##### 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, 2008
 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 Road 
Paramus, New Jersey
    
    07652(Address of Principal Executive Offices)
    
    (Zip Code)
  
   þ o
 
 Large accelerated filer þ
    
    Accelerated filer o
    
    Non-accelerated filer o
    
    Smaller reporting company o(Do not check if a smaller reporting company)
  o þ




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##### 



PageNumberPART I  FINANCIAL INFORMATIONItem 1.  Financial StatementsConsolidated Statements of Financial Condition 
June 30, 2008 (Unaudited) and December 31, 2007
    
    
    4Consolidated Statements of Income (Unaudited)  For
the three and six months ended June 30, 2008 and
2007
    
    
    5Consolidated Statements of Changes in Shareholders
Equity (Unaudited)  For the six months ended June
30, 
2008 and 2007
    
    
    6Consolidated Statements of Cash Flows (Unaudited) 
For the six months ended June 30, 2008 and 2007
    
    
    7Notes to Unaudited Consolidated Financial Statements
    
    
    8Item 2.  Managements Discussion and Analysis of Financial Condition and Results of
Operations
    
    
    18Item 3.  Quantitative and Qualitative Disclosures About Market Risk
    
    
    38Item 4.  Controls and Procedures
    
    
    42PART II  OTHER INFORMATIONItem 1.  Legal Proceedings
    
    
    43Item 1A.  Risk Factors
    
    
    43Item 2.  Unregistered Sales of Equity Securities and Use of Proceeds
    
    
    43Item 3.  Defaults Upon Senior Securities
    
    
    43Item 4.  Submission of Matters to a Vote of Security Holders
    
    
    44Item 5.  Other Information
    
    
    44Item 6.  Exhibits
    
    
    45SIGNATURES
    
    
    46EX-31.1: CERTIFICATIONEX-31.2: CERTIFICATIONEX-32.1: CERTIFICATION
  Page 2




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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.
  Page 3




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PART I  FINANCIAL INFORMATION
 
 Item 1.  Financial Statements
 Hudson City Bancorp, Inc. and Subsidiary
 
 Consolidated Statements of Financial Condition
 June 30,
    
    
    December 31,2008
    
    
    2007(In thousands, except share and per share amounts)
    
    (unaudited)Assets:Cash and due from banks
    
    $
    128,629
    
    
    $
    111,245Federal funds sold
    
    
    56,957
    
    
    
    106,299Total cash and cash equivalents
    
    
    185,586
    
    
    
    217,544Securities available for sale:Mortgage-backed securities
    
    
    7,600,182
    
    
    
    5,005,409Investment securities
    
    
    3,287,143
    
    
    
    2,765,491Securities held to maturity:Mortgage-backed securities (fair value of $9,347,408 at June 30, 2008
and $9,566,312 at 
December 31, 2007)
    
    
    9,336,644
    
    
    
    9,565,526Investment securities (fair value of $71,954 at June 30, 2008 and
$1,410,246 at December 31, 2007)
    
    
    71,695
    
    
    
    1,408,501Total securities
    
    
    20,295,664
    
    
    
    18,744,927Loans
    
    
    27,229,771
    
    
    
    24,192,281Deferred loan costs
    
    
    48,808
    
    
    
    40,598Allowance for loan losses
    
    
    (39,078
    )
    
    
    (34,741
    )Net loans
    
    
    27,239,501
    
    
    
    24,198,138Federal Home Loan Bank of New York stock
    
    
    809,320
    
    
    
    695,351Foreclosed real estate, net
    
    
    8,151
    
    
    
    4,055Accrued interest receivable
    
    
    277,664
    
    
    
    245,113Banking premises and equipment, net
    
    
    74,276
    
    
    
    75,094Goodwill
    
    
    152,109
    
    
    
    152,109Other assets
    
    
    119,715
    
    
    
    91,640Total Assets
    
    $
    49,161,986
    
    
    $
    44,423,971Liabilities and Shareholders Equity:Deposits:Interest-bearing
    
    $
    16,088,244
    
    
    $
    14,635,412Noninterest-bearing
    
    
    631,101
    
    
    
    517,970Total deposits
    
    
    16,719,345
    
    
    
    15,153,382Repurchase agreements
    
    
    13,550,000
    
    
    
    12,016,000Federal Home Loan Bank of New York advances
    
    
    13,925,000
    
    
    
    12,125,000Total borrowed funds
    
    
    27,475,000
    
    
    
    24,141,000Due to brokers
    
    
    12,889
    
    
    
    281,853Accrued expenses and other liabilities
    
    
    245,158
    
    
    
    236,429Total liabilities
    
    
    44,452,392
    
    
    
    39,812,664Common stock, $0.01 par value, 3,200,000,000 shares authorized;
741,466,555 shares issued; 519,478,371 and 518,569,602
shares outstanding at June 30, 2008 and December 31, 2007
    
    
    7,415
    
    
    
    7,415Additional paid-in capital
    
    
    4,597,370
    
    
    
    4,578,578Retained earnings
    
    
    2,099,941
    
    
    
    2,002,049Treasury stock, at cost; 221,988,184 and 222,896,953 shares at
June 30, 2008 and December 31, 2007
    
    
    (1,765,696
    )
    
    
    (1,771,106
    )Unallocated common stock held by the employee stock ownership plan
    
    
    (219,247
    )
    
