##### 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: March 31, 2007
 o
    
    Transition Report Pursuant to Section 13 or 15(d) of the Securities Exchange Act of
1934
 For the transition period from  to
 Commission File Number: 0-26001
 Hudson City Bancorp, Inc.
  Delaware
    
    22-3640393(State or other jurisdiction of 
incorporation or organization)
    
    (I.R.S. Employer
Identification No.)West 80 Century RoadParamus, New Jersey
    
    07652(Address of Principal Executive Offices)
    
    (Zip Code)
 (201) 967-1900
  þ o
  þ o o
  o þ




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##### 



Page NumberPART I  FINANCIAL INFORMATIONItem 1.  Financial StatementsConsolidated Statements of Financial Condition  March 31, 2007 (Unaudited) and December 31, 2006
    
    
    4Consolidated Statements of Income (Unaudited)  For the three months ended March 31, 2007 and 2006
    
    
    5Consolidated Statements of Changes in Stockholders Equity (Unaudited)  For the three months ended March 31, 2007 and 2006
    
    
    6Consolidated Statements of Cash Flows (Unaudited)  For the three months ended March 31, 2007 and 2006
    
    
    7Notes to Unaudited Consolidated Financial Statements
    
    
    8Item 2.  Managements Discussion and Analysis of Financial Condition and Results of Operations
    
    
    13Item 3.  Quantitative and Qualitative Disclosures About Market Risk
    
    
    26Item 4.  Controls and Procedures
    
    
    29PART II  OTHER INFORMATIONItem 1.  Legal Proceedings
    
    
    30Item 1A.  Risk Factors
    
    
    30Item 2.  Unregistered Sales of Equity Securities and Use of Proceeds
    
    
    30Item 3.  Defaults Upon Senior Securities
    
    
    30Item 4.  Submission of Matters to a Vote of Security Holders
    
    
    31Item 5.  Other Information
    
    
    31Item 6.  Exhibits
    
    
    31SIGNATURES
    
    
    32EX-31.1: CERTIFICATIONEX-31.2: CERTIFICATIONEX-32.1: CERTIFICATIONS
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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.
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PART I  FINANCIAL INFORMATION
 
 Item 1.  Financial Statements
 Hudson City Bancorp, Inc. and Subsidiary
 
 Consolidated Statements of Financial Condition
 March 31,
    
    
    December 31,2007
    
    
    2006(In thousands, except share and per share amounts)
    
    (Unaudited)Assets:Cash and due from banks
    
    $
    105,031
    
    
    $
    125,630Federal funds sold
    
    
    17,047
    
    
    
    56,616Total cash and cash equivalents
    
    
    122,078
    
    
    
    182,246Securities available for sale:Mortgage-backed securities
    
    
    2,273,874
    
    
    
    2,404,421Investment securities
    
    
    4,117,442
    
    
    
    4,379,615Securities held to maturity:Mortgage-backed securities (fair value of $7,986,490 at March 31, 2007
and $6,804,598 at December 31, 2006)
    
    
    8,086,955
    
    
    
    6,925,210Investment securities (fair value of $1,511,862 at March 31, 2007
and $1,502,934 at December 31, 2006)
    
    
    1,533,978
    
    
    
    1,533,969Total securities
    
    
    16,012,249
    
    
    
    15,243,215Loans
    
    
    20,265,873
    
    
    
    19,083,617Deferred loan costs
    
    
    20,000
    
    
    
    16,159Allowance for loan losses
    
    
    (30,993
    )
    
    
    (30,625
    )Net loans
    
    
    20,254,880
    
    
    
    19,069,151Federal Home Loan Bank of New York stock
    
    
    514,441
    
    
    
    445,006Foreclosed real estate, net
    
    
    2,625
    
    
    
    3,161Accrued interest receivable
    
    
    218,063
    
    
    
    194,229Banking premises and equipment, net
    
    
    74,791
    
    
    
    73,929Goodwill
    
    
    151,792
    
    
    
