##### 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, 2005
 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




---



PageNumberPART I  FINANCIAL INFORMATIONItem 1.  Financial StatementsConsolidated Statements of Financial Condition
 June 30, 2005 (Unaudited) and December 31, 2004
    
    
    4Consolidated Statements of Income (Unaudited)
 For the three and six months ended
June 30, 2005 and 2004
    
    
    5Consolidated Statements of Cash Flows (Unaudited) 
For the six months ended June 30, 2005 and 2004
    
    
    6Notes to Consolidated Financial Statements
    
    
    7Item 2.  Managements Discussion and
Analysis of Financial Condition and
Results of Operations
    
    
    16Item 3.  Quantitative and Qualitative Disclosures About Market Risk
    
    
    35Item 4.  Controls and Procedures
    
    
    39PART II  OTHER INFORMATIONItem 1.  Legal
Proceedings
    
    
    39Item 2.  Unregistered Sales of Equity Securities and Use of Proceeds
    
    
    39Item 3.  Defaults Upon Senior Securities
    
    
    39Item 4.  Submission of Matters to a Vote of Security Holders
    
    
    40Item 5.  Other Information
    
    
    41Item 6.  Exhibits
    
    
    42SIGNATURES
    
    
    43EX-10.1: LOAN AGREEMENTEX-31.1EX-31.2EX-32.1
  Page 2




---



##### Table of Contents




    
    the timing and occurrence or non-occurrence of events may be subject to
circumstances beyond our control;
    
    there may be increases in competitive pressure among 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 may adversely affect our business;
    
    applicable technological changes may be more difficult or expensive than we anticipate;
    
    success or consummation of new business initiatives may be more difficult or
expensive than we anticipate; or
    
    litigation or matters before regulatory agencies, whether currently existing or
commencing in the future, may delay the occurrence or non-occurrence of events
longer than we anticipate.
  Page 3




---



##### 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 31,2005
    
    2004(Unaudited)(In thousands)AssetsCash and due from banks
    
    $
    94,999
    
    
    $
    122,483Federal funds sold
    
    
    14,400
    
    
    
    45,700Total cash and cash equivalents
    
    
    109,399
    
    
    
    168,183Investment securities held to maturity, market value of $1,533,112 at
June 30, 2005 and $1,326,336 at December 31, 2004
    
    
    1,534,211
    
    
    
    1,334,249Investment securities available for sale, at market value
    
    
    4,346,183
    
    
    
    1,594,639Federal Home Loan Bank of New York stock
    
    
    180,000
    
    
    
    140,000Mortgage-backed securities held to maturity, market value of $4,082,893
at June 30, 2005 and $3,721,029 at December 31, 2004
    
    
    4,085,808
    
    
    
    3,755,921Mortgage-backed securities available for sale, at market value
    
    
    2,460,357
    
    
    
    1,620,708Loans
    
    
    13,088,763
    
    
    
    11,363,039Less:Deferred loan fees
    
    
    4,792
    
    
    
    8,073Allowance for loan losses
    
    
    27,385
    
    
    
    27,319Net loans
    
    
    13,056,586
    
    
    
    11,327,647Foreclosed real estate, net
    
    
    761
    
    
    
    878Accrued interest receivable
    
    
    116,254
    
    
    
    97,490Banking premises and equipment, net
    
    
    45,511
    
    
    
    36,399Other assets
    
    
    70,061
    
    
    
    69,867Total Assets
    
    $
    26,005,131
    
    
    $
    20,145,981Liabilities and Stockholders EquityDeposits:Interest-bearing
    
    $
    10,807,366
    
    
    $
    11,059,798Noninterest-bearing
    
    
    456,699
    
    
    
    417,502Total deposits
    
    
    11,264,065
    
    
    
    11,477,300Borrowed funds
    
    
    9,150,000
    
    
    
    7,150,000Accrued expenses and other liabilities
    
    
    117,511
    
    
    
    115,797Total liabilities
    
    
    20,531,576
    
    
    
    18,743,097Common stock, $0.01 par value, 3,200,000,000 shares authorized;
741,466,555 shares issued; 597,471,988 shares outstanding
at June 30, 2005; 596,777,836 shares outstanding
at December 31, 2004
    
    
    7,415
    
    
    
    7,415Additional paid-in capital
    
    
    4,531,339
    
    
    
    565,403Retained earnings
    
    
    1,689,351
    
    
    
    1,588,792Treasury stock, at cost; 143,994,567 shares at June 30, 2005 and
144,688,719 shares at December 31, 2004
    
    
    (694,891
    )
    
    
    (696,812
    )Unallocated common stock held by the employee stock ownership plan
    
    
    (46,572
    )
    
    
    (47,552
    )Unearned common stock held by the recognition and retention plan
    
    
    (3,646
    )
    
    
    (5,267
    )Accumulated other comprehensive loss, net of tax
    
    
    (9,441
    )
    
    
    (9,095
    )Total stockholders equity
    
    
    5,473,555
    
    
    
    1,402,884Total Liabilities and Stockholders Equity
    
    $
    26,005,131
    
    
    $
    20,145,981
  Page 4




---



##### Table of Contents



Hudson
City Bancorp, Inc. and Subsidiary
 
 Consolidated Statements of Income
(Unaudited)
 For the Three Months
    
    For the Six MonthsEnded June 30,
    
    Ended June 30,2005
    
    2004
    
    2005
    
    2004(In thousands, except share data)Interest and Dividend Income:Interest and fees on first mortgage loans
    
    $
    166,558
    
    
    $
    127,892
    
    
    $
    322,656
    
    
    $
    250,979Interest and fees on consumer and other loans
    
    
    2,465
    
    
    
    2,083
    
    
    
    4,766
    
    
    