    
    (222,251
    )Accumulated other comprehensive (loss) income, net of tax
    
    
    (10,189
    )
    
    
    16,622Total shareholders equity
    
    
    4,709,594
    
    
    
    4,611,307Total Liabilities and Shareholders Equity
    
    $
    49,161,986
    
    
    $
    44,423,971
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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 30,2008
    
    
    2007
    
    
    2008
    
    
    2007(In thousands, except per share data)Interest and Dividend Income:First mortgage loans
    
    $
    369,096
    
    
    $
    289,772
    
    
    $
    715,373
    
    
    $
    559,454Consumer and other loans
    
    
    6,877
    
    
    
    7,078
    
    
    
    13,733
    
    
    
    13,970Mortgage-backed securities held to maturity
    
    
    123,619
    
    
    
    109,563
    
    
    
    248,464
    
    
    
    205,080Mortgage-backed securities available for sale
    
    
    88,952
    
    
    
    26,805
    
    
    
    158,462
    
    
    
    55,096Investment securities held to maturity
    
    
    944
    
    
    
    18,630
    
    
    
    11,890
    
    
    
    37,243Investment securities available for sale
    
    
    41,974
    
    
    
    48,351
    
    
    
    80,529
    
    
    
    99,186Dividends on Federal Home Loan Bank of New York stock
    
    
    13,993
    
    
    
    8,747
    
    
    
    28,219
    
    
    
    16,219Federal funds sold
    
    
    1,205
    
    
    
    2,548
    
    
    
    3,278
    
    
    
    4,893Total interest and dividend income
    
    
    646,660
    
    
    
    511,494
    
    
    
    1,259,948
    
    
    
    991,141Interest Expense:Deposits
    
    
    141,399
    
    
    
    146,432
    
    
    
    299,415
    
    
    
    288,395Borrowed funds
    
    
    272,129
    
    
    
    207,404
    
    
    
    534,086
    
    
    
    388,634Total interest expense
    
    
    413,528
    
    
    
    353,836
    
    
    
    833,501
    
    
    
    677,029Net interest income
    
    
    233,132
    
    
    
    157,658
    
    
    
    426,447
    
    
    
    314,112Provision for Loan Losses
    
    
    3,000
    
    
    
    500
    
    
    
    5,500
    
    
    
    800Net interest income after provision for loan losses
    
    
    230,132
    
    
    
    157,158
    
    
    
    420,947
    
    
    
    313,312Non-Interest Income:Service charges and other income
    
    
    2,088
    
    
    
    1,823
    
    
    
    4,309
    
    
    
    3,373Non-Interest Expense:Compensation and employee benefits
    
    
    31,299
    
    
    
    25,812
    
    
    
    62,844
    
    
    
    51,560Net occupancy expense
    
    
    7,433
    
    
    
    7,070
    
    
    
    14,804
    
    
    
    14,279Federal deposit insurance assessment
    
    
    423
    
    
    
    447
    
    
    
    839
    
    
    
    888Computer and related services
    
    
    748
    
    
    
    715
    
    
    
    1,387
    
    
    
    1,381Other expense
    
    
    8,374
    
    
    
    6,823
    
    
    
    16,515
    
    
    
    13,856Total non-interest expense
    
    
    48,277
    
    
    
    40,867
    
    
    
    96,389
    
    
    
    81,964Income before income tax expense
    
    
    183,943
    
    
    
    118,114
    
    
    
    328,867
    
    
    
    234,721Income Tax Expense
    
    
    73,240
    
    
    
    45,450
    
    
    
    129,495
    
    
    
    90,814Net income
    
    $
    110,703
    
    
    $
    72,664
    
    
    $
    199,372
    
    
    $
    143,907Basic Earnings Per Share
    
    $
    0.23
    
    
    $
    0.14
    
    
    $
    0.41
    
    
    $
    0.28Diluted Earnings Per Share
    
    $
    0.22
    
    
    $
    0.14
    
    
    $
    0.40
    
    
    $
    0.28Weighted Average Number of Common Shares Outstanding:Basic
    
    
    483,885,720
    
    
    
    504,902,448
    
    
    
    483,491,345
    
    
    
    511,622,385Diluted
    
    
    496,078,754
    
    
    
    514,998,167
    
    
    
    495,362,864
    
    
    
    522,157,901
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Hudson City Bancorp, Inc. and Subsidiary
 
 Consolidated Statements of Changes in Shareholders Equity
 (Unaudited
 For the Six MonthsEnded June 30,2008
    
    
    2007(In thousands, except per share data)Common Stock
    
    $
    7,415
    
    
    $
    7,415Additional paid-in capital:Balance at beginning of year
    
    
    4,578,578
    
    
    
    4,553,614Stock option plan expense
    
    
    7,520
    
    
    
    6,275Tax benefit from stock plans
    
    
    5,417
    
    
    
    2,057Allocation of ESOP stock
    
    
    5,154
    
    
    
    3,471Vesting of RRP stock
    
    
    701
    
    
    
    907Balance at end of period
    
    
    4,597,370
    
    
    
    4,566,324Retained Earnings:Balance at beginning of year
    
    
    2,002,049
    
    
    
    1,877,840Net Income
    
    
    199,372
    
    
    
    143,907Dividends paid on common stock ($0.20 and $0.16 per share, respectively)
    
    
    (96,711
    )
    
