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UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
 Washington, D.C. 20549
 FORM 10-K
  þ
    
    Annual Report Pursuant to Section 13 or 15(d) of the Securities Exchange Act of 1934
 For the fiscal year ended: December 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 Road Paramus, New Jersey
    
    07652(Address of Principal Executive Offices)
    
    (Zip Code)
 
    
   þ o
  o þ
  þ o
 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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##### 



Hudson City Bancorp, Inc.
2007 Annual Report on Form 10-K
Table of Contents
 PageForward-Looking Statements and Associated Risk Factors
    
    
    1PART IItem 1
    
    Business
    
    
    2Item 1A
    
    Risk Factors
    
    
    48Item 1B
    
    Unresolved Staff Comments
    
    
    51Item 2
    
    Properties
    
    
    51Item 3
    
    Legal Proceedings
    
    
    51Item 4
    
    Submission of Matters to a Vote of Security Holders
    
    
    51PART IIItem 5
    
    Market for Registrants Common Equity, Related Stockholder
Matters and Issuer Purchases of Equity Securities
    
    
    52Item 6
    
    Selected Financial Data
    
    
    54Item 7
    
    Managements Discussion and Analysis of Financial Condition
and Results
Of Operations
    
    
    56Item 7A
    
    Quantitative and Qualitative Disclosures About Market Risk
    
    
    76Item 8
    
    Financial Statements and Supplementary Data
    
    
    83Item 9
    
    Changes in and Disagreements with Accountants on Accounting and
Financial Disclosure
    
    
    124Item 9A
    
    Controls and Procedures
    
    
    124Item 9B
    
    Other Information
    
    
    125PART IIIItem 10
    
    Directors, Executive Officers and Corporate Governance
    
    
    126Item 11
    
    Executive Compensation
    
    
    126Item 12
    
    Security Ownership of Certain Beneficial Owners and Management
and Related Stockholder Matters
    
    
    126Item 13
    
    Certain Relationships and Related Transactions, and Director
Independence
    
    
    126Item 14
    
    Principal Accounting Fees and Services
    
    
    127PART IVItem 15
    
    Exhibits, Financial Statement Schedules
    
    
    128SIGNATURES
    
    
    
    
    131EX-10.1: EMPLOYEE STOCK OWNERSHIP PLANEX-10.4: FORM OF TWO-YEAR CHANGE IN CONTROL AGREEMENTEX-21.1: SUBSIDIARIESEX-23.1: CONSENT OF KPMG LLPEX-31.1: CERTIFICATIONEX-31.2: CERTIFICATIONEX-32.1: CERTIFICATION




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PRIVATE SECURITIES LITIGATION REFORM ACT SAFE HARBOR STATEMENT
  
    
    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 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 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;
    
    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;
    
    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 1




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PART I
 
 Item 1. Business.
 Hudson City Bancorp, Inc.
 Hudson City Savings.
      Page 2




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Available Information
 ,
 Market Area
   
   Page 3




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Competition
    Lending Activities
 Loan Portfolio Composition.
 Page 4




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Page 5




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At December 31,2007
    
    
    2006
    
    
    2005
    
    
    2004
    
    
    2003Percent
    
    
    
    
    
    
    Percent
    
    
    
    
    
    
    Percent
    
    
    
    
    
    
    Percent
    
    
    
    
    
    
    PercentAmount
    
    
    of Total
    
    
    Amount
    
    
    of Total
    
    
    Amount
    
    
    of Total
    
    
    Amount
    
    
    of Total
    
    
    Amount
    
    
    of Total(Dollars in thousands)First mortgage loans:One- to four-family
    
    $
    23,671,712
    
    
    
    97.86
    %
    
    $
    18,561,467
    
    
    
    97.27
    %
    
    $
    14,780,819
    
    
    
    98.13
    %
    
    $
    11,120,874
    
    
    
    97.87
    %
    
    $
    8,567,442
    
    
    
    97.32
    %FHA/VA
    
    
    22,940
    
    
    
    0.09
    
    
    
    29,573
    
    
    
    0.15
    
    
    
    43,672
    
    
    
    0.29
    
    
    
    81,915
    
    
    
    0.72
    
    
    
    98,502
    
    
    
    1.12Multi-family and
commercial
    
    
    58,874
    
    
    
    0.24
    
    
    
    69,322
    
    
    
    0.36
    
    
    
    2,320
    
    
    
    0.02
    
    
    
    3,000
    
    
    
    0.03
    
    
    
    2,843
    
    
    
    0.03Construction
    
    
    34,064
    
    
    
    0.14
    
    
    
    41,150
    
    
    
    0.22
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    Total first
mortgage loans
    
    
    23,787,590
    
    
    
    98.33
    
    
    
    18,701,512
    
    
    
    98.00
    
    
    
    14,826,811
    
    
    
    98.44
    
    
    
    11,205,789
    
    
    
    98.62
    
    
    
    8,668,787
    
    
    
    98.47Consumer
and other loans:Fixed-rate second
mortgages
    
    
    284,406
    
    
    
    1.18
    
    
    
    274,028
    
    
    
    1.44
    
    
    
    205,826
    
    
    
    1.37
    
    
    
    127,737
    
    
    
    1.12
    
    
    
    105,361
    
    
    
    1.20Home equity credit
    
    
    104,567
    
    
    
    0.43
    
    
    
    97,644
    
    
    
    0.51
    
    
    
    29,150
    
    
    
    0.19
    
    
    
    28,929
    
    
    
    0.25
    
    
    
    28,217
    
    
    
    0.32Other
    
    
    15,718
    
    
    
    0.06
    
    
    
    10,433
    
    
    
    0.05
    
    
    
    662
    
    
    
    
    
    
    
    584
    
    
    
    0.01
    
    
    
    701
    
    
    
    0.01Total consumer other loans
    
    
    404,691
    
    
    
    1.67
    
    
    
    382,105
    
    
    
    2.00
    
    
    
    235,638
    
    
    
    1.56
    
    
    
    157,250
    
    
    
    1.38
    
    
    
    134,279
    
    
    
    1.53Total loans
    
    
    24,192,281
    
    
    
    100.00
    %
    
    
    19,083,617
    
    
    
    100.00
    %
    
    
    15,062,449
    
    
    
    100.00
    %
    
    
    11,363,039
    
    
    
    100.00
    %
    
    
    8,803,066
    
    
    
    100.00
    %Deferred loan
costs (fees)
    
    
    40,598
    
    
    
    
    
    
    
    16,159
    
    
    
    
    
    
    
    1,653
    
    
    
    
    
    
    
    (8,073
    )
    
    
    
    
    
    
    (10,255
    )Allowance for
loan losses
    
    
    (34,741
    )
    
    
    
    
    
    
    (30,625
    )
    
    
    
    
    
    
    (27,393
    )
    
    
    
    
    
    
    (27,319
    )
    
    
    
    
    
    
    (26,547
    )Net Loans
    
    $
    24,198,138
    
    
    
    
    
    
    $
    19,069,151
    
    
    
    
    
    
    $
    15,036,709
    
    
    
    
    
    
    $
    11,327,647
    
    
    
    
    
    
    $
    8,766,264
 Page 6




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Loan Maturity .
 At December 31, 2007Multi-familyFirst Mortgage
    
    
    and Commercial
    
    
    
    
    
    
    Consumer andLoans
    
    
    Mortgages
    
    
    Construction
    
    
    Other Loans
    
    
    Total(In thousands)Amounts Due:One year or less
    
    $
    3,313
    
    
    $
    1,300
    
    
    $
    34,064
    
    
    $
    1,056
    
    
    $
    39,733After one year:One to three years
    
    
    8,310
    
    
    
    995
    
    
    
    
    
    
    
    16,846
    
    
    
    26,151Three to five years
    
    
    23,377
    
    
    
    466
    
    
    
    
    
    
    
    15,536
    
    
    
    39,379Five to ten years
    
    
    455,342
    
    
    
    3,612
    
    
    
    
    
    
    
    66,699
    
    
    
    525,653Ten to twenty years
    
    
    2,165,971
    
    
    
    29,288
    
    
    
    
    
    
    
    299,929
    
    
    
    2,495,188Over twenty years
    
    
    21,038,339
    
    
    
    23,213
    
    
    
    
    
    
    
    4,625
    
    
    
    21,066,177Total due after one year
    
    
    23,691,339
    
    
    
    57,574
    
    
    
    
    
    
    
    403,635
    
    
    
    24,152,548Total loans
    
    $
    23,694,652
    
    
    $
    58,874
    
    
    $
    34,064
    
    
    $
    404,691
    
    
    
    24,192,281Deferred loan costs
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    40,598Allowance for loan losses
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    (34,741
    )Net loans
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    $
    24,198,138
  Due After December 31, 2008Fixed
    
    
    Adjustable
    
    
    Total(In thousands)First mortgage loans
    
    $
    19,072,096
    
    
    $
    4,619,243
    
    
    $
    23,691,339Multi-family and commercial mortgages
    
    
    55,486
    
    
    
    2,088
    
    
    
    57,574Consumer and other loans
    
    
    291,821
    
    
    
    111,814
    
    
    
    403,635Total loans due after one year
    
    $
    19,419,403
    
    
    $
    4,733,145
    
    
    $
    24,152,548
 Page 7




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For the Year Ended December 31,2007
    
    
    2006
    
    
    2005(In thousands)Total loans:Balance outstanding at beginning of period
    
    $
    19,083,617
    
    
    $
    15,062,449
    
    
    $
    11,363,039Loans transferred in Acquisition
    
    
    
    
    
    
    774,908
    
    
    
    Originations:One- to four-family first mortgage loans
    
    
    3,206,695
    
    
    
    2,144,991
    
    
    
    2,068,183Multi-family and commercial mortgage loans
    
    
    4,125
    
    
    
    3,392
    
    
    
    Construction loans
    
    
    8,593
    
    
    
    7,614
    
    
    
    Consumer and other loans
    
    
    133,098
    
    
    
    151,490
    
    
    
    126,591Total originations
    
    
    3,352,511
    
    
    
    2,307,487
    
    
    
    2,194,774Purchases:One- to four-family first mortgage loans
    
    
    3,971,273
    
    
    
    2,685,186
    
    
    
    3,676,260FHA/VA first mortgage loans
    
    
    
    
    
    
    26,418
    
    
    
    Other first mortgage loans
    
    
    
    
    
    
    544
    
    
    
    Total purchases
    
    
    3,971,273
    
    
    
    2,712,148
    
    
    
    3,676,260Less:Principal payments:First mortgage loans
    
    
    (2,098,493
    )
    
    
    (1,678,882
    )
    
    
    (2,103,100
    )Consumer and other loans
    
    
    (110,510
    )
    
    
    (73,997
    )
    
    
    (48,203
    )Total principal payments
    
    
    (2,209,003
    )
    
    
    (1,752,879
    )
    
    
    (2,151,303
    )Premium amortization and discount accretion, net
    
    
    1,585
    
    
    
    (1,440
    )
    
    
    (8,247
    )Transfers to foreclosed real estate
    
    
    (1,752
    )
    
    
    (3,642
    )
    
    
    (1,750
    )Loan sales
    
    
    
    
    
    
    (15,414
    )
    
    
    (10,324
    )Balance outstanding at end of period
    
    $
    24,192,281
    
    
    $
    19,083,617
    
    
    $
    15,062,449
 Residential Mortgage Lending .
  Page 8




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.
   Page 9




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Percent ofFirst MortgageAmount
    
    Loan Originations(In thousands)2007
    
    $
    107,481
    
    
    
    3.3
    %2006
    
    
    83,693
    
    
    
    3.92005
    
    
    156,492
    
    
    
    7.6
  Mortgage LoansModified(In thousands)2007
    
    $
    15,2722006
    
    
    11,6562005
    
    
    39,254
  Page 10




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Page 11




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.
 Multi-family and Commercial Mortgage Loans.
  Page 12




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Construction Lending .
   Page 13




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Consumer Loans .
    Loan Approval Procedures and Authority .
  Page 14




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Asset Quality
  .
 Delinquent Loans and Foreclosed Assets .
 Page 15




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Page 16




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At December 31,2007
    
    
    2006
    
    
    200560-89 Days
    
    
    90 Days or More
    
    
    60-89 Days
    
    
    90 Days or More
    
    
    60-89 Days
    
    
    90 Days or MorePrincipal
    
    
    
    
    
    
    Principal
    
    
    
    
    
    
    Principal
    
    
    
    
    
    
    Principal
    
    
    
    
    
    
    Principal
    
    
    
    
    
    
    PrincipalNo. of
    
    
    Balance
    
    
    No. of
    
    
    Balance
    
    
    No. of
    
    
    Balance
    
    
    No. of
    
    
    Balance
    
    
    No. of
    
    
    Balance
    
    
    No. of
    
    
    BalanceLoans
    
    
    of Loans
    
    
    Loans
    
    
    of Loans
    
    
    Loans
    
    
    of Loans
    
    
    Loans
    
    
    of Loans
    
    
    Loans
    
    
    of Loans
    
    
    Loans
    
    
    of Loans(Dollars in thousands)One- to four-family
first mortgages
    
    
    103
    
    
    $
    32,448
    
    
    
    198
    
    
    $
    71,614
    
    
    
    60
    
    
    $
    16,910
    
    
    
    82
    
    
    $
    22,026
    
    
    
    44
    
    
    $
    10,113
    
    
    
    67
    
    
    $
    15,273FHA/VA first mortgages
    
    
    12
    
    
    
    1,995
    
    
    
    21
    
    
    
    4,157
    
    
    
    8
    
    
    
    1,236
    
    
    
    23
    
    
    
    3,657
    
    
    
    10
    
    
    
    1,755
    
    
    
    24
    
    
    
    4,037Multi-family and
commercial mortgages
    
    
    3
    
    
    
    1,393
    
    
    
    2
    
    
    
    2,028
    
    
    
    1
    
    
    
    566
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    Construction loans
    
    
    3
    
    
    
    4,457
    
    
    
    1
    
    
    
    647
    
    
    
    4
    
    
    
    2,769
    
    
    
    2
    
    
    
    3,098
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    Consumer and other loans
    
    
    7
    
    
    
    329
    
    
    
    12
    
    
    
    956
    
    
    
    20
    
    
    
    1,125
    
    
    
    11
    
    
    
    1,217
    
    
    
    2
    
    
    
    2
    
    
    
    2
    
    
    
    2Total delinquent loans
(60 days and over)
    
    
    128
    
    
    $
    40,622
    
    
    
    234
    
    
    $
    79,402
    
    
    
    93
    
    
    $
    22,606
    
    
    
    118
    
    
    $
    29,998
    
    
    
    56
    
    
    $
    11,870
    
    
    
    93
    
    
    $
    19,312Delinquent loans
(60 days and over)
to total loans
    
    
    
    
    
    
    0.17
    %
    
    
    
    
    
    
    0.33
    %
    
    
    
    
    
    
    0.12
    %
    
    
    
    
    
    
    0.16
    %
    
    
    
    
    
    
    0.08
    %
    
    
    
    
    
    
    0.13
    %
     Page 17




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At December 31,2007
    
    
    2006
    
    
    2005
    
    
    2004
    
    
    2003(Dollars in thousands)Non-accrual first mortgage loans
    
    $
    71,932
    
    
    $
    20,053
    
    
    $
    9,649
    
    
    $
    6,057
    
    
    $
    4,401Non-accrual construction loans
    
    
    647
    
    
    
    3,098
    
    
    
    
    
    
    
    
    
    
    
    Non-accrual consumer and other loans
    
    
    956
    
    
    
    1,217
    
    
    
    2
    
    
    
    
    
    
    
    102Accruing loans delinquent 90 days or more
    
    
    5,867
    
    
    
    5,630
    
    
    
    9,661
    
    
    
    15,550
    
    
    
    15,748Total non-performing loans
    
    
    79,402
    
    
    
    29,998
    
    
    
    19,312
    
    
    
    21,607
    
    
    
    20,251Foreclosed real estate, net
    
    
    4,055
    
    
    
    3,161
    
    
    
    1,040
    
    
    
    878
    
    
    
    1,002Total non-performing assets
    
    $
    83,457
    
    
    $
    33,159
    
    
    $
    20,352
    
    
    $
    22,485
    
    
    $
    21,253Non-performing loans to total loans
    
    
    0.33
    %
    
    
    0.16
    %
    
    
    0.13
    %
    
    
    0.19
    %
    
    
    0.23
    %Non-performing assets to total assets
    
    
    0.19
    
    
    
    0.09
    
    
    
    0.07
    
    
    
    0.11
    
    
    
    0.12
  Page 18




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Allowance for Loan Losses .
 At or for the Year December 31,2007
    
    
    2006
    
    
    2005
    
    
    2004
    
    
    2003(Dollars in thousands)Balance at beginning of year
    
    $
    30,625
    
    
    $
    27,393
    
    
    $
    27,319
    
    
    $
    26,547
    
    
    $
    25,501Provision for loan losses
    
    
    4,800
    
    
    
    
    
    
    
    65
    
    
    
    790
    
    
    
    900Allowance transferred in Acquisition
    
    
    
    
    
    
    3,308
    
    
    
    
    
    
    
    
    
    
    
    Charge-offs:First mortgage loans
    
    
    (701
    )
    
    
    (72
    )
    
    
    (2
    )
    
    
    (11
    )
    
    
    (92
    )Consumer and other loans
    
    
    (62
    )
    
    
    (7
    )
    
    
    (8
    )
    
    
    (9
    )
    
    
    (4
    )Total charge-offs
    
    
    (763
    )
    
    
    (79
    )
    
    
    (10
    )
    
    
    (20
    )
    
    
    (96
    )Recoveries
    
    
    79
    
    
    
    3
    
    
    
    19
    
    
    
    2
    
    
    
    242Net (charge-offs) recoveries
    
    
    (684
    )
    
    
    (76
    )
    
    
    9
    
    
    
    (18
    )
    
    
    146Balance at end of year
    
    $
    34,741
    
    
    $
    30,625
    
    
    $
    27,393
    
    
    $
    27,319
    
    
    $
    26,547Allowance for loan losses to total loans
    
    
    0.14
    %
    
    
    0.16
    %
    
    
    0.18
    %
    
    
    0.24
    %
    
    
    0.30
    %Allowance for loan losses to
non-performing loans
    
    
    43.75
    
    
    
    102.09
    
    
    
    141.84
    
    
    
    126.44
    
    
    
    131.09
    Page 19




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##### Table of Contents



Page 20




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##### Table of Contents



At December 31,2007
    
    
    2006
    
    
    2005
    
    
    2004
    
    
    2003Percentage
    
    
    
    
    
    
    Percentage
    
    
    
    
    
    
    Percentage
    
    
    
    
    
    
    Percentage
    
    
    
    
    
    
    Percentageof Loans in
    
    
    
    
    
    
    of Loans in
    
    
    
    
    
    
    of Loans in
    
    
    
    
    
    
    of Loans in
    
    
    
    
    
    
    of Loans inCategory to
    
    
    
    
    
    
    Category to
    
    
    
    
    
    
    Category to
    
    
    
    
    
    
    Category to
    
    
    
    
    
    
    Category toAmount
    
    
    Total Loans
    
    
    Amount
    
    
    Total Loans
    
    
    Amount
    
    
    Total Loans
    
    
    Amount
    
    
    Total Loans
    
    
    Amount
    
    
    Total Loans(Dollars in thousands)First mortgage loans:One- to four-family
    
    $
    29,511
    
    
    
    97.95
    %
    
    $
    24,578
    
    
    
    97.42
    %
    
    $
    25,474
    
    
    
    98.13
    %
    
    $
    25,524
    
    
    
    97.87
    %
    
    $
    24,690
    
    
    
    97.32
    %Other first mortgages
    
    
    1,883
    
    
    
    0.38
    
    
    
    999
    
    
    
    0.58
    
    
    
    23
    
    
    
    0.31
    
    
    
    35
    
    
    
    0.75
    
    
    
    28
    
    
    
    1.15Total first
mortgage loans
    
    
    31,394
    
    
    
    98.33
    
    
    
    25,577
    
    
    
    98.00
    
    
    
    25,497
    
    
    
    98.44
    
    
    
    25,559
    
    
    
    98.62
    
    
    
    24,718
    
    
    
    98.47Consumer and other loans
    
    
    3,347
    
    
    
    1.67
    
    
    
    3,618
    
    
    
    2.00
    
    
    
    1,774
    
    
    
    1.56
    
    
    
    1,305
    
    
    
    1.38
    
    
    
    1,152
    
    
    
    1.53Unallocated
    
    
    
    
    
    
    
    
    
    
    1,430
    
    
    
    
    
    
    
    122
    
    
    
    
    
    
    
    455
    
    
    
    
    
    
    
    677
    
    
    
    Total allowance for
loans losses
    
    $
    34,741
    
    
    
    100.00
    %
    
    $
    30,625
    
    
    
    100.00
    %
    
    $
    27,393
    
    
    
    100.00
    %
    
    $
    27,319
    
    
    
    100.00
    %
    
    $
    26,547
    
    
    
    100.00
    %
 Investment Activities
   Page 21




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##### Table of Contents



Investment Securities .
 Mortgage-backed Securities .
 Page 22




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##### Table of Contents



For the Year Ended December 31,2007
    
    
    2006
    
    
    2005(In thousands)Investment securities:Carrying value at beginning of year
    
    $
    5,913,584
    
    
    $
    5,496,727
    
    
    $
    2,928,888Transferred in Acquisition
    
    
    
    
    
    
    120,087
    
    
    
    Purchases:Held to maturity
    
    
    
    
    