    4,132Interest on mortgage-backed securities held to maturity
    
    
    44,301
    
    
    
    44,104
    
    
    
    87,345
    
    
    
    89,955Interest on mortgage-backed securities available for sale
    
    
    20,467
    
    
    
    16,864
    
    
    
    37,597
    
    
    
    32,660Interest on investment securities held to maturity
    
    
    18,289
    
    
    
    10,371
    
    
    
    35,316
    
    
    
    11,702Interest and dividend income on investment securities
available for sale
    
    
    22,123
    
    
    
    18,450
    
    
    
    38,143
    
    
    
    42,387Dividends on Federal Home Loan Bank
of New York stock
    
    
    3,739
    
    
    
    733
    
    
    
    4,915
    
    
    
    1,392Interest on federal funds sold
    
    
    1,262
    
    
    
    294
    
    
    
    2,085
    
    
    
    611Total interest and dividend income
    
    
    279,204
    
    
    
    220,791
    
    
    
    532,823
    
    
    
    433,818Interest Expense:Interest on deposits
    
    
    70,903
    
    
    
    51,431
    
    
    
    133,818
    
    
    
    101,200Interest on borrowed funds
    
    
    76,614
    
    
    
    50,400
    
    
    
    141,432
    
    
    
    98,119Total interest expense
    
    
    147,517
    
    
    
    101,831
    
    
    
    275,250
    
    
    
    199,319Net interest income
    
    
    131,687
    
    
    
    118,960
    
    
    
    257,573
    
    
    
    234,499Provision for Loan Losses
    
    
    
    
    
    
    225
    
    
    
    65
    
    
    
    450Net interest income after provision
for loan losses
    
    
    131,687
    
    
    
    118,735
    
    
    
    257,508
    
    
    
    234,049Non-Interest Income:Service charges and other income
    
    
    1,242
    
    
    
    1,282
    
    
    
    2,378
    
    
    
    2,476Gains on securities transactions, net
    
    
    3
    
    
    
    2,634
    
    
    
    2,740
    
    
    
    5,071Total non-interest income
    
    
    1,245
    
    
    
    3,916
    
    
    
    5,118
    
    
    
    7,547Non-Interest Expense:Compensation and employee benefits
    
    
    20,275
    
    
    
    19,787
    
    
    
    40,205
    
    
    
    39,471Net occupancy expense
    
    
    4,492
    
    
    
    3,804
    
    
    
    9,048
    
    
    
    7,744Federal deposit insurance assessment
    
    
    414
    
    
    
    406
    
    
    
    822
    
    
    
    823Computer and related services
    
    
    636
    
    
    
    417
    
    
    
    1,228
    
    
    
    956Other expense
    
    
    4,439
    
    
    
    4,770
    
    
    
    9,718
    
    
    
    9,243Total non-interest expense
    
    
    30,256
    
    
    
    29,184
    
    
    
    61,021
    
    
    
    58,237Income before income tax expense
    
    
    102,676
    
    
    
    93,467
    
    
    
    201,605
    
    
    
    183,359Income Tax Expense
    
    
    38,385
    
    
    
    35,049
    
    
    
    75,385
    
    
    
    68,712Net income
    
    $
    64,291
    
    
    $
    58,418
    
    
    $
    126,220
    
    
    $
    114,647Basic Earnings Per Share
    
    $
    0.11
    
    
    $
    0.10
    
    
    $
    0.22
    
    
    $
    0.20Diluted Earnings Per Share
    
    $
    0.11
    
    
    $
    0.10
    
    
    $
    0.21
    
    
    $
    0.19Weighted Average Number of Common Shares Outstanding:Basic
    
    
    574,613,999
    
    
    
    578,186,125
    
    
    
    574,422,972
    
    
    
    580,075,972Diluted
    
    
    587,656,762
    
    
    
    594,425,169
    
    
    
    587,647,095
    
    
    
    596,973,188
  Page 5




---



##### Table of Contents



Hudson
City Bancorp, Inc. and Subsidiary
 
 Consolidated Statements of Cash Flows
(Unaudited
 For the Six MonthsEnded June 30,2005
    
    2004(In thousands)Cash Flows from Operating Activities:Net income
    
    $
    126,220
    
    
    $
    114,647Adjustments to reconcile net income to net cash provided
by operating activities:Depreciation, accretion and amortization expense
    
    
    8,335
    
    
    
    13,847Provision for loan losses
    
    
    65
    
    
    
    450Gains on securities transactions, net
    
    
    (2,740
    )
    
    
    (5,071
    )Allocation of stock for employee benefit plans
    
    
    7,454
    
    
    
    10,080Deferred tax benefit
    
    
    
    
    
    
    415Net proceeds from sale of foreclosed real estate
    
    
    718
    
    
    
    1,073Increase in accrued interest receivable
    
    
    (18,764
    )
    
    
    (13,843
    )Decrease (increase) in other assets
    
    
    44
    
    
    
    (891
    )Increase in accrued expenses and other liabilities
    
    
    1,714
    
    
    
    7,358Tax benefit from stock plans
    
    
    8,451
    
    
    
    13,073Net Cash Provided by Operating Activities
    
    
    131,497
    
    
    
    141,138Cash Flows from Investing Activities:Originations of loans
    
    
    (863,875
    )
    
    
    (812,005
    )Purchases of loans
    
    
    (1,921,951
    )
    
    
    (1,594,636
    )Payments on loans
    
    
    1,052,351
    
    
    
    1,154,542Principal collection of mortgage-backed securities held to maturity
    
    
    453,140
    
    
    
    881,578Purchases of mortgage-backed securities held to maturity
    
    
    (788,585
    )
    
    
    (564,710
    )Principal collection of mortgage-backed securities available for sale
    
    
    177,974
    
    
    
