Hudson City Bancorp

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Hudson City Bancorp, Inc.
Founded March 27, 1868; 146 years ago (1868-03-27)
Headquarters Paramus, New Jersey, U.S., United States
Services Bank holding company

Hudson City Bancorp, Inc., based in Paramus, in the U.S. state of New Jersey, is a bank-holding company for Hudson City Savings Bank, its only subsidiary, the largest savings bank in New Jersey and one of the oldest banks in the United States, with US$50 billion in assets. It is now a fully publicly held entity, and one of the most recent additions to the S&P 500 Index of largest publicly traded companies in the United States. In 2005 its US$3.93 billion secondary offering of common stock was the largest in United States banking history. At the time it was also the seventh largest domestic public offering in United States history [1] The bank avoided the excesses of the housing boom and as labeled "best bank of 2007" by Forbes.[2] M&T Bank agreed to acquire Hudson City on August 27, 2012.[3][4][5]

The company is located at West 80 Century Road, in Paramus, New Jersey.[6]


Hudson City Savings Bank[edit]

On March 27, 1868, the Hudson City Savings Bank received a charter from the New Jersey Legislature to open in what was then the small Hudson City, New Jersey. Garrett D. Van Reipen, the city's first mayor, became the first President of the small bank. .[7]

By the early 1870s, the city of Hudson was annexed by Jersey City, New Jersey, the second largest city in the state. By the end of the 19th Century, the bank had accumulated assets and deposits of over $1 million.[7] In January 1918, Robert J. Rendall became the savings bank's President, and by his death in 1950 he had become one of the longest serving Presidents in the company's history.[7]

In the 1920s, Hudson City Savings Bank opened its second branch office, and moved from the old headquarters on Newark Avenue, to 587 Summit Avenue in Jersey City. The company survived the aftermath of the stock market crash of 1929 when many other banks closed. By the end of the Great Depression of the 1930s, it had accumulated US$11 million in assets and held US$800,000 in reserves.[7] By the end of the 1940s, the savings bank had opened a total of three Jersey City branches, with over US$26 million in assets.[7]

In August 1950, President Robert J. Rendall died. During the 1950s New Jersey's growth rate was double the national average, boosting the savings bank's growth as well: by 1959, Hudson City Savings Bank had accumulated over US$50 million in assets.[7] In 1968 Kenneth L. Birchby became President and CEO of the Bank. By the late 1960s, New Jersey's banking laws made it legal for banks to operate across county lines. In 1969, the Bank opened its fifth branch, and its first branch across the county line at Waldwick, in Bergen County, New Jersey. The bank's total assets by then had reached US$175 million.[7]

During the long secular bear market and economic malaise of the 1970s the bank grew to 37 branches in 12 New Jersey counties. In 1978, the headquarters moved to neighboring Bergen County, New Jersey. By then the bank had accumulated total assets and deposits of over US$1.1 billion each.[7] In 1981, Leonard S. Gudelski became President. The bank survived the troubles surrounding double-digit inflation and interest rates, and also survived the following early 1980s recession and then the late 1980s Savings and Loan crisis when many other banks and savings and loans failed.[7]

In 1988, Ronald E. Hermance, Jr. was hired at Hudson City Savings as Senior Executive Vice President and Chief Operating Officer. He had previously been Chief Financial Officer of Southold Savings Bank on Long Island, New York.[8] By the end of 1989, Hudson City Savings Bank had 69 branches and total assets of US$3.2 billion.[7] In 1992, following the 1990-1991 recession, the bank became the largest savings bank in New Jersey. In 1996, Leonard S. Gudelski was elected Chairman, and also retained his position as President through that year.[7]

In January 1997, Ronald E. Hermance, Jr. was promoted to replace Gudelski as the 11th president of the bank.[8] Gudelski remained as Chairman.[7] As of January 1, 2011, there were 136 branch offices, nine in Fairfield County, Connecticut, 29 in New York State, and 98 in New Jersey spanning Bergen, Passaic, Morris, Warren, Essex, Hudson, Union, Somerset, Middlesex, Mercer, Monmouth, Ocean, Burlington, Camden, Atlantic, and Gloucester counties.