    
    
    
    
    
    300,000Available for sale
    
    
    2,148,705
    
    
    
    1,250,010
    
    
    
    4,008,680Calls:Held to maturity
    
    
    (125,480
    )
    
    
    (256
    )
    
    
    (99,978
    )Available for sale
    
    
    (2,100,060
    )
    
    
    (350,004
    )
    
    
    (100,007
    )Maturities:Held to maturity
    
    
    
    
    
    
    
    
    
    
    (65
    )Available for sale
    
    
    (1,725,000
    )
    
    
    (500,005
    )
    
    
    (1,500,000
    )Sales:Available for sale
    
    
    
    
    
    
    (97,549
    )
    
    
    Mutual fund shares
    
    
    
    
    
    
    (15,530
    )
    
    
    (10,000
    )Premium amortization and discount accretion, net
    
    
    1,025
    
    
    
    (17
    )
    
    
    16,295Change in unrealized gain or loss
    
    
    61,218
    
    
    
    10,121
    
    
    
    (47,086
    )Net (decrease) increase in investment securities
    
    
    (1,739,592
    )
    
    
    416,857
    
    
    
    2,567,839Carrying value at end of year
    
    $
    4,173,992
    
    
    $
    5,913,584
    
    
    $
    5,496,727
 Page 23




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##### Table of Contents



For the Year Ended December 31,2007
    
    
    2006
    
    
    2005(In thousands)Mortgage-backed securities:Carrying value at beginning of year
    
    $
    9,329,631
    
    
    $
    6,910,497
    
    
    $
    5,376,629Transferred in Acquisition
    
    
    
    
    
    
    186,169
    
    
    
    Purchases:Held to maturity
    
    
    3,861,633
    
    
    
    3,313,669
    
    
    
    1,604,473Available for sale
    
    
    3,248,326
    
    
    
    617,171
    
    
    
    1,675,428Principal payments:Held to maturity
    
    
    (1,215,867
    )
    
    
    (773,343
    )
    
    
    (960,630
    )Available for sale
    
    
    (696,560
    )
    
    
    (741,200
    )
    
    
    (499,387
    )Sales:Held to maturity
    
    
    
    
    
    
    
    
    
    
    Available for sale
    
    
    
    
    
    
    (186,169
    )
    
    
    (227,894
    )Premium amortization and discount accretion, net
    
    
    (10,257
    )
    
    
    (10,709
    )
    
    
    (14,627
    )Change in unrealized gain or loss
    
    
    54,029
    
    
    
    13,546
    
    
    
    (43,495
    )Net increase in mortgage-backed securities
    
    
    5,241,304
    
    
    
    2,419,134
    
    
    
    1,533,868Carrying value at end of year
    
    $
    14,570,935
    
    
    $
    9,329,631
    
    
    $
    6,910,497
  Page 24




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##### Table of Contents



At December 31,2007
    
    
    2006
    
    
    2005Percent
    
    
    
    
    
    
    
    
    
    
    Percent
    
    
    
    
    
    
    
    
    
    
    PercentCarrying
    
    
    of
    
    
    Fair
    
    
    Carrying
    
    
    of
    
    
    Fair
    
    
    Carrying
    
    
    of
    
    
    FairValue
    
    
    Total (1)
    
    
    Value
    
    
    Value
    
    
    Total (1)
    
    
    Value
    
    
    Value
    
    
    Total (1)
    
    
    Value(Dollars in thousands)Money market investments:Federal funds sold
    
    $
    106,299
    
    
    
    100.00
    %
    
    $
    106,299
    
    
    $
    56,616
    
    
    
    100.00
    %
    
    $
    56,616
    
    
    $
    4,587
    
    
    
    100.00
    %
    
    $
    4,587Investment securities:Held to maturity:United States government-
sponsored enterprises
    
    $
    1,408,071
    
    
    
    33.74
    %
    
    $
    1,409,814
    
    
    $
    1,533,059
    
    
    
    25.92
    %
    
    $
    1,502,014
    
    
    $
    1,533,050
    
    
    
    27.89
    %
    
    $
    1,506,865Municipal bonds
    
    
    430
    
    
    
    0.01
    
    
    
    432
    
    
    
    910
    
    
    
    0.02
    
    
    
    920
    
    
    
    1,166
    
    
    
    0.02
    
    
    
    1,190Total held to maturity
    
    
    1,408,501
    
    
    
    33.75
    
    
    
    1,410,246
    
    
    
    1,533,969
    
    
    
    25.94
    
    
    
    1,502,934
    
    
    
    1,534,216
    
    
    
    27.91
    
    
    
    1,508,055Available for sale:United States government-
sponsored enterprises
    
    
    2,758,193
    
    
    
    66.08
    
    
    
    2,758,193
    
    
    
    4,372,295
    
    
    
    73.94
    
    
    
    4,372,295
    
    
    
    3,962,178
    
    
    
    72.09
    
    
    
    3,962,178Corporate bonds
    
    
    4
    
    
    
    
    
    
    
    4
    
    
    
    57
    
    
    
    
    
    
    
    57
    
    
    
    67
    
    
    
    
    
    
    
    67Equity securities
    
    
    7,294
    
    
    
    0.17
    
    
    
    7,294
    
    
    
    7,263
    
    
    
    0.12
    
    
    
    7,263
    
    
    
    266
    
    
    
    
    
    
    
    266Total available for sale
    
    
    2,765,491
    
    
    
    66.25
    
    
    
    2,765,491
    
    
    
    4,379,615
    
    
    
    74.06
    
    
    
    4,379,615
    
    
    
    3,962,511
    
    
    
    72.09
    
    
    
    3,962,511Total investment securities
    
    $
    4,173,992
    
    
    
    100.00
    %
    
    $
    4,175,737
    
    
    $
    5,913,584
    
    
    
    100.00
    %
    
    $
    5,882,549
    
    
    $
    5,496,727
    
    
    
    100.00
    %
    
    $
    5,470,566Mortgage-backed securities:By issuer:Held to maturity:GNMA pass-through
certificates
    
    $
    157,716
    
    
    
    1.08
    %
    
    $
    158,999
    
    
    $
    215,161
    
    
    
    2.31
    %
    
    $
    216,504
    
    
    $
    293,680
    
    
    
    4.25
    %
    
    $
    294,332FNMA pass-through
certificates
    
    
    3,214,509
    
    
    
    22.06
    
    
    
    3,205,922
    
    
    
    3,233,852
    
    
    
    34.66
    
    
    
    3,191,324
    
    
    
    2,535,361
    
    
    
    36.69
    
    
    
    2,489,102FHLMC pass-through
certificates
    
    
    5,808,288
    
    
    
    39.86
    
    
    
    5,849,744
    
    
    
    3,069,884
    
    
    
    32.90
    
    
    
    3,019,995
    
    
    
    1,108,195
    
    
    
    16.04
    
    
    
    1,082,564FHLMC and FNMA
REMICs
    
    
    385,013
    
    
    
    2.64
    
    
    
    351,647
    
    
    
    406,313
    
    
    
    4.36
    
    
    
    376,775
    
    
    
    452,628
    
    
    
    6.55
    
    
    
    422,774Total held to maturity
    
    
    9,565,526
    
    
    
    65.65
    
    
    
    9,566,312
    
    
    
    6,925,210
    
    
    
    74.23
    
    
    
    6,804,598
    
    
    
    4,389,864
    
    
    
    63.53
    
    
    
    4,288,772Available for sale:GNMA pass-through
certificates
    
    
    1,257,893
    
    
    
    8.62
    
    
    
    1,257,893
    
    
    
    1,696,715
    
    
    
    18.18
    
    
    
    1,696,715
    
    
    
    1,700,132
    
    
    
    24.60
    
    
    
    1,700,132FNMA pass-through
certificates
    
    
    1,098,072
    
    
    
    7.54
    
    
    
    1,098,072
    
    
    
    575,293
    
    
    
    6.17
    
    
    
    575,293
    
    
    
    666,485
    
    
    
    9.64
    
    
    
    666,485FHLMC pass-through
certificates
    
    
    2,649,444
    
    
    
    18.18
    
    
    
    2,649,444
    
    
    
    132,413
    
    
    
    1.42
    
    
    
    132,413
    
    
    
    154,016
    
    
    
    2.23
    
    
    
    154,016Total available for sale
    
    
    5,005,409
    
    
    
    34.35
    
    
    
    5,005,409
    
    
    
    2,404,421
    
    
    
    25.77
    
    
    
    2,404,421
    
    
    
    2,520,633
    
    
    
    36.47
    
    
    
    2,520,633Total mortgage-backed
securities
    
    $
    14,570,935
    
    
    
    100.00
    %
    
    $
    14,571,721
    
    
    $
    9,329,631
    
    
    
    100.00
    %
    
    $
    9,209,019
    
    
    $
    6,910,497
    
    
    
    100.00
    %
    
    $
    6,809,405By coupon type:Adjustable-rate
    
    $
    11,995,377
    
    
    
    82.32
    %
    
    $
    12,055,525
    
    
    $
    6,495,769
    
    
    
    69.63
    %
    
    $
    6,457,465
    
    
    $
    3,704,146
    
    
    
    53.60
    %
    
    $
    3,683,965Fixed-rate
    
    
    2,575,558
    
    
    
    17.68
    
    
    
    2,516,196
    
    
    
    2,833,862
    
    
    
    30.37
    
    
    
    2,751,554
    
    
    
    3,206,351
    
    
    
    46.40
    
    
    
    3,125,440Total mortgage-backed
securities
    
    $
    14,570,935
    
    
    
    100.00
    %
    
    $
    14,571,721
    
    
    $
    9,329,631
    
    
    
    100.00
    %
    
    $
    9,209,019
    
    
    $
    6,910,497
    
    
    
    100.00
    %
    
    $
    6,809,405Total investment portfolio
    
    $
    18,851,226
    
    
    
    
    
    
    $
    18,853,757
    
    
    $
    15,299,831
    
    
    
    
    
    
    $
    15,148,184
    
    
    $
    12,411,811
    
    
    
    
    
    
    $
    12,284,558
 
 (1)
    
    Based on carrying value for each investment type. Carrying Values, Rates and Maturities .
 Page 25




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##### Table of Contents



At December 31, 2007More Than One Year
    
    
    More Than Five YearsOne Year or Less
    
    
    to Five Years
    
    
    to Ten Years
    
    
    More Than Ten Years
    
    
    TotalWeighted
    
    
    
    
    
    
    Weighted
    
    
    
    
    
    
    Weighted
    
    
    
    
    
    
    Weighted
    
    
    
    
    
    
    WeightedCarrying
    
    
    Average
    
    
    Carrying
    
    
    Average
    
    
    Carrying
    
    
    Average
    
    
    Carrying
    
    
    Average
    
    
    Carrying
    
    
    AverageValue
    
    
    Rate
    
    
    Value
    
    
    Rate
    
    
    Value
    
    
    Rate
    
    
    Value
    
    
    Rate
    
    
    Value
    
    
    Rate(Dollars in thousands)Money market investments:Federal funds sold
    
    $
    106,299
    
    
    
    4.25
    %
    
    $
    
    
    
    
    
    
    
    $
    
    
    
    
    
    
    
    $
    
    
    
    
    
    
    
    $
    106,299
    
    
    
    4.25
    %Investment securities:Held to maturity:United States government-
sponsored enterprises
    
    $
    
    
    
    
    
    
    
    $
    786,531
    
    
    
    4.74
    %
    
    $
    
    
    
    
    
    
    
    $
    621,540
    
    
    
    5.02
    %
    
    $
    1,408,071
    
    
    
    4.86Municipal bonds
    
    
    
    
    
    
    
    
    
    
    125
    
    
    
    8.02
    
    
    
    305
    
    
    
    9.53
    %
    
    
    
    
    
    
    
    
    
    
    430
    
    
    
    9.09Total held to maturity
    
    
    
    
    
    
    
    
    
    
    786,656
    
    
    
    4.74
    
    
    
    305
    
    
    
    9.53
    
    
    
    621,540
    
    
    
    5.02
    
    
    
    1,408,501
    
    
    
    4.86Available for sale:United States government-
sponsored enterprises
    
    
    71,946
    
    
    
    3.50
    
    
    
    1,279,986
    
    
    
    4.12
    
    
    
    1,406,261
    
    
    
    5.15
    
    
    
    
    
    
    
    
    
    
    
    2,758,193
    
    
    
    4.63Corporate bonds
    
    
    4
    
    
    
    3.85
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    4
    
    
    
    3.85Total available for sale
    
    
    71,950
    
    
    
    3.50
    
    
    
    1,279,986
    
    
    
    4.12
    
    
    
    1,406,261
    
    
    
    5.15
    
    
    
    
    
    
    
    
    
    
    
    2,758,197
    
    
    
    4.63Total investment securities
    
    $
    71,950
    
    
    
    3.50
    
    
    $
    2,066,642
    
    
    
    4.36
    
    
    $
    1,406,566
    
    
    
    5.15
    
    
    $
    621,540
    
    
    
    5.02
    
    
    $
    4,166,698
    
    
    
    4.71Mortgage-backed securities:By issuer:Held to maturity:GNMA pass-through
certificates
    
    $
    61
    
    
    
    7.36
    
    
    $
    227
    
    
    
    9.60
    
    
    $
    47
    
    
    
    11.45
    
    
    $
    157,381
    
    
    
    6.00
    
    
    $
    157,716
    
    
    
    6.01FNMA pass-through
certificates
    
    
    710
    
    
    
    5.75
    
    
    
    742
    
    
    
    6.19
    
    
    
    5,964
    
    
    
    7.07
    
    
    
    3,207,093
    
    
    
    5.22
    
    
    
    3,214,509
    
    
    
    5.22FHLMC pass-through
certificates
    
    
    20
    
    
    
    8.09
    
    
    
    1,182
    
    
    
    7.06
    
    
    
    4,435
    
    
    
    6.79
    
    
    
    5,802,651
    
    
    
    5.41
    
    
    
    5,808,288
    
    
    
    5.41FHLMC and FNMA
REMICs
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    385,013
    
    
    
    4.58
    
    
    
    385,013
    
    
    
    4.58Total held to maturity
    
    
    791
    
    
    
    5.93
    
    
    
    2,151
    
    
    
    7.03
    
    
    
    10,446
    
    
    
    6.97
    
    
    
    9,552,138
    
    
    
    5.32
    
    
    
    9,565,526
    
    
    
    5.32Available for sale:GNMA pass-through
certificates
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    1,257,893
    
    
    
    5.26
    
    
    
    1,257,893
    
    
    
    5.26FNMA pass-through
certificates
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    1,098,072
    
    
    
    5.26
    
    
    
    1,098,072
    
    
    
    5.26FHLMC pass-through
certificates
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    2,649,444
    
    
    
    5.71
    
    
    
    2,649,444
    
    
    
    5.71Total available for sale
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    5,005,409
    
    
    
    5.50
    
    
    
    5,005,409
    
    
    
    5.50Total mortgage-backed
securities
    
    $
    791
    
    
    
    5.93
    
    
    $
    2,151
    
    
    
    7.03
    
    
    $
    10,446
    
    
    
    6.97
    
    
    $
    14,557,547
    
    
    
    5.38
    
    
    $
    14,570,935
    
    
    
    5.38By coupon type:Adjustable-rate
    
    $
    
    
    
    
    
    
    
    $
    
    
    
    
    
    
    
    $
    3,685
    
    
    
    6.60
    
    
    $
    11,991,692
    
    
    
    5.47
    
    
    $
    11,995,377
    
    
    
    5.47Fixed-rate
    
    
    791
    
    
    
    5.93
    
    
    
    2,151
    
    
    
    7.03
    
    
    
    6,761
    
    
    
    7.17
    
    
    
    2,565,855
    
    
    
    4.96
    
    
    
    2,575,558
    
    
    
    4.97Total mortgage-backed
securities
    
    $
    791
    
    
    
    5.93
    
    
    $
    2,151
    
    
    
    7.03
    
    
    $
    10,446
    
    
    
    6.97
    
    
    $
    14,557,547
    
    
    
    5.38
    
    
    $
    14,570,935
    
    
    
    5.38Total investment portfolio
    
    $
    179,040
    
    
    
    3.96
    
    
    $
    2,068,793
    
    
    
    4.36
    
    
    $
    1,417,012
    
    
    
    5.16
    
    
    $
    15,179,087
    
    
    
    5.37
    
    
    $
    18,843,932
    
    
    
    5.23
 Page 26




---



##### Table of Contents



Sources of Funds
 General .
 Deposits .
   Page27




---



##### Table of Contents



For the Year Ended December 31,2007
    
    
    2006
    
    
    2005(Dollars in thousands)Total deposits at beginning of year
    
    $
    13,415,587
    
    
    $
    11,383,300
    
    
    $
    11,477,300Deposits assumed in Acquisition
    
    
    
    
    
    
    1,062,121
    
    
    
    Net increase (decrease) in deposits
    
    
    1,130,859
    
    
    
    534,070
    
    
    
    (387,736
    )Interest credited
    
    
    606,936
    
    
    
    436,096
    
    
    
    293,736Total deposits at end of year
    
    $
    15,153,382
    
    
    $
    13,415,587
    
    
    $
    11,383,300Net increase (decrease)
    
    $
    1,737,795
    
    
    $
    2,032,287
    
    
    $
    (94,000
    )Percent increase (decrease)
    
    
    12.95
    %
    
    
    17.85
    %
    
    
    (0.82
    )%
  Maturity Period
    
    Amount(In thousands)3 months or less
    
    $
    1,756,750Over 3 months through 6 months
    
    
    1,324,134Over 6 months through 12 months
    
    
    144,657Over 12 months
    
    
    110,508Total
    
    $
    3,336,049
 Page28




---



##### Table of Contents



At December 31,2007
    
    
    
    
    
    
    
    
    
    
    2006
    
    
    
    
    
    
    
    
    
    
    2005Weighted
    
    
    
    
    
    
    
    
    
    
    Weighted
    
    
    
    
    
    
    
    
    
    
    WeightedPercent
    
    
    average
    
    
    
    
    
    
    Percent
    
    
    average
    
    
    
    
    
    
    Percent
    
    
    averageof total
    
    
    nominal
    
    
    
    
    
    
    of total
    
    
    nominal
    
    
    
    
    
    
    of total
    
    
    nominalAmount
    
    
    deposits
    
    
    rate
    
    
    Amount
    
    
    deposits
    
    
    rate
    
    
    Amount
    
    
    deposits
    
    
    rate(Dollars in thousands)Savings
    
    $
    737,813
    
    
    
    4.87
    %
    
    
    0.74
    %
    
    $
    805,278
    
    
    
    6.00
    %
    
    
    0.92
    %
    
    $
    808,325
    
    
    
    7.10
    %
    
    
    0.98
    %Interest-bearing demand
    
    
    1,588,084
    
    
    
    10.48
    
    
    
    3.26
    
    
    
    2,095,811
    
    
    
    15.62
    
    
    
    3.29
    
    
    
    3,616,644
    
    
    
    31.77
    
    
    
    3.19Money market
    
    
    1,575,097
    
    
    
    10.39
    
    
    
    4.26
    
    
    
    918,549
    
    
    
    6.85
    
    
    
    3.59
    
    
    
    342,021
    
    
    
    3.00
    
    
    
    1.14Noninterest-bearing
demand
    
    
    517,970
    
    
    
    3.42
    
    
    
    
    
    
    
    498,301
    
    
    
    3.71
    
    
    
    
    
    
    
    442,042
    
    
    
    3.88
    
    
    
    Total
    
    
    4,418,964
    
    
    
    29.16
    
    
    
    2.81
    
    
    
    4,317,939
    
    
    
    32.18
    
    
    
    2.53
    
    
    
    5,209,032
    
    
    
    45.75
    
    
    
    2.44Time deposits:Time deposits $100,000
and over
    
    
    3,336,049
    
    
    
    22.02
    
    
    
    4.97
    
    
    
    2,565,020
    
    
    
    19.12
    
    
    
    5.03
    
    
    
    1,378,340
    
    
    
    12.11
    
    
    
    3.61Time deposits less than
$100,000 with original
maturities of:3 months or less
    
    
    1,057,289
    
    
    
    6.98
    
    
    
    4.98
    
    
    
    146,921
    
    
    
    1.10
    
    
    
    4.37
    
    
    
    199,280
    
    
    
    1.75
    
    
    
    3.17Over 3 months to
12 months
    
    
    4,558,298
    
    
    
    30.07
    
    
    
    5.04
    
    
    
    4,302,331
    
    
    
    32.06
    
    
    
    5.23
    
    
    
    1,338,588
    
    
    
    11.76
    
    
    
    3.72Over 12 months to
24 months
    
    
    524,722
    
    
    
    3.46
    
    
    
    4.57
    
    
    
    557,510
    
    
    
    4.16
    
    
    
    3.82
    
    
    
    1,541,166
    
    
    
    13.54
    
    
    
    3.36Over 24 months
to 36 months
    
    
    79,613
    
    
    
    0.53
    
    
    
    3.87
    
    
    
    202,276
    
    
    
    1.51
    
    
    
    3.67
    
    
    
    495,670
    
    
    
    4.35
    
    
    
    3.17Over 36 months to
48 months
    
    
    77,185
    
    
    
    0.51
    
    
    
    3.93
    
    
    
    264,204
    
    
    
    1.97
    
    
    
    3.66
    
    
    
    294,538
    
    
    
    2.59
    
    
    
    3.47Over 48 months
to 60 months
    
    
    32,299
    
    
    
    0.21
    
    
    
    3.94
    
    
    
    43,243
    
    
    
