Back to top

Analyst Blog

On Apr 5, 2013, we reiterated our long-term recommendation on Hudson City Bancorp, Inc. (HCBK - Analyst Report) at Neutral. Our decision rests on lower expenses and solid capital ratios. However, these positives were offset by a decline in both net interest and non-interest income.

Why Neutral?

Hudson City’s fourth-quarter 2012 earnings came in at $0.10 per share, marginally missing the Zacks Consensus Estimate. The company experienced lower expenses and a robust capital position.

Following its fourth-quarter results, the Zacks Consensus Estimate for 2013 remained stable at $0.43 per share over the last 60 days. However, the Zacks Consensus Estimate for 2014 fell 2.9% to $0.41 per share over the same time frame. Due to lack of significant estimate revisions, Hudson City currently holds a Zacks Rank #3 (Hold).

Hudson City completed its balance sheet restructuring in 2011, which substantially reduced its higher-cost structured borrowings. Further, Hudson City was not required to participate in the aid provided by the government during the height of the financial crisis. Therefore, it has no loans outstanding to the government.

On the flip side, credit metrics at Hudson City remain a matter of concern over the last couple of years. Nonperforming assets have continuously increased over the past few quarters. Moreover, Hudson City’s net interest margin has been steadily declining along with a decrease in net interest income.

Further, the unfavorable interest rate environment, sluggish economic recovery combined with the uncertainty surrounding the new and anticipated regulations are likely to affect its revenues going forward.

Other Major Banks to Consider

Other major banks that are performing better than Hudson City include Banner Corporation (BANR - Snapshot Report), Capitol Federal Financial, Inc. (CFFN - Snapshot Report) and Heritage Financial Corp. (HFWA - Snapshot Report). All these companies carry a Zacks Rank #2 (Buy).

Please login to or register to post a comment.

New to Zacks?

Start Here

Zacks Investment Research


Are you a new Zacks Member or a visitor to

Top Zacks Features

My Portfolio Tracker

Is it Time to Sell?

One of the most important steps you can take today is to set up your portfolio tracker on Once you do, you'll be notified of major events affecting your stocks and/or funds with daily email alerts.

More Zacks Resources

Zacks Rank Home - Evaluate your stocks and use the Zacks Rank to eliminate the losers and keep the winners.

Mutual Fund Rank Home - Evaluate your funds with the Mutual Fund Rank for both your personal and retirement funds.

Stock/Mutual Fund Screening - Find better stocks and mutual funds. The ones most likely to beat the market and provide a positive return.

My Portfolio - Track your Portfolio and find out where your stocks/mutual funds stack up with the Zacks Rank.

Zacks #1 Rank Top Movers for Zacks #1 Rank Top Movers

Company Symbol Price %Chg
TRIQUINT SE… TQNT 20.67 +6.52%
RF MICRO DE… RFMD 12.47 +6.04%
VASCO DATA… VDSI 14.77 +4.68%
STRATTEC SE… STRT 80.24 +3.00%
PATTERSON-U… PTEN 34.54 +2.98%