    
    (82,414
    )Exercise of stock options
    
    
    (4,769
    )
    
    
    (3,722
    )Balance at end of period
    
    
    2,099,941
    
    
    
    1,935,611Treasury Stock:Balance at beginning of year
    
    
    (1,771,106
    )
    
    
    (1,230,793
    )Purchase of common stock
    
    
    (3,600
    )
    
    
    (357,577
    )Exercise of stock options
    
    
    9,010
    
    
    
    6,099Balance at end of period
    
    
    (1,765,696
    )
    
    
    (1,582,271
    )Unallocated common stock held by the ESOP:Balance at beginning of year
    
    
    (222,251
    )
    
    
    (228,257
    )Allocation of ESOP stock
    
    
    3,004
    
    
    
    3,003Balance at end of period
    
    
    (219,247
    )
    
    
    (225,254
    )Accumulated other comprehensive loss:Balance at beginning of year
    
    
    16,622
    
    
    
    (49,563
    )Unrealized holding (losses) gains arising during period, net of tax
(benefit)
expense of $(18,445) and $727 in 2008 and 2007, respectively
    
    
    (26,707
    )
    
    
    1,053Pension and other postretirement benefits adjustment, net of tax benefit of
$72 and $116 for 2008 and 2007, respectively
    
    
    (104
    )
    
    
    (168
    )Balance at end of period
    
    
    (10,189
    )
    
    
    (48,678
    )Total Shareholders Equity
    
    $
    4,709,594
    
    
    $
    4,653,147Summary of comprehensive incomeNet income
    
    $
    199,372
    
    
    $
    143,907Other comprehensive (loss) income, net of tax
    
    
    (26,811
    )
    
    
    885Total comprehensive income
    
    $
    172,561
    
    
    $
    144,792
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Hudson City Bancorp, Inc. and Subsidiary
 
 Consolidated Statements of Cash Flows
 (Unaudited
 For the Six monthsEnded June 30,2008
    
    
    2007(In thousands)Cash Flows from Operating Activities:Net income
    
    $
    199,372
    
    
    $
    143,907Adjustments to reconcile net income to net cash provided
by operating activities:Depreciation, accretion and amortization expense
    
    
    13,486
    
    
    
    11,227Provision for loan losses
    
    
    5,500
    
    
    
    800Share-based compensation, including committed ESOP shares
    
    
    16,379
    
    
    
    13,656Deferred tax (benefit) expense
    
    
    (11,065
    )
    
    
    3,787Increase in accrued interest receivable
    
    
    (32,551
    )
    
    
    (28,251
    )Decrease in other assets
    
    
    213
    
    
    
    10,301Increase (decrease) in accrued expenses and other liabilities
    
    
    8,729
    
    
    
    (6,243
    )Net Cash Provided by Operating Activities
    
    
    200,063
    
    
    
    149,184Cash Flows from Investing Activities:Originations of loans
    
    
    (2,420,250
    )
    
    
    (1,598,789
    )Purchases of loans
    
    
    (2,171,358
    )
    
    
    (2,369,034
    )Principal payments on loans
    
    
    1,536,938
    
    
    
    1,146,056Principal collection of mortgage-backed securities held to maturity
    
    
    755,450
    
    
    
    596,980Purchases of mortgage-backed securities held to maturity
    
    
    (529,730
    )
    
    
    (2,703,101
    )Principal collection of mortgage-backed securities available for sale
    
    
    523,210
    
    
    
    368,108Purchases of mortgage-backed securities available for sale
    
    
    (3,406,592
    )
    
    
    (38,261
    )Proceeds from maturities and calls of investment securities held to maturity
    
    
    1,336,860
    
    
    
    Proceeds from maturities and calls of investment securities available for sale
    
    
    1,349,901
    
    
    
    1,100,054Purchases of investment securities available for sale
    
    
    (1,900,000
    )
    
    
    (500,000
    )Purchases of Federal Home Loan Bank of New York stock
    
    
    (114,689
    )
    
    
    (166,285
    )Redemption of Federal Home Loan Bank of New York stock
    
    
    720
    
    
    
    9,315Purchases of premises and equipment, net
    
    
    (4,104
    )
    
    
    (7,327
    )Net proceeds from sale of foreclosed real estate
    
    
    2,313
    
    
    
    2,095Net Cash Used in Investment Activities
    
    
    (5,041,331
    )
    
    
    (4,160,189
    )Cash Flows from Financing Activities:Net increase in deposits
    
    
    1,565,963
    
    
    
    774,923Proceeds from borrowed funds
    
    
    3,700,000
    
    
    
    6,000,000Principal payments on borrowed funds
    
    
    (366,000
    )
    
    
    (2,307,000
    )Dividends paid
    
    
    (96,711
    )
    
    
    (82,414
    )Purchases of treasury stock
    
    
    (3,600
    )
    
    
    (357,577
    )Exercise of stock options
    
    
    4,241
    
    
    
    2,377Tax benefit from stock plans
    
    
    5,417
    
    
    
    2,057Net Cash Provided by Financing Activities
    
    
    4,809,310
    
    
    
    4,032,366Net (Decrease) Increase in Cash and Cash Equivalents
    
    
    (31,958
    )
    
    
    21,361Cash and Cash Equivalents at Beginning of Year
    
    
    217,544
    
    
    