    142,997Proceeds from sales of mortgage-backed securities available for sale
    
    
    230,632
    
    
    
    226,593Purchases of mortgage-backed securities available for sale
    
    
    (1,245,475
    )
    
    
    (637,405
    )Proceeds from maturities and calls of investment securities held to maturity
    
    
    100,043
    
    
    
    30Purchases of investment securities held to maturity
    
    
    (300,000
    )
    
    
    (1,099,084
    )Proceeds from maturities and calls of investment securities available for sale
    
    
    100,022
    
    
    
    861,335Proceeds from sales of investment securities available for sale
    
    
    9,980
    
    
    
    Purchases of investment securities available for sale
    
    
    (2,858,680
    )
    
    
    (337,306
    )Purchases of Federal Home Loan Bank of New York stock
    
    
    (42,500
    )
    
    
    Redemption of Federal Home Loan Bank of New York stock
    
    
    2,500
    
    
    
    14,850Purchases of premises and equipment, net
    
    
    (11,514
    )
    
    
    (4,239
    )Net Cash Used in Investment Activities
    
    
    (5,905,938
    )
    
    
    (1,767,460
    )Cash Flows from Financing Activities:Net (decrease) increase in deposits
    
    
    (213,235
    )
    
    
    622,681Proceeds from borrowed funds
    
    
    2,100,000
    
    
    
    1,850,000Principal payments on borrowed funds
    
    
    (100,000
    )
    
    
    (800,000
    )Cash proceeds from the common stock offering  net
    
    
    3,953,922
    
    
    
    Dividends paid
    
    
    (23,262
    )
    
    
    (19,493
    )Purchases of stock by the RRP
    
    
    (1,290
    )
    
    
    (7,299
    )Purchases of treasury stock
    
    
    (2,659
    )
    
    
    (115,538
    )Exercise of stock options
    
    
    2,181
    
    
    
    4,121Net Cash Provided by Financing Activities
    
    
    5,715,657
    
    
    
    1,534,472Net Decrease in Cash and Cash Equivalents
    
    
    (58,784
    )
    
    
    (91,850
    )Cash and Cash Equivalents at Beginning of Period
    
    
    168,183
    
    
    
    254,584Cash and Cash Equivalents at End of Period
    
    $
    109,399
    
    
    $
    162,734Supplemental Disclosures:Interest paid
    
    $
    265,778
    
    
    $
    196,195Income taxes paid
    
    $
    78,964
    
    
    $
    53,699
  Page 6




---



##### Table of Contents



1.  Basis of Presentation
    Statements of Cash Flow.
 Stock Option Plans Fair Value Disclosure.
 Page 7




---



##### Table of Contents



For the Three MonthsEnded June 30,2005
    
    2004(In thousands, except per share data)Net income, as reported
    
    $
    64,291
    
    
    $
    58,418Add: expense recognized for the recognition and
retention plans, net of related tax effect
    
    
    395
    
    
    
    1,827Less: total stock option and recognition and
retention plans expense, determined under
the fair value method, net of
related tax effect
    
    
    (769
    )
    
    
    (2,656
    )Pro forma net income
    
    $
    63,917
    
    
    $
    57,589Basic earnings per share: As reported
    
    $
    0.11
    
    
    $
    0.10Pro forma
    
    
    0.11
    
    
    
    0.10Diluted earnings per share: As reported
    
    $
    0.11
    
    
    $
    0.10Pro forma
    
    
    0.11
    
    
    
    0.10
 For the Six MonthsEnded June 30,2005
    
    2004(In thousands, except per share data)Net income, as reported
    
    $
    126,220
    
    
    $
    114,647Add: expense recognized for the recognition and
retention plans, net of related tax effect
    
    
    1,465
    
    
    
    2,987Less: total stock option and recognition and
retention plans expense, determined under
the fair value method, net of
related tax effect
    
    
    (2,213
    )
    
    
    (4,644
    )Pro forma net income
    
    $
    125,472
    
    
    $
    112,990Basic earnings per share: As reported
    
    $
    0.22
    
    
    $
    0.20Pro forma
    
    
    0.22
    
    
    
    0.19Diluted earnings per share: As reported
    
    $
    0.21
    
    
    $
    0.19Pro forma
    
    
    0.21
    
    
    
    0.19
 Page 8




---



##### Table of Contents



For the Three and Six Months Ended June 30,2005
    
    2004Expected dividend yield
    
    
    2.23
    %
    
    
    1.69
    %Expected volatility
    
    
    21.57
    
    
    
    19.66Risk-free interest rate
    
    
    3.64
    
    
    
    3.05Expected option life
    
    5 years
    
    5 years
 2. Plan of Conversion and Reorganization
  Page 9




---



##### Table of Contents



3.  Comprehensive Income
  For the Three MonthsEnded June 30,2005
    
    2004(In thousands)Net income
    
    $
    64,291
    
    
    $
    58,418Other comprehensive income:Unrealized holding gain (loss) on securities
available for sale, net of tax of $15,051
for 2005 and ($43,990) for 2004
    
    
    21,793
    
    
    
    (63,696
    )Reclassification adjustment for gains
in net income, net of tax of ($1)
for 2005 and ($1,076) for 2004
    
    
    (2
    )
    
    
    (1,558
    )Total accumulated other comprehensive
income (loss)
    
    $
    86,082
    
    
    $
    (6,836
    )
 For the Six MonthsEnded June 30,2005
    
    2004(In thousands)Net income
    
    $
    126,220
    
    
    $
    114,647Other comprehensive income:Unrealized holding gain (loss) on securities
available for sale, net of tax of $881
for 2005 and ($26,696) for 2004
    
    
    1,275
    
    
    
    (38,656
    )Reclassification adjustment for gains
in net income, net of tax of ($1,119)
for 2005 and ($2,072) for 2004
    