    150,831Other assets
    
    
    114,231
    
    
    
    144,813Total Assets
    
    $
    37,465,150
    
    
    $
    35,506,581Liabilities and Stockholders Equity:Deposits:Interest-bearing
    
    $
    13,394,501
    
    
    $
    12,917,286Noninterest-bearing
    
    
    519,814
    
    
    
    498,301Total deposits
    
    
    13,914,315
    
    
    
    13,415,587Repurchase agreements
    
    
    8,916,000
    
    
    
    8,923,000Federal Home Loan Bank of New York advances
    
    
    9,600,000
    
    
    
    8,050,000Total borrowed funds
    
    
    18,516,000
    
    
    
    16,973,000Accrued expenses and other liabilities
    
    
    203,783
    
    
    
    187,738Total liabilities
    
    
    32,634,098
    
    
    
    30,576,325Common stock, $0.01 par value, 3,200,000,000 shares authorized;
741,466,555 shares issued; 546,976,092 shares outstanding
at March 31, 2007 and 557,787,921 shares outstanding
at December 31, 2006
    
    
    7,415
    
    
    
    7,415Additional paid-in capital
    
    
    4,560,464
    
    
    
    4,553,614Retained earnings
    
    
    1,905,693
    
    
    
    1,877,840Treasury stock, at cost; 194,490,463 shares at March 31, 2007 and
183,678,634 shares at December 31, 2006
    
    
    (1,380,801
    )
    
    
    (1,230,793
    )Unallocated common stock held by the employee stock ownership plan
    
    
    (226,755
    )
    
    
    (228,257
    )Accumulated other comprehensive loss, net of tax
    
    
    (34,964
    )
    
    
    (49,563
    )Total stockholders equity
    
    
    4,831,052
    
    
    
    4,930,256Total Liabilities and Stockholders Equity
    
    $
    37,465,150
    
    
    $
    35,506,581
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Hudson City Bancorp, Inc. and Subsidiary
 
 Consolidated Statements of Income
(Unaudited)
 For the Three MonthsEnded March 31,2007
    
    
    2006(In thousands, except share and per share data)Interest and Dividend Income:First mortgage loans
    
    $
    269,682
    
    
    $
    209,187Consumer and other loans
    
    
    6,892
    
    
    
    3,514Mortgage-backed securities held to maturity
    
    
    95,517
    
    
    
    53,622Mortgage-backed securities available for sale
    
    
    28,291
    
    
    
    28,161Investment securities held to maturity
    
    
    18,613
    
    
    
    18,631Investment securities available for sale
    
    
    50,835
    
    
    
    42,557Federal Home Loan Bank of New York stock
    
    
    7,472
    
    
    
    2,508Federal funds sold
    
    
    2,345
    
    
    
    1,508Total interest and dividend income
    
    
    479,647
    
    
    
    359,688Interest Expense:Deposits
    
    
    141,963
    
    
    
    89,364Borrowed funds
    
    
    181,230
    
    
    
    112,645Total interest expense
    
    
    323,193
    
    
    
    202,009Net interest income
    
    
    156,454
    
    
    
    157,679Provision for Loan Losses
    
    
    300
    
    
    
    Net interest income after provision for loan losses
    
    
    156,154
    
    
    
    157,679Non-Interest Income:Service charges and other income
    
    
    1,550
    
    
    
    1,264Non-Interest Expense:Compensation and employee benefits
    
    
    25,748
    
    
    
    26,352Net occupancy expense
    
    
    7,209
    
    
    
    5,512Federal deposit insurance assessment
    
    
    441
    
    
    
    424Computer and related services
    
    
    666
    
    
    
    597Other expense
    
    
    7,033
    
    
    
    5,400Total non-interest expense
    
    
    41,097
    
    
    
    38,285Income before income tax expense
    
    
    116,607
    
    
    
    120,658Income Tax Expense
    
    
    45,364
    
    
    