    182,246Cash and Cash Equivalents at End of Period
    
    $
    185,586
    
    
    $
    203,607Supplemental Disclosures:Interest paid
    
    $
    821,515
    
    
    $
    658,500Loans transferred to foreclosed real estate
    
    $
    6,409
    
    
    $
    2,633Income tax payments
    
    $
    140,972
    
    
    $
    83,720
  Page 7




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##### Table of Contents



1. Organization
  2. Basis of Presentation
   Page 8




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##### Table of Contents



3. Earnings Per Share
  For the Three Months Ended June 30,2008
    
    
    2007Per
    
    
    
    
    
    
    
    
    
    
    PerAverage
    
    
    Share
    
    
    
    
    
    
    Average
    
    
    ShareIncome
    
    
    Shares
    
    
    Amount
    
    
    Income
    
    
    Shares
    
    
    Amount(In thousands, except per share data)Net income
    
    $
    110,703
    
    
    
    
    
    
    
    
    
    
    $
    72,664Basic earnings per share:Income available to
common stockholders
    
    $
    110,703
    
    
    
    483,886
    
    
    $
    0.23
    
    
    $
    72,664
    
    
    
    504,902
    
    
    $
    0.14Effect of dilutive common
stock equivalents
    
    
    
    
    
    
    12,193
    
    
    
    
    
    
    
    
    
    
    
    10,096Diluted earnings per share:Income available to
common stockholders
    
    $
    110,703
    
    
    
    496,079
    
    
    $
    0.22
    
    
    $
    72,664
    
    
    
    514,998
    
    
    $
    0.14
 For the Six Months Ended June 30,2008
    
    
    2007Per
    
    
    
    
    
    
    
    
    
    
    PerShare
    
    
    
    
    
    
    
    
    
    
    ShareIncome
    
    
    Shares
    
    
    Amount
    
    
    Income
    
    
    Shares
    
    
    Amount(In thousands, except per share data)Net income
    
    $
    199,372
    
    
    
    
    
    
    
    
    
    
    $
    143,907Basic earnings per share:Income available to
common stockholders
    
    $
    199,372
    
    
    
    483,491
    
    
    $
    0.41
    
    
    $
    143,907
    
    
    
    511,622
    
    
    $
    0.28Effect of dilutive commonstock equivalents
    
    
    
    
    
    
    11,872
    
    
    
    
    
    
    
    
    
    
    
    10,536Diluted earnings per share:Income available to
common stockholders
    
    $
    199,372
    
    
    
    495,363
    
    
    $
    0.40
    
    
    $
    143,907
    
    
    
    522,158
    
    
    $
    0.28
 4.
    
    Stock Repurchase Programs
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##### Table of Contents



5. Fair Value Measurements
     
    
    Level 1  Valuation is based upon quoted prices for identical instruments traded in active
markets.
    
    Level 2  Valuation is based upon quoted prices for similar instruments in active markets,
quoted prices for identical or similar instruments in markets that are not active and model-based
valuation techniques for which all significant assumptions are observable in the market.
    
    Level 3  Valuation is generated from model-based techniques that use significant assumptions
not observable in the market. These unobservable assumptions reflect our own estimates of
assumptions that market participants would use in pricing the asset or liability. Valuation
techniques include the use of option pricing models, discounted cash flow models and similar
techniques. The results cannot be determined with precision and may not be realized in an actual
sale or immediate settlement of the asset or liability.
   Page 10




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Fair Value Measurements at June 30, 2008Quoted Prices in Active
    
    
    Significant Other
    
    
    SignificantCarrying
    
    
    Markets for Identical
    
    
    Observable Inputs
    
    
    Unobservable InputsDescription
    
    Value
    
    
    Assets (Level 1)
    
    
    (Level 2)
    
    
    (Level 3)(In thousands)Available for sale:Mortgage-backed securities
    
    $
    7,600,182
    
    
    $
    
    
    
    $
    7,600,182
    
    
    $
    Investment securities
    
    
    3,287,143
    
    
    
    7,206
    
    
    
    3,279,937
    
    
    
    Total available for sale
    
    $
    10,887,325
    
    
    $
    7,206
    
    
    $
    10,880,119
    
    
    $
    
   Page 11




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##### Table of Contents



Fair Value Measurements at June 30, 2008Quoted Prices in Active
    
    Significant Other
    
    SignificantMarkets for Identical
    
    Observable Inputs
    
    Unobservable InputsDescription
    
    Assets (Level 1)
    
    (Level 2)
    
    (Level 3)(In thousands)Impaired loans
    
    $
    
    
    
    $
    
    
    
    $
    5,799Foreclosed real estate
    
    
    
    
    
    
    
    
    
    
    5,192
 6. Postretirement Plans
   Page 12




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For the Three Months Ended June 30,Retirement Plans
    
    
    Other Benefits2008
    
    
    2007
    
    
    2008
    
    
    2007(In thousands)Service cost
    
    $
    881
    
    
    $
    810
    
    
    $
    253
    
    
    $
    268Interest cost
    
    
    1,682
    
    
    
    1,569
    
    
    
    544
    
    
    
    525Expected return on assets
    
    
    (2,135
    )
    
    
    (2,034
    )
    
    
    
    
    
    
    Amortization of:Net loss
    
    
    81
    
    
    
    37
    
    
    
    141
    
    
    
