits
    
    
    9,584,729
    
    
    
    234,419
    
    
    
    4.93
    
    
    
    6,568,518
    
    
    
    125,040
    
    
    
    3.84Total interest-bearing deposits
    
    
    13,301,794
    
    
    
    288,395
    
    
    
    4.37
    
    
    
    11,038,707
    
    
    
    187,772
    
    
    
    3.43Repurchase agreements
    
    
    9,153,243
    
    
    
    187,617
    
    
    
    4.13
    
    
    
    8,204,696
    
    
    
    150,402
    
    
    
    3.70Federal Home Loan Bank of New York advances
    
    
    9,436,740
    
    
    
    201,017
    
    
    
    4.30
    
    
    
    4,672,459
    
    
    
    94,386
    
    
    
    4.07Total borrowed funds
    
    
    18,589,983
    
    
    
    388,634
    
    
    
    4.22
    
    
    
    12,877,155
    
    
    
    244,788
    
    
    
    3.83Total interest-bearing liabilities
    
    
    31,891,777
    
    
    
    677,029
    
    
    
    4.28
    
    
    
    23,915,862
    
    
    
    432,560
    
    
    
    3.65Noninterest-bearing liabilities:Noninterest-bearing deposits
    
    
    507,294
    
    
    
    
    
    
    
    
    
    
    
    448,328Other noninterest-bearing liabilities
    
    
    213,065
    
    
    
    
    
    
    
    
    
    
    
    184,831Total noninterest-bearing liabilities
    
    
    720,359
    
    
    
    
    
    
    
    
    
    
    
    633,159Total liabilities
    
    
    32,612,136
    
    
    
    
    
    
    
    
    
    
    
    24,549,021Stockholders equity
    
    
    4,853,513
    
    
    
    
    
    
    
    
    
    
    
    5,136,272Total Liabilities and Stockholders Equity
    
    $
    37,465,649
    
    
    
    
    
    
    
    
    
    
    $
    29,685,293Net interest income/net interest rate spread (2)
    
    
    
    
    
    $
    314,112
    
    
    
    1.10
    %
    
    
    
    
    
    $
    311,268
    
    
    
    1.41
    %Net interest-earning assets/net interest margin (3)
    
    $
    4,977,599
    
    
    
    
    
    
    
    1.67
    %
    
    $
    5,460,813
    
    
    
    
    
    
    
    2.09
    %Ratio of interest-earning assets to
interest-bearing liabilities
    
    
    
    
    
    
    
    
    
    
    1.16
    x
    
    
    
    
    
    
    
    
    
    
    1.23
    x
 
 (1)
    
    Average balance 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. General.
 Page 24




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Interest and Dividend Income .
      Page 25




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##### Table of Contents



Interest Expense.
   Net Interest Income.
 Page 26




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##### Table of Contents



Provision for Loan Losses.
 Non-Interest Income.
 Non-Interest Expense.
 Income Taxes.
 Liquidity and Capital Resources
  Page 27




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Page 28




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Off-Balance Sheet Arrangements and Contractual Obligations
   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
    
    $
    405,892
    
    
    $
    405,892
    
    
    
    
    
    
    
    
    
    
    
    Mortgage loan purchases
    
    
    575,808
    
    
    
    575,808
    
    
    
    
    
    
    
    
    
    
    
    Mortgage-backed security purchases
    
    
    850,300
    
    
    
    850,300
    
    
    
    
    
    
    
    
    
    
    
    Operating leases
    
    
    123,289
    
    
    
    7,155
    
    
    
    14,468
    
    
    
    13,623
    
    
    
    88,043Total
    
    $
    1,955,289
    
    
    $
    1,839,155
    
    
    $
    14,468
    
    
    $
    13,623
    
    
    $
    88,043
 Page 29




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Critical Accounting Policies
  Allowance for Loan Losses
    Page 30




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Asset Impairment Judgments
    Page 31




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Stock-Based Compensation
    Goodwill
  Page 32