    0.32
    
    
    
    3.72
    
    
    
    50,680
    
    
    
    0.45
    
    
    
    3.72Over 60 months
    
    
    138,738
    
    
    
    0.92
    
    
    
    3.98
    
    
    
    164,502
    
    
    
    1.23
    
    
    
    3.99
    
    
    
    149,724
    
    
    
    1.32
    
    
    
    3.93Qualified retirement plans
    
    
    930,225
    
    
    
    6.14
    
    
    
    4.70
    
    
    
    851,641
    
    
    
    6.35
    
    
    
    4.47
    
    
    
    726,282
    
    
    
    6.38
    
    
    
    3.49Total time deposits
    
    
    10,734,418
    
    
    
    70.84
    
    
    
    4.93
    
    
    
    9,097,648
    
    
    
    67.82
    
    
    
    4.89
    
    
    
    6,174,268
    
    
    
    54.25
    
    
    
    3.51Total deposits
    
    $
    15,153,382
    
    
    
    100.00
    %
    
    
    4.31
    
    
    $
    13,415,587
    
    
    
    100.00
    %
    
    
    4.13
    
    
    $
    11,383,300
    
    
    
    100.00
    %
    
    
    3.02
    %
 Page29




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##### Table of Contents



At December 31,2007
    
    
    2006
    
    
    2005(In thousands)Time deposit accounts:3.00% or less
    
    $
    2,397
    
    
    $
    38,158
    
    
    $
    816,8383.01% to 3.50%
    
    
    44,450
    
    
    
    457,995
    
    
    
    2,246,3613.51% to 4.00%
    
    
    514,022
    
    
    
    979,918
    
    
    
    2,154,7844.01% to 4.50%
    
    
    317,633
    
    
    
    1,283,911
    
    
    
    952,2284.51% to 5.00%
    
    
    3,639,404
    
    
    
    482,847
    
    
    
    3,3415.01% and over
    
    
    6,216,512
    
    
    
    5,854,819
    
    
    
    716Total
    
    $
    10,734,418
    
    
    $
    9,097,648
    
    
    $
    6,174,268
  Period to Maturity from December 31, 2007Within
    
    
    Over three
    
    
    Over six
    
    
    Over one
    
    
    Over two
    
    
    Overthree
    
    
    to six
    
    
    months to
    
    
    to two
    
    
    to three
    
    
    threemonths
    
    
    months
    
    
    one year
    
    
    years
    
    
    years
    
    
    years
    
    
    Total(In thousands)Time deposit accounts:3.00% or less
    
    $
    506
    
    
    $
    206
    
    
    $
    868
    
    
    $
    817
    
    
    $
    
    
    
    $
    
    
    
    $
    2,3973.01% to 3.50%
    
    
    8,022
    
    
    
    15,959
    
    
    
    20,461
    
    
    
    4
    
    
    
    4
    
    
    
    
    
    
    
    44,4503.51% to 4.00%
    
    
    138,187
    
    
    
    55,087
    
    
    
    149,776
    
    
    
    157,742
    
    
    
    12,948
    
    
    
    282
    
    
    
    514,0224.01% to 4.50%
    
    
    5,041
    
    
    
    19,983
    
    
    
    78,568
    
    
    
    99,509
    
    
    
    84,615
    
    
    
    29,917
    
    
    
    317,6334.51% to 5.00%
    
    
    1,237,230
    
    
    
    1,887,941
    
    
    
    410,288
    
    
    
    101,770
    
    
    
    1,784
    
    
    
    391
    
    
    
    3,639,4045.01% and over
    
    
    3,902,698
    
    
    
    2,312,643
    
    
    
    7
    
    
    
    3
    
    
    
    1,157
    
    
    
    4
    
    
    
    6,216,512Total
    
    $
    5,291,684
    
    
    $
    4,291,819
    
    
    $
    659,968
    
    
    $
    359,845
    
    
    $
    100,508
    
    
    $
    30,594
    
    
    $
    10,734,418
 Borrowings.
 .
 Page30




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##### Table of Contents



2007
    
    
    2006Weighted
    
    
    
    
    
    
    WeightedAverage
    
    
    
    
    
    
    AveragePrincipal
    
    
    Rate
    
    
    Principal
    
    
    Rate(Dollars in thousands)Securities sold under agreements to repurchase:FHLB
    
    $
    2,066,000
    
    
    
    4.62
    %
    
    $
    823,000
    
    
    
    4.96
    %Other brokers
    
    
    9,950,000
    
    
    
    4.15
    
    
    
    8,100,000
    
    
    
    3.86Total securities sold under agreements to repurchase
    
    
    12,016,000
    
    
    
    4.23
    
    
    
    8,923,000
    
    
    
    3.96Advances from the FHLB
    
    
    12,125,000
    
    
    
    4.20
    
    
    
    8,050,000
    
    
    
    4.21Total borrowed funds
    
    $
    24,141,000
    
    
    
    4.22
    
    
    $
    16,973,000
    
    
    
    4.08
  At or for the Year Ended December 31,2007
    
    
    2006
    
    
    2005(Dollars in thousands)Repurchase Agrements:Average balance outstanding during the year
    
    $
    10,305,216
    
    
    $
    8,313,321
    
    
    $
    6,447,560Maximum balance outstanding at any month-end
during the year
    
    $
    12,016,000
    
    
    $
    8,923,000
    
    
    $
    7,900,000Weighted average rate during the period
    
    
    4.20
    %
    
    
    3.81
    %
    
    
    3.52
    %FHLB Advances:Average balance outstanding during the year
    
    $
    10,286,869
    
    
    $
    5,977,115
    
    
    $
    2,469,529Maximum balance outstanding at any month-end
during the year
    
    $
    12,125,000
    
    
    $
    8,050,000
    
    
    $
    3,450,000Weighted average rate during the period
    
    
    4.28
    %
    
    
    4.17
    %
    
    
    3.89
    %
   Page31




---



##### Table of Contents



Borrowings by Scheduled
    
    
    Borrowings by Earler of MaturityMaturity Date
    
    
    or Next Potential Call DateWeighted
    
    
    
    
    
    
    WeightedAverage
    
    
    
    
    
    
    AverageYear
    
    Principal
    
    
    Rate
    
    
    Principal
    
    
    Rate(Dollars in thousands)2008
    
    $
    16,000
    
    
    
    4.94
    %
    
    $
    14,966,000
    
    
    
    4.27
    %2009
    
    
    
    
    
    
    
    
    
    
    6,275,000
    
    
    
    4.182010
    
    
    300,000
    
    
    
    5.68
    
    
    
    2,050,000
    
    
    
    3.882011
    
    
    250,000
    
    
    
    4.90
    
    
    
    250,000
    
    
    
    4.902012
    
    
    100,000
    
    
    
    4.76
    
    
    
    600,000
    
    
    
    4.332013
    
    
    250,000
    
    
    
    5.30
    
    
    
    
    
    
    
    2014
    
    
    350,000
    
    
    
    3.37
    
    
    
    
    
    
    
    2015
    
    
    4,075,000
    
    
    
    3.86
    
    
    
    
    
    
    
    2016
    
    
    8,075,000
    
    
    
    4.32
    
    
    
    
    
    
    
    2017
    
    
    10,725,000
    
    
    
    4.22
    
    
    
    
    
    
    
    Total
    
    $
    24,141,000
    
    
    
    4.22
    
    
    $
    24,141,000
    
    
    
    4.22
   At or for the Year Ended December 31,2007
    
    
    2006
    
    
    2005(Dollars in thousands)Amortized cost of collateral:United States government-sponsored enterprise securities
    
    $
    3,620,083
    
    
    $
    3,329,639
    
    
    $
    2,849,947Mortgage-backed securities
    
    
    9,004,519
    
    
    
    5,937,758
    
    
    
    5,224,648REMICs
    
    
    304,032
    
    
    
    319,920
    
    
    
    356,579Total amortized cost of collateral
    
    $
    12,928,634
    
    
    $
    9,587,317
    
    
    $
    8,431,174Fair value of collateral:United States government-sponsored enterprise securities
    
    $
    3,626,572
    
    
    $
    3,195,765
    
    
    $
    2,778,462Mortgage-backed securities
    
    
    9,016,537
    
    
    
    5,846,562
    
    
    
    5,119,225REMICs
    
    
    277,727
    
    
    
    296,661
    
    
    
    332,532Total fair value of collateral
    
    $
    12,920,836
    
    
    $
    9,338,988
    
    
    $
    8,230,219
 Subsidiaries
  Page32




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##### Table of Contents



Personnel
  REGULATION OF HUDSON CITY SAVINGS BANK AND HUDSON CITY BANCORP
 General
   Federally Chartered Savings Bank Regulation
 Activity Powers.
 Page33




---



##### Table of Contents




    
    real estate mortgages;
    
    consumer and commercial loans;
    
    certain types of debt securities; and
    
    certain other assets.
  Capital Requirements.
 OTS RequirementsMinimum Capital
    
    
    For Classification asBank Actual
    
    
    Adequacy
    
    
    Well-CapitalizedAmount
    
    
    Ratio
    
    
    Amount
    
    
    Ratio
    
    
    Amount
    
    
    Ratio(Dollars in thousands)December 31, 2007Tangible capital
    
    $
    4,055,952
    
    
    
    9.16
    %
    
    $
    664,169
    
    
    
    1.50
    %
    
    
    n/a
    
    
    
    n/aLeverage (core) capital
    
    
    4,055,952
    
    
    
    9.16
    
    
    
    1,771,118
    
    
    
    4.00
    
    
    $
    2,213,898
    
    
    
    5.00
    %Total-risk-based capital
    
    
    4,090,693
    
    
    
    24.83
    
    
    
    1,318,102
    
    
    
    8.00
    
    
    
    1,647,627
    
    
    
    10.00December 31, 2006Tangible capital
    
    $
    4,000,577
    
    
    
    11.30
    %
    
    $
    530,878
    
    
    
    1.50
    %
    
    
    n/a
    
    
    
    n/aLeverage (core) capital
    
    
    4,000,577
    
    
    
    11.30
    
    
    
    1,415,674
    
    
    
    4.00
    
    
    $
    1,769,592
    
    
    
    5.00
    %Total-risk-based capital
    
    
    4,031,202
    
    
    
    30.99
    
    
    
    1,040,513
    
    
    
    8.00
    
    
    
    1,300,642
    
    
    
    10.00
 Page34




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##### Table of Contents



Safety and Soundness Standards.
  Prompt Corrective Action.
 Page 35




---



##### Table of Contents



1.
    
    an amount equal to five percent of the banks total assets at the time it became
undercapitalized; and2.
    
    the amount that is necessary (or would have been necessary) to bring the bank
into compliance with all capital standards applicable with respect to such bank as of
the time it fails to comply with the plan.
  Insurance Activities.
 Deposit Insurance.
    Page 36




---



##### Table of Contents



Transactions with Affiliates of Hudson City Savings.
   Page 37




---



##### Table of Contents



Privacy Standards.
   Community Reinvestment Act.
  
    
    a lending test, to evaluate the institutions record of making loans in its service
areas;
    
    an investment test, to evaluate the institutions record of investing in community
development projects, affordable housing, and programs benefiting low or moderate income
individuals and businesses; and
    
    a service test, to evaluate the institutions delivery of services through its
branches, ATMs and other offices.
  Page 38




---



##### Table of Contents



Loans to One Borrower.
 Interagency Guidance on Nontraditional Mortgage Product Risks.
   Page 39




---



##### Table of Contents



OTS Guidance on Commercial Real Estate Lending.
 Qualified Thrift Lender (QTL) Test.
  Limitation on Capital Distributions.
  Page 40




---



##### Table of Contents



Liquidity.
 Assessments.
 Branching.
 Anti-Money Laundering and Customer Identification
  Page 41




---



##### Table of Contents




    
    Establishment of anti-money laundering programs.
    
    Establishment of a program specifying procedures for obtaining identifying
information from customers seeking to open new accounts, including verifying the
identity of customers within a reasonable period of time.
    
    Establishment of enhanced due diligence policies, procedures and controls designed to
detect and report money-laundering.
    
    Prohibitions on correspondent accounts for foreign shell banks and compliance with
record keeping obligations with respect to correspondent accounts of foreign banks.
    
    Bank regulators are directed to consider a holding companys effectiveness in
combating money laundering when ruling on Federal Reserve Act and Bank Merger Act
applications.
 Federal Home Loan Bank System
   Page 42




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##### Table of Contents



Federal Reserve System
  Federal Holding Company Regulation
  Restrictions Applicable to New Savings and Loan Holding Companies.
 
    
    furnishing or performing management services for a savings institution subsidiary of
such holding company;
    
    conducting an insurance agency or escrow business;
    
    holding, managing, or liquidating assets owned or acquired from a savings institution
subsidiary of such company;
    
    holding or managing properties used or occupied by a savings institution subsidiary
of such company;
    
    acting as trustee under a deed of trust;
    
    any other activity (i) that the FRB, by regulation, has determined to be permissible
for bank holding companies under Section 4(c) of the Bank Holding Company Act of 1956
(the
 Page 43




---



##### Table of Contents



BHC Act), unless the Director of the Office of Thrift Supervision, by regulation,
prohibits or limits any such activity for savings and loan holding companies, or (ii)
which multiple savings and loan holding companies were authorized by regulation to
directly engage in on March 5, 1987;
    
    purchasing, holding, or disposing of stock acquired in connection with a qualified
stock issuance if the purchase of such stock by such holding company is approved by the
Director of the Office of Thrift Supervision; and
    
    any activity permissible for financial holding companies under section 4(k) of the
BHC Act.
  
    
    lending, exchanging, transferring, investing for others, or safeguarding money or
securities;
    
    insurance activities or providing and issuing annuities, and acting as principal,
agent, or broker;
    
    financial, investment, or economic advisory services;
    
    issuing or selling instruments representing interests in pools of assets that a bank
is permitted to hold directly;
    
    underwriting, dealing in, or making a market in securities;
    
    activities previously determined by the FRB to be closely related to banking;
    
    activities that bank holding companies are permitted to engage in outside of the
U.S.; and
    
    portfolio investments made by an insurance company.
  Restrictions Applicable to All Savings and Loan Holding Companies.
 
    
    control (as defined under HOLA) of another savings institution (or a holding company
parent) without prior Office of Thrift Supervision approval;
    
    through merger, consolidation, or purchase of assets, another savings institution or
a holding company thereof, or acquiring all or substantially all of the assets of such
institution (or a holding company) without prior Office of Thrift Supervision approval;
or
    
    control of any depository institution not insured by the FDIC (except through a
merger with and into the holding companys savings institution subsidiary that is
approved by the Office of Thrift Supervision).
 Page 44




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##### Table of Contents




    
    in the case of certain emergency acquisitions approved by the FDIC;
    
    if such holding company controls a savings institution subsidiary that operated a
home or branch office in such additional state as of March 5, 1987; or
    
    if the laws of the state in which the savings institution to be acquired is located
specifically authorize a savings institution chartered by that state to be acquired by a
savings institution chartered by the state where the acquiring savings institution or
savings and loan holding company is located or by a holding company that controls such a
state chartered association.
     Page 45




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##### Table of Contents



Federal Securities Law
  Delaware Corporation Law
  TAXATION
 Federal
 General.
 Bad Debt Reserves.
 Distributions.
  Page 46




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##### Table of Contents



Corporate Alternative Minimum Tax.
 Elimination of Dividends; Dividends Received Deduction.
 State
 New Jersey State Taxation.
  Delaware State Taxation.
 New York State Taxation.
 Connecticut State Taxation.
 New York City Taxation.
 Page 47




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##### Table of Contents



Item 1A. Risk Factors.
 Changes In Interest Rates Could Adversely Affect Our Results of Operations And Financial Condition.
   Page 48




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##### Table of Contents



Because We Compete Primarily On The Basis Of The Interest Rates We Offer Depositors And The Terms
Of Loans We Offer Borrowers, Our Margins Could Decrease If We Were Required To Increase Deposit
Rates Or Lower Interest Rates On Loans In Response To Competitive Pressures.
   Page 49




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We May Not Be Able To Successfully Implement Our Plans For Growth.
  The Geographic Concentration Of Our Loan Portfolio And Lending Activities Makes Us Vulnerable To A
Downturn In The Local Economy.
  Page 50




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##### Table of Contents



We operate in a highly regulated industry, which limits the manner and scope of our business
activities.
 
 Item 1B. Unresolved Staff Comments.
  
 Item 2. Properties.
   
 Item 3. Legal Proceedings.
  
 Item 4. Submission of Matters to a Vote of Security Holders.
 .
 Page 51




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##### Table of Contents



PART II
 
 Item 5.
    
    Market for Registrants Common Equity, Related Stockholder Matters and Issuer Purchases
of Equity Securities.
  Sales Price
    
    Dividend InformationAmountHigh
    
    Low
    
    Per Share
    
    Date of Payment2006First quarter
    
    
    13.50
    
    
    
    11.90
    
    
    
    0.075
    
    
    March 1, 2006Second quarter
    
    
    14.07
    
    
    
    12.93
    
    
    
    0.075
    
    
    June 1, 2006Third quarter
    
    
    13.53
    
    
    
    12.64
    
    
    
    0.075
    
    
    September 1, 2006Fourth quarter
    
    
    14.09
    
    
    
    12.99
    
    
    
    0.075
    
    
    December 1, 20062007First quarter
    
    
    14.25
    
    
    
    13.11
    
    
    
    0.080
    
    
    March 1, 2007Second quarter
    
    
    13.83
    
    
    
    12.11
    
    
    
    0.080
    
    
    June 1, 2007Third quarter
    
    
    15.66
    
    
    
    11.45
    
    
    
    0.085
    
    
    September 3, 2007Fourth quarter
    
    
    16.08
    
    
    
    14.10
    
    
    
    0.085
    
    
    December 3, 2007
    Page 52




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##### Table of Contents



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)October 1-October 31, 2007
    
    
    1,500,000
    
    
    $
    15.53
    
    
    
    1,500,000
    
    
    
    57,573,550November 1-November 30, 2007
    
    
    1,300,000
    
    
    
    14.74
    
    
    
    1,300,000
    
    
    
    56,273,550December 1-December 31, 2007
    
    
    1,100,000
    
    
    
    14.99
    
    
    
    1,100,000
    
    
    
    55,173,550Total
    
    
    3,900,000
    
    
    
    15.11
    
    
    
    3,900,000
 
 (1)
    
    On September 20, 2006, Hudson City Bancorp announced the adoption of its seventh Stock Repurchase Program, which authorized the repurchase of up to
56,975,000 shares of common stock. This program has no expiration date and has 3,773,550 shares yet to be purchased as of December 31, 2007.
On July 25, 2007, Hudson City Bancorp announced the adoption of its eighth Stock Repurchase Program, which authorized the repurchase of up to
51,400,000 shares of common stock. This program has no expiration date and no shares have been purchased pursuant to this program. Performance Graph
  Hudson City Bancorp, Inc. Total Return Performance
 
 12/31/2002
    
    12/31/2003
    
    12/31/2004
    
    12/31/2005
    
    12/31/2006
    
    12/31/2007Hudson City Bancorp, Inc.
    