    144Unrecognized prior service cost
    
    
    82
    
    
    
    69
    
    
    
    (391
    )
    
    
    (391
    )Net periodic benefit cost
    
    $
    591
    
    
    $
    451
    
    
    $
    547
    
    
    $
    546
 For the Six Months Ended June 30,Retirement Plans
    
    
    Other Benefits2008
    
    
    2007
    
    
    2008
    
    
    2007(In thousands)Service cost
    
    
    1,762
    
    
    
    1,620
    
    
    
    506
    
    
    
    536Interest cost
    
    
    3,364
    
    
    
    3,138
    
    
    
    1,088
    
    
    
    1,050Expected return on assets
    
    
    (4,270
    )
    
    
    (4,068
    )
    
    
    
    
    
    
    Amortization of:Net loss
    
    
    162
    
    
    
    74
    
    
    
    282
    
    
    
    288Unrecognized prior service cost
    
    
    164
    
    
    
    138
    
    
    
    (782
    )
    
    
    (782
    )Net periodic benefit cost
    
    
    1,182
    
    
    
    902
    
    
    
    1,094
    
    
    
    1,092
  Page 13




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7. Stock Option Plans
  Six Months Ended June 30,2008
    
    2007Number of
    
    Weighted
    
    Number of
    
    WeightedStock
    
    Average
    
    Stock
    
    AverageOptions
    
    Exercise Price
    
    Options
    
    Exercise PriceOutstanding at beginning of period
    
    
    29,080,114
    
    
    $
    7.91
    
    
    
    26,979,989
    
    
    $
    6.89Granted
    
    
    4,025,000
    
    
    
    15.96
    
    
    
    3,477,500
    
    
    
    13.74Exercised
    
    
    (1,133,031
    )
    
    
    3.78
    
    
    
    (870,728
    )
    
    
    2.73Forfeited
    
    
    
    
    
    
    
    
    
    
    (66,740
    )
    
    
    10.03Outstanding at end of period
    
    
    31,972,083
    
    
    
    9.07
    
    
    
    29,520,021
    
    
    
    7.65
    2008Expected dividend yield
    
    
    2.30
    %Expected volatility
    
    
    20.61
    %Risk-free interest rate
    
    
    2.82
    %Expected option life
    
    5.3 years




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8.
    
    Recent Accounting Pronouncements
     Page 15




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purchase method
    Page 16




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##### Table of Contents



Page 17




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Item 2.  Managements Discussion and Analysis of Financial Condition and Results of Operations
 Executive Summary
      Page 18




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Page 19




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Comparison of Financial Condition at June 30, 2008 and December 31, 2007
      Page 20




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Page 21




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Page 22




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Comparison of Operating Results for the Three Months Ended June 30, 2008 and 2007
 Average Balance Sheet.
 For the Three Months Ended June 30,2008
    
    
    2007Average
    
    
    
    
    
    
    
    
    
    
    AverageAverage
    
    
    
    
    
    
    Yield/
    
    
    Average
    
    
    
    
    
    
    Yield/Balance
    
    
    Interest
    
    
    Cost
    
    
    Balance
    
    
    Interest
    
    
    Cost(Dollars in thousands)Assets:Interest-earnings assets:First mortgage loans, net (1)
    
    $
    25,708,148
    
    
    $
    369,096
    
    
    
    5.74
    %
    
    $
    20,437,687
    
    
    $
    289,772
    
    
    
    5.67
    %Consumer and other loans
    
    
    426,390
    
    
    
    6,877
    
    
    
    6.45
    
    
    
    428,474
    
    
    
    7,078
    
    
    
    6.61Federal funds sold
    
    
    244,780
    
    
    
    1,205
    
    
    
    1.98
    
    
    
    195,085
    
    
    
    2,548
    
    
    
    5.24Mortgage-backed securities at amortized cost
    
    
    16,308,532
    
    
    
    212,571
    
    
    
    5.21
    
    
    
    10,673,572
    
    
    
    136,368
    
    
    
    5.11Federal Home Loan Bank stock
    
    
    774,089
    
    
    
    13,993
    
    
    
    7.23
    
    
    
    567,694
    
    
    
    8,747
    
    
    
    6.16Investment securities, at amortized cost
    
    
    3,488,540
    
    
    
    42,918
    
    
    
    4.92
    
    
    
    5,615,664
    
    
    
    66,981
    
    
    
    4.77Total interest-earning assets
    
    
    46,950,479
    
    
    
    646,660
    
    
    
    5.51
    
    
    
    37,918,176
    
    
    
    511,494
    
    
    
    5.40Noninterest-earnings assets
    
    
    817,708
    
    
    
    
    
    
    
    
    
    
    
    607,385Total Assets
    
    $
    47,768,187
    
    
    
    
    
    
    
    
    
    
    $
    38,525,561Liabilities and Shareholders Equity:Interest-bearing liabilities:Savings accounts
    
    $
    736,421
    
    
    
    1,382
    
    
    
    0.75
    
    
    $
    790,499
    
    
    
    1,639
    
    
    
    0.83Interest-bearing transaction accounts
    
    
    1,595,180
    
    
    
    11,788
    
    
    
    2.97
    
    
    
    1,878,714
    
    
    
    15,799
    
    
    
    3.37Money market accounts
    
    
    2,146,642
    
    
    
    16,570
    
    
    
    3.10
    
    
    
