Hudson City Bancorp
|Traded as||NASDAQ: HCBK|
|Founded||March 27, 1868|
|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 the 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, surpassing Google's highly publicized 2004 offering at US$2.7 billion, among others. It avoided the excesses of the housing boom and labeled "best bank of 2007" by Forbes. M&T Bank agreed to acquire Hudson City on August 27, 2012.
The company is located at West 80 Century Road, in Paramus, New Jersey.
Hudson City Savings Bank
On March 27, 1868 the Hudson City Savings Bank received a special charter from the New Jersey Legislature to open in what was then the small Hudson City, New Jersey. Garrett D. Van Reipen became the first President of the small bank. Van Reipen was the city's first mayor.
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.
By about 1905, the bank's assets reached US$2 million. During World War I Hudson City Savings Bank sold Liberty Loan bonds and Victory Loan bonds, and also bought a half million dollars of war bonds. 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.
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, the savings bank had accumulated US$11 million in assets and held US$800,000 in reserves.
During World War II, Hudson City Savings Bank sold millions of dollars' worth of U.S. war bonds. 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.
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.
In 1968, Kenneth L. Birchby became President and CEO of Hudson City Savings Bank. By the late 1960s, New Jersey State banking laws made it legal for banks to operate across county lines. In 1969, Hudson City Savings Bank opened its fifth branch, and its first branch across the county line at Waldwick, in Bergen County, New Jersey. The savings bank's total assets by then had reached US$175 million.
During the long secular bear market and economic malaise of the 1970s the savings 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.
In 1981, Leonard S. Gudelski became President. The savings bank survived the troubles surrounding double-digit inflation and interest rates, followed by the early 1980s recession and then the late 1980s Savings and Loan crisis when many other banks and savings and loans failed.
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.
Following the 1990-1991 recession, by 1992, Hudson City Savings Bank became the largest savings bank in New Jersey. In 1996, Leonard S. Gudelski was elected Chairman of the savings bank, and also retained his position as President through that year.
In January 1997, Ronald E. Hermance, Jr. retained his position as COO, and also became promoted to replace Gudelski as the 11th President of Hudson City Savings Bank. Gudelski remained as Chairman.
As of January 1, 2011 there are 136 branch offices, 9 in Connecticut, all in Fairfield County, 29 in New York, occupying Rockland, Putnam, Westchester, and Suffolk Counties as well as the Boro of Staten Island in New York City, 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
In February 1999, the savings 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.
On January 1, 2002 Ronald E. Hermance, Jr. retained his position as President and also became promoted from COO to CEO of the new holding company.
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. The move was in preparation for its huge stock offering, the company's second-step mutual-to-stock conversion.
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.
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. The new Hudson City Bancorp shares traded on the NASDAQ under the ticker symbol symbol HCBK.
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.
Recent financial problems
During the subprime mortgage crisis, Hudson City was cited as an example of good management. They continued to require a good credit score and adequate down payments of 10 to 20 percent. They avoided "exotic mortgages" allowing no income verification and/or no downpayment. Forbes called the bank the "best managed bank of 2007." While not plagued by the credit quality of its loans, by 2012 the bank was weakened by the continued lower mortgage rates encouraged a wave of refinancing to the lower rates.
Hudson City was successful in avoiding the mortgage/banking meltdown made by prudent lending. 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 bailout the banking system. It's portfolio of jumbo loans was previously ineligible to refinance into a conforming loan, given the bank a stable long-term asset base. After the housing crisis, the rules to changed raising the conforming limit. This enabled the high credit quality jumbo loans to refinance to the lower rate available to GSE-purchased mortgages. The lengthly foreclosure process left Hudson City with a large number of non-proforming loans. A loss of high-quality borrowers, an inability to issue new mortgages at reasonable rates, and a portfolio on non-performing loans encouraged the bank 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 gains $25 billion in deposits and $28 billion in loans, along with 135 brick and mortar branch locations, 97 of which are located in New Jersey. Herefater, Hudson City Bancorp became a better buyer of alll specified pools.
- THACHER PROFFITT REPRESENTS HUDSON CITY BANCORP IN 7TH LARGEST DOMESTIC PUBLIC OFFERING IN HISTORY, June 8, 2005, PRNewswire, Insurance Newscast, InsuranceBroadcasting.com
- Vicki Mabrey; Steven Baker (October 3, 2008). "Haven't Heard of Hudson City Bank? Now You Might". ABC news. Retrieved December 4, 2013.
- 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]
- "M&T Bank to Buy Hudson City Bancorp for $3.7 Billion". New York Times. Aug 27, 2012.
- Allissa Kline (October 24, 2013). "Profits drop for M&T acquisition target". ABC news.
- Institution History for HUDSON CITY BANCORP, INC. (2367556), National Information Center
- Hudson City Savings Bank
- Officers & Directors Detail Hudson City Bancorp Inc HCBK.O (NASDAQ), Hermance, Ronald E., Brief Biography, Reuters.com
- Robin Sidel (August 29, 2012). "Regional Bank Lands Big-City Deal". Wall Street Journal.
- Arron Elstein (February 11, 2013). "A sad end for Hudson City Savings Bank". Crain's New York.
- Richard Newman (Aug 30, 2013). "Study: Paramus-based Hudson City ranks No. 8 in U.S. for loans in foreclosure". newjersey.com.
- Hudson City Savings Bank
- America's Smartest Banker: The nation's financial industry is cratering, so how come Hudson City Bank is thriving? by Daniel Gross