    
    (1,621
    )
    
    
    (2,999
    )Total accumulated other comprehensive
income
    
    $
    125,874
    
    
    $
    72,992
 Page 10




---



##### Table of Contents



4.  Earnings Per Share
 For the Three Months Ended June 30,2005
    
    2004Per
    
    
    
    
    
    
    
    
    
    PerShare
    
    
    
    
    
    
    
    
    
    ShareIncome
    
    Shares
    
    Amount
    
    Income
    
    Shares
    
    Amount(In thousands, except per share data)Net income
    
    $
    64,291
    
    
    
    
    
    
    
    
    
    
    $
    58,418Basic earnings per share:Income available to
common stockholders
    
    $
    64,291
    
    
    
    574,614
    
    
    $
    0.11
    
    
    $
    58,418
    
    
    
    578,186
    
    
    $
    0.10Effect of dilutive common
stock equivalents
    
    
    
    
    
    
    13,043
    
    
    
    
    
    
    
    
    
    
    
    16,239Diluted earnings per share:Income available to
common stockholders
    
    $
    64,291
    
    
    
    587,657
    
    
    $
    0.11
    
    
    $
    58,418
    
    
    
    594,425
    
    
    $
    0.10
 For the Six Months Ended June 30,2005
    
    2004Per
    
    
    
    
    
    
    
    
    
    PerShare
    
    
    
    
    
    
    
    
    
    ShareIncome
    
    Shares
    
    Amount
    
    Income
    
    Shares
    
    Amount(In thousands, except per share data)Net income
    
    $
    126,220
    
    
    
    
    
    
    
    
    
    
    $
    114,647Basic earnings per share:Income available to
common stockholders
    
    $
    126,220
    
    
    
    574,423
    
    
    $
    0.22
    
    
    $
    114,647
    
    
    
    580,076
    
    
    $
    0.20Effect of dilutive common
stock equivalents
    
    
    
    
    
    
    13,224
    
    
    
    
    
    
    
    
    
    
    
    16,897Diluted earnings per share:Income available to
common stockholders
    
    $
    126,220
    
    
    
    587,647
    
    
    $
    0.21
    
    
    $
    114,647
    
    
    
    596,973
    
    
    $
    0.19
 Page 11




---



##### Table of Contents



5.  Fair Value and Unrealized Losses of Securities
  Less Than 12 Months
    
    12 Months or Longer
    
    TotalFair
    
    Unrealized
    
    Fair
    
    Unrealized
    
    Fair
    
    UnrealizedValue
    
    Losses
    
    Value
    
    Losses
    
    Value
    
    Losses(In thousands)2005United States government-
sponsored agencies
    
    $
    1,361,889
    
    
    $
    3,061
    
    
    $
    1,159,143
    
    
    $
    15,065
    
    
    $
    2,521,032
    
    
    $
    18,126GNMA pass-through certificates
    
    $
    831,212
    
    
    $
    5,844
    
    
    $
    53,075
    
    
    $

    426
    
    
    $
    884,287
    
    
    $
    6,270FNMA pass-through certificates
    
    
    153,789
    
    
    
    343
    
    
    
    906,107
    
    
    
    4,824
    
    
    
    1,059,896
    
    
    
    5,167FHLMC pass-through certificates
    
    
    405,762
    
    
    
    3,407
    
    
    
    291,366
    
    
    
    5,065
    
    
    
    697,128
    
    
    
    8,472FHLMC and FNMA REMICs
    
    
    
    
    
    
    
    
    
    
    510,657
    
    
    
    13,647
    
    
    
    510,657
    
    
    
    13,647Total mortgage-backed
securities
    
    $
    1,390,763
    
    
    $
    9,594
    
    
    $
    1,761,205
    
    
    $
    23,962
    
    
    $
    3,151,968
    
    
    $
    33,5562004United States government-
sponsored agencies
    
    $
    2,436,154
    
    
    $
    69,326
    
    
    $
    
    
    
    $
    
    
    
    $
    2,436,154
    
    
    $
    69,326Corporate bonds
    
    
    
    
    
    
    
    
    
    
    69
    
    
    
    1
    
    
    
    69
    
    
    
    1Equity securities
    
    
    9,931
    
    
    
    237
    
    
    
    
    
    
    
    
    
    
    
    9,931
    
    
    
    237Total investment
securities
    
    $
    2,446,085
    
    
    $
    69,563
    
    
    $
    69
    
    
    $
    1
    
    
    $
    2,446,154
    
    
    $
    69,564GNMA pass-through certificates
    
    $
    646,091
    
    
    $
    9,826
    
    
    $
    
    
    
    $
    
    
    
    $
    646,091
    
    
    $
    9,826FNMA pass-through certificates
    
    
    2,575,152
    
    
    
    67,913
    
    
    
    
    
    
    
    
    
    
    
    2,575,152
    
    
    
    67,913FHLMC pass-through certificates
    
    
    699,102
    
    
    
    21,389
    
    
    
    
    
    
    
    
    
    
    
    699,102
    
    
    
    21,389FHLMC, FNMA and GNMA -
REMICs
    
    
    806,702
    
    
    
    66,577
    
    
    
    132,671
    
    
    
    23,016
    
    
    
    939,373
    
    
    
    89,593Total mortgage-backed
securities
    
    $
    4,727,047
    
    
    $
    165,705
    
    
    $
    132,671
    
    
    $
    23,016
    
    
    $
    4,859,718
    
    
    $
    188,721
  6.  Stockholders Equity
  Page 12




---



##### Table of Contents



7.  Net Periodic Benefit Plans Expenses
   For the Three Months Ended June 30,Retirement Plans
    
    Other Benefits2005
    
    2004
    
    2005
    
    2004(In thousands)Service cost
    
    $
    806
    
    
    $
    726
    
    
    $
    598
    
    
    $
    552Interest cost
    
    
    1,172
    
    
    