    1,019,661
    
    
    
    9,836
    
    
    
    3.87Time deposits
    
    
    11,417,332
    
    
    
    111,659
    
    
    
    3.93
    
    
    
    9,736,187
    
    
    
    119,158
    
    
    
    4.91Total interest-bearing deposits
    
    
    15,895,575
    
    
    
    141,399
    
    
    
    3.58
    
    
    
    13,425,061
    
    
    
    146,432
    
    
    
    4.37Repurchase agreements
    
    
    12,884,615
    
    
    
    134,454
    
    
    
    4.20
    
    
    
    9,383,033
    
    
    
    98,186
    
    
    
    4.20Federal Home Loan Bank of New York advances
    
    
    13,345,879
    
    
    
    137,675
    
    
    
    4.15
    
    
    
    10,191,209
    
    
    
    109,218
    
    
    
    4.30Total borrowed funds
    
    
    26,230,494
    
    
    
    272,129
    
    
    
    4.17
    
    
    
    19,574,242
    
    
    
    207,404
    
    
    
    4.25Total interest-bearing liabilities
    
    
    42,126,069
    
    
    
    413,528
    
    
    
    3.95
    
    
    
    32,999,303
    
    
    
    353,836
    
    
    
    4.30Noninterest-bearing liabilities:Noninterest-bearing deposits
    
    
    588,089
    
    
    
    
    
    
    
    
    
    
    
    527,819Other noninterest-bearing liabilities
    
    
    276,299
    
    
    
    
    
    
    
    
    
    
    
    205,159Total noninterest-bearing
liabilities
    
    
    864,388
    
    
    
    
    
    
    
    
    
    
    
    732,978Total liabilities
    
    
    42,990,457
    
    
    
    
    
    
    
    
    
    
    
    33,732,281Shareholders equity
    
    
    4,777,730
    
    
    
    
    
    
    
    
    
    
    
    4,793,280Total Liabilities and
Shareholders Equity
    
    $
    47,768,187
    
    
    
    
    
    
    
    
    
    
    $
    38,525,561Net interest income/net interest rate spread (2)
    
    
    
    
    
    $
    233,132
    
    
    
    1.56
    
    
    
    
    
    
    $
    157,658
    
    
    
    1.10Net interest-earning assets/net interest margin (3)
    
    $
    4,824,410
    
    
    
    
    
    
    
    1.97
    %
    
    $
    4,918,873
    
    
    
    
    
    
    
    1.65
    %Ratio of interest-earning assets to
interest-bearing liabilities
    
    
    
    
    
    
    
    
    
    
    1.11
    x
    
    
    
    
    
    
    
    
    
    
    1.15
    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 23




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General.
 Interest and Dividend Income.
     Page 24




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Interest Expense.
    Page 25




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##### Table of Contents



Net Interest Income.
  Provision for Loan Losses.
   Page 26




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Page 27




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Non-Interest Income.
 Non-Interest Expense.
  Income Taxes.
 Page 28




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Comparison of Operating Results for the Six Months Ended June 30, 2008 and 2007
 Average Balance Sheet.
 For the Six Months Ended June 30,2008
    
    
    2007Average
    
    
    
    
    
    
    
    
    
    
    AverageAverage
    
    
    
    
    
    
    Yield/
    
    
    Average
    
    
    
    
    
    
    Yield/Balance
    
    
    Interest
    
    
    Cost
    
    
    Balance
    
    
    Interest
    
    
    Cost(Dollars in thousands)Assets:Interest-earnings assets:First mortgage loans, net (1)
    
    $
    24,883,976
    
    
    $
    715,373
    
    
    
    5.75
    %
    
    $
    19,731,035
    
    
    $
    559,454
    
    
    
    5.67
    %Consumer and other loans
    
    
    430,984
    
    
    
    13,733
    
    
    
    6.37
    
    
    
    426,018
    
    
    
    13,970
    
    
    
    6.56Federal funds sold
    
    
    261,000
    
    
    
    3,278
    
    
    
    2.53
    
    
    
    187,396
    
    
    
    4,893
    
    
    
    5.27Mortgage-backed securities at amortized cost
    
    
    15,503,898
    
    
    
    406,926
    
    
    
    5.25
    
    
    
    10,239,739
    
    
    
    260,176
    
    
    
    5.08Federal Home Loan Bank stock
    
    
    747,960
    
    
    
    28,219
    
    
    
    7.55
    
    
    
    520,601
    
    
    
    16,219
    
    
    
    6.23Investment securities, at amortized cost
    
    
    3,837,728
    
    
    
    92,419
    
    
    
    4.82
    
    
    
    5,764,587
    
    
    
    136,429
    
    
    
    4.73Total interest-earning assets
    
    
    45,665,546
    
    
    
    1,259,948
    
    
    
    5.52
    
    
    
    36,869,376
    
    
    
    991,141
    
    
    
    5.38Noninterest-earnings assets
    
    
    783,080
    
    
    
    
    
    
    
    
    
    
    
    596,273Total Assets
    
    $
    46,448,626
    
    
    
    
    
    
    
    
    
    
    $
    37,465,649Liabilities and Shareholders Equity:Interest-bearing liabilities:Savings accounts
    
    $
    734,107
    
    
    
    2,754
    
    
    
    0.75
    
    
    $
    794,209
    
    
    
    3,468
    
    
    