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Pension and Other Postretirement Benefit Assumptions
     Page 33




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Item 3.  Quantitative and Qualitative Disclosures About Market Risk
  General
      Page 34




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Simulation Model.
 Change in
    
    Percent Change inInterest Rates
    
    Net Interest Income(Basis points)200
    
    
    
    (17.42
    )%100
    
    
    
    (8.29
    )50
    
    
    
    (3.97
    )
    
    
    
    (50
    )
    
    
    2.65(100
    )
    
    
    2.99(200
    )
    
    
    (3.35
    )
   Page 35




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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
    
    
    $
    2,668,186
    
    
    $
    (2,100,913
    )
    
    
    (44.05
    )%
    
    
    7.38
    %
    
    
    (483
    )100
    
    
    
    3,730,721
    
    
    
    (1,038,378
    )
    
    
    (21.77
    )
    
    
    9.92
    
    
    
    (229
    )50
    
    
    
    4,276,396
    
    
    
    (492,703
    )
    
    
    (10.33
    )
    
    
    11.15
    
    
    
    (106
    )
    
    
    
    4,769,099
    
    
    
    
    
    
    
    
    
    
    
    12.21
    
    
    
    (50
    )
    
    
    4,917,546
    
    
    
    148,447
    
    
    
    3.11
    
    
    
    12.38
    
    
    
    17(100
    )
    
    
    4,554,628
    
    
    
    (214,471
    )
    
    
    (4.50
    )
    
    
    11.35
    
    
    
    (86
    )(200
    )
    
    
    2,921,991
    
    
    
    (1,847,108
    )
    
    
    (38.73
    )
    
    
    7.25
    
    
    
    (496
    )
    GAP Analysis.
 Page 36




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June 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
    
    $
    1,324,287
    
    
    $
    1,425,449
    
    
    $
    2,411,838
    
    
    $
    2,736,448
    
    
    $
    2,661,270
    
    
    $
    10,909,191
    
    
    $
    21,468,483Consumer and other loans
    
    
    100,277
    
    
    
    805
    
    
    
    9,473
    
    
    
    4,283
    
    
    
    16,984
    
    
    
    258,824
    
    
    
    390,646Federal funds sold
    
    
    84,077
    
    
    
    0
    
    
    
    0
    
    
    
    0
    
    
    
    0
    
    
    
    0
    
    
    
    84,077Mortgage-backed securities
    
    
    1,430,757
    
    
    
    1,363,674
    
    
    
    1,500,917
    
    
    
    1,673,641
    
    
    
    3,372,151
    
    
    
    1,758,607
    
    
    
    11,099,747FHLB stock
    
    
    601,976
    
    
    
    0
    
    
    
    0
    
    
    
    0
    
    
    
    0
    
    
    
    0
    
    
    
    601,976Investment securities
    
    
    731,377
    
    
    
    300,008
    
    
    
    2,073,973
    
    
    
    519,445
    
    
    
    1,457,978
    
    
    
    233,348
    
    
    
    5,316,129Total interest-earning assets
    
    
    4,272,751
    
    
    
    3,089,936
    
    
    
    5,996,201
    
    
    
    4,933,817
    
    
    
    7,508,383
    
    
    
    13,159,970
    
    
    
    38,961,058Interest-bearing liabilities:Savings accounts
    
    
    43,657
    
    
    
    39,233
    
    
    
    38,937
    
    
    
    38,937
    
    
    
    77,874
    
    
    
    545,114
    
    
    
    783,752Interest-bearing demand accounts
    
    
    168,565
    
    
    
    168,565
    
    
    
    261,600
    
    
    
    261,600
    
    
    
    440,667
    
    
    
    489,680
    
    
    
    1,790,677Money market accounts
    
    
    28,576
    
    
    
    28,576
    
    
    
    114,304
    
    
    
    114,304
    
    
    
    228,608
    
    
    
    628,670
    
    
    
    1,143,038Time deposits
    
    
    8,391,974
    
    
    
    926,482
    
    
    