    45,430Net income
    
    $
    71,243
    
    
    $
    75,228Basic Earnings Per Share
    
    $
    0.14
    
    
    $
    0.14Diluted Earnings Per Share
    
    $
    0.13
    
    
    $
    0.13Weighted Average Number of Common Shares Outstanding:Basic
    
    
    518,416,987
    
    
    
    548,957,071Diluted
    
    
    529,034,187
    
    
    
    561,308,749
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Hudson City Bancorp, Inc. and Subsidiary
 
 Consolidated Statements of Changes in Stockholders Equity
 (Unaudited
 For the Three MonthsEnded March 31,2007
    
    
    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
    
    
    3,064
    
    
    
    523Tax benefit from stock plans
    
    
    1,451
    
    
    
    4,107Allocation of ESOP stock
    
    
    1,799
    
    
    
    1,553Vesting of RRP stock
    
    
    536
    
    
    
    642Balance at end of period
    
    
    4,560,464
    
    
    
    4,537,339Retained Earnings:Balance at beginning of year
    
    
    1,877,840
    
    
    
    1,759,492Net Income
    
    
    71,243
    
    
    
    75,228Dividends paid on common stock ($0.08 and $0.075 per share, respectively)
    
    
    (41,704
    )
    
    
    (41,373
    )Exercise of stock options
    
    
    (1,686
    )
    
    
    (4,433
    )Balance at end of period
    
    
    1,905,693
    
    
    
    1,788,914Treasury Stock:Balance at beginning of year
    
    
    (1,230,793
    )
    
    
    (798,232
    )Purchase of common stock
    
    
    (153,083
    )
    
    
    (118,993
    )Exercise of stock options
    
    
    3,075
    
    
    
    8,661Balance at end of period
    
    
    (1,380,801
    )
    
    
    (908,564
    )Unallocated common stock held by the ESOP:Balance at beginning of year
    
    
    (228,257
    )
    
    
    (234,264
    )Allocation of ESOP stock
    
    
    1,502
    
    
    
    1,502Balance at end of period
    
    
    (226,755
    )
    
    
    (232,762
    )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 $10,083 and ($11,357) in 2007 and 2006, respectively
    
    
    14,599
    
    
    
    (16,454
    )Balance at end of period
    
    
    (34,964
    )
    
    
    (79,903
    )Total Stockholders Equity
    
    $
    4,831,052
    
    
    $
    5,112,439Summary of comprehensive incomeNet income
    
    $
    71,243
    
    
    $
    75,228Other comprehensive income(loss), net of tax
    
    
    14,599
    
    
    
    (16,454
    )Total comprehensive income
    
    $
    85,842
    
    
    $
    58,774
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Hudson City Bancorp, Inc. and Subsidiary
 
 Consolidated Statements of Cash Flows
 (Unaudited
 For the Three monthsEnded March 31,2007
    
    
    2006(In thousands)Cash Flows from Operating Activities:Net income
    
    $
    71,243
    
    
    $
    75,228Adjustments to reconcile net income to net cash provided
by operating activities:Depreciation, accretion and amortization expense
    
    
    5,487
    
    
    
    4,522Provision for loan losses
    
    
    300
    
    
    
    Share-based compensation, including committed ESOP shares
    
    
    6,901
    
    
    
    4,220Deferred tax benefit (expense)
    
    
    6,139
    
    
    
    (7,256
    )Increase in accrued interest receivable
    
    
    (23,834
    )
    
    
    (13,212
    )Decrease in other assets
    
    
    12,380
    
    
    
    2,521Increase in accrued expenses and other liabilities
    
    
    16,045
    
    
    
    50,852Net Cash Provided by Operating Activities
    
    
    94,661
    
    
    
    116,875Cash Flows from Investing Activities:Originations of loans
    
    
    (653,120
    )
    
    
    (547,469
    )Purchases of loans
    
    
    (1,077,702
    )
    
    
    (811,192
    )Principal payments on loans
    
    
    544,166
    
    
    