    
    100
    
    
    
    209
    
    
    
    206
    
    
    
    222
    
    
    
    260
    
    
    
    289SNL Thrift Index
    
    
    100
    
    
    
    142
    
    
    
    158
    
    
    
    163
    
    
    
    190
    
    
    
    114S&P 500 Index
    
    
    100
    
    
    
    126
    
    
    
    138
    
    
    
    142
    
    
    
    161
    
    
    
    167
 
 *
    
    Source: SNL Financial LC and Bloomberg Financial DatabaseThere can be no assurance that stock performance will continue in the future with the same or
similar trends as those depicted in the graph above. Page 53




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##### Table of Contents



Item 6. Selected Financial Data
  At December 31,2007
    
    2006
    
    2005
    
    2004
    
    2003(In thousands)Selected Financial Condition Data:Total assets
    
    $
    44,423,971
    
    
    $
    35,506,581
    
    
    $
    28,075,353
    
    
    $
    20,145,981
    
    
    $
    17,033,360Total loans
    
    
    24,192,281
    
    
    
    19,083,617
    
    
    
    15,062,449
    
    
    
    11,363,039
    
    
    
    8,803,066Federal Home Loan Bank of New York stock
    
    
    695,351
    
    
    
    445,006
    
    
    
    226,962
    
    
    
    140,000
    
    
    
    164,850Investment securities held to maturity
    
    
    1,408,501
    
    
    
    1,533,969
    
    
    
    1,534,216
    
    
    
    1,334,249
    
    
    
    1,366Investment securities available for sale
    
    
    2,765,491
    
    
    
    4,379,615
    
    
    
    3,962,511
    
    
    
    1,594,639
    
    
    
    2,243,812Mortgage-backed securities held to maturity
    
    
    9,565,526
    
    
    
    6,925,210
    
    
    
    4,389,864
    
    
    
    3,755,921
    
    
    
    4,292,444Mortgage-backed securities available for sale
    
    
    5,005,409
    
    
    
    2,404,421
    
    
    
    2,520,633
    
    
    
    1,620,708
    
    
    
    1,130,257Total cash and cash equivalents
    
    
    217,544
    
    
    
    182,246
    
    
    
    102,259
    
    
    
    168,183
    
    
    
    254,584Foreclosed real estate, net
    
    
    4,055
    
    
    
    3,161
    
    
    
    1,040
    
    
    
    878
    
    
    
    1,002Total deposits
    
    
    15,153,382
    
    
    
    13,415,587
    
    
    
    11,383,300
    
    
    
    11,477,300
    
    
    
    10,453,780Total borrowed funds
    
    
    24,141,000
    
    
    
    16,973,000
    
    
    
    11,350,000
    
    
    
    7,150,000
    
    
    
    5,150,000Total stockholders equity
    
    
    4,611,307
    
    
    
    4,930,256
    
    
    
    5,201,476
    
    
    
    1,402,884
    
    
    
    1,329,366
 For the Year Ended December 31,2007
    
    
    2006
    
    
    2005
    
    
    2004
    
    
    2003(In thousands)Selected Operating Data:Total interest and dividend income
    
    $
    2,127,505
    
    
    $
    1,614,843
    
    
    $
    1,178,908
    
    
    $
    915,058
    
    
    $
    777,328Total interest expense
    
    
    1,480,322
    
    
    
    1,001,610
    
    
    
    616,774
    
    
    
    430,066
    
    
    
    376,354Net interest income
    
    
    647,183
    
    
    
    613,233
    
    
    
    562,134
    
    
    
    484,992
    
    
    
    400,974Provision for loan losses
    
    
    4,800
    
    
    
    
    
    
    
    65
    
    
    
    790
    
    
    
    900Net interest income after provision for loan losses
    
    
    642,383
    
    
    
    613,233
    
    
    
    562,069
    
    
    
    484,202
    
    
    
    400,074Non-interest income:Service charges and other income
    
    
    7,267
    
    
    
    6,287
    
    
    
    5,267
    
    
    
    5,128
    
    
    
    5,338Gains on securities transactions, net
    
    
    6
    
    
    
    4
    
    
    
    2,740
    
    
    
    11,429
    
    
    
    24,326Total non-interest income
    
    
    7,273
    
    
    
    6,291
    
    
    
    8,007
    
    
    
    16,557
    
    
    
    29,664Total non-interest expense
    
    
    167,913
    
    
    
    158,955
    
    
    
    127,703
    
    
    
    118,348
    
    
    
    102,527Income before income tax expense
    
    
    481,743
    
    
    
    460,569
    
    
    
    442,373
    
    
    
    382,411
    
    
    
    327,211Income tax expense
    
    
    185,885
    
    
    
    171,990
    
    
    
    166,318
    
    
    
    143,145
    
    
    
    119,801Net income
    
    $
    295,858
    
    
    $
    288,579
    
    
    $
    276,055
    
    
    $
    239,266
    
    
    $
    207,410
 Page 54




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At or for the Year Ended December 31,2007
    
    2006
    
    2005
    
    2004
    
    2003Selected Financial Ratios and Other Data:Performance Ratios:Return on average assets
    
    
    0.74
    %
    
    
    0.91
    %
    
    
    1.14
    %
    
    
    1.29
    %
    
    
    1.34
    %Return on average stockholders equity
    
    
    6.23
    
    
    
    5.70
    
    
    
    7.52
    
    
    
    17.66
    
    
    
    15.38Net interest rate spread (1)
    
    
    1.11
    
    
    
    1.31
    
    
    
    1.84
    
    
    
    2.43
    
    
    
    2.37Net interest margin (2)
    
    
    1.65
    
    
    
    1.96
    
    
    
    2.35
    
    
    
    2.66
    
    
    
    2.65Non-interest expense to average assets
    
    
    0.42
    
    
    
    0.50
    
    
    
    0.53
    
    
    
    0.64
    
    
    
    0.66Efficiency ratio (3)
    
    
    25.66
    
    
    
    25.66
    
    
    
    22.40
    
    
    
    23.60
    
    
    
    23.81Average interest-earning assets to
average interest-bearing liabilities
    
    
    1.14x
    
    
    
    1.20x
    
    
    
    1.20x
    
    
    
    1.09x
    
    
    
    1.11xShare and Per Share Data:Basic earnings per share
    
    $
    0.59
    
    
    $
    0.54
    
    
    $
    0.49
    
    
    $
    0.41
    
    
    $
    0.35Diluted earnings per share
    
    
    0.58
    
    
    
    0.53
    
    
    
    0.48
    
    
    
    0.40
    
    
    
    0.34Cash dividends paid per common share
    
    
    0.33
    
    
    
    0.30
    
    
    
    0.27
    
    
    
    0.22
    
    
    
    0.16Dividend pay-out ratio (4)
    
    
    55.93
    %
    
    
    55.56
    %
    
    
    54.69
    %
    
    
    53.17
    %
    
    
    46.29
    %Book value per share (5)
    
    $
    9.55
    
    
    $
    9.47
    
    
    $
    9.44
    
    
    $
    7.85
    
    
    $
    7.33Tangible book value per share (5)
    
    
    9.22
    
    
    
    9.15
    
    
    
    9.44
    
    
    
    7.85
    
    
    
    7.33Weighted average number of commonshares outstanding:Basic
    
    
    499,607,828
    
    
    
    536,214,778
    
    
    
    567,789,397
    
    
    
    576,621,209
    
    
    
    585,316,009Diluted
    
    
    509,927,433
    
    
    
    546,790,604
    
    
    
    581,063,426
    
    
    
    593,000,573
    
    
    
    601,681,732Capital Ratios:Average stockholders equity to average assets
    
    
    11.93
    %
    
    
    16.00
    %
    
    
    15.10
    %
    
    
    7.29
    %
    
    
    8.73
    %Stockholders equity to assets
    
    
    10.38
    
    
    
    13.89
    
    
    
    18.53
    
    
    
    6.96
    
    
    
    7.80Regulatory Capital Ratios of Bank:Leverage capital (6)
    
    
    9.16
    %
    
    
    11.30
    %
    
    
    14.68
    %
    
    
    6.36
    %
    
    
    7.52
    %Total risk-based capital (7)
    
    
    24.83
    
    
    
    30.99
    
    
    
    41.31
    
    
    
    17.49
    
    
    
    20.89Asset Quality Ratios:Non-performing loans to total loans
    
    
    0.33
    %
    
    
    0.16
    %
    
    
    0.13
    %
    
    
    0.19
    %
    
    
    0.23
    %Non-performing assets to total assets
    
    
    0.19
    
    
    
    0.09
    
    
    
    0.07
    
    
    
    0.11
    
    
    
    0.12Allowance for loan losses to non-performing loans
    
    
    43.75
    
    
    
    102.09
    
    
    
    141.84
    
    
    
    126.44
    
    
    
    131.09Allowance for loan losses to total loans
    
    
    0.14
    
    
    
    0.16
    
    
    
    0.18
    
    
    
    0.24
    
    
    
    0.30Branch and Deposit Data:Number of deposit accounts
    
    
    605,018
    
    
    
    580,987
    
    
    
    484,956
    
    
    
    476,627
    
    
    
    491,293Branches
    
    
    119
    
    
    
    111
    
    
    
    90
    
    
    
    85
    
    
    
    81Average deposits per branch (thousands)
    
    $
    127,339
    
    
    $
    120,861
    
    
    $
    126,481
    
    
    $
    135,027
    
    
    $
    129,059
 
 (1)
    
    Determined by subtracting the weighted average cost of average total interest-bearing liabilities from the weighted average yield
on average total interest-earning assets.(2)
    
    Determined by dividing net interest income by average total interest-earning assets.(3)
    
    Determined by dividing total non-interest expense by the sum of net interest income and total non-interest income.(4)
    
    The dividend pay-out ratio for 2004 and 2005 uses per share information that does not reflect the dividend waiver by Hudson City, MHC.(5)
    
    Computed based on total common shares issued, less treasury shares, unallocated ESOP shares and unvested stock award shares. Tangible book value excludes goodwill and other intangible assets.(6)
    
    Ratios for 2003 were determined pursuant to FDIC regulations. Beginning January 1, 2004, Hudson City Savings became subject to the capital requirements under OTS regulations.(7)
    
    The calculation is the same under both OTS and FDIC regulations. Page 55




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Item 7. Managements Discussion and Analysis of Financial Condition and Results of Operations
 .
 Executive Summary
      Page 56




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##### Table of Contents



Comparison of Financial Condition at December 31, 2007 and December 31, 2006
  Page 57




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Page 58




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Analysis of Net Interest Income
  Page 59




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Average Balance Sheet.
 For the Year Ended December 31,2007
    
    
    2006
    
    
    2005Average
    
    
    
    
    
    
    
    
    
    
    Average
    
    
    
    
    
    
    
    
    
    
    AverageAverage
    
    
    
    
    
    
    Yield/
    
    
    Average
    
    
    
    
    
    
    Yield/
    
    
    Average
    
    
    
    
    
    
    Yield/Balance
    
    
    Interest
    
    
    Cost
    
    
    Balance
    
    
    Interest
    
    
    Cost
    
    
    Balance
    
    
    Interest
    
    
    Cost(Dollars in thousands)Assets:Interest-earnings assets:First mortgage loans, net (1)
    
    $
    21,208,167
    
    
    $
    1,205,461
    
    
    
    5.68
    %
    
    $
    16,685,920
    
    
    $
    932,550
    
    
    
    5.59
    %
    
    $
    12,656,118
    
    
    $
    689,435
    
    
    
    5.45
    %Consumer and other loans
    
    
    431,491
    
    
    
    28,247
    
    
    
    6.55
    
    
    
    316,844
    
    
    
    19,698
    
    
    
    6.22
    
    
    
    185,320
    
    
    
    10,786
    
    
    
    5.82Federal funds sold
    
    
    248,201
    
    
    
    12,293
    
    
    
    4.95
    
    
    
    165,380
    
    
    
    8,242
    
    
    
    4.98
    
    
    
    236,288
    
    
    
    5,013
    
    
    
    2.12Mortgage-backed securities,
at amortized cost
    
    
    11,391,487
    
    
    
    587,905
    
    
    
    5.16
    
    
    
    8,022,309
    
    
    
    381,995
    
    
    
    4.76
    
    
    
    6,218,312
    
    
    
    273,063
    
    
    
    4.39Federal Home Loan Bank stock
    
    
    586,021
    
    
    
    39,492
    
    
    
    6.74
    
    
    
    345,870
    
    
    
    16,507
    
    
    
    4.77
    
    
    
    169,781
    
    
    
    9,394
    
    
    
    5.53Investment securities, at amortized cost
    
    
    5,358,155
    
    
    
    254,107
    
    
    
    4.74
    
    
    
    5,697,565
    
    
    
    255,851
    
    
    
    4.49
    
    
    
    4,503,416
    
    
    
    191,217
    
    
    
    4.25Total interest-earning assets
    
    
    39,223,522
    
    
    
    2,127,505
    
    
    
    5.42
    
    
    
    31,233,888
    
    
    
    1,614,843
    
    
    
    5.17
    
    
    
    23,969,235
    
    
    
    1,178,908
    
    
    
    4.92Noninterest-earning assets
    
    
    621,860
    
    
    
    
    
    
    
    
    
    
    
    414,084
    
    
    
    
    
    
    
    
    
    
    
    324,004Total assets
    
    $
    39,845,382
    
    
    
    
    
    
    
    
    
    
    $
    31,647,972
    
    
    
    
    
    
    
    
    
    
    $
    24,293,239Liabilities and stockholders equity:Interest-bearing liabilities:Savings accounts
    
    $
    775,802
    
    
    
    6,330
    
    
    
    0.82
    
    
    $
    796,410
    
    
    
    7,851
    
    
    
    0.99
    
    
    $
    980,707
    
    
    
    9,709
    
    
    
    0.99Interest-bearing transaction accounts
    
    
    1,806,203
    
    
    
    60,641
    
    
    
    3.36
    
    
    
    2,734,787
    
    
    
    90,936
    
    
    
    3.33
    
    
    
    4,124,359
    
    
    
    118,530
    
    
    
    2.87Money market accounts
    
    
    1,176,185
    
    
    
    47,172
    
    
    
    4.01
    
    
    
    688,311
    
    
    
    20,670
    
    
    
    3.00
    
    
    
    469,254
    
    
    
    5,172
    
    
    
    1.10Time deposits
    
    
    10,005,377
    
    
    
    492,793
    
    
    
    4.93
    
    
    
    7,417,812
    
    
    
    316,639
    
    
    
    4.27
    
    
    
    5,546,364
    
    
    
    160,325
    
    
    
    2.89Total interest-bearing deposits
    
    
    13,763,567
    
    
    
    606,936
    
    
    
    4.41
    
    
    
    11,637,320
    
    
    
    436,096
    
    
    
    3.75
    
    
    
    11,120,684
    
    
    
    293,736
    
    
    
    2.64Repurchase agreements
    
    
    10,305,216
    
    
    
    432,852
    
    
    
    4.20
    
    
    
    8,313,321
    
    
    
    316,444
    
    
    
    3.81
    
    
    
    6,447,560
    
    
    
    226,909
    
    
    
    3.52Federal Home Loan Bank of New York
    
    
    10,286,869
    
    
    
    440,534
    
    
    
    4.28
    
    
    
    5,977,115
    
    
    
    249,070
    
    
    
    4.17
    
    
    
    2,469,529
    
    
    
    96,129
    
    
    
    3.89Total borrowed funds
    
    
    20,592,085
    
    
    
    873,386
    
    
    
    4.24
    
    
    
    14,290,436
    
    
    
    565,514
    
    
    
    3.96
    
    
    
    8,917,089
    
    
    
    323,038
    
    
    
    3.62Total interest-bearing liabilities
    
    
    34,355,652
    
    
    
    1,480,322
    
    
    
    4.31
    
    
    
    25,927,756
    
    
    
    1,001,610
    
    
    
    3.86
    
    
    
    20,037,773
    
    
    
    616,774
    
    
    
    3.08Noninterest-bearing liabilities:Noninterest-bearing deposits
    
    
    514,685
    
    
    
    
    
    
    
    
    
    
    
    462,022
    
    
    
    
    
    
    
    
    
    
    
    437,790Other noninterest-bearing liabilities
    
    
    222,760
    
    
    
    
    
    
    
    
    
    
    
    195,845
    
    
    
    
    
    
    
    
    
    
    
    148,523Total noninterest-bearing liabilities
    
    
    737,445
    
    
    
    
    
    
    
    
    
    
    
    657,867
    
    
    
    
    
    
    
    
    
    
    
    586,313Total liabilities
    
    
    35,093,097
    
    
    
    
    
    
    
    
    
    
    
    26,585,623
    
    
    
    
    
    
    
    
    
    
    
    20,624,086Stockholders equity
    
    
    4,752,285
    
    
    
    
    
    
    
    
    
    
    
    5,062,349
    
    
    
    
    
    
    
    
    
    
    
    3,669,153Total liabilities and
stockholders equity
    
    $
    39,845,382
    
    
    
    
    
    
    
    
    
    
    $
    31,647,972
    
    
    
    
    
    
    
    
    
    
    $
    24,293,239Net interest income
    
    
    
    
    
    $
    647,183
    
    
    
    
    
    
    
    
    
    
    $
    613,233
    
    
    
    
    
    
    
    
    
    
    $
    562,134Net interest rate spread (2)
    
    
    
    
    
    
    
    
    
    
    1.11
    %
    
    
    
    
    
    
    
    
    
    
    1.31
    %
    
    
    
    
    
    
    
    
    
    
    1.84
    %Net interest-earning assets
    
    $
    4,867,870
    
    
    
    
    
    
    
    
    
    
    $
    5,306,132
    
    
    
    
    
    
    
    
    
    
    $
    3,931,462Net interest margin (3)
    
    
    
    
    
    
    
    
    
    
    1.65
    %
    
    
    
    
    
    
    
    
    
    
    1.96
    %
    
    
    
    
    
    
    
    
    
    
    2.35
    %Ratio of interest-earning assets to
interest-bearing liabilities
    
    
    
    
    
    
    
    
    
    
    1.14x
    
    
    
    
    
    
    
    
    
    
    
    1.20x
    
    
    
    
    
    
    
    
    
    
    
    1.20x
 
 (1)
    
    Amount is net of deferred loan fees and allowance for loan losses and includes non-performing loans.(2)
    
    Determined by subtracting the weighted average cost of average total interest-bearing liabilities from the weighted average yield on average total interest-earning assets.(3)
    
    Determined by dividing net interest income by average total interest-earning assets. Page 60




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Rate/Volume Analysis.
 
    
    changes attributable to changes in volume (changes in volume multiplied by prior
rate);
    
    changes attributable to changes in rate (changes in rate multiplied by prior volume);
and
    
    the net change.
  2007 Compared to 2006
    
    
    2006 Compared to 2005Increase (Decrease) Due To
    
    
    Increase (Decrease) Due ToVolume
    
    
    Rate
    
    
    Net
    
    
    Volume
    
    
    Rate
    
    
    Net(In thousands)Interest-earning assets:First mortgage loans, net
    
    $
    257,608
    
    
    $
    15,303
    
    
    $
    272,911
    
    
    $
    224,965
    
    
    $
    18,150
    
    
    $
    243,115Consumer and other loans
    
    
    7,455
    
    
    
    1,094
    
    
    
    8,549
    
    
    
    8,125
    
    
    
    787
    
    
    
    8,912Federal funds sold
    
    
    4,101
    
    
    
    (50
    )
    
    
    4,051
    
    
    
    (1,872
    )
    
    
    5,101
    
    
    
    3,229Mortgage-backed securities
    
    
    171,579
    
    
    
    34,331
    
    
    
    205,910
    
    
    
    84,409
    
    
    
    24,523
    
    
    
    108,932Federal Home Loan Bank stock
    
    
    14,412
    
    
    
    8,573
    
    
    
    22,985
    
    
    
    8,559
    
    
    
    (1,446
    )
    
    
    7,113Investment securities
    
    
    (15,627
    )
    
    
    13,883
    
    
    
    (1,744
    )
    
    
    53,286
    
    
    
    11,348
    
    
    
    64,634Total
    
    
    439,528
    
    
    
    73,134
    
    
    
    512,662
    
    
    
    377,472
    
    
    
    58,463
    
    
    
    435,935Interest-bearing liabilities:Savings accounts
    
    
    (199
    )
    
    
    (1,322
    )
    
    
    (1,521
    )
    
    
    (1,858
    )
    
    
    
    
    
    
    (1,858
    )Interest-bearing transaction accounts
    
    
    (31,110
    )
    
    
    815
    
    
    
    (30,295
    )
    
    
    (44,411
    )
    
    
    16,817
    
    
    
    (27,594
    )Money market accounts
    
    
    17,968
    
    
    
    8,534
    
    
    
    26,502
    
    
    
    3,298
    
    
    
    12,200
    
    
    
    15,498Time deposits
    
    
    122,066
    
    
    
    54,088
    
    
    
    176,154
    
    
    
    64,721
    
    
    
    91,593
    
    
    
    156,314Repurchase agreements
    
    
    81,563
    
    
    
    34,845
    
    
    
    116,408
    
    
    
    69,693
    
    
    
    19,842
    
    
    
    89,535FHLB Advances
    
    
    184,706
    
    
    
    6,758
    
    
    
    191,464
    
    
    
    145,564
    
    
    
    7,377
    
    
    
    152,941Total
    
    
    374,994
    
    
    
    103,718
    
    
    
    478,712
    
    
    
    237,007
    
    
    
    147,829
    
    
    
    384,836Net change in net interest income
    
    $
    64,534
    
    
    $
    (30,584
    )
    
    $
    33,950
    
    
    $
    140,465
    
    
    $
    (89,366
    )
    
    $
    51,099
 Page 61




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Comparison of Operating Results for the Years Ended December 31, 2007 and 2006
 General.
 Interest and Dividend Income .
      Page 62




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Interest Expense.
    Net Interest Income.
 Page 63




---



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Provision for Loan Losses.
   Page 64




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Page 65




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Non-Interest Income.
 Non-Interest Expense.
 Income Taxes.
 Comparison of Operating Results for the Years Ended December 31, 2006 and 2005
 General.
 Page 66




---



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Interest and Dividend Income.
    Interest Expense.
  Page 67




---



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Net Interest Income.
  Provision for Loan Losses.
 Page 68




---



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Non-Interest Income.
 Non-Interest Expense.
 Income Taxes.
 Liquidity and Capital Resources
   Page 69




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Page 70




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Off-Balance Sheet Arrangements and Contractual Obligations
   Payments Due By PeriodLess Than
    
    
    One Year to
    
    
    Three Years to
    
    
    More ThanContractual Obligation
    
    Total
    
    
    One Year
    
    
    Three Years
    
    
    Five Years
    
    
    Five Years(In thousands)Mortgage loan originations
    
    $
    198,336
    
    
    $
    198,336
    
    
    $
    
    
    
    $
    
    
    
    $
    Mortgage loan purchases
    
    
    669,000
    
    
    
    669,000
    
    
    
    
    
    
    
    
    
    
    
    Mortgage-backed security purchases
    
    
    520,000
    
    
    
    520,000
    
    
    
    
    
    
    
    
    
    
    
    Operating leases
    
    
    137,556
    
    
    
    7,533
    
    
    
    15,312
    
    
    
    14,596
    
    
    
    100,115Total
    
    $
    1,524,892
    
    
    $
    1,394,869
    
    
    $
    15,312
    
    
    $
    14,596
    
    
    $
    100,115
  Recent Accounting Pronouncements
  Page 71




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Page 72




---



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Impact of Inflation and Changing Prices
  Critical Accounting Policies
  Allowance for Loan Losses
   Page 73




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Stock-Based Compensation
   Page 74




---



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Pension and Other Postretirement Benefit Assumptions
     Page 75




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Item 7A. Quantitative and Qualitative Disclosures About Market Risk.
 General
      Page 76