    385,943
    
    
    
    138,405
    
    
    
    49,358
    
    
    
    
    
    
    
    9,892,162Borrowed funds
    
    
    2,525,000
    
    
    
    4,466,000
    
    
    
    
    
    
    
    
    
    
    
    550,000
    
    
    
    13,125,000
    
    
    
    20,666,000Total interest-bearing liabilities
    
    
    11,157,772
    
    
    
    5,628,856
    
    
    
    800,784
    
    
    
    553,246
    
    
    
    1,346,507
    
    
    
    14,788,464
    
    
    
    34,275,629Interest rate sensitivity gap
    
    $
    (6,885,021
    )
    
    $
    (2,538,920
    )
    
    $
    5,195,417
    
    
    $
    4,380,571
    
    
    $
    6,161,876
    
    
    $
    (1,628,494
    )
    
    $
    4,685,429Cumulative interest rate sensitivity gap
    
    $
    (6,885,021
    )
    
    $
    (9,423,941
    )
    
    $
    (4,228,524
    )
    
    $
    152,047
    
    
    $
    6,313,923
    
    
    $
    4,685,429Cumulative interest rate sensitivity gap
as a percent of total assets
    
    
    (17.35)
    %
    
    
    (23.74)
    %
    
    
    (10.65)
    %
    
    
    0.38
    %
    
    
    15.91
    %
    
    
    11.80
    %Cumulative interest-earning assets
as a percent of interest-bearing
liabilities
    
    
    38.29
    %
    
    
    43.86
    %
    
    
    75.96
    %
    
    
    100.84
    %
    
    
    132.40
    %
    
    
    113.67
    %
  
 Item 4.  Controls and Procedures
  Page 37




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PART II  OTHER INFORMATION
 
 Item 1.  Legal Proceedings
  
 Item 1A.  Risk Factors
  
 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)April 1-April 30, 2007
    
    
    1,425,000
    
    
    $
    13.69
    
    
    
    1,425,000
    
    
    
    31,620,700May 1-May 31, 2007
    
    
    6,238,504
    
    
    
    13.35
    
    
    
    6,200,000
    
    
    
    25,420,700June 1-June 30, 2007
    
    
    7,897,150
    
    
    
    12.87
    
    
    
    7,897,150
    
    
    
    17,523,550Total
    
    
    15,560,654
    
    
    
    13.14
    
    
    
    15,522,150
 
 (1)
    
    On June 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 17,523,550 shares yet to be purchased as of June 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. 
 Item 3.  Defaults Upon Senior Securities
  Page 38




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##### Table of Contents



Item 4.  Submission of Matters to a Vote of Security Holders
  Proposal 1
  For:
    
    
    476,397,305Withheld:
    
    
    12,927,358
  For:
    
    
    477,829,237Withheld:
    
    
    11,495,426
  For:
    
    
    479,244,063Withheld:
    
    
    10,080,600
  Proposal 2
 For:
    
    
    478,822,640Against:
    
    
    7,110,084Abstain:
    
    
    3,391,940
  
 Item 5.  Other Information
  
 Item 6.  Exhibits
 Exhibit Number
    
    Exhibit3.1
    
    Amended bylaws of Hudson City Bancorp, Inc.10.1
    
    Agreement between Hudson City Bancorp, Inc. and John M.
Tassillo, Executive Vice-President and Treasurer31.1
    
    Certification of Chief Executive Officer
 Page 39




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##### Table of Contents



Exhibit Number
    
    Exhibit31.2
    
    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 40




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##### Table of Contents



SIGNATURES
  Hudson City Bancorp, Inc.Date: August 8, 2007
    By:
    /s/ Ronald E. Hermance, Jr.Ronald E. Hermance, Jr.Chairman, President and Chief
Executive Officer
(Principal Executive Officer)Date: August 8, 2007
    By:
    /s/ James C. KranzJames C. Kranz
Senior Vice President and
Chief Financial Officer
(Principal Financial Officer) Page 41