    382,281Principal collection of mortgage-backed securities held to maturity
    
    
    268,687
    
    
    
    154,864Purchases of mortgage-backed securities held to maturity
    
    
    (1,431,636
    )
    
    
    (567,021
    )Principal collection of mortgage-backed securities available for sale
    
    
    179,322
    
    
    
    144,129Purchases of mortgage-backed securities available for sale
    
    
    (38,261
    )
    
    
    (255,483
    )Proceeds from maturities and calls of investment securities available for sale
    
    
    575,000
    
    
    
    Purchases of investment securities available for sale
    
    
    (300,000
    )
    
    
    (50,000
    )Purchases of Federal Home Loan Bank of New York stock
    
    
    (78,750
    )
    
    
    (47,250
    )Redemption of Federal Home Loan Bank of New York stock
    
    
    9,315
    
    
    
    Purchases of premises and equipment, net
    
    
    (3,330
    )
    
    
    (4,011
    )Net proceeds from sale of foreclosed real estate
    
    
    1,699
    
    
    
    743Net Cash Used in Investment Activities
    
    
    (2,004,610
    )
    
    
    (1,600,409
    )Cash Flows from Financing Activities:Net increase in deposits
    
    
    498,728
    
    
    
    138,408Proceeds from borrowed funds
    
    
    2,900,000
    
    
    
    1,750,000Principal payments on borrowed funds
    
    
    (1,357,000
    )
    
    
    (250,000
    )Dividends paid
    
    
    (41,704
    )
    
    
    (41,373
    )Purchases of treasury stock
    
    
    (153,083
    )
    
    
    (118,993
    )Exercise of stock options
    
    
    1,389
    
    
    
    4,228Tax benefit from stock plans
    
    
    1,451
    
    
    
    4,107Net Cash Provided by Financing Activities
    
    
    1,849,781
    
    
    
    1,486,377Net (Decrease) Increase in Cash and Cash Equivalents
    
    
    (60,168
    )
    
    
    2,843Cash and Cash Equivalents at Beginning of Year
    
    
    182,246
    
    
    
    102,259Cash and Cash Equivalents at End of Period
    
    $
    122,078
    
    
    $
    105,102Supplemental Disclosures:Interest paid
    
    $
    318,855
    
    
    $
    197,326Loans transferred to foreclosed real estate
    
    $
    1,163
    
    
    $
    703Income tax (refunds) payments
    
    $
    (768
    )
    
    $
    2,034
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1. Organization
  Plan of Conversion and Reorganization
  Acquisition of Sound Federal
  2. Basis of Presentation
   Page 8




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3. Earnings Per Share
  For the Three Months Ended March 31,2007
    
    
    2006Per
    
    
    
    
    
    
    
    
    
    
    PerAverage
    
    
    Share
    
    
    
    
    
    
    Average
    
    
    ShareIncome
    
    
    Shares
    
    
    Amount
    
    
    Income
    
    
    Shares
    
    
    Amount(In thousands, except per share data)Net income
    
    $
    71,243
    
    
    
    
    
    
    
    
    
    
    $
    75,228Basic earnings per share:Income available to
common stockholders
    
    $
    71,243
    
    
    
    518,417
    
    
    $
    0.14
    
    
    $
    75,228
    
    
    
    548,957
    
    
    $
    0.14Effect of dilutive common
stock equivalents
    
    
    
    
    
    
    10,617
    
    
    
    
    
    
    
    
    
    
    
    12,352Diluted earnings per share:Income available to
common stockholders
    
    $
    71,243
    
    
    
    529,034
    
    
    $
    0.13
    
    
    $
    75,228
    
    
    
    561,309
    
    
    $
    0.13
 4. Stock Repurchase Programs
  5. Postretirement Plans
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For the Three Months Ended March 31,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
  6. Stock Option Plans
  Three Months Ended March 31,2007
    
    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
    
    
    3,127,500
    
    
    
    13.78
    
    
    