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Management of Interest Rate Risk
  
    
    evaluate the interest rate risk inherent in our balance sheet accounts;
    
    determine the appropriate level of interest rate risk given our business plan, the
current business environment and our capital and liquidity requirements; and
    
    manage interest rate risk in a manner consistent with the approved guidelines and
policies set by our Board of Directors.
    Page 77




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Cash Flow Determination.
  
    
    we assumed an annual prepayment rate for fixed-rate first mortgage loans of 115% of the
FHLMC fixed-rate index of moderately seasoned loans and an annual prepayment rate for
variable-rate first mortgage loans of 115% of the FHLMC five year balloon index of new
loans;
    
    we assumed an annual prepayment rate for our mortgage-backed securities using the
prepayment rate associated with the security type;
 Page 78




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
    
    for savings accounts that had no stated maturity, we used decay rates (the assumed rate
at which the balance of existing accounts would decline) of: 7.5% in less than six months,
7.5% in six months to one year, 10.0% in one year to two years, 10.0% in two years to three
years, 25.0% in three years to five years, and 40.0% in more than five years;
    
    for our High Value Checking product, which is included in interest-bearing transaction
accounts, we used decay rates of: 10.0% in less than six months, 10.0% in six months to one
year, 15% in one to two years, 15% in two to three years, 25% in three to five years, and
25% in more than five years;
    
    for other interest-bearing transaction accounts that had no stated maturity, we used
decay rates of : 7.5% in less than six months, 7.5% in six months to one year, 10.0% in
one to two years, 10.0% in two to three years, 25.0% in three years to five years, and
40.0% in more than five years;
    
    for money market accounts that had no stated maturity, we used decay rates of: 10.0% in
less than six months, 10.0% in six months to one year, 20.0% in one to two years, 20.0% in
two to three years, 35.0% in three years to five years, and 5.0% in more than five years;
and
    
    callable investment securities and borrowed funds are shown at the earlier of their
probable call date or maturity date given the rate of the instrument in relation to the
current market rate environment and the call option frequency, the model assumed calls of
investment securities of $1.10 billion and calls of borrowed funds of $350.0 million over
the next year in the current (zero basis point) change scenario.
 Simulation Model.
  Change in
    
    Percent Change inInterest Rates
    
    Net Interest Income(Basis points)200
    
    
    (11.01
    )%100
    
    
    0.96
    
    
    (100)
    
    
    (0.74
    )
 Page 79




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Present Value of EquityAs Percent of PresentValue of AssetsChange in
    
    Present
    
    Basis PointInterest Rates
    
    Value Ratio
    
    Change(Basis points)200
    
    
    6.55
    %
    
    
    (290
    )100
    
    
    8.55
    
    
    
    (90
    )0
    
    
    9.45
    
    
    (100)
    
    
    8.10
    
    
    
    (135
    )
  Page 80




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Gap Analysis.
   Page 81




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At December 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
    
    $
    1,497,522
    
    
    $
    1,587,154
    
    
    $
    2,671,268
    
    
    $
    3,068,727
    
    
    $
    2,827,215
    
    
    $
    12,061,914
    
    
    $
    23,713,800Consumer and other loans
    
    
    103,839
    
    
    
    906
    
    
    
    11,021
    
    
    
    5,560
    
    
    
    15,311
    
    
    
    267,097
    
    
    
    403,734Federal funds sold
    
    
    106,299
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    106,299Mortgage-backed securities
    
    
    1,524,350
    
    
    
    1,750,079
    
    
    
    1,898,523
    
    
    
    3,046,243
    
    
    
    4,506,554
    
    
    
    1,845,186
    
    
    
    14,570,935FHLB stock
    
    
    695,351
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    695,351Investment securities
    
    
    1,111,010
    
    
    
    71,946
    
    
    
    2,019,722
    
    
    
    321,950
    
    
    
    451,438
    
    
    
    197,926
    
    
    
    4,173,992Total interest-earning assets
    
    
    5,038,371
    
    
    
    3,410,085
    
    
    
    6,600,534
    
    
    
    6,442,480
    
    
    
    7,800,518
    
    
    
    14,372,123
    
    
    
    43,664,111Interest-bearing liabilities:Savings accounts
    
    
    55,922
    
    
    
    56,646
    
    
    
    73,558
    
    
    
    73,558
    
    
    
    183,896
    
    
    
    294,233
    
    
    
    737,813Interest-bearing transaction accounts
    
    
    155,359
    
    
    
    155,359
    
    
    
    231,314
    
    
    
    231,314
    
    
    
    397,022
    
    
    
    417,716
    
    
    
    1,588,084Money market accounts
    
    
    157,510
    
    
    
    157,510
    
    
    
    315,019
    
    
    
    315,019
    
    
    
    551,284
    
    
    
    78,755
    
    
    
    1,575,097Time deposits
    
    
    9,583,503
    
    
    
    659,968
    
    
    
    359,845
    
    
    
    100,508
    
    
    
    30,594
    
    
    
    
    
    
    
    10,734,418Borrowed funds
    
    
    366,000
    
    
    
    
    
    
    
    
    
    
    
    300,000
    
    
    
    350,000
    
    
    
    23,125,000
    
    
    
    24,141,000Total interest-bearing
liabilities
    
    
    10,318,294
    
    
    
    1,029,483
    
    
    
    979,736
    
    
    
    1,020,399
    
    
    
    1,512,796
    
    
    
    23,915,704
    
    
    
    38,776,412Interest rate sensitivity gap
    
    $
    (5,279,923
    )
    
    $
    2,380,602
    
    
    $
    5,620,798
    
    
    $
    5,422,081
    
    
    $
    6,287,722
    
    
    $
    (9,543,581
    )
    
    $
    4,887,699Cumulative interest rate
sensitivity gap
    
    $
    (5,279,923
    )
    
    $
    (2,899,321
    )
    
    $
    2,721,477
    
    
    $
    8,143,558
    
    
    $
    14,431,280
    
    
    $
    4,887,699Cumulative interest rate
sensitivity gap as a
percent of total assets
    
    
    (11.89)
    %
    
    
    (6.53)
    %
    
    
    6.13
    %
    
    
    18.33
    %
    
    
    32.49
    %
    
    
    11.00
    %Cumulative interest-earning
assets as a percent of
interest-bearing liabilities
    
    
    48.83
    %
    
    
    74.45
    %
    
    
    122.08
    %
    
    
    161.01
    %
    
    
    197.11
    %
    
    
    112.60
    %
   Page 82




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Item 8. Financial Statements and Supplementary Data.
 Report of Independent Registered Public Accounting Firm
 
     
  
 Page 83




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Report of Independent Registered Public Accounting Firm
 
 Internal Control -
Integrated Framework .
    Internal Control  Integrated Framework
  Page 84




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.
 
  
 Page 85




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Hudson City Bancorp, Inc. and Subsidiary
Consolidated Statements of Financial Condition
 December 31,
    
    
    December 31,2007
    
    
    2006(In thousands, except share and per share amounts)Assets:Cash and due from banks
    
    $
    111,245
    
    
    $
    125,630Federal funds sold
    
    
    106,299
    
    
    
    56,616Total cash and cash equivalents
    
    
    217,544
    
    
    
    182,246Securities available for sale:Mortgage-backed securities
    
    
    5,005,409
    
    
    
    2,404,421Investment securities
    
    
    2,765,491
    
    
    
    4,379,615Securities held to maturity:Mortgage-backed securities (fair value of $9,566,312 and $6,804,598
at December 31, 2007 and 2006, respectively)
    
    
    9,565,526
    
    
    
    6,925,210Investment securities (fair value of $1,410,246 and $1,502,934
at December 31, 2007 and 2006, respectively)
    
    
    1,408,501
    
    
    
    1,533,969Total securities
    
    
    18,744,927
    
    
    
    15,243,215Loans
    
    
    24,192,281
    
    
    
    19,083,617Deferred loan costs
    
    
    40,598
    
    
    
    16,159Allowance for loan losses
    
    
    (34,741
    )
    
    
    (30,625
    )Net loans
    
    
    24,198,138
    
    
    
    19,069,151Federal Home Loan Bank of New York stock
    
    
    695,351
    
    
    
    445,006Foreclosed real estate, net
    
    
    4,055
    
    
    
    3,161Accrued interest receivable
    
    
    245,113
    
    
    
    194,229Banking premises and equipment, net
    
    
    75,094
    
    
    
    73,929Goodwill
    
    
    152,109
    
    
    
    150,831Other assets
    
    
    91,640
    
    
    
    144,813Total Assets
    
    $
    44,423,971
    
    
    $
    35,506,581Liabilities and Stockholders Equity:Deposits:Interest-bearing
    
    $
    14,635,412
    
    
    $
    12,917,286Noninterest-bearing
    
    
    517,970
    
    
    
    498,301Total deposits
    
    
    15,153,382
    
    
    
    13,415,587Repurchase agreements
    
    
    12,016,000
    
    
    
    8,923,000Federal Home Loan Bank of New York advances
    
    
    12,125,000
    
    
    
    8,050,000Total borrowed funds
    
    
    24,141,000
    
    
    
    16,973,000Due to brokers for securities purchases
    
    
    281,853
    
    
    
    Accrued expenses and other liabilities
    
    
    236,429
    
    
    
    187,738Total liabilities
    
    
    39,812,664
    
    
    
    30,576,325Commitments and Contingencies (Note 14)Common stock, $0.01 par value, 3,200,000,000 shares authorized;
741,466,555 shares issued; 518,569,602 and 557,787,921 shares
outstanding at December 31, 2007 and 2006, respectively
    
    
    7,415
    
    
    
    7,415Additional paid-in capital
    
    
    4,578,578
    
    
    
    4,553,614Retained earnings
    
    
    2,002,049
    
    
    
    1,877,840Treasury stock, at cost; 222,896,953 and 183,678,634 shares at
December 31, 2007 and 2006, respectively
    
    
    (1,771,106
    )
    
    
    (1,230,793
    )Unallocated common stock held by the employee stock ownership plan
    
    
    (222,251
    )
    
    
    (228,257
    )Accumulated other comprehensive income (loss) net of tax
    
    
    16,622
    
    
    
    (49,563
    )Total stockholders equity
    
    
    4,611,307
    
    
    
    4,930,256Total Liabilities and Stockholders Equity
    
    $
    44,423,971
    
    
    $
    35,506,581
  Page 86




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Hudson City Bancorp, Inc. and Subsidiary
Consolidated Statements of Income
 Year Ended December 31,2007
    
    
    2006
    
    
    2005(In thousands, except per share data)Interest and Dividend Income:First mortgage loans
    
    $
    1,205,461
    
    
    $
    932,550
    
    
    $
    689,435Consumer and other loans
    
    
    28,247
    
    
    
    19,698
    
    
    
    10,786Mortgage-backed securities held to maturity
    
    
    457,720
    
    
    
    262,417
    
    
    
    182,309Mortgage-backed securities available for sale
    
    
    130,185
    
    
    
    119,578
    
    
    
    90,754Investment securities held to maturity
    
    
    74,198
    
    
    
    74,592
    
    
    
    72,582Investment securities available for sale
    
    
    179,909
    
    
    
    181,259
    
    
    
    118,635Dividends on Federal Home Loan Bank of New York stock
    
    
    39,492
    
    
    
    16,507
    
    
    
    9,394Federal funds sold
    
    
    12,293
    
    
    
    8,242
    
    
    
    5,013Total interest and dividend income
    
    
    2,127,505
    
    
    
    1,614,843
    
    
    
    1,178,908Interest Expense:Deposits
    
    
    606,936
    
    
    
    436,096
    
    
    
    293,736Borrowed funds
    
    
    873,386
    
    
    
    565,514
    
    
    
    323,038Total interest expense
    
    
    1,480,322
    
    
    
    1,001,610
    
    
    
    616,774Net interest income
    
    
    647,183
    
    
    
    613,233
    
    
    
    562,134Provision for Loan Losses
    
    
    4,800
    
    
    
    
    
    
    
    65Net interest income after
provision for loan losses
    
    
    642,383
    
    
    
    613,233
    
    
    
    562,069Non-Interest Income:Service charges and other income
    
    
    7,267
    
    
    
    6,287
    
    
    
    5,267Gains on securities transactions, net
    
    
    6
    
    
    
    4
    
    
    
    2,740Total non-interest income
    
    
    7,273
    
    
    
    6,291
    
    
    
    8,007Non-Interest Expense:Compensation and employee benefits
    
    
    106,630
    
    
    
    103,443
    
    
    
    83,211Net occupancy expense
    
    
    29,589
    
    
    
    25,015
    
    
    
    20,211Federal deposit insurance assessment
    
    
    1,701
    
    
    
    1,695
    
    
    
    1,656Computer and related services
    
    
    2,605
    
    
    
    2,812
    
    
    
    2,498Other expense
    
    
    27,388
    
    
    
    25,990
    
    
    
    20,127Total non-interest expense
    
    
    167,913
    
    
    
    158,955
    
    
    
    127,703Income before income tax expense
    
    
    481,743
    
    
    
    460,569
    
    
    
    442,373Income Tax Expense
    
    
    185,885
    
    
    
    171,990
    
    
    
    166,318Net income
    
    $
    295,858
    
    
    $
    288,579
    
    
    $
    276,055Basic Earnings Per Share
    
    $
    0.59
    
    
    $
    0.54
    
    
    $
    0.49Diluted Earnings Per Share
    
    $
    0.58
    
    
    $
    0.53
    
    
    $
    0.48
  Page 87




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##### Table of Contents



Hudson City Bancorp, Inc. and Subsidiary
Consolidated Statements of Changes in Stockholders Equity
 Year Ended December 31,2007
    
    
    2006
    
    
    2005(In thousands , except share amounts)Common Stock
    
    $
    7,415
    
    
    $
    7,415
    
    
    $
    7,415Additional paid-in capital:Balance at beginning of year
    
    
    4,553,614
    
    
    
    4,533,329
    
    
    
    565,403Common stock offering
    
    
    
    
    
    
    
    
    
    
    3,953,001Unvested RRP awards reclassified as additonal paid-in-capital
    
    
    
    
    
    
    (2,815
    )
    
    
    Stock option plan expense
    
    
    12,242
    
    
    
    5,526
    
    
    
    Tax benefit from stock plans
    
    
    3,761
    
    
    
    8,633
    
    
    
    9,431Allocation of ESOP stock
    
    
    7,313
    
    
    
    6,700
    
    
    
    5,632Vesting of RRP stock
    
    
    1,648
    
    
    
    2,241
    
    
    
    (138
    )Balance at end of year
    
    
    4,578,578
    
    
    
    4,553,614
    
    
    
    4,533,329Retained Earnings:Balance at beginning of year
    
    
    1,877,840
    
    
    
    1,759,492
    
    
    
    1,588,792Net Income
    
    
    295,858
    
    
    
    288,579
    
    
    
    276,055Dividends paid on common stock ($0.33, $0.30, and
$0.268 per share, respectively)
    
    
    (165,376
    )
    
    
    (161,374
    )
    
    
    (102,103
    )Exercise of stock options
    
    
    (6,273
    )
    
    
    (8,857
    )
    
    
    (3,252
    )Balance at end of year
    
    
    2,002,049
    
    
    
    1,877,840
    
    
    
    1,759,492Treasury Stock:Balance at beginning of year
    
    
    (1,230,793
    )
    
    
    (798,232
    )
    
    
    (696,812
    )Purchase of common stock
    
    
    (550,215
    )
    
    
    (448,237
    )
    
    
    (107,499
    )Exercise of stock options
    
    
    9,902
    
    
    
    15,676
    
    
    
    6,079Balance at end of year
    
    
    (1,771,106
    )
    
    
    (1,230,793
    )
    
    
    (798,232
    )Unallocated common stock held by the ESOP:Balance at beginning of year
    
    
    (228,257
    )
    
    
    (234,264
    )
    
    
    (47,552
    )Purchase of ESOP stock
    
    
    
    
    
    
    
    
    
    
    (189,348
    )Allocation of ESOP stock
    
    
    6,006
    
    
    
    6,007
    
    
    
    2,636Balance at end of year
    
    
    (222,251
    )
    
    
    (228,257
    )
    
    
    (234,264
    )Unallocated common stock held by the recognition and retention plan:Balance at beginning of year
    
    
    
    
    
    
    (2,815
    )
    
    
    (5,267
    )Unvested RRP awards reclassified as additonal paid-in-capital
    
    
    
    
    
    
    2,815
    
    
    
    Purchase of RRP stock
    
    
    
    
    
    
    
    
    
    
    (1,290
    )Vesting of RRP stock
    
    
    
    
    
    
    
    
    
    
    3,742Balance at end of year
    
    
    
    
    
    
    
    
    
    
    (2,815
    )Accumulated other comprehensive income (loss):Balance at beginning of year
    
    
    (49,563
    )
    
    
    (63,449
    )
    
    
    (9,095
    )Unrealized holding gains(losses) arising during the year,
net
of tax expense(benefit) of $47,073 for 2007, $9,765 for 2006 and
($35,884) for 2005
    
    
    68,173
    
    
    
    14,143
    
    
    
    (51,958
    )Reclassification adjustment for gains included in net income, net
of tax of ($2) for 2007, ($2) for 2006 and ($1,119) for 2005
    
    
    (4
    )
    
    
    (2
    )
    
    
    (1,621
    )Pension and other postretirement benefits adjustment, net of tax benefit of $1,366 for 2007, $175 for 2006 and $533 for 2005
    
    
    (1,984
    )
    
    
    (255
    )
    
    
    (775
    )Balance at end of year
    
    
    16,622
    
    
    
    (49,563
    )
    
    
    (63,449
    )Total Stockholders Equity
    
    $
    4,611,307
    
    
    $
    4,930,256
    
    
    $
    5,201,476Summary of comprehensive incomeNet income
    
    $
    295,858
    
    
    $
    288,579
    
    
    $
    276,055Other comprehensive income(loss), net of tax
    
    
    66,185
    
    
    
    13,886
    
    
    
    (54,354
    )Total comprehensive income
    
    $
    362,043
    
    
    $
    302,465
    
    
    $
    221,701
  Page 88




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##### Table of Contents



Hudson City Bancorp, Inc. and Subsidiary
Consolidated Statements of Cash Flows
 Year Ended December 31,2007
    
    
    2006
    
    
    2005(In thousands)Cash Flows from Operating Activities:Net income
    
    $
    295,858
    
    
    $
    288,579
    
    
    $
    276,055Adjustments to reconcile net income to net cash provided
by operating activities:Depreciation, accretion and amortization expense
    
    
    22,484
    
    
    
    21,952
    
    
    
    10,197Provision for loan losses
    
    
    4,800
    
    
    
    
    
    
    
    65Gains on securities transactions, net
    
    
    (6
    )
    
    
    (4
    )
    
    
    (2,740
    )Share-based compensation, including committed ESOP shares
    
    
    27,209
    
    
    
    20,474
    
    
    
    11,872Deferred tax benefit
    
    
    (9,430
    )
    
    
    (3,659
    )
    
    
    (6,505
    )Increase in accrued interest receivable
    
    
    (50,884
    )
    
    
    (48,580
    )
    
    
    (43,233
    )Decrease (increase) in other assets
    
    
    11,871
    
    
    
    (4,166
    )
    
    
    2,070Increase in accrued expenses and other liabilities
    
    
    45,901
    
    
    
    46,571
    
    
    
    24,005Tax benefit from stock plans
    
    
    
    
    
    
    
    
    
    
    9,431Net Cash Provided by Operating Activities
    
    
    347,803
    
    
    
    321,167
    
    
    
    281,217Cash Flows from Investing Activities:Originations of loans
    
    
    (3,352,511
    )
    
    
    (2,307,487
    )
    
    
    (2,194,774
    )Purchases of loans
    
    
    (3,971,273
    )
    
    
    (2,712,148
    )
    
    
    (3,676,260
    )Payments on loans
    
    
    2,189,018
    
    
    
    1,754,157
    
    
    
    2,154,125Principal collection of mortgage-backed securities held to maturity
    
    
    1,215,867
    
    
    
    773,343
    
    
    
    960,630Purchases of mortgage-backed securities held to maturity
    
    
    (3,861,633
    )
    
    
    (3,313,668
    )
    
    
    (1,604,473
    )Principal collection of mortgage-backed securities available for sale
    
    
    696,560
    
    
    
    741,200
    
    
    
    499,387Proceeds from sales of mortgage-backed securities available for sale
    
    
    
    
    
    
    186,169
    
    
    
    230,632Purchases of mortgage-backed securities available for sale
    
    
    (3,248,326
    )
    
    
    (617,172
    )
    
    
    (1,675,428
    )Proceeds from maturities and calls of investment securities held to maturity
    
    
    125,480
    
    
    
    256
    
    
    
    100,043Purchases of investment securities held to maturity
    
    
    
    
    
    
    
    
    
    
    (300,000
    )Proceeds from maturities and calls of investment securities available for sale
    
    
    3,825,060
    
    
    
    850,013
    
    
    
    1,600,029Proceeds from sales of investment securities available for sale
    
    
    
    
    
    
    112,157
    
    
    
    9,980Purchases of investment securities available for sale
    
    
    (2,148,705
    )
    
    
    (1,250,010
    )
    
    
    (4,008,680
    )Purchases of Federal Home Loan Bank of New York stock
    
    
    (259,660
    )
    
    
    (233,236
    )
    
    
    (104,162
    )Redemption of Federal Home Loan Bank of New York stock
    
    
    9,315
    
    
    
    18,000
    
    
    
    17,200Increase in
due to brokers for securities purchases
    
    
    281,853
    
    
    
    
    
    
    