    0.88Interest-bearing transaction accounts
    
    
    1,580,337
    
    
    
    24,689
    
    
    
    3.14
    
    
    
    1,945,341
    
    
    
    32,516
    
    
    
    3.37Money market accounts
    
    
    1,915,999
    
    
    
    32,465
    
    
    
    3.41
    
    
    
    977,515
    
    
    
    17,992
    
    
    
    3.71Time deposits
    
    
    11,186,331
    
    
    
    239,507
    
    
    
    4.31
    
    
    
    9,584,729
    
    
    
    234,419
    
    
    
    4.93Total interest-bearing deposits
    
    
    15,416,774
    
    
    
    299,415
    
    
    
    3.91
    
    
    
    13,301,794
    
    
    
    288,395
    
    
    
    4.37Repurchase agreements
    
    
    12,448,055
    
    
    
    262,861
    
    
    
    4.25
    
    
    
    9,153,243
    
    
    
    187,617
    
    
    
    4.13Federal Home Loan Bank of New York advances
    
    
    13,032,868
    
    
    
    271,225
    
    
    
    4.19
    
    
    
    9,436,740
    
    
    
    201,017
    
    
    
    4.30Total borrowed funds
    
    
    25,480,923
    
    
    
    534,086
    
    
    
    4.22
    
    
    
    18,589,983
    
    
    
    388,634
    
    
    
    4.22Total interest-bearing liabilities
    
    
    40,897,697
    
    
    
    833,501
    
    
    
    4.10
    
    
    
    31,891,777
    
    
    
    677,029
    
    
    
    4.28Noninterest-bearing liabilities:Noninterest-bearing deposits
    
    
    549,223
    
    
    
    
    
    
    
    
    
    
    
    507,294Other noninterest-bearing liabilities
    
    
    278,675
    
    
    
    
    
    
    
    
    
    
    
    213,065Total noninterest-bearing liabilities
    
    
    827,898
    
    
    
    
    
    
    
    
    
    
    
    720,359Total liabilities
    
    
    41,725,595
    
    
    
    
    
    
    
    
    
    
    
    32,612,136Shareholders equity
    
    
    4,723,031
    
    
    
    
    
    
    
    
    
    
    
    4,853,513Total Liabilities and Shareholders Equity
    
    $
    46,448,626
    
    
    
    
    
    
    
    
    
    
    $
    37,465,649Net interest income/net interest rate spread (2)
    
    
    
    
    
    $
    426,447
    
    
    
    1.42
    
    
    
    
    
    
    $
    314,112
    
    
    
    1.10Net interest-earning assets/net interest margin (3)
    
    $
    4,767,849
    
    
    
    
    
    
    
    1.85
    %
    
    $
    4,977,599
    
    
    
    
    
    
    
    1.67
    %Ratio of interest-earning assets to
interest-bearing liabilities
    
    
    
    
    
    
    
    
    
    
    1.12
    x
    
    
    
    
    
    
    
    
    
    
    1.16
    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 29




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General.
 Interest and Dividend Income.
     Page 30




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Interest Expense.
    Page 31




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Net Interest Income.
  Provision for Loan Losses. .
 Non-Interest Income.
 Non-Interest Expense.
  Page 32




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Income Taxes.
 Liquidity and Capital Resources
     Page 33




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Page 34




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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
    
    $
    672,135
    
    
    $
    672,135
    
    
    $
    
    
    
    $
    
    
    
    $
    Mortgage loan purchases
    
    
    203,618
    
    
    
    203,618
    
    
    
    
    
    
    
    
    
    
    
    Mortgage-backed security purchases
    
    
    1,150,000
    
    
    
    1,150,000
    
    
    
    
    
    
    
    
    
    
    
    Operating leases
    
    
    145,378
    
    
    
    8,017
    
    
    
    16,338
    
    
    
    15,816
    
    
    
    105,207Total
    
    $
    2,171,131
    
    
    $
    2,033,770
    
    
    $
    16,338
    
    
    $
    15,816
    
    
    $
    105,207
  Critical Accounting Policies
  Page 35




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Allowance for Loan Losses
     Page 36




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Stock-Based Compensation
    Page 37




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Pension and Other Postretirement Benefit Assumptions
     
 Item 3.
 Quantitative and Qualitative Disclosures About Market Risk
  General
  Page 38




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Page 39




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Simulation Model.
 Net Interest Income.
  Change in
    
    Percent Change inInterest Rates
    
    Net Interest Income(Basis points)200
    
    
    
    (7.60
    )%100
    
    
    
    (2.25
    )
    
    
    
    (100
    )
    
    
    0.57
   Present Value of Equity.
 Page 40




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Present Value of EquityAs Percent of PresentValue of AssetsChange in
    
    Present
    
    Basis PointInterest Rates
    
    Value Ratio
    
    Change(Basis points)200
    
    
    4.72
    %
    
    
    (366
    )100
    
    
    7.00
    
    
    
    (138
    )0
    
    
    8.38
    
    
    
    (100)
    
    
    7.84
    
    
    
    (54
    )
    GAP Analysis.
 Page 41




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At June 30, 2008More 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
    
    $
    1,729,440
    
    
    $
    1,720,022
    
    
    $
    3,454,534
    
    
    $
    2,916,727
    
    
    $
    3,157,121
    
    
    $
    13,750,777
    
    
    $
    26,728,621Consumer and other loans
    
    
    97,964
    
    
    