    
    
    
    
    Exercised
    
    
    (456,471
    )
    
    
    3.04
    
    
    
    (1,531,211
    )
    
    
    2.76Forfeited
    
    
    (66,740
    )
    
    
    
    
    
    
    (6,412
    )
    
    
    4.21Outstanding at end of period
    
    
    29,584,278
    
    
    
    7.68
    
    
    
    20,122,246
    
    
    
    4.32
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2007Expected dividend yield
    
    
    2.32
    %Expected volatility
    
    
    19.38
    %Risk-free interest rate
    
    
    4.87
    %Expected option life
    
    5.4 years
  7. Income Taxes
  8. Recent Accounting Pronouncements
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Page 12




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Item 2.  Managements Discussion and Analysis of Financial Condition and Results of Operations
 Executive Summary
      Page 13




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Comparison of Financial Condition at March 31, 2007 and December 31, 2006
      Page 14




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Page 15




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Comparison of Operating Results for the Three-Month Periods Ended March 31, 2007 and 2006
 Average
Balance Sheet.
 For the Three Months Ended March 31,2007
    2006Average
    
    
    
    
    
    
    Average
    
    
    Average
    
    
    
    
    
    
    AverageBalance
    

    Interest


    Yield/Cost (4)


    Balance


    Interest


    Yield/Cost(Dollars in thousands)Interest-earnings assets:First mortgage loans, net (1)
    
    $
    19,014,206
    
    
    $
    269,682
    
    
    
    5.67
    %
    
    $
    15,162,365
    
    
    $
    209,187
    
    
    
    5.52
    %Consumer and other loans
    
    
    423,536
    
    
    
    6,892
    
    
    
    6.51
    
    
    
    242,588
    
    
    
    3,514
    
    
    
    5.79Federal funds sold
    
    
    179,622
    
    
    
    2,345
    
    
    
    5.29
    
    
    
    140,093
    
    
    
    1,508
    
    
    
    4.37Mortgage-backed securities at amortized cost
    
    
    9,801,089
    
    
    
    123,808
    
    
    
    5.05
    
    
    
    7,157,847
    
    
    
    81,783
    
    
    
    4.57Federal Home Loan Bank stock
    
    
    472,986
    
    
    
    7,472
    
    
    
    6.32
    
    
    
    247,920
    
    
    
    2,508
    
    
    
    4.05Investment securities, at amortized cost
    
    
    5,915,167
    
    
    
    69,448
    
    
    
    4.70
    
    
    
    5,592,877
    
    
    
    61,188
    
    
    
    4.38Total interest-earning assets
    
    
    35,806,606
    
    
    
    479,647
    
    
    
    5.36
    
    
    
    28,543,690
    
    
    
    359,688
    
    
    
    5.04Noninterest-earnings assets
    
    
    588,193
    
    
    
    
    
    
    
    
    
    
    
    307,306Total Assets
    
    $
    36,394,799
    
    
    
    
    
    
    
    
    
    
    $
    28,850,996Interest-bearing liabilities:Savings accounts
    
    $
    797,961
    
    
    
    1,829
    
    
    
    0.93
    
    
    $
    796,279
    
    
    
    1,943
    
    
    
    0.99Interest-bearing transaction accounts
    
    
    2,012,707
    
    
    
    16,717
    
    
    
    3.37
    
    
    
    3,404,928
    
    
    
    28,081
    
    
    
    3.34Money market accounts
    
    
    934,900
    
    
    
    8,156
    
    
    
    3.54
    
    
    
    426,629
    
    
    
    1,993
    
    
    
    1.89Time deposits
    
    
    9,431,588
    
    
    
    115,261
    
    
    
    4.96
    
    
    
    6,344,647
    
    
    
    57,347
    
    
    
    3.67Total interest-bearing deposits
    
    
    13,177,156
    
    
    
    141,963
    
    
    
    4.37
    
    
    
    10,972,483
    
    
    
    89,364
    
    
    