Hudson City Bancorp[edit]

In February 1999, the bank initiated a plan of reorganization as a wholly owned subsidiary of Hudson City Bancorp, Inc. The company issued stock for the first time, raising over US$500 million of new capital. Assets exceeded $8 billion by then.[7] On July 13, 1999, Hudson City Bancorp, Inc., was formally recognized by the United States Federal Reserve as the bank holding company for the savings bank.[6] Ronald E. Hermance, Jr., retained his position as President and also was promoted from COO to CEO of the new holding company.[8]

On January 1, 2004, the company was changed from a Bank Holding Company to a Domestic Entity Other as categorized by the Federal Reserve System, defined generically as a domestic institution that engages in the business of banking in the United States.[6] The move was in preparation for its huge stock offering, the company's second-step mutual-to-stock conversion.[1] On January 1, 2005, Ronald Hermance, Jr., replaced Gudelski as Chairman, as well as retaining his existing positions as President and CEO. In 2004, he had also begun serving on the board of directors of the Federal Home Loan Bank of New York.[8]

On June 8, 2005, the company made the largest public stock offering in the history of the United States banking industry, represented by Thacher Proffitt. The conversion from the mutual holding company structure made Hudson City Bancorp a fully publicly held entity. In the public offering, 393 million shares were sold at $10.00 per share. The company also split its existing stock 3.206-for-one.[1] The new Hudson City Bancorp shares traded on the NASDAQ under the ticker symbol HCBK.[7]

By 2007, Hudson City Savings Bank had become the largest New Jersey based savings bank, and the third largest savings and loan association in the United States, with over US$35 billion in assets, over 100 branches in New Jersey, New York and Connecticut, and with over 1,300 employees.[7] On February 14, 2007, the company was added to the S&P 500 Index by Standard & Poor's, where it replaced American Power Conversion Corporation[7]

Recent financial problems[edit]

During the subprime mortgage crisis, Hudson City was cited as an example of good management. They continued to require a good credit score and down payments of 10 to 20 percent, and avoided "exotic mortgages" allowing no income verification and/or no down-payment. Forbes called the bank the "best managed bank of 2007."[2] While not plagued by the credit quality of its loans, by 2012 the bank was weakened as the continued lower mortgage rates encouraged a wave of refinancing to the lower rates.[9]

Hudson City was successful in avoiding the mortgage and banking meltdown made by prudent lending.[10] However, "actions taken by the government to rescue the banking system proved to be Hudson City's undoing." It borrowed at 4% in 2005 and successfully avoided the rise in interest rates in 2006 but suffered from an unprecedented reduction in interest rates implemented by the Fed to bail out the banking system. Its portfolio of jumbo loans was previously ineligible to refinance into a conforming loan, giving the bank a stable long-term asset base. After the housing crisis, the rules changed raising the conforming limit, which enabled the high credit quality jumbo loans to refinance to the lower rate available to GSE-purchased mortgages.[10] The lengthly foreclosure process left Hudson City with a large number of non-performing loans.[11] A loss of high-quality borrowers, an inability to issue new mortgages at reasonable rates, and a portfolio of non-performing loans encouraged the bank to accept a buy-out.

On August 27, 2012, Hudson City Bancorp agreed to a buy-out by Buffalo, New York-based M&T Bank for $3.7 billion. M&T will gain $25 billion in deposits and $28 billion in loans, along with 135 branch locations, 97 of which are located in New Jersey.[3][4][9] Thereafter, Hudson City Bancorp became a better buyer of all specified pools. The buy-out has been delayed for over two years due to concerns by the Federal Reserve Board about M&T's anti-money laundering compliance.


  2. ^ a b Vicki Mabrey; Steven Baker (October 3, 2008). "Haven't Heard of Hudson City Bank? Now You Might". ABC news. Retrieved December 4, 2013. 
  3. ^ a b Epstein, Jonathan D. (27 August 2012). "M&T to expand in New Jersey with Hudson City purchase". The Buffalo News. Retrieved 27 August 2012. [dead link]
  4. ^ a b "M&T Bank to Buy Hudson City Bancorp for $3.7 Billion". New York Times. Aug 27, 2012. 
  5. ^ Allissa Kline (October 24, 2013). "Profits drop for M&T acquisition target". ABC news. 
  6. ^ a b c Institution History for HUDSON CITY BANCORP, INC. (2367556), National Information Center
  7. ^ a b c d e f g h i j k l m n o p Hudson City Savings Bank
  8. ^ a b c d Officers & Directors Detail Hudson City Bancorp Inc HCBK.O (NASDAQ), Hermance, Ronald E., Brief Biography,
  9. ^ a b Robin Sidel (August 29, 2012). "Regional Bank Lands Big-City Deal". Wall Street Journal. 
  10. ^ a b Arron Elstein (February 11, 2013). "A sad end for Hudson City Savings Bank". Crain's New York. 
  11. ^ Richard Newman (Aug 30, 2013). "Study: Paramus-based Hudson City ranks No. 8 in U.S. for loans in foreclosure". 

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