    Cash paid in purchase acquistion, net of cash acquired
    
    
    
    
    
    
    (197,653
    )
    
    
    Purchases of premises and equipment, net
    
    
    (11,694
    )
    
    
    (22,557
    )
    
    
    (18,566
    )Net proceeds from sale of foreclosed real estate
    
    
    550
    
    
    
    1,449
    
    
    
    1,588Net Cash Used in Investment Activities
    
    
    (8,510,099
    )
    
    
    (6,217,187
    )
    
    
    (8,008,729
    )Cash Flows from Financing Activities:Net increase (decrease) in deposits
    
    
    1,737,795
    
    
    
    970,166
    
    
    
    (94,000
    )Proceeds from borrowed funds
    
    
    10,725,000
    
    
    
    9,125,000
    
    
    
    5,125,000Principal payments on borrowed funds
    
    
    (3,557,000
    )
    
    
    (3,525,000
    )
    
    
    (925,000
    )Cash proceeds from the common stock offering  net
    
    
    
    
    
    
    
    
    
    
    3,806,627Consolidation of Hudson City, MHC
    
    
    
    
    
    
    
    
    
    
    146,374Dividends paid
    
    
    (165,376
    )
    
    
    (161,374
    )
    
    
    (102,103
    )Purchases of stock by the employee stock ownership plan
    
    
    
    
    
    
    
    
    
    
    (189,348
    )Purchases of stock by the recognition and retention plan
    
    
    
    
    
    
    
    
    
    
    (1,290
    )Purchases of treasury stock
    
    
    (550,215
    )
    
    
    (448,237
    )
    
    
    (107,499
    )Exercise of stock options
    
    
    3,629
    
    
    
    6,819
    
    
    
    2,827Tax benefit from stock plans
    
    
    3,761
    
    
    
    8,633
    
    
    
    Net Cash Provided by Financing Activities
    
    
    8,197,594
    
    
    
    5,976,007
    
    
    
    7,661,588Net Increase (Decrease) in Cash and Cash Equivalents
    
    
    35,298
    
    
    
    79,987
    
    
    
    (65,924
    )Cash and Cash Equivalents at Beginning of Year
    
    
    182,246
    
    
    
    102,259
    
    
    
    168,183Cash and Cash Equivalents at End of Year
    
    $
    217,544
    
    
    $
    182,246
    
    
    $
    102,259Supplemental Disclosures:Interest paid
    
    $
    1,413,140
    
    
    $
    969,606
    
    
    $
    599,037Loans transferred to foreclosed real estate
    
    $
    1,752
    
    
    $
    3,642
    
    
    $
    1,750Income taxes paid
    
    $
    161,983
    
    
    $
    172,382
    
    
    $
    167,200
  Page 89




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##### Table of Contents



Notes to Consolidated Financial Statements
 1. Organization
  Plan of Conversion and Reorganization
  Acquisition of Sound Federal
  2. Summary of Significant Accounting Policies
 Basis of Presentation
  Page 90




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##### Table of Contents



Cash and Cash Equivalents
  Mortgage-Backed Securities
   Investment Securities
  Page 91




---



##### Table of Contents



Loans
     Allowance for Loan Losses
   Page 92




---



##### Table of Contents



Foreclosed Real Estate
  Banking Premises and Equipment
  Page 93




---



##### Table of Contents



Goodwill and Other Intangible Assets
  Income Taxes
   Employee Benefit Plans
    Page 94




---



##### Table of Contents



Stock-Based Compensation
  Bank-Owned Life Insurance
  Borrowed Funds
   Comprehensive Income
  Page 95




---



##### Table of Contents



Segment Information
  Earnings Per Share
   3. Stock Repurchase Programs
  Page 96




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##### Table of Contents



4. Mortgage-Backed Securities
  Gross
    
    
    Gross
    
    
    EstimatedAmortized
    
    
    Unrealized
    
    
    Unrealized
    
    
    Fair MarketCost
    
    
    Gains
    
    
    Losses
    
    
    Value(In thousands)2007Held to Maturity:GNMA pass-through certificates
    
    $
    157,716
    
    
    $
    1,379
    
    
    $
    (96
    )
    
    $
    158,999FNMA pass-through certificates
    
    
    3,214,509
    
    
    
    15,216
    
    
    
    (23,803
    )
    
    
    3,205,922FHLMC pass-through certificates
    
    
    5,808,288
    
    
    
    52,536
    
    
    
    (11,080
    )
    
    
    5,849,744FHLMC and FNMA  REMICs
    
    
    385,013
    
    
    
    2
    
    
    
    (33,368
    )
    
    
    351,647Total held to maturity
    
    $
    9,565,526
    
    
    $
    69,133
    
    
    $
    (68,347
    )
    
    $
    9,566,312Available for Sale:GNMA pass-through certificates
    
    $
    1,254,706
    
    
    $
    5,031
    
    
    $
    (1,844
    )
    
    $
    1,257,893FNMA pass-through certificates
    
    
    1,104,434
    
    
    
    2,200
    
    
    
    (8,562
    )
    
    
    1,098,072FHLMC pass-through certificates
    
    
    2,624,612
    
    
    
    25,887
    
    
    
    (1,055
    )
    
    
    2,649,444Total available for sale
    
    $
    4,983,752
    
    
    $
    33,118
    
    
    $
    (11,461
    )
    
    $
    5,005,4092006Held to Maturity:GNMA pass-through certificates
    
    $
    215,161
    
    
    $
    1,491
    
    
    $
    (148
    )
    
    $
    216,504FNMA pass-through certificates
    
    
    3,233,852
    
    
    
    6,796
    
    
    
    (49,324
    )
    
    
    3,191,324FHLMC pass-through certificates
    
    
    3,069,884
    
    
    
    9,197
    
    
    
    (59,086
    )
    
    
    3,019,995FHLMC and FNMA  REMICs
    
    
    406,313
    
    
    
    4
    
    
    
    (29,542
    )
    
    
    376,775Total held to maturity
    
    $
    6,925,210
    
    
    $
    17,488
    
    
    $
    (138,100
    )
    
    $
    6,804,598Available for Sale:GNMA pass-through certificates
    
    $
    1,708,855
    
    
    $
    638
    
    
    $
    (12,778
    )
    
    $
    1,696,715FNMA pass-through certificates
    
    
    592,514
    
    
    
    
    
    
    
    (17,221
    )
    
    
    575,293FHLMC pass-through certificates
    
    
    135,424
    
    
    
    
    
    
    
    (3,011
    )
    
    
    132,413Total available for sale
    
    $
    2,436,793
    
    
    $
    638
    
    
    $
    (33,010
    )
    
    $
    2,404,421
 Page 97




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##### Table of Contents



Less Than 12 Months
    
    
    12 Months or Longer
    
    
    TotalUnrealized
    
    
    
    
    
    
    Unrealized
    
    
    
    
    
    
    UnrealizedFair Value
    
    
    Losses
    
    
    Fair Value
    
    
    Losses
    
    
    Fair Value
    
    
    Losses(In thousands)2007Held to Maturity:GNMA pass-through
certificates
    
    $
    2,236
    
    
    $
    (3
    )
    
    $
    18,943
    
    
    $
    (93
    )
    
    $
    21,179
    
    
    $
    (96
    )FNMA pass-through
certificates
    
    
    72,976
    
    
    
    (302
    )
    
    
    1,490,241
    
    
    
    (23,501
    )
    
    
    1,563,217
    
    
    
    (23,803
    )FHLMC pass-through
certificates
    
    
    68,385
    
    
    
    (279
    )
    
    
    713,637
    
    
    
    (10,801
    )
    
    
    782,022
    
    
    
    (11,080
    )FHLMC and FNMA  REMICs
    
    
    
    
    
    
    
    
    
    
    351,387
    
    
    
    (33,368
    )
    
    
    351,387
    
    
    
    (33,368
    )Total held to maturity
    
    
    143,597
    
    
    
    (584
    )
    
    
    2,574,208
    
    
    
    (67,763
    )
    
    
    2,717,805
    
    
    
    (68,347
    )Available for Sale:GNMA pass-through
certificates
    
    
    
    
    
    
    
    
    
    
    435,687
    
    
    
    (1,844
    )
    
    
    435,687
    
    
    
    (1,844
    )FNMA pass-through
certificates
    
    
    137,603
    
    
    
    (151
    )
    
    
    470,121
    
    
    
    (8,411
    )
    
    
    607,724
    
    
    
    (8,562
    )FHLMC pass-through
certificates
    
    
    
    
    
    
    
    
    
    
    116,141
    
    
    
    (1,055
    )
    
    
    116,141
    
    
    
    (1,055
    )Total available for sale
    
    
    137,603
    
    
    
    (151
    )
    
    
    1,021,949
    
    
    
    (11,310
    )
    
    
    1,159,552
    
    
    
    (11,461
    )Total
    
    $
    281,200
    
    
    $
    (735
    )
    
    $
    3,596,157
    
    
    $
    (79,073
    )
    
    $
    3,877,357
    
    
    $
    (79,808
    )2006Held to Maturity:GNMA pass-through
certificates
    
    $
    156
    
    
    $
    (1
    )
    
    $
    27,078
    
    
    $
    (147
    )
    
    $
    27,234
    
    
    $
    (148
    )FNMA pass-through
certificates
    
    
    130,800
    
    
    
    (357
    )
    
    
    2,008,981
    
    
    
    (48,967
    )
    
    
    2,139,781
    
    
    
    (49,324
    )FHLMC pass-through
certificates
    
    
    138,348
    
    
    
    (214
    )
    
    
    858,612
    
    
    
    (58,872
    )
    
    
    996,960
    
    
    
    (59,086
    )FHLMC and FNMA  REMICs
    
    
    
    
    
    
    
    
    
    
    376,245
    
    
    
    (29,542
    )
    
    
    376,245
    
    
    
    (29,542
    )Total held to maturity
    
    
    269,304
    
    
    
    (572
    )
    
    
    3,270,916
    
    
    
    (137,528
    )
    
    
    3,540,220
    
    
    
    (138,100
    )Available for Sale:GNMA pass-through
certificates
    
    
    311,551
    
    
    
    (1,044
    )
    
    
    1,196,044
    
    
    
    (11,734
    )
    
    
    1,507,595
    
    
    
    (12,778
    )FNMA pass-through
certificates
    
    
    
    
    
    
    
    
    
    
    575,293
    
    
    
    (17,221
    )
    
    
    575,293
    
    
    
    (17,221
    )FHLMC pass-through
certificates
    
    
    
    
    
    
    
    
    
    
    132,413
    
    
    
    (3,011
    )
    
    
    132,413
    
    
    
    (3,011
    )Total available for sale
    
    
    311,551
    
    
    
    (1,044
    )
    
    
    1,903,750
    
    
    
    (31,966
    )
    
    
    2,215,301
    
    
    
    (33,010
    )Total
    
    $
    580,855
    
    
    $
    (1,616
    )
    
    $
    5,174,666
    
    
    $
    (169,494
    )
    
    $
    5,755,521
    
    
    $
    (171,110
    )
  Page 98




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EstimatedAmortized
    
    
    Fair MarketCost
    
    
    Value(In thousands)Held to Maturity:Due in one year or less
    
    $
    791
    
    
    $
    795Due after one year through five years
    
    
    2,152
    
    
    
    2,204Due after five years through ten years
    
    
    10,446
    
    
    
    10,877Due after ten years
    
    
    9,552,137
    
    
    
    9,552,436Total held to maturity
    
    $
    9,565,526
    
    
    $
    9,566,312Available for Sale:Due after ten years
    
    $
    4,983,752
    
    
    $
    5,005,409Total available for sale
    
    $
    4,983,752
    
    
    $
    5,005,409
  5. Investment Securities
  Gross
    
    
    Gross
    
    
    EstimatedAmortized
    
    
    Unrealized
    
    
    Unrealized
    
    
    Fair MarketCost
    
    
    Gains
    
    
    Losses
    
    
    Value(In thousands)2007Held to Maturity:United States government-sponsored enterprises
    
    $
    1,408,071
    
    
    $
    1,743
    
    
    $
    
    
    
    $
    1,409,814Municipal bonds
    
    
    430
    
    
    
    2
    
    
    
    
    
    
    
    432Total held to maturity
    
    $
    1,408,501
    
    
    $
    1,745
    
    
    $
    
    
    
    $
    1,410,246Available for Sale:United States government-sponsored enterprises
    
    $
    2,747,012
    
    
    $
    14,365
    
    
    $
    (3,184
    )
    
    $
    2,758,193Corporate bonds
    
    
    4
    
    
    
    
    
    
    
    
    
    
    
    4Equity securities
    
    
    6,935
    
    
    
    359
    
    
    
    
    
    
    
    7,294Total available for sale
    
    $
    2,753,951
    
    
    $
    14,724
    
    
    $
    (3,184
    )
    
    $
    2,765,4912006Held to Maturity:United States government-sponsored enterprises
    
    $
    1,533,059
    
    
    $
    
    
    
    $
    (31,045
    )
    
    $
    1,502,014Municipal bonds
    
    
    910
    
    
    
    10
    
    
    
    
    
    
    
    920Total held to maturity
    
    $
    1,533,969
    
    
    $
    10
    
    
    $
    (31,045
    )
    
    $
    1,502,934Available for Sale:United States government-sponsored enterprises
    
    $
    4,422,300
    
    
    $
    94
    
    
    $
    (50,099
    )
    
    $
    4,372,295Corporate bonds
    
    
    58
    
    
    
    
    
    
    
    (1
    )
    
    
    57Equity securities
    
    
    6,935
    
    
    
    328
    
    
    
    
    
    
    
    7,263Total available for sale
    
    $
    4,429,293
    
    
    $
    422
    
    
    $
    (50,100
    )
    
    $
    4,379,615
 Page 99




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Less Than 12 Months
    
    
    12 Months or Longer
    
    
    TotalUnrealized
    
    
    
    
    
    
    Unrealized
    
    
    
    
    
    
    UnrealizedFair Value
    
    
    Losses
    
    
    Fair Value
    
    
    Losses
    
    
    Fair Value
    
    
    Losses(In thousands)2007Available for Sale:United States government-sponsored enterprises
    
    $
    
    
    
    $
    
    
    
    $
    821,891
    
    
    $
    (3,184
    )
    
    $
    821,891
    
    
    $
    (3,184
    )Total
    
    $
    
    
    
    $
    
    
    
    $
    821,891
    
    
    $
    (3,184
    )
    
    $
    821,891
    
    
    $
    (3,184
    )2006Held to Maturity:United States government-sponsored enterprises
    
    $
    
    
    
    $
    
    
    
    $
    1,502,014
    
    
    $
    (31,045
    )
    
    $
    1,502,014
    
    
    $
    (31,045
    )Total held to maturity securities
    
    
    
    
    
    
    
    
    
    
    1,502,014
    
    
    
    (31,045
    )
    
    
    1,502,014
    
    
    
    (31,045
    )Available for Sale:United States government-sponsored enterprises
    
    $
    453,267
    
    
    $
    (1,421
    )
    
    $
    3,668,934
    
    
    $
    (48,678
    )
    
    $
    4,122,201
    
    
    $
    (50,099
    )Corporate bonds
    
    
    57
    
    
    
    (1
    )
    
    
    
    
    
    
    
    
    
    
    57
    
    
    
    (1
    )Total available for sale securities
    
    
    453,324
    
    
    
    (1,422
    )
    
    
    3,668,934
    
    
    
    (48,678
    )
    
    
    4,122,258
    
    
    
    (50,100
    )Total
    
    $
    453,324
    
    
    $
    (1,422
    )
    
    $
    5,170,948
    
    
    $
    (79,723
    )
    
    $
    5,624,272
    
    
    $
    (81,145
    )
  Page 100




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##### Table of Contents



EstimatedAmortized
    
    
    Fair MarketCost
    
    
    Value(In thousands)Held to Maturity:Due after one year through five years
    
    $
    786,656
    
    
    $
    787,523Due after five years through ten years
    
    
    305
    
    
    
    306Due after ten years
    
    
    621,540
    
    
    
    622,417Total held to maturity
    
    $
    1,408,501
    
    
    $
    1,410,246Available for Sale:Due in one year or less
    
    $
    72,334
    
    
    $
    71,950Due after one year through five years
    
    
    1,280,763
    
    
    
    1,279,986Due after five years through ten years
    
    
    1,393,919
    
    
    
    1,406,261Total available for sale
    
    $
    2,747,016
    
    
    $
    2,758,197
  6. Loans and Allowance for Loan Losses
  2007
    
    
    2006(In thousands)First mortgage loans:One- to four-family
    
    $
    23,671,712
    
    
    $
    18,561,467FHA/VA
    
    
    22,940
    
    
    
    29,573Multi-family and commercial
    
    
    58,874
    
    
    
    69,322Construction
    
    
    34,064
    
    
    
    41,150Total first mortgage loans
    
    
    23,787,590
    
    
    
    18,701,512Consumer and other loans:Fixedrate second mortgages
    
    
    284,406
    
    
    
    274,028Home equity credit lines
    
    
    104,567
    
    
    
    97,644Other
    
    
    15,718
    
    
    
    10,433Total consumer and other loans
    
    
    404,691
    
    
    
    382,105Total loans
    
    $
    24,192,281
    
    
    $
    19,083,617
   Page 101




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2007
    
    
    2006(In thousands)Non-accrual loans
    
    $
    73,535
    
    
    $
    24,368Accruing loans delinquent 90 days or more
    
    
    5,867
    
    
    
    5,630Total non-performing loans
    
    $
    79,402
    
    
    $
    29,998
    2007
    
    
    2006
    
    
    2005(In thousands)Balance at beginning of year
    
    $
    30,625
    
    
    $
    27,393
    
    
    $
    27,319Charge-offs
    
    
    (763
    )
    
    
    (79
    )
    
    
    (10
    )Recoveries
    
    
    79
    
    
    
    3
    
    
    
    19Net (charge-offs) recoveries
    
    
    (684
    )
    
    
    (76
    )
    
    
    9Provision for loan losses
    
    
    4,800
    
    
    
    
    
    
    
    65Allowance transferred in Acquisition
    
    
    
    
    
    
    3,308
    
    
    
    Balance at end of year
    
    $
    34,741
    
    
    $
    30,625
    
    
    $
    27,393
 Page 102




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##### Table of Contents



7. Banking Premises and Equipment, net
  2007
    
    
    2006(In thousands)Land
    
    $
    5,806
    
    
    $
    5,806Buildings
    
    
    53,924
    
    
    
    50,889Leasehold improvements
    
    
    38,094
    
    
    
    33,921Furniture, fixtures and equipment
    
    
    71,649
    
    
    
    67,601Total acquisition cost
    
    
    169,473
    
    
    
    158,217Accumulated depreciation and amortization
    
    
    (94,379
    )
    
    
    (84,288
    )Total banking premises and equipment, net
    
    $
    75,094
    
    
    $
    73,929
    Year
    
    Amount(In thousands)2008
    
    $
    7,5332009
    
    
    7,7682010
    
    
    7,5442011
    
    
    7,3462012
    
    
    7,250Thereafter
    
    
    100,115Total
    
    $
    137,556
  Page 103




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##### Table of Contents



8. Deposits
  2007
    
    
    2006Balance
    
    
    Percent
    
    
    Balance
    
    
    Percent(Dollars in thousands)Savings
    
    $
    737,813
    
    
    
    4.87
    %
    
    $
    805,278
    
    
    
    6.00
    %Noninterest-bearing demand
    
    
    517,970
    
    
    
    3.42
    
    
    
    498,301
    
    
    
    3.71Interest-bearing transaction
    
    
    1,588,084
    
    
    
    10.48
    
    
    
    2,095,811
    
    
    
    15.62Money market
    
    
    1,575,097
    
    
    
    10.39
    
    
    
    918,549
    
    
    
    6.85Time deposits
    
    
    10,734,418
    
    
    
    70.84
    
    
    
    9,097,648
    
    
    
    67.82Total deposits
    
    $
    15,153,382
    
    
    
    100.00
    %
    
    $
    13,415,587
    
    
    
    100.00
    %
   Year
    
    Amount(In thousands)2008
    
    $
    10,243,4712009
    
    
    359,8452010
    
    
    100,5082011
    
    
    11,8162012
    
    
    18,778Total
    
    $
    10,734,418
 9. Borrowed Funds
  2007
    
    
    2006Weighted
    
    
    
    
    
    
    WeightedAverage
    
    
    
    
    
    
    AveragePrincipal
    
    
    Rate
    
    
    Principal
    
    
    Rate(Dollars in thousands)Securities sold under agreements to repurchase:FHLB
    
    $
    2,066,000
    
    
    
    4.62
    %
    
    $
    823,000
    
    
    
    4.96
    %Other brokers
    
    
    9,950,000
    
    
    
    4.15
    
    
    
    8,100,000
    
    
    
    3.86Total securities sold under agreements to repurchase
    
    
    12,016,000
    
    
    
    4.23
    
    
    
    8,923,000
    
    
    
    3.96Advances from the FHLB
    
    
    12,125,000
    
    
    
    4.20
    
    
    
    8,050,000
    
    
    
    4.21Total borrowed funds
    
    $
    24,141,000
    
    
    
    4.22
    
    
    $
    16,973,000
    
    
    
    4.08
 Page 104




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##### Table of Contents



At or for the Year Ended December 31,2007
    
    
    2006
    
    
    2005(Dollars in thousands)Repurchase Agrements:Average balance outstanding during the year
    