    3.30Repurchase agreements
    
    
    8,920,900
    
    
    
    89,431
    
    
    
    4.07
    
    
    
    8,149,444
    
    
    
    73,828
    
    
    
    3.67Federal Home Loan Bank of New York advances
    
    
    8,673,889
    
    
    
    91,799
    
    
    
    4.29
    
    
    
    3,922,389
    
    
    
    38,817
    
    
    
    4.01Total borrowed funds
    
    
    17,594,789
    
    
    
    181,230
    
    
    
    4.18
    
    
    
    12,071,833
    
    
    
    112,645
    
    
    
    3.78Total interest-bearing liabilities
    
    
    30,771,945
    
    
    
    323,193
    
    
    
    4.26
    
    
    
    23,044,316
    
    
    
    202,009
    
    
    
    3.56Noninterest-bearing liabilities:Noninterest-bearing deposits
    
    
    486,934
    
    
    
    
    
    
    
    
    
    
    
    438,190Other noninterest-bearing liabilities
    
    
    221,225
    
    
    
    
    
    
    
    
    
    
    
    179,056Total noninterest-bearing liabilities
    
    
    708,159
    
    
    
    
    
    
    
    
    
    
    
    617,246Total liabilities
    
    
    31,480,104
    
    
    
    
    
    
    
    
    
    
    
    23,661,562Stockholders equity
    
    
    4,914,695
    
    
    
    
    
    
    
    
    
    
    
    5,189,434Total Liabilities and Stockholders Equity
    
    $
    36,394,799
    
    
    
    
    
    
    
    
    
    
    $
    28,850,996Net interest income/net interest rate spread (2)
    
    
    
    
    
    $
    156,454
    
    
    
    1.10
    %
    
    
    
    
    
    $
    157,679
    
    
    
    1.48
    %Net interest-earning assets/net interest margin (3)
    
    $
    5,034,661
    
    
    
    
    
    
    
    1.70
    %
    
    $
    5,499,374
    
    
    
    
    
    
    
    2.17
    %Ratio of interest-earning assets to
interest-bearing liabilities
    
    
    
    
    
    
    
    
    
    
    1.16
    x
    
    
    
    
    
    
    
    
    
    
    1.24
    x
 
 (1)
    
    Average balance includes 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.(4)
    
    At March 31, 2007, the weighted-average rate on our outstanding interest-earning assets,
other than our FHLB stock, was as follows: first mortgage loans, 5.82%, consumer and
other loans, 6.47%, federal funds sold, 5.25%, mortgage-backed securities, 5.27%,
investment securities, 4.77%. At March 31, 2007, the weighted-average rate on our
outstanding interest-bearing liabilities was as follows: savings accounts, 0.92%,
interest-bearing transaction accounts, 3.29%, money market accounts, 3.67%, time
deposits, 4.97%, borrowed funds, 4.16%. Page 16




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General.
 Interest and Dividend Income .
    Interest Expense.
 Page 17




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Net Interest Income.
  Provision for Loan Losses.
 Page 18




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##### Table of Contents



Non-Interest Income.
 Non-Interest Expense.
 Income Taxes.
 Liquidity and Capital Resources
  Page 19




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Page 20




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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
    
    $
    282,500
    
    
    $
    282,500
    
    
    $
    
    
    
    $
    
    
    
    $
    Mortgage loan purchases
    
    
    1,166,239
    
    
    
    1,166,239
    
    
    
    
    
    
    
    
    
    
    
    Mortgage-backed security purchases
    
    
    780,000
    
    
    
    780,000
    
    
    
    
    
    
    
    
    
    
    
    Operating leases
    
    
    126,187
    
    
    
    7,419
    
    
    
    15,184
    
    
    
    13,778
    
    
    
    89,806Total
    
    $
    2,354,926
    
    
    $
    2,236,158
    
    
    $
    15,184
    
    
    $
    13,778
    
    
    $
    89,806
 Page 21




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Critical Accounting Policies
  Allowance for Loan Losses
    Page 22