    1,134
    
    
    
    657
    
    
    
    638Expected return on assets
    
    
    (1,693
    )
    
    
    (1,643
    )
    
    
    
    
    
    
    Amortization of:Net loss (gain)
    
    
    86
    
    
    
    12
    
    
    
    (3
    )
    
    
    1Unrecognized prior service cost
    
    
    (4
    )
    
    
    (4
    )
    
    
    
    
    
    
    Net periodic benefit cost
    
    $
    367
    
    
    $
    225
    
    
    $
    1,252
    
    
    $
    1,191
 For the Six Months Ended June 30,Retirement Plans
    
    Other Benefits2005
    
    2004
    
    2005
    
    2004(In thousands)Service cost
    
    $
    1,612
    
    
    $
    1,453
    
    
    $
    1,196
    
    
    $
    1,105Interest cost
    
    
    2,345
    
    
    
    2,268
    
    
    
    1,313
    
    
    
    1,276Expected return on assets
    
    
    (3,386
    )
    
    
    (3,286
    )
    
    
    
    
    
    
    Amortization of:Net loss (gain)
    
    
    173
    
    
    
    24
    
    
    
    (6
    )
    
    
    1Unrecognized prior service cost
    
    
    (8
    )
    
    
    (8
    )
    
    
    
    
    
    
    Net periodic benefit cost
    
    $
    736
    
    
    $
    451
    
    
    $
    2,503
    
    
    $
    2,382
 Page 13




---



##### Table of Contents



8.  Subsequent Event
  9.  Recent Accounting Pronouncements
   Page 14




---



##### Table of Contents



Page 15




---



##### Table of Contents



Item 2.  Managements Discussion and Analysis of Financial Condition and Results of
Operations
 Executive Summary
      Page 16




---



##### Table of Contents



Page 17




---



##### Table of Contents



Comparison of Financial Condition at June 30, 2005 and December 31, 2004
    Page 18




---



##### Table of Contents



Page 19




---



##### Table of Contents



Average Balance Sheets for the Three- and Six-Months Ended June 30, 2005 and 2004
  Page 20




---



##### Table of Contents



For the Three Months Ended June 30,2005
    
    2004Average
    
    
    
    
    
    
    
    
    
    AverageAverage
    
    
    
    
    
    Yield/
    
    Average
    
    
    
    
    
    Yield/Balance
    
    Interest
    
    Cost
    
    Balance
    
    Interest
    
    Cost(Dollars in thousands)Assets:Interest-earnings assets:First mortgage loans, net (1)
    
    $
    12,254,495
    
    
    $
    166,558
    
    
    
    5.44
    %
    
    $
    9,368,244
    
    
    $
    127,892
    
    
    
    5.46
    %Consumer and other loans
    
    
    169,850
    
    
    
    2,465
    
    
    
    5.81
    
    
    
    139,040
    
    
    
    2,083
    
    
    
    5.99Federal funds sold
    
    
    171,416
    
    
    
    1,262
    
    
    
    2.95
    
    
    
    125,231
    
    
    
    294
    
    
    
    0.94Mortgage-backed securities at amortized cost
    
    
    5,921,617
    
    
    
    64,768
    
    
    
    4.38
    
    
    
    5,504,413
    
    
    
    60,968
    
    
    
    4.43Federal Home Loan Bank of New York stock
    
    
    164,565
    
    
    
    3,739
    
    
    
    9.09
    
    
    
    155,973
    
    
    
    733
    
    
    
    1.88Investment securities at amortized cost
    
    
    3,792,885
    
    
    
    40,412
    
    
    
    4.26
    
    
    
    2,580,210
    
    
    
    28,821
    
    
    
    4.47Total
interest-earning
assets
    
    
    22,474,828
    
    
    
    279,204
    
    
    
    4.97
    
    
    
    17,873,111
    
    
    
    220,791
    
    
    
    4.94Noninterest-earnings assets
    
    
    651,868
    
    
    
    
    
    
    
    
    
    
    
    379,875Total Assets
    
    $
    23,126,696
    
    
    
    
    
    
    
    
    
    
    $
    18,252,986Liabilities and Stockholders Equity:Interest-bearing liabilities:Savings accounts
    
    $
    1,324,444
    
    
    
    3,269
    
    
    
    0.99
    
    
    $
    949,999
    
    
    
    2,345
    
    
    
    0.99Interest-bearing demand accounts
    
    
    4,248,495
    
    
    
    30,660
    
    
    
    2.89
    
    
    
    3,389,216
    
    
    
    17,850
    
    
    
    2.12Money market accounts
    
    
    561,686
    
    
    
    1,474
    
    
    
    1.05
    
    
    
    600,796
    
    
    
    1,428
    
    
    
    0.96Time deposits
    
    
    5,381,904
    
    
    
    35,500
    
    
    
    2.65
    
    
    
    5,571,349
    
    
    
    29,808
    
    
    
    2.15Total
interest-bearing
deposits
    
    
    11,516,529
    
    
    
    70,903
    
    
    
    2.47
    
    
    
    10,511,360
    
    
    
    51,431
    
    
    
    1.97Borrowed funds
    
    
    8,533,407
    
    
    
    76,614
    
    
    
    3.60
    
    
    
    5,818,912
    
    
    
    50,400
    
    
    
    3.48Total interest-bearing liabilities
    
    
    20,049,936
    
    
    
    147,517
    
    
    
    2.95
    
    
    
    16,330,272
    
    
    
    101,831
    
    
    
    2.51Noninterest-bearing liabilities:Noninterest-bearing deposits
    
    
    439,415
    
    
    