    $
    10,305,216
    
    
    $
    8,313,321
    
    
    $
    6,447,560Maximum balance outstanding at any month-end
during the year
    
    $
    12,016,000
    
    
    $
    8,923,000
    
    
    $
    7,900,000Weighted average rate during the period
    
    
    4.20
    %
    
    
    3.81
    %
    
    
    3.52
    %FHLB Advances:Average balance outstanding during the year
    
    $
    10,286,869
    
    
    $
    5,977,115
    
    
    $
    2,469,529Maximum balance outstanding at any month-end
during the year
    
    $
    12,125,000
    
    
    $
    8,050,000
    
    
    $
    3,450,000Weighted average rate during the period
    
    
    4.28
    %
    
    
    4.17
    %
    
    
    3.89
    %
  Borrowings by Scheduled
    
    
    Borrowings by Earler of MaturityMaturity Date
    
    
    or Next Potential Call DateWeighted
    
    
    
    
    
    
    WeightedAverage
    
    
    
    
    
    
    AverageYear
    
    Principal
    
    
    Rate
    
    
    Principal
    
    
    Rate(Dollars in thousands)2008
    
    $
    16,000
    
    
    
    4.94
    %
    
    $
    14,966,000
    
    
    
    4.27
    %2009
    
    
    
    
    
    
    
    
    
    
    6,275,000
    
    
    
    4.182010
    
    
    300,000
    
    
    
    5.68
    
    
    
    2,050,000
    
    
    
    3.882011
    
    
    250,000
    
    
    
    4.90
    
    
    
    250,000
    
    
    
    4.902012
    
    
    100,000
    
    
    
    4.76
    
    
    
    600,000
    
    
    
    4.332013
    
    
    250,000
    
    
    
    5.30
    
    
    
    
    
    
    
    2014
    
    
    350,000
    
    
    
    3.37
    
    
    
    
    
    
    
    2015
    
    
    4,075,000
    
    
    
    3.86
    
    
    
    
    
    
    
    2016
    
    
    8,075,000
    
    
    
    4.32
    
    
    
    
    
    
    
    2017
    
    
    10,725,000
    
    
    
    4.22
    
    
    
    
    
    
    
    Total
    
    $
    24,141,000
    
    
    
    4.22
    
    
    $
    24,141,000
    
    
    
    4.22
 Page 105




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##### Table of Contents



At or for the Year Ended December 31,2007
    
    
    2006
    
    
    2005(Dollars in thousands)Amortized cost of collateral:United
States government-sponsored enterprise securities
    
    $
    3,620,083
    
    
    $
    3,329,639
    
    
    $
    2,849,947Mortgage-backed securities
    
    
    9,004,519
    
    
    
    5,937,758
    
    
    
    5,224,648REMICs
    
    
    304,032
    
    
    
    319,920
    
    
    
    356,579Total amortized cost of collateral
    
    $
    12,928,634
    
    
    $
    9,587,317
    
    
    $
    8,431,174Fair value of collateral:United States government-sponsored enterprise securities
    
    $
    3,626,572
    
    
    $
    3,195,765
    
    
    $
    2,778,462Mortgage-backed securities
    
    
    9,016,537
    
    
    
    5,846,562
    
    
    
    5,119,225REMICs
    
    
    277,727
    
    
    
    296,661
    
    
    
    332,532Total fair value of collateral
    
    $
    12,920,836
    
    
    $
    9,338,988
    
    
    $
    8,230,219
   10. Employee Benefit Plans
 a) Retirement and Other Postretirement Benefits
   Page 106




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##### Table of Contents



Retirement Plans
    
    
    Other Benefits2007
    
    
    2006
    
    
    2007
    
    
    2006(In thousands)Change in Benefit Obligation:Benefit obligation at beginning of year
    
    $
    106,069
    
    
    $
    90,093
    
    
    $
    35,850
    
    
    $
    36,254Benefit obligation assumed in Acquisition
    
    
    
    
    
    
    13,515
    
    
    
    
    
    
    
    Service cost
    
    
    3,358
    
    
    
    3,404
    
    
    
    945
    
    
    
    1,076Interest cost
    
    
    6,392
    
    
    
    5,766
    
    
    
    2,058
    
    
    
    1,996Plan amendments
    
    
    1,205
    
    
    
    (2,007
    )
    
    
    
    
    
    
    Participant contributions
    
    
    
    
    
    
    
    
    
    
    36
    
    
    
    39Actuarial (gain) loss
    
    
    1,575
    
    
    
    (1,008
    )
    
    
    (73
    )
    
    
    (1,257
    )Benefits paid
    
    
    (4,108
    )
    
    
    (3,694
    )
    
    
    (1,679
    )
    
    
    (2,258
    )Medicare
subsidy
    
    
    
    
    
    
    
    
    
    
    108
    
    
    
    Benefit obligation at end of year
    
    
    114,491
    
    
    
    106,069
    
    
    
    37,245
    
    
    
    35,850Change in Plan Assets:Fair value of plan assets at beginning
of year
    
    
    99,568
    
    
    
    80,091
    
    
    
    
    
    
    
    Assets received in Acquisition
    
    
    
    
    
    
    12,503
    
    
    
    
    
    
    
    Actual return on plan assets
    
    
    6,161
    
    
    
    9,725
    
    
    
    
    
    
    
    Employer contribution
    
    
    2,442
    
    
    
    943
    
    
    
    1,643
    
    
    
    2,219Participant contributions
    
    
    
    
    
    
    
    
    
    
    36
    
    
    
    39Benefits paid
    
    
    (4,108
    )
    
    
    (3,694
    )
    
    
    (1,679
    )
    
    
    (2,258
    )Fair value of plan assets at end of year
    
    
    104,063
    
    
    
    99,568
    
    
    
    
    
    
    
    Funded Status
    
    
    (10,428
    )
    
    
    (6,501
    )
    
    
    (37,245
    )
    
    
    (35,850
    )
  Retirement Plans
    
    Other Benefits2007
    
    2006
    
    2007
    
    2006(In thousands)Assets
    
    $
    
    
    
    $
    401
    
    
    $
    
    
    
    $
    Liabilities
    
    
    (10,428
    )
    
    
    (6,902
    )
    
    
    (37,245
    )
    
    
    (35,850
    )
  Retirement Plans
    
    Other Benefits2007
    
    2006
    
    2007
    
    2006(In thousands)Net actuarial loss
    
    $
    14,725
    
    
    $
    11,131
    
    
    $
    13,064
    
    
    $
    13,713Prior service cost(credit)
    
    
    2,902
    
    
    
    2,525
    
    
    
    (25,600
    )
    
    
    (25,628
    )Total
    
    $
    17,627
    
    
    $
    13,656
    
    
    
    ($12,536
    )
    
    
    ($11,915
    )
  Page 107




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##### Table of Contents



Retirement Plans
    
    
    Other Benefits2007
    
    
    2006
    
    
    2005
    
    
    2007
    
    
    2006
    
    
    2005(In thousands)Net periodic benefit cost:Service cost
    
    $
    3,358
    
    
    $
    3,404
    
    
    $
    3,048
    
    
    $
    945
    
    
    $
    1,076
    
    
    $
    1,921Interest cost
    
    
    6,392
    
    
    
    5,766
    
    
    
    4,784
    
    
    
    2,058
    
    
    
    1,996
    
    
    
    2,492Expected return on assets
    
    
    (8,269
    )
    
    
    (8,447
    )
    
    
    (6,774
    )
    
    
    
    
    
    
    
    
    
    
    Amortization of:Net actuarial loss
    
    
    284
    
    
    
    943
    
    
    
    435
    
    
    
    575
    
    
    
    645
    
    
    
    621Prior service cost (credit)
    
    
    300
    
    
    
    168
    
    
    
    25
    
    
    
    (1,565
    )
    
    
    (1,565
    )
    
    
    (978
    )Net periodic benefit cost
    
    $
    2,065
    
    
    $
    1,834
    
    
    $
    1,518
    
    
    $
    2,013
    
    
    $
    2,152
    
    
    $
    4,056Other changes in plan assets and benefit obligations recognized
in other comprehensive income:Net
actuarial loss (gain)
    
    $
    3,878
    
    
    $
    
    
    
    $
    
    
    
    $
    (74
    )
    
    $
    
    
    
    $
    Prior service cost (credit)
    
    
    677
    
    
    
    
    
    
    
    
    
    
    
    (1,537
    )
    
    
    
    
    
    
    Amortization of net actuarial loss
    
    
    (284
    )
    
    
    
    
    
    
    
    
    
    
    (575
    )
    
    
    
    
    
    
    Amortization of prior service cost
    
    
    (300
    )
    
    
    
    
    
    
    
    
    
    
    1,565
    
    
    
    
    
    
    
    Total recognized in other comprehensive
income
    
    
    3,971
    
    
    
    
    
    
    
    
    
    
    
    (621
    )
    
    
    
    
    
    
    Total recognized in net periodic benefit cost
and other comprehensive
income
    
    $
    6,036
    
    
    $
    1,834
    
    
    $
    1,518
    
    
    $
    1,392
    
    
    $
    2,152
    
    
    $
    4,056
   Retirement Plans
    
    Other Benefits2007
    
    2006
    
    2005
    
    2007
    
    2006
    
    2005Discount rate
    
    
    6.00
    %
    
    
    5.75
    %
    
    
    5.75
    %
    
    
    6.00
    %
    
    
    5.75
    %
    
    
    5.75
    %Expected return on assets
    
    
    8.25
    
    
    
    8.75
    
    
    
    8.75
    
    
    
    
    
    
    
    
    
    
    
    Rate of compensation increase
    
    
    4.25
    
    
    
    4.25
    
    
    
    4.25
    
    
    
    
    
    
    
    
    
    
    
    
  Retirement Plans
    
    Other Benefits2007
    
    2006
    
    2007
    
    2006Discount rate
    
    
    6.00
    %
    
    
    6.00
    %
    
    
    6.00
    %
    
    
    6.00
    %Rate of compensation increase
    
    
    4.25
    
    
    
    4.25
    
    
    
    
    
    
    
    
  Page 108




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##### Table of Contents



1% Increase
    
    1% DecreaseEffect on total service cost and interest cost
    
    $
    76
    
    
    $
    (66
    )Effect on other benefit obligations
    
    
    1,632
    
    
    
    (1,428
    )
  Asset Category
    
    2007
    
    2006Equity securities
    
    
    61.0
    %
    
    
    60.9
    %Fixed income
securities
    
    
    32.5
    
    
    
    28.5Cash
    
    
    6.5
    
    
    
    10.6Total
    
    
    100.0
    %
    
    
    100.0
    %
    Page 109




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##### Table of Contents



Retirement
    
    OtherYear
    
    Plans
    
    Benefits(In thousands)2008
    
    $
    4,765
    
    
    $
    1,8862009
    
    
    4,954
    
    
    
    2,0172010
    
    
    5,102
    
    
    
    2,1472011
    
    
    5,416
    
    
    
    2,3352012
    
    
    5,796
    
    
    
    2,5192013 through 2017
    
    
    39,195
    
    
    
    14,829
 b) Employee Stock Ownership Plan
     Page 110




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##### Table of Contents



c) Recognition and Retention Plans
      Resticted Stock Awards2007
    
    2006
    
    2005Weighted
    
    
    
    
    
    Weighted
    
    
    
    
    
    WeightedAverage
    
    
    
    
    
    Average
    
    
    
    
    
    AverageNumber of
    
    Grant Date
    
    Number of
    
    Grant Date
    
    Number of
    
    Grant DateShares
    
    Fair Value
    
    Shares
    
    Fair Value
    
    Shares
    
    Fair ValueOutstanding at beginning of period
    
    
    540,851
    
    
    $
    11.57
    
    
    
    951,761
    
    
    $
    9.69
    
    
    
    2,973,759
    
    
    $
    4.66Granted
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    150,682
    
    
    
    11.18Vested
    
    
    (190,275
    )
    
    
    11.27
    
    
    
    (410,910
    )
    
    
    7.22
    
    
    
    (2,172,680
    )
    
    
    2.91Outstanding at end of period
    
    
    350,576
    
    
    
    11.74
    
    
    
    540,851
    
    
    
    11.57
    
    
    
    951,761
    
    
    
    9.69
  d) Stock Option Plans
  Page 111




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2005(In thousands, except per share data)Net income, as reported
    
    $
    276,055Add: expense recognized for the recognition and
retention plans, net of related tax effect
    
    
    2,249Less: total stock option and recognition and
retention plans expense, determined under the
fair value method, net of related tax effect
    
    
    (3,738
    )Pro forma net income
    
    $
    274,566Basic earnings per share: As reported
    
    $
    0.49Pro forma
    
    
    0.48Diluted earnings per share: As reported
    
    $
    0.48Pro forma
    
    
    0.47
  2005Expected dividend yield
    
    
    2.23
    %Expected volatility
    
    
    21.57Risk-free interest rate
    
    
    3.64Expected option life
    
    5 yearsFair value of options granted
    
    $
    2.20
   Page 112




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2007
    
    2006Expected dividend yield
    
    
    2.32
    %
    
    
    2.35
    %Expected volatility
    
    
    19.12
    
    
    
    19.96Risk-free interest rate
    
    
    4.87
    
    
    
    4.98Expected option life
    
    5.20 years
    
    5.40 yearsFair value of options granted
    
    $
    2.77
    
    
    $
    2.71
   2007
    
    2006
    
    2005Weighted
    
    
    
    
    
    Weighted
    
    
    
    
    
    WeightedNumber of
    
    Average
    
    Number of
    
    Average
    
    Number of
    
    AverageStock
    
    Exercise
    
    Stock
    
    Exercise
    
    Stock
    
    ExerciseOptions
    
    Price
    
    Options
    
    Price
    
    Options
    
    PriceOutstanding at beginning
of year
    
    
    26,979,989
    
    
    $
    6.89
    
    
    
    21,659,869
    
    
    $
    4.21
    
    
    
    22,425,161
    
    
    $
    3.95Granted
    
    
    3,527,500
    
    
    
    13.74
    
    
    
    7,960,000
    
    
    
    12.76
    
    
    
    496,930
    
    
    
    11.17Exercised
    
    
    (1,360,635
    )
    
    
    2.67
    
    
    
    (2,629,621
    )
    
    
    2.60
    
    
    
    (1,247,475
    )
    
    
    2.26Forfeited
    
    
    (66,740
    )
    
    
    10.03
    
    
    
    (10,259
    )
    
    
    4.21
    
    
    
    (14,747
    )
    
    
    8.13Outstanding at end of year
    
    
    29,080,114
    
    
    
    7.91
    
    
    
    26,979,989
    
    
    
    6.89
    
    
    
    21,659,869
    
    
    
    4.21
  Page 113




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Options Outstanding
    
    Options ExercisableWeightedAverage
    
    Weighted
    
    
    
    
    
    WeightedNumber
    
    Remaining
    
    Average
    
    Number
    
    AverageOf Options
    
    Contractual
    
    Exercise
    
    Of Options
    
    ExerciseOutstanding
    
    Life
    
    Price
    
    Exercisable
    
    Price11,167,819
    
    2 years
    
    $
    2.16
    
    
    
    11,167,819
    
    
    $
    2.16203,058
    
    3 years
    
    
    3.09
    
    
    
    203,058
    
    
    
    3.09411,801
    
    3 years
    
    
    3.40
    
    
    
    411,801
    
    
    
    3.40820,736
    
    3 years
    
    
    3.59
    
    
    
    820,736
    
    
    
    3.59238,576
    
    4 years
    
    
    4.20
    
    
    
    238,576
    
    
    
    4.20614,440
    
    4 years
    
    
    5.53
    
    
    
    614,440
    
    
    
    5.53217,153
    
    5 years
    
    
    5.96
    
    
    
    160,078
    
    
    
    5.96206,480
    
    5 years
    
    
    6.35
    
    
    
    206,480
    
    
    
    6.35448,840
    
    6 years
    
    
    10.33
    
    
    
    269,304
    
    
    
    10.33479,589
    
    7 years
    
    
    11.17
    
    
    
    216,045
    
    
    
    11.17363,344
    
    6 years
    
    
    11.91
    
    
    
    209,689
    
    
    
    11.912,468,278
    
    6 years
    
    
    12.22
    
    
    
    1,092,894
    
    
    
    12.227,935,000
    
    8.5 years
    
    
    12.76
    
    
    
    
    
    
    3,505,000
    
    9 years
    
    
    13.74
    
    
    
    
    
    
    29,080,114
    
    
    
    
    7.91
    
    
    
    15,610,920
    
    
    
    3.64
  e) Incentive Plans
   Page 114




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11. Income Taxes
  2007
    
    
    2006
    
    
    2005(In thousands)Federal:Current
    
    $
    170,374
    
    
    $
    161,558
    
    
    $
    160,263Deferred
    
    
    (7,896
    )
    
    
    (2,443
    )
    
    
    (5,573
    )Total federal
    
    
    162,478
    
    
    
    159,115
    
    
    
    154,690State:Current
    
    
    24,941
    
    
    
    14,091
    
    
    
    12,560Deferred
    
    
    (1,534
    )
    
    
    (1,216
    )
    
    
    (932
    )Total state
    
    
    23,407
    
    
    
    12,875
    
    
    
    11,628Total income tax expense
    
    $
    185,885
    
    
    $
    171,990
    
    
    $
    166,318
   2007
    
    
    2006
    
    
    2005(Dollars in thousands)Income before income tax expense
    
    $
    481,743
    
    
    $
    460,569
    
    
    $
    442,373Statutory income tax rate
    
    
    35
    %
    
    
    35
    %
    
    
    35
    %Computed expected income tax expense
    
    
    168,610
    
    
    
    161,199
    
    
    
    154,831State income taxes, net of federal income tax benefit
    
    
    15,215
    
    
    
    8,369
    
    
    
    7,558ESOP fair market value adjustment
    
    
    2,559
    
    
    
    2,345
    
    
    
    1,971Other, net
    
    
    (499
    )
    
    
    77
    
    
    
    1,958Income tax expense
    
    $
    185,885
    
    
    $
    171,990
    
    
    $
    166,318
 Page 115




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##### Table of Contents



2007
    
    
    2006(In thousands)Deferred tax asset:Postretirement benefits
    
    $
    20,936
    
    
    $
    20,502Allowance for loan loss reserve
    
    
    13,340
    
    
    
    11,888Mortgage premium amortization
    
    
    7,535
    
    
    
    6,787Non-qualified benefit plans
    
    
    31,802
    
    
    
    28,440Net unrealized loss on securities available for sale
    
    
    
    
    
    
    33,517ESOP expense
    
    
    10,384
    
    
    
    7,931Fair value adjustment on mortgages recorded in Acquisition
    
    
    4,093
    
    
    
    4,719Other
    
    
    6,787
    
    
    
    5,41894,877
    
    
    
    119,202Deferred tax liabilities:Retirement plan
    
    
    10,969
    
    
    
    5,268Principal payments on ESOP loans
    
    
    4,642
    
    
    
    3,736Net unrealized gain on securities available for sale
    
    
    13,561
    
    
    
    Fair value adjustments related to the Acquisition:Core deposit intangible
    
    
    4,177
    
    
    
    5,395Buildings
    
    
    2,007
    
    
    
    2,232Other
    
    
    377
    
    
    
    1,22635,733
    
    
    
    17,857Net deferred
tax asset (included in other assets)
    
    $
    59,144
    
    
    $
    101,345
   Page 116




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##### Table of Contents



(in thousands)Balance at January 1, 2007
    
    $
    1,834Additions based on tax positions related
to the current year
    
    
    502Additions for tax positions of prior years
    
    
    Reductions for tax positions of prior years
    
    
    (147
    )Balance at December 31, 2007
    
    $
    2,189
  12. Fair Value of Financial Instruments
     Page 117




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##### Table of Contents



2007
    
    2006Carrying
    
    Estimated
    
    Carrying
    
    EstimatedAmount
    
    Fair Value
    
    Amount
    
    Fair Value(In thousands)Assets:Cash and due from banks
    
    $
    111,245
    
    
    $
    111,245
    
    
    $
    125,630
    
    
    $
    125,630Federal funds sold
    
    
    106,299
    
    
    
    106,299
    
    
    
    56,616
    
    
    
    56,616Investment securities held to maturity
    
    
    1,408,501
    
    
    
    1,410,246
    
    
    
    1,533,969
    
    
    
    1,502,934Investment securities available for sale
    
    
    2,765,491
    
    
    
    2,765,491
    
    
    
    4,379,615
    
    
    
    4,379,615Federal Home Loan Bank of New York stock
    
    
    695,351
    
    
    
    695,351
    
    
    
    445,006
    
    
    
    445,006Mortgage-backed securities held to maturity
    
    
    9,565,526
    
    
    
    9,566,312
    
    
    
    6,925,210
    
    
    
    6,804,598Mortgage-backed securities available for sale
    
    
    5,005,409
    
    
    
    5,005,409
    
    
    
    2,404,421
    
    
    
    2,404,421Loans
    
    
    24,198,138
    
    
    
    24,270,758
    
    
    
    19,069,151
    
    
    
    19,235,250Liabilities:Deposits
    
    
    15,153,382
    
    
    
    15,162,402
    
    
    
    13,415,587
    
    
    
    13,424,527Borrowed funds
    
    
    24,141,000
    
    
    
    25,046,472
    
    
    
    16,973,000
    
    
    
    17,069,882
 13. Regulatory Matters
    OTS RequirementsMinimum Capital
    
    For Classification asBank Actual
    
    Adequacy
    
    Well-CapitalizedAmount
    
    Ratio
    
    Amount
    
   Ratio
    
    Amount
    
    Ratio(Dollars in thousands)December 31, 2007Tangible capital
    
    $
    4,055,952
    
    
    