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Asset Impairment Judgments
   Page 23




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Stock-Based Compensation
    Goodwill
  Page 24




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Pension and Other Postretirement Benefit Assumptions
     Page 25




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Item 3.  Quantitative and Qualitative Disclosures About Market Risk
  General
      Page 26




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Simulation Model.
 Change in
    
    
    
    
    
    Percent Change inInterest Rates
    
    
    
    
    
    Net Interest Income(Basis points)200
    
    
    
    
    
    
    
    (13.99
    )%100
    
    
    
    
    
    
    
    (6.29
    )50
    
    
    
    
    
    
    
    (2.45
    )
    
    
    
    
    
    
    
    (50
    )
    
    
    
    
    
    
    1.16(100
    )
    
    
    
    
    
    
    (1.07
    )(200
    )
    
    
    
    
    
    
    (10.79
    )
  Page 27




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Present Value of EquityAs Percent of PresentPresent 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
    
    
    $
    3,561,645
    
    
    $
    (1,702,763
    )
    
    
    (32.34
    )%
    
    
    10.24
    %
    
    
    (384
    )100
    
    
    
    4,516,315
    
    
    
    (748,093
    )
    
    
    (14.21
    )
    
    
    12.50
    
    
    
    (158
    )50
    
    
    
    4,987,885
    
    
    
    (276,523
    )
    
    
    (5.25
    )
    
    
    13.56
    
    
    
    (52
    )
    
    
    
    5,264,408
    
    
    
    
    
    
    
    
    
    
    
    14.08
    
    
    (50
    )
    
    
    5,082,400
    
    
    
    (182,008
    )
    
    
    (3.46
    )
    
    
    13.43
    
    
    
    (65
    )(100
    )
    
    
    4,438,524
    
    
    
    (825,884
    )
    
    
    (15.69
    )
    
    
    11.70
    
    
    
    (238
    )(200
    )
    
    
    2,708,822
    
    
    
    (2,555,586
    )
    
    
    (48.54
    )
    
    
    7.15
    
    
    
    (693
    )
   GAP Analysis.
 Page 28




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At March 31, 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
    
    $
    1,238,624
    
    
    $
    1,309,193
    
    
    $
    2,246,437
    
    
    $
    2,273,524
    
    
    $
    2,816,132
    
    
    $
    9,968,167
    
    
    $
    19,852,077Consumer and other loans
    
    
    97,530
    
    
    
    698
    
    
    
    8,087
    
    
    
    3,603
    
    
    
    18,130
    
    
    
    254,431
    
    
    
    382,479Federal funds sold
    
    
    17,047
    
    
    
    0
    
    
    
    0
    
    
    
    0
    
    
    
    0
    
    
    
    0
    
    
    
    17,047Mortgage-backed securities
    
    
    1,462,265
    
    
    
    1,295,200
    
    
    
    1,422,547
    
    
    
    1,362,120
    
    
    
    3,478,935
    
    
    
    1,339,762
    
    
    
    10,360,829FHLB stock
    
    
    514,441
    
    
    
    0
    
    
    
    0
    
    
    
    0
    
    
    
    0
    
    
    
    0
    
    
    
    514,441Investment securities
    
    
    1,080,762
    
    
    
    324,719
    
    
    
    1,960,839
    
    
    
    425,746
    
    
    
    1,597,955
    
    
    
    261,399
    
    
    
    5,651,420Total interest-earning assets
    
    
    4,410,669
    
    
    
    2,929,810
    
    
    
    5,637,910
    
    
    
    4,064,993
    
    
    
    7,911,152
    
    
    
    11,823,759
    
    
    
    36,778,293Interest-bearing liabilities:Savings accounts
    
    
    41,008
    
    
    
    43,070
    
    
    
    39,879
    
    
    
    39,879
    
    
    
    79,757
    
    
    
    558,298
    
    
    
    801,891Interest-bearing demand accounts
    
    
    184,544
    
    
    