    
    
    
    
    
    
    
    
    428,257Other
noninterest-bearing liabilities
    
    
    131,517
    
    
    
    
    
    
    
    
    
    
    
    118,638Total noninterest-bearing liabilities
    
    
    570,932
    
    
    
    
    
    
    
    
    
    
    
    546,895Total liabilities
    
    
    20,620,868
    
    
    
    
    
    
    
    
    
    
    
    16,877,167Stockholders equity
    
    
    2,505,828
    
    
    
    
    
    
    
    
    
    
    
    1,375,819Total Liabilities
and Stockholders
Equity
    
    $
    23,126,696
    
    
    
    
    
    
    
    
    
    
    $
    18,252,986Net interest income/net interest rate spread (2)
    
    
    
    
    
    $
    131,687
    
    
    
    2.02
    %
    
    
    
    
    
    $
    118,960
    
    
    
    2.43
    %Net interest-earning assets/net interest margin (3)
    
    $
    2,424,892
    
    
    
    
    
    
    
    2.34
    %
    
    $
    1,542,839
    
    
    
    
    
    
    
    2.65
    %Ratio of interest-earning assets to
interest-bearing liabilities (4)
    
    
    
    
    
    
    
    
    
    
    1.12
    x
    
    
    
    
    
    
    
    
    
    
    1.09
    x
 
 (1)
    
    Amount is net of deferred loan fees and allowance for loan losses and includes non-performing loans.(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 June 30, 2005, interest-earnings assets were 1.29 times interest-bearing liabilities. Page 21




---



##### Table of Contents



For the Six Months Ended June 30,2005
    
    2004Average
    
    
    
    
    
    
    
    
    
    AverageAverage
    
    
    
    
    
    Yield/
    
    Average
    
    
    
    
    
    Yield/Balance
    
    Interest
    
    Cost (4)
    
    Balance
    
    Interest
    
    Cost(Dollars in thousands)Assets:Interest-earnings assets:First mortgage loans, net (1)
    
    $
    11,815,575
    
    
    $
    322,656
    
    
    
    5.46
    %
    
    $
    9,102,544
    
    
    $
    250,979
    
    
    
    5.51
    %Consumer and other loans
    
    
    164,669
    
    
    
    4,766
    
    
    
    5.79
    
    
    
    137,170
    
    
    
    4,132
    
    
    
    6.02Federal funds sold
    
    
    155,296
    
    
    
    2,085
    
    
    
    2.71
    
    
    
    132,452
    
    
    
    611
    
    
    
    0.93Mortgage-backed securities at amortized cost
    
    
    5,689,854
    
    
    
    124,942
    
    
    
    4.39
    
    
    
    5,522,596
    
    
    
    122,615
    
    
    
    4.44Federal Home Loan Bank of New York stock
    
    
    152,599
    
    
    
    4,915
    
    
    
    6.44
    
    
    
    158,093
    
    
    
    1,392
    
    
    
    1.76Investment securities at amortized cost
    
    
    3,379,278
    
    
    
    73,459
    
    
    
    4.35
    
    
    
    2,440,856
    
    
    
    54,089
    
    
    
    4.43Total
interest-earning
assets
    
    
    21,357,271
    
    
    
    532,823
    
    
    
    4.99
    
    
    
    17,493,711
    
    
    
    433,818
    
    
    
    4.96Noninterest-earnings assets
    
    
    483,690
    
    
    
    
    
    
    
    
    
    
    
    349,527Total Assets
    
    $
    21,840,961
    
    
    
    
    
    
    
    
    
    
    $
    17,843,238Liabilities and Stockholders Equity:Interest-bearing liabilities:Savings accounts
    
    $
    1,123,131
    
    
    
    5,514
    
    
    
    0.99
    
    
    $
    946,762
    
    
    
    4,676
    
    
    
    0.99Interest-bearing demand accounts
    
    
    4,284,477
    
    
    
    57,958
    
    
    
    2.73
    
    
    
    3,190,741
    
    
    
    33,476
    
    
    
    2.11Money market accounts
    
    
    565,176
    
    
    
    2,915
    
    
    
    1.04
    
    
    
    609,564
    
    
    
    2,900
    
    
    
    0.96Time deposits
    
    
    5,353,883
    
    
    
    67,431
    
    
    
    2.54
    
    
    
    5,606,964
    
    
    
    60,148
    
    
    
    2.16Total interest-bearing deposits
    
    
    11,326,667
    
    
    
    133,818
    
    
    
    2.38
    
    
    
    10,354,031
    
    
    
    101,200
    
    
    
    1.97Borrowed funds
    
    
    7,970,939
    
    
    
    141,432
    
    
    
    3.58
    
    
    
    5,597,642
    
    
    
    98,119
    
    
    
    3.52Total interest-bearing liabilities
    
    
    19,297,606
    
    
    
    275,250
    
    
    
    2.88
    
    
    
    15,951,673
    
    
    
    199,319
    
    
    
    2.51Noninterest-bearing liabilities:Noninterest-bearing deposits
    
    
    429,055
    
    
    
    
    
    
    
    
    
    
    
    411,212Other noninterest-bearing liabilities
    
    
    138,896
    
    
    
    
    
    
    
    
    
    
    
    121,163Total
noninterest-bearing
liabilities
    
    
    567,951
    
    
    
    
    
    
    
    
    
    
    
    532,375Total liabilities
    
    
    19,865,557
    
    
    
    
    
    
    
    
    
    
    
    16,484,048Stockholders equity
    
    
    1,975,404
    
    
    
    
    
    
    
    
    
    
    
    1,359,190Total Liabilities
and Stockholders
Equity
    
    $
    21,840,961
    
    
    
    
    
    
    
    
    
    
    $
    17,843,238Net interest income/net interest rate spread (2)
    