    2,910
    
    
    
    11,086
    
    
    
    5,027
    
    
    
    16,409
    
    
    
    255,176
    
    
    
    388,572Federal funds sold
    
    
    56,957
    
    
    
    0
    
    
    
    0
    
    
    
    0
    
    
    
    0
    
    
    
    0
    
    
    
    56,957Mortgage-backed securities
    
    
    1,792,324
    
    
    
    1,668,354
    
    
    
    2,566,379
    
    
    
    3,988,092
    
    
    
    4,306,429
    
    
    
    2,615,248
    
    
    
    16,936,826FHLB stock
    
    
    809,320
    
    
    
    0
    
    
    
    0
    
    
    
    0
    
    
    
    0
    
    
    
    0
    
    
    
    809,320Investment securities
    
    
    7,205
    
    
    
    21,625
    
    
    
    2,300,005
    
    
    
    100
    
    
    
    922,396
    
    
    
    107,507
    
    
    
    3,358,838Total interest-earning assets
    
    
    4,493,210
    
    
    
    3,412,911
    
    
    
    8,332,004
    
    
    
    6,909,946
    
    
    
    8,402,355
    
    
    
    16,728,708
    
    
    
    48,279,134Interest-bearing liabilities:Savings accounts
    
    
    55,295
    
    
    
    55,295
    
    
    
    73,727
    
    
    
    73,727
    
    
    
    184,316
    
    
    
    294,905
    
    
    
    737,265Interest-bearing demand accounts
    
    
    158,523
    
    
    
    158,523
    
    
    
    236,176
    
    
    
    236,176
    
    
    
    404,349
    
    
    
    423,649
    
    
    
    1,617,396Money market accounts
    
    
    242,464
    
    
    
    242,464
    
    
    
    484,928
    
    
    
    484,928
    
    
    
    848,625
    
    
    
    121,233
    
    
    
    2,424,642Time deposits
    
    
    9,374,251
    
    
    
    1,363,983
    
    
    
    467,700
    
    
    
    66,605
    
    
    
    36,402
    
    
    
    
    
    
    
    11,308,941Borrowed funds
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    500,000
    
    
    
    400,000
    
    
    
    26,575,000
    
    
    
    27,475,000Total interest-bearing liabilities
    
    
    9,830,533
    
    
    
    1,820,265
    
    
    
    1,262,531
    
    
    
    1,361,436
    
    
    
    1,873,692
    
    
    
    27,414,787
    
    
    
    43,563,244Interest rate sensitivity gap
    
    $
    (5,337,323
    )
    
    $
    1,592,646
    
    
    $
    7,069,473
    
    
    $
    5,548,510
    
    
    $
    6,528,663
    
    
    $
    (10,686,079
    )
    
    $
    4,715,890Cumulative interest rate sensitivity gap
    
    $
    (5,337,323
    )
    
    $
    (3,744,677
    )
    
    $
    3,324,796
    
    
    $
    8,873,306
    
    
    $
    15,401,969
    
    
    $
    4,715,890Cumulative interest rate sensitivity gap
as a percent of total assets
    
    
    (10.86
    )%
    
    
    (7.62
    )%
    
    
    6.76
    %
    
    
    18.05
    %
    
    
    31.33
    %
    
    
    9.59
    %Cumulative interest-earning assets
as a percent of interest-bearing
liabilities
    
    
    45.71
    %
    
    
    67.86
    %
    
    
    125.75
    %
    
    
    162.16
    %
    
    
    195.38
    %
    
    
    110.83
    %
  
 Item 4.  Controls and Procedures
  Page 42




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##### Table of Contents



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, 2008
    
    
    
    
    
    $
    
    
    
    
    
    
    
    
    54,973,550May 1-May 31, 2008
    
    
    24,262
    (2)
    
    
    18.84
    
    
    
    
    
    
    
    54,973,550June 1-June 30, 2008
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    54,973,550Total
    
    
    24,262
    
    
    
    18.84
    
    
    
    
 
 (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 3,573,550 shares yet to be purchased as of June 30, 2008. 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 purcahsed pursuant to this program.(2)
    
    This purchase reflects the surrender of vesting RRP awards to satisfy withholding requirements. 
 Item 3.  Defaults Upon Senior Securities
  Page 43




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##### Table of Contents



Item 4.  Submission of Matters to a Vote of Security Holders
  Proposal
1
  For:
    
    
    423,614,658Withheld:
    
    
    19,384,083
  For:
    
    
    429,809,554Withheld:
    
    
    13,189,187
  For:
    
    
    429,870,322Withheld:
    
    
    13,128,419
  Proposal 2
 For:
    
    
    423,781,369Against:
    
    
    8,559,782Abstain:
    
    
    10,657,590
  
 Item 5.  Other Information
  Page 44




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##### Table of Contents



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 45




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##### Table of Contents



SIGNATURES
  Hudson City Bancorp, Inc.Date: August 8, 2008
    By:
    /s/ Ronald E. Hermance, Jr.Ronald E. Hermance, Jr.Chairman, President and
Chief Executive Officer
(Principal Executive Officer)Date: August 8, 2008
    By:
    /s/ James C. KranzJames C. KranzExecutive Vice President and
Chief Financial Officer
(Principal Financial Officer) Page 46