    184,546
    
    
    
    286,066
    
    
    
    286,066
    
    
    
    481,710
    
    
    
    533,503
    
    
    
    1,956,435Money market accounts
    
    
    24,224
    
    
    
    24,224
    
    
    
    96,895
    
    
    
    96,895
    
    
    
    193,791
    
    
    
    532,925
    
    
    
    968,954Time deposits
    
    
    8,199,770
    
    
    
    843,314
    
    
    
    396,960
    
    
    
    157,906
    
    
    
    69,271
    
    
    
    
    
    
    
    9,667,221Borrowed funds
    
    
    1,000,000
    
    
    
    1,816,000
    
    
    
    
    
    
    
    
    
    
    
    550,000
    
    
    
    15,150,000
    
    
    
    18,516,000Total interest-bearing liabilities
    
    
    9,449,546
    
    
    
    2,911,154
    
    
    
    819,800
    
    
    
    580,746
    
    
    
    1,374,529
    
    
    
    16,774,726
    
    
    
    31,910,501Interest rate sensitivity gap
    
    $
    (5,038,877
    )
    
    $
    18,656
    
    
    $
    4,818,110
    
    
    $
    3,484,247
    
    
    $
    6,536,623
    
    
    $
    (4,950,967
    )
    
    $
    4,867,792Cumulative interest rate sensitivity gap
    
    $
    (5,038,877
    )
    
    $
    (5,020,221
    )
    
    $
    (202,111
    )
    
    $
    3,282,136
    
    
    $
    9,818,759
    
    
    $
    4,867,792Cumulative interest rate sensitivity gap
as a percent of total assets
    
    
    (13.45)
    %
    
    
    (13.40)
    %
    
    
    (0.54)
    %
    
    
    8.76
    %
    
    
    26.21
    %
    
    
    12.99
    %Cumulative interest-earning assets
as a percent of interest-bearing
liabilities
    
    
    46.68
    %
    
    
    59.39
    %
    
    
    98.47
    %
    
    
    123.85
    %
    
    
    164.87
    %
    
    
    115.25
    %
  
 Item 4.  Controls and Procedures
  Page 29




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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)January 1-January 31, 2007
    
    
    
    
    
    $
    
    
    
    
    
    
    
    
    44,314,000February 1-February 28, 2007
    
    
    2,730,000
    
    
    
    13.74
    
    
    
    2,730,000
    
    
    
    41,584,000March 1-March 31, 2007
    
    
    8,538,300
    
    
    
    13.54
    
    
    
    8,538,300
    
    
    
    33,045,700Total
    
    
    11,268,300
    
    
    
    13.59
    
    
    
    11,268,300
 
 (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 33,045,700 shares yet to be purchased as of
March 31, 2007.
 
 Item 3.  Defaults Upon Senior Securities
  Page 30




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Item 4.  Submission of Matters to a Vote of Security Holders
  
 Item 5.  Other Information
  
 Item 6.  Exhibits
 Exhibit Number
    
    Exhibit31.1
    
    Certification of Chief Executive Officer31.2
    
    Certification of Chief Financial Officer32.1
    
    Written Statement of Chief Executive Officer and
Chief Financial Officer furnished pursuant to
Section 906 of the Sarbanes-Oxley Act of 2002,
18 U.S.C. Section 1350. *
 
 *
    
    Pursuant to SEC rules, this exhibit will not be deemed filed for purposes of Section 18
of the Exchange Act or otherwise subject to the liability of that section. Page 31




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##### Table of Contents



SIGNATURES
   Date: May 8, 2007
    
    By:
    
    /s/ Ronald E. Hermance, Jr.Ronald E. Hermance, Jr.Chairman, President and ChiefExecutive Officer(Principal Executive Officer)Date: May 8, 2007
    
    By:
    
    /s/ James C. KranzJames C. KranzSenior Vice President andChief Financial Officer(Principal Financial Officer)
 Page 32