    
    
    
    
    $
    257,573
    
    
    
    2.11
    %
    
    
    
    
    
    $
    234,499
    
    
    
    2.45
    %Net interest-earning assets/net interest margin (3)
    
    $
    2,059,665
    
    
    
    
    
    
    
    2.39
    %
    
    $
    1,542,038
    
    
    
    
    
    
    
    2.67
    %Ratio of interest-earning assets to
interest-bearing liabilities (5)
    
    
    
    
    
    
    
    
    
    
    1.11
    x
    
    
    
    
    
    
    
    
    
    
    1.10
    x
 
 (1)
    
    Amount is net of deferred loan fees and allowance for loan losses and includes non-performing loans.(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 June 30, 2005, the weighted-average rate on our outstanding interest-earning assets, other than our FHLB stock, was as follows: first
mortgage loans, 5.52%, consumer and other loans, 5.79%, federal funds sold, 3.25%, mortgage-backed securities, 4.70%, investment securities,
4.32%. At June 30, 2005, the weighted-average rate on our outstanding interest-bearing liabilities was as follows: savings accounts, 0.98%,
interest-bearing demand accounts, 3.00%, money market accounts, 0.97%, time deposits, 2.78%, borrowed funds, 3.57%.(5)
    
    At June 30, 2005, interest-earnings assets were 1.29 times interest-bearing liabilities. Page 22




---



##### Table of Contents



Comparison of Operating Results for the Three Months Ended June 30, 2005 and 2004
 General.
 Interest and Dividend Income.
    Page 23




---



##### Table of Contents



Interest Expense.
    Net Interest Income.
 Page 24




---



##### Table of Contents



Provision for Loan Losses.
    Non-Interest Income.
 Non-Interest Expense.
 Page 25




---



##### Table of Contents



Income Taxes.
 Comparison of Operating Results for the Six Months Ended June 30, 2005 and 2004
 General.
 Interest and Dividend Income.
   Page 26




---



##### Table of Contents



Interest Expense.
    Page 27




---



##### Table of Contents



Net Interest Income.
 Provision for Loan Losses.
 Non-Interest Income.
 Non-Interest Expense.
 Income Taxes.
 Liquidity and Capital Resources
  Page 28




---



##### Table of Contents



Page 29




---



##### Table of Contents



Page 30




---



##### Table of Contents



Page 31




---



##### Table of Contents



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 loans
originations
    
    $
    266,320
    
    
    $
    266,320
    
    
    $
    
    
    
    $
    
    
    
    $
    Mortgage loan
purchases
    
    
    700,930
    
    
    
    700,930
    
    
    
    
    
    
    
    
    
    
    
    Mortgage-backed security
purchases
    
    
    628,800
    
    
    
    628,800
    
    
    
    
    
    
    
    
    
    
    
    Operating
leases
    
    
    85,104
    
    
    
    4,914
    
    
    
    10,410
    
    
    
    10,006
    
    
    
    59,774Total
    
    $
    1,681,154
    
    
    $
    1,600,964
    
    
    $
    10,410
    
    
    $
    10,006
    
    
    $
    59,774
  Page 32




---



##### Table of Contents



Critical Accounting Policies
  Allowance for Loan Losses.
    Page 33




---



##### Table of Contents



Asset Impairment Judgments.
  Page 34




---



##### Table of Contents



Item 3.  Quantitative and Qualitative Disclosures About Market Risk
  General.
    Interest Rate Risk Analysis.
 Page 35




---



##### Table of Contents



Present Value of EquityAs Percent of PresentPresent Value of Equity
    
    Value of AssetsChange in
    
    Dollar
    
    Dollar
    
    Percent
    
    Percent
    
    PercentInterest Rates
    
    Amount
    
    Change
    
    Change
    
    Value Ratio
    
    Change(Basis points)
    
    (Dollars in thousands)200
    
    $
    5,577,597
    
    
    $
    (904,634
    )
    
    
    (13.96
    )%
    
    
    22.93
    %
    
    
    (7.28
    )%100
    
    
    6,117,728
    
    
    
    (364,503
    )
    
    
    (5.62
    )
    
    
    24.16
    
    
    
    (2.30
    )50
    
    
    6,360,511
    
    
    
    (121,720
    )
    
    
    (1.88
    )
    
    
    24.64
    
    
    
    (0.36
    )0
    
    
    6,482,231
    
    
    
    
    
    
    
    
    
    
    
    24.73
    
    
    
    (50)
    
    
    6,292,634
    
    
    
    (189,597
    )
    
    
    (2.92
    )
    
    
    23.90
    
    
    
    (3.36
    )(100)
    
    
    5,935,190
    
    
    
    (547,041
    )
    
    
    (8.44
    )
    
    
    22.55
    
    
    
    (8.82
    )(200)
    
    
    5,029,984
    
    
    
    (1,452,247
    )
    
    
    (22.40
    )
    
    
    19.10
    
    
    
    (22.77
    )
   Page 36




---



##### Table of Contents



Change in
    
    Percent Change inInterest Rates
    
    Net Interest Income(Basis points)200
    
    
    (1.48
    )%100
    
    
    0.3450
    
    
    0.760
    
    
    (50)
    
    
    (5.31
    )(100)
    
    
    (12.23
    )(200)
    
    
    (30.65
    )
  GAP Analysis.
  Page 37




---



##### Table of Contents



At June 30, 2005More 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
    
    $
    1,013,175
    
    
    $
    1,006,753
    
    
    $
    1,642,526
    
    
    $
    1,441,359
    
    
    $
    2,065,421
    
    
    $
    5,734,169
    
    
    $
    12,903,403Consumer and other loans
    
    
    28,205
    
    
    
    247
    
    
    
    1,336
    
    
    