    9.16
    %
    
    $
    664,169
    
    
    
    1.50
    %
    
    
    n/a
    
    
    
    n/aLeverage (core) capital
    
    
    4,055,952
    
    
    
    9.16
    
    
    
    1,771,118
    
    
    
    4.00
    
    
    $
    2,213,898
    
    
    
    5.00
    %Total-risk-based capital
    
    
    4,090,693
    
    
    
    24.83
    
    
    
    1,318,102
    
    
    
    8.00
    
    
    
    1,647,627
    
    
    
    10.00December 31, 2006Tangible capital
    
    $
    4,000,577
    
    
    
    11.30
    %
    
    $
    530,878
    
    
    
    1.50
    %
    
    
    n/a
    
    
    
    n/aLeverage (core) capital
    
    
    4,000,577
    
    
    
    11.30
    
    
    
    1,415,674
    
    
    
    4.00
    
    
    $
    1,769,592
    
    
    
    5.00
    %Total-risk-based capital
    
    
    4,031,202
    
    
    
    30.99
    
    
    
    1,040,513
    
    
    
    8.00
    
    
    
    1,300,642
    
    
    
    10.00
 Page 118




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14. Commitments and Contingencies
   Page 119




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15. Parent Company Only Financial Statements
  Statements of Financial Condition
 December 31, 2007
    
    
    December 31, 2006(In thousands)Assets:Cash and due from subsidiary bank
    
    $
    140,486
    
    
    $
    576,263Investment in subsidiary
    
    
    4,234,428
    
    
    
    4,116,112ESOP loan receivable
    
    
    236,629
    
    
    
    238,846Total Assets
    
    $
    4,611,543
    
    
    $
    4,931,221Liabilities and Stockholders Equity:Accrued expenses
    
    $
    236
    
    
    $
    965Total stockholders equity
    
    
    4,611,307
    
    
    
    4,930,256Total Liabilities and Stockholders Equity
    
    $
    4,611,543
    
    
    $
    4,931,221
 Page 120




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##### Table of Contents



Statements of Income
 Year Ended December 31,2007
    
    
    2006
    
    
    2005(In thousands)Income:Dividends received from subsidiary
    
    $
    278,176
    
    
    $
    282,929
    
    
    $
    259,329Interest on ESOP loan receivable
    
    
    11,942
    
    
    
    12,048
    
    
    
    6,954Interest on deposit with subsidiary
    
    
    2,820
    
    
    
    6,674
    
    
    
    5,964Total income
    
    
    292,938
    
    
    
    301,651
    
    
    
    272,247Expenses
    
    
    1,059
    
    
    
    1,273
    
    
    
    1,733Income before income tax expense
and equity in undistributed (overdistributed) earnings of subsidiary
    
    
    291,879
    
    
    
    300,378
    
    
    
    270,514Income tax expense
    
    
    5,115
    
    
    
    6,515
    
    
    
    4,205Income before equity in undistributed
(overdistributed) earnings of subsidiary
    
    
    286,764
    
    
    
    293,863
    
    
    
    266,309Equity in undistributed (overdistributed) earnings
of subsidiary
    
    
    9,094
    
    
    
    (5,284
    )
    
    
    9,746Net Income
    
    $
    295,858
    
    
    $
    288,579
    
    
    $
    276,055
 Statements of Cash Flows
 Year Ended December 31,2007
    
    
    2006
    
    
    2005(In thousands)Cash Flows from Operating Activities:Net income
    
    $
    295,858
    
    
    $
    288,579
    
    
    $
    276,055Adjustments to reconcile net income
to cash provided by operating activities:Equity in (undistributed) overdistributed earnings
    
    
    (9,094
    )
    
    
    5,284
    
    
    
    (9,746
    )Decrease (increase) in other assets
    
    
    
    
    
    
    83
    
    
    
    (2
    )(Decrease) increase in accrued expenses
    
    
    (729
    )
    
    
    126
    
    
    
    713Net Cash Provided by Operating Activities
    
    
    286,035
    
    
    
    294,072
    
    
    
    267,020Cash Flows from Investing Activities:Capital contribution to subsidiary
    
    
    
    
    
    
    
    
    
    
    (3,000,000
    )Loan to ESOP
    
    
    
    
    
    
    
    
    
    
    (189,348
    )Principal collected on ESOP loan
    
    
    2,217
    
    
    
    2,112
    
    
    
    1,105Net Cash Provided by (Used in) Investing Activities
    
    
    2,217
    
    
    
    2,112
    
    
    
    (3,188,243
    )Cash Flows from Financing Activities:Proceeds from second-step conversion and stock
offering, net
    
    
    
    
    
    
    
    
    
    
    3,953,001Purchases of treasury stock
    
    
    (550,215
    )
    
    
    (448,237
    )
    
    
    (107,499
    )Exercise of stock options
    
    
    3,629
    
    
    
    6,819
    
    
    
    2,827Cash dividends paid on unallocated ESOP shares
    
    
    (12,067
    )
    
    
    (11,257
    )
    
    
    (7,636
    )Cash dividends paid
    
    
    (165,376
    )
    
    
    (161,374
    )
    
    
    (102,103
    )Net Cash (Used in) Provided by Financing Activities
    
    
    (724,029
    )
    
    
    (614,049
    )
    
    
    3,738,590Net (Decrease) Increase in Cash Due from Bank
    
    
    (435,777
    )
    
    
    (317,865
    )
    
    
    817,367Cash Due from Bank at Beginning of Year
    
    
    576,263
    
    
    
    894,128
    
    
    
    76,761Cash Due from Bank at End of Year
    
    $
    140,486
    
    
    $
    576,263
    
    
    $
    894,128
 Page121




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##### Table of Contents



16. Selected Quarterly Financial Data (Unaudited)
  2007 Quarter EndedMarch 31
    
    
    June 30
    
    
    September 30
    
    
    December 31(In thousands except per share data)Interest and dividend income
    
    $
    479,647
    
    
    $
    511,494
    
    
    $
    548,203
    
    
    $
    588,161Interest expense
    
    
    323,193
    
    
    
    353,836
    
    
    
    385,987
    
    
    
    417,306Net interest income
    
    
    156,454
    
    
    
    157,658
    
    
    
    162,216
    
    
    
    170,855Provision for loan losses
    
    
    300
    
    
    
    500
    
    
    
    2,000
    
    
    
    2,000Net interest income after
provision for loan losses
    
    
    156,154
    
    
    
    157,158
    
    
    
    160,216
    
    
    
    168,855Non-interest income
    
    
    1,550
    
    
    
    1,823
    
    
    
    2,049
    
    
    
    1,851Non-interest expense
    
    
    41,097
    
    
    
    40,867
    
    
    
    41,188
    
    
    
    44,761Income before income tax expense
    
    
    116,607
    
    
    
    118,114
    
    
    
    121,077
    
    
    
    125,945Income tax expense
    
    
    45,364
    
    
    
    45,450
    
    
    
    46,634
    
    
    
    48,437Net income
    
    $
    71,243
    
    
    $
    72,664
    
    
    $
    74,443
    
    
    $
    77,508Basic earnings per share
    
    $
    0.14
    
    
    $
    0.14
    
    
    $
    0.15
    
    
    $
    0.16Diluted earnings per share
    
    $
    0.13
    
    
    $
    0.14
    
    
    $
    0.15
    
    
    $
    0.16
 2006 Quarter EndedMarch 31
    
    
    June 30
    
    
    September 30
    
    
    December 31(In thousands except per share data)Interest and dividend income
    
    $
    359,688
    
    
    $
    384,140
    
    
    $
    422,045
    
    
    $
    448,970Interest expense
    
    
    202,009
    
    
    
    230,551
    
    
    
    268,917
    
    
    
    300,133Net interest income
    
    
    157,679
    
    
    
    153,589
    
    
    
    153,128
    
    
    
    148,837Provision for loan losses
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    Net interest income after
provision for loan losses
    
    
    157,679
    
    
    
    153,589
    
    
    
    153,128
    
    
    
    148,837Non-interest income
    
    
    1,264
    
    
    
    1,455
    
    
    
    1,669
    
    
    
    1,903Non-interest expense
    
    
    38,285
    
    
    
    38,515
    
    
    
    40,588
    
    
    
    41,567Income before income tax expense
    
    
    120,658
    
    
    
    116,529
    
    
    
    114,209
    
    
    
    109,173Income tax expense
    
    
    45,430
    
    
    
    43,361
    
    
    
    43,238
    
    
    
    39,961Net income
    
    $
    75,228
    
    
    $
    73,168
    
    
    $
    70,971
    
    
    $
    69,212Basic earnings per share
    
    $
    0.14
    
    
    $
    0.14
    
    
    $
    0.13
    
    
    $
    0.13Diluted earnings per share
    
    $
    0.13
    
    
    $
    0.13
    
    
    $
    0.13
    
    
    $
    0.13
 Page122




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17. Earnings Per Share
  For the Year Ended December 31,2007
    
    
    
    
    
    
    
    
    
    
    2006
    
    
    
    
    
    
    
    
    
    
    2005Per
    
    
    
    
    
    
    
    
    
    
    Per
    
    
    
    
    
    
    
    
    
    
    PerShare
    
    
    
    
    
    
    
    
    
    
    Share
    
    
    
    
    
    
    
    
    
    
    ShareIncome
    
    
    Shares
    
    
    Amount
    
    
    Income
    
    
    Shares
    
    
    Amount
    
    
    Income
    
    
    Shares
    
    
    Amount(In thousands, except per share data)Net income
    
    $
    295,858
    
    
    
    
    
    
    
    
    
    
    $
    288,579
    
    
    
    
    
    
    
    
    
    
    $
    276,055Basic earnings per share:Income available to
common stockholders
    
    $
    295,858
    
    
    
    499,608
    
    
    $
    0.59
    
    
    $
    288,579
    
    
    
    536,215
    
    
    $
    0.54
    
    
    $
    276,055
    
    
    
    567,789
    
    
    $
    0.49Effect of dilutive common
stock equivalents
    
    
    
    
    
    
    10,319
    
    
    
    
    
    
    
    
    
    
    
    10,576
    
    
    
    
    
    
    
    
    
    
    
    13,274Diluted earnings per share:Income available to
common stockholders
    
    $
    295,858
    
    
    
    509,927
    
    
    $
    0.58
    
    
    $
    288,579
    
    
    
    546,791
    
    
    $
    0.53
    
    
    $
    276,055
    
    
    
    581,063
    
    
    $
    0.48
 18. Recent Accounting Pronouncements
   Page123




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##### Table of Contents



Item 9. Changes in and Disagreements with Accountants on Accounting and Financial Disclosure.
  
 Item 9A. Controls and Procedures.
 Evaluation of Disclosure Controls and Procedures
  Page124




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##### Table of Contents



Changes in Internal Control Over Financial Reporting
  Management Report on Internal Control Over Financial Reporting
    Internal
Control-Integrated Framework
  
 Item 9B. Other Information.
  Page125




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##### Table of Contents



PART III
 
 Item 10. Directors, Executive Officers and Corporate Governance.
  Audit Committee Financial Expert
  Code of Ethics
  
 Item 11. Executive Compensation.
  
 Item 12. Security Ownership of Certain Beneficial Owners and Management and Related Stockholder
Matters.
  
 Item 13. Certain Relationships and Related Transactions, and Director Independence
  Page126




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##### Table of Contents



Item 14. Principal Accounting Fees and Services.
  Page127




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##### Table of Contents



PART IV
 
 Item 15. Exhibits, Financial Statement Schedules
 (a)
    
    List of Documents Filed as Part of this Annual Report on Form 10-K
 (1)
    
    The following consolidated financial statements are in Item 8
of this annual report:
 
    
    Reports of Independent Registered Public Accounting Firm
    
    Consolidated Statements of Financial Condition as of December 31,
2007 and 2006
    
    Consolidated Statements of Income for the years ended December 31,
2007, 2006 and 2005
    
    Consolidated Statements of Changes in Stockholders Equity for the
years ended December 31, 2007, 2006 and 2005
    
    Consolidated Statements of Cash Flows for the years ended
December 31, 2007, 2006 and 2005
    
    Notes to Consolidated Financial Statements
 (2)
    
    Financial Statement Schedules have been omitted because they
are not applicable or the required information is shown in the Consolidated
Financial Statements or Notes thereto in Item 8 of this annual report.
 (b)
    
    Exhibits Required by Item 601 of Regulation S-K
 Page 128




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##### Table of Contents



EXHIBIT
    
    DESCRIPTION2.1
    
    Amended and Restated Plan of Conversion and Reorganization of Hudson City, MHC, Hudson City
Bancorp, Inc. and Hudson City Savings Bank (1)2.2
    
    Agreement and Plan of Merger by and between Hudson City Bancorp, Inc. and Sound Federal
Bancorp, Inc. (2)3.1
    
    Certificate of Incorporation of Hudson City Bancorp, Inc. (1)3.2
    
    Amended and Restated Bylaws of Hudson City Bancorp, Inc. (4)4.1
    
    Certificate of Incorporation of Hudson City Bancorp, Inc. (See Exhibit 3.1)4.2
    
    Amended and Restated Bylaws of Hudson City Bancorp, Inc. (See Exhibit 3.2)4.3
    
    Form of Stock Certificate of Hudson City Bancorp, Inc. (3)10.1
    
    Employee Stock Ownership Plan of Hudson City Savings Bank (Incorporating amendments No.
1,2,3,4,5 and 6) *10.2
    
    Profit Incentive Bonus Plan of Hudson City Savings Bank (5)10.3
    
    Agreement between Hudson
City Bancorp, Inc. and John M. Tassillo (12)10.4
    
    Form of Two-Year Change in Control Agreement by and among Hudson City Savings Bank and Hudson
City Bancorp, Inc. and certain officers (together with Schedule
pursuant to Instruction 2  of Item 601 of Regulation S-K)*10.5
    
    Severance Pay Plan of Hudson City Savings Bank (3)10.6
    
    Hudson City Savings Bank Outside Directors Consultation Plan (3)10.7
    
    Hudson City Bancorp, Inc. 2000 Stock Option Plan (6)10.8
    
    Hudson City Bancorp, Inc. 2000 Recognition and Retention Plan (6)10.9
    
    Hudson City Bancorp, Inc. Denis J. Salamone Stock Option Plan (7)10.10
    
    Hudson City Bancorp, Inc. 2005 Employment Inducement Stock Program with Ronald E. Butkovich (8)10.11
    
    Hudson City Bancorp, Inc. 2005 Employment Inducement Stock Program with Christopher Nettleton
(8)10.12
    
    Amended and Restated Employment Agreement between Hudson City Bancorp, Inc. and Ronald E.
Hermance, Jr. (9)10.13
    
    Amended and Restated Employment Agreement between Hudson City Savings Bank and Ronald E.
Hermance, Jr. (9)10.14
    
    Amended and Restated Employment Agreement between Hudson City Bancorp, Inc. and John M.
Tassillo (9)10.15
    
    Amended and Restated Employment Agreement between Hudson City Savings Bank and John M. Tassillo
(9)10.16
    
    Amended and Restated Employment Agreement between Hudson City Bancorp, Inc. and Denis J.
Salamone (9)10.17
    
    Amended and Restated Employment Agreement between Hudson City Savings Bank and Denis J.
Salamone (9)10.18
    
    Executive Officer Annual Incentive Plan of Hudson City Savings Bank (9)10.19
    
    Amended and Restated Loan Agreement by and between Employee Stock Ownership Plan Trust of
Hudson City Savings Bank and Hudson City Bancorp, Inc. (9)10.20
    
    Amended and Restated Promissory Note between Employee Stock Ownership Plan Trust and Hudson
City Bancorp, Inc. (9)10.21
    
    Amended and Restated Pledge Agreement by and between Employee Stock Ownership Plan Trust of
Hudson City Savings Bank and Hudson City Bancorp, Inc. (9)10.22
    
    Form of Amended and Restated Assignment between Employee Stock Ownership Plan Trust and Hudson
City Bancorp, Inc. (9)10.23
    
    Loan Agreement by and between Employee Stock Ownership Plan Trust of Hudson City Savings Bank
and Hudson City Bancorp, Inc. (9)10.24
    
    Promissory Note between Employee Stock Ownership Plan Trust and Hudson City Bancorp, Inc. (9)10.25
    
    Pledge Agreement by and between Employee Stock Ownership Plan Trust of Hudson City Savings Bank
and Hudson City Bancorp, Inc. (9)10.26
    
    Form of Assignment between Employee Stock Ownership Plan Trust and Hudson City Bancorp, Inc. (9)10.27
    
    Hudson City Bancorp, Inc. 2006 Stock Incentive Plan (10)10.28
    
    Form of Hudson City Bancorp, Inc. 2006 Stock Incentive Plan Performance Stock Option Agreement
(11)10.29
    
    Form of Hudson City Bancorp, Inc. 2006 Stock Incentive Plan Retention Stock Option Agreement
(11)10.30
    
    Form of Hudson City Bancorp, Inc. 2006 Stock Incentive Plan Director Stock Option Agreement (11)10.31
    
    Benefit Maintenance Plan of Hudson City Savings Bank (11)
 Page 129




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EXHIBIT
    
    DESCRIPTION10.32
    
    Summary of Material Terms of Directed Charitable Contribution Program (11)10.33
    
    Summary of Director Compensation (11)21.1
    
    Subsidiaries of Hudson City Bancorp, Inc.*23.1
    
    Consent of KPMG LLP *31.1
    
    Certification of Disclosure of Ronald E. Hermance, Jr.*31.2
    
    Certification of Disclosure of James C. Kranz*32.1
    
    Statement Furnished Pursuant to Section 906 of the Sarbanes-Oxley Act of 2002, 18 U.S.C.
Section 1350*
 
 (1)
    
    Incorporated herein by reference to the Exhibits to the Registrants Registration Statement No. 333-122989 on Form S-3 filed with
the Securities and Exchange Commission on February 25, 2005, as amended.(2)
    
    Incorporated herein by reference to the Exhibits to the Registrants Current Report on Form 8-K filed with the Securities and
Exchange Commission on February 10, 2006.(3)
    
    Incorporated herein by reference to the Exhibits to the Registrants Registration Statement No. 333-74383 on Form S-1, filed with
the Securities and Exchange Commission on March 15, 1999, as amended.(4)
    
    Incorporated herein by reference to the Exhibits to the Registrants Current Report on Form 8-K filed with the Securities and
Exchange Commission on January 27, 2003.(5)
    
    Incorporated herein by reference to the Exhibits to the Registrants Annual Report on Form 10-K for the fiscal year ended December
31, 2005 filed with the Securities and Exchange Commission on February 25, 2005.(6)
    
    Incorporated herein by reference to the Exhibits to the Registrants Registration Statement No. 333-95193 on Form S-8, filed with
the Securities and Exchange Commission on January 21, 2000.(7)
    
    Incorporated herein by reference to the Exhibits to the Registrants Annual Report on Form 10-K for the fiscal year ended December
31, 2001 filed with the Securities and Exchange Commission on March 28, 2002.(8)
    
    Incorporated herein by reference to the Exhibits to the Registrants Registration Statement No. 333-114536 on Form S-8, filed with
the Securities and Exchange Commission on April 16, 2004.(9)
    
    Incorporated herein by reference to the Exhibits to the Registrants Annual Report on Form 10-K for the fiscal year ended December
31, 2005 filed with the Securities and Exchange Commission on March 16, 2006.(10)
    
    Incorporated herein by reference to the Proxy Statement No. 000-26001 filed with the Securities and Exchange Commission on April
28, 2006.(11)
    
    Incorporated herein by reference to the Exhibits to the Registrants Annual Report on Form 10-K for the fiscal year ended December
31, 2006 filed with the Securities and Exchange Commission on March 1, 2007.(12)
    
    Incorporated herein by reference to the Exhibits to the Registrants Quarterly Report on Form 10-Q for the quarter ended September 30, 2007 filed with the Securities and Exchange Commission on August 8, 2007.(*)
    
    Filed herewith. Page 130




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##### Table of Contents



SIGNATURES
  Hudson City Bancorp, Inc.By:
    
    /s/ Ronald E. Hermance, Jr.
    
    
    
    /s/ James C. KranzRonald E. Hermance, Jr.
    
    
    
    James C. KranzChairman, President and
Chief Executive Officer
    
    
    
    Executive Vice President
and Chief Financial Officer(Principal Executive Officer)
    
    
    
    (Principal Financial Officer)
 Page 131




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##### Table of Contents



NAME
    
    TITLE
    
    DATE/s/ Ronald E. Hermance, Jr.
    
    Director, Chairman, President and
    
    February 28, 2008Ronald E. Hermance, Jr.
    
    Chief Executive Officer
(Principal Executive Officer)/s/ Denis J. Salamone
    
    Director, Senior Executive Vice President and
    
    February 28, 2008Denis J. Salamone
    
    Chief Operating Officer/s/ Michael W. Azzara
    
    Director
    
    February 28, 2008Michael W. Azzara/s/ William G. Bardel
    
    Director
    
    February 28, 2008William G. Bardel/s/ Scott A. Belair
    
    Director
    
    February 28, 2008Scott A. Belair/s/ Victoria H. Bruni
    
    Director
    
    February 28, 2008Victoria H. Bruni/s/ William J. Cosgrove
    
    Director
    
    February 28, 2008William J. Cosgrove/s/ Donald O. Quest
    
    Director
    
    February 28, 2008Donald O. Quest/s/ Joseph G. Sponholz
    
    Director
    
    February 28, 2008Joseph G. Sponholz
 Page 132