    3,244
    
    
    
    16,193
    
    
    
    130,868
    
    
    
    180,093Federal funds sold
    
    
    14,400
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    14,400Mortgage-backed securities
    
    
    1,107,794
    
    
    
    1,209,182
    
    
    
    976,516
    
    
    
    805,296
    
    
    
    1,067,285
    
    
    
    1,380,092
    
    
    
    6,546,165FHLB stock
    
    
    180,000
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    180,000Investment securities
    
    
    1,488,858
    
    
    
    499,475
    
    
    
    870,404
    
    
    
    76
    
    
    
    1,306,970
    
    
    
    1,714,611
    
    
    
    5,880,394Total interest-earning assets
    
    
    3,832,432
    
    
    
    2,715,657
    
    
    
    3,490,782
    
    
    
    2,249,975
    
    
    
    4,455,869
    
    
    
    8,959,740
    
    
    
    25,704,455Interest-bearing liabilities:Savings accounts
    
    
    25,769
    
    
    
    22,062
    
    
    
    43,625
    
    
    
    43,625
    
    
    
    87,250
    
    
    
    654,375
    
    
    
    876,706Interest-bearing demand accounts
    
    
    104,611
    
    
    
    104,611
    
    
    
    418,442
    
    
    
    418,442
    
    
    
    836,883
    
    
    
    2,301,426
    
    
    
    4,184,415Money market accounts
    
    
    9,976
    
    
    
    9,976
    
    
    
    39,902
    
    
    
    39,902
    
    
    
    79,805
    
    
    
    219,463
    
    
    
    399,024Time deposits
    
    
    2,424,495
    
    
    
    1,424,470
    
    
    
    837,152
    
    
    
    338,558
    
    
    
    322,546
    
    
    
    
    
    
    
    5,347,221Borrowed funds
    
    
    825,000
    
    
    
    650,000
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    7,675,000
    
    
    
    9,150,000Total interest-bearing liabilities
    
    
    3,389,851
    
    
    
    2,211,119
    
    
    
    1,339,121
    
    
    
    840,527
    
    
    
    1,326,484
    
    
    
    10,850,264
    
    
    
    19,957,366Interest rate sensitivity gap
    
    $
    442,581
    
    
    $
    504,538
    
    
    $
    2,151,661
    
    
    $
    1,409,448
    
    
    $
    3,129,385
    
    
    $
    (1,890,524
    )
    
    $
    5,747,089Cumulative interest rate sensitivity gap
    
    $
    442,581
    
    
    $
    947,119
    
    
    $
    3,098,780
    
    
    $
    4,508,228
    
    
    $
    7,637,613
    
    
    $
    5,747,089Cumulative interest rate sensitivity gap
as a percent of total assets
    
    
    1.70
    %
    
    
    3.64
    %
    
    
    11.92
    %
    
    
    17.34
    %
    
    
    29.37
    %
    
    
    22.10
    %Cumulative interest-earning assets
as a percent of interest-bearing
liabilities
    
    
    113.06
    %
    
    
    116.91
    %
    
    
    144.65
    %
    
    
    157.94
    %
    
    
    183.86
    %
    
    
    128.80
    %
 Page 38




---



##### Table of Contents



Item 4.  Controls and Procedures
   
 PART II  OTHER INFORMATION
 
 Item 1.  Legal Proceedings
  
 Item 2.  Unregistered Sales of Equity Securities and Use of Proceeds
  
 Item 3.  Defaults Upon Senior Securities
  Page 39




---



##### Table of Contents



Item 4.  Submission of Matters to a Vote of Security Holders
  Proposal 1
 For:
    
    
    167,715,883Against:
    
    
    2,107,659Abstain:
    
    
    296,140
  Proposal 2
 For:
    
    
    172,366,208Against:
    
    
    7,120,070Abstain:
    
    
    296,104
  Proposal 3
  For:
    
    
    178,772,167Withheld:
    
    
    1,010,215
  For:
    
    
    179,017,389Withheld:
    
    
    764,993
  For:
    
    
    179,019,256Withheld:
    
    
    763,126
  Page 40




---



##### Table of Contents



Proposal 4
 For:
    
    
    165,129,151Against:
    
    
    4,113,015Abstain:
    
    
    877,516
  Proposal 5
 For:
    
    
    178,255,229Against:
    
    
    1,178,066Abstain:
    
    
    349,087
  Proposal 6
 For:
    
    
    174,141,049Against:
    
    
    5,161,327Abstain:
    
    
    480,006
  
 Item 5.  Other Information
  Page 41




---



##### Table of Contents



Item 6.  Exhibits
 Exhibit Number
    
    Exhibit10.1
    
    Loan Agreement by and between Employee Stock
Ownership Plan Trust of Hudson City Savings
Bank and Hudson City Bancorp, Inc.10.2
    
    Executive Officer Annual Incentive Plan of
Hudson City Bancorp, Inc. (1)31.1
    
    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. *
 
 (1)
    
    Incorporated herein by reference to Exhibit A to the Registrants Proxy Statement on
Schedule 14A, filed with the Securities and Exchange Commission on April 20, 2005.*
    
    Pursuant to SEC rules, this exhibit will not be deemed filed for purposes of Section 18
of the Exchange Act or otherwise subject to the liability of that section. Page 42




---



##### Table of Contents



SIGNATURES
  Hudson City Bancorp, Inc.Date: August 9, 2005
    
    

    By:

    /s/ Ronald E. Hermance, Jr.Ronald E. Hermance, Jr.Chairman, President and Chief
Executive Officer
(principal executive officer) Date: August 9, 2005
    By:
    /s/ Denis J. SalamoneDenis J. SalamoneSenior Executive Vice President and
Chief Operating Officer
(principal financial and
accounting officer) Page 43