Hudson City halves dividend - HCBK

Apr. 20, 2011 6:03 PM ETHCBK

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Seeking Alpha Analyst Since 2008

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Hudson City Bank has reported a large loss for the quarter, the result of a previously-announced balance sheet charge required by regulators. (HCBK unwound borrowings used to buy mortgages.) The loss is below analysts' estimates. HCBK also cut its dividend to 0.08 from 0.15, no surprise given the charge. That was the bad news.

The good news was that the write-off will improve net interest margins this quarter; operating earnings are positive and non-performing loans are even quarter-to-quarter on a $ basis though up over the year and on a % basis. Even though non-performing assets are up, actual loss ratios are down. Revenue exceeded Zacks estimates. Tier 1 capital improved.

One of the odder reports. Tomorrow will tell whether the market focuses on the good news or the bad. Since many HCBK holders are small investors, any panic selling on the dividend cut news might offer a reasonable entry price. Yield on new dividend, about 3.3%, down from 6.3%.

Just my opinion.

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Hudson City Swings to Loss, Cuts Dividend
http://www.thestreet.com/_yahoo/story/11088557/1/hudson-city-swings-to-loss-cuts-dividend.html?cm_ven=YAHOO&cm_cat=FREE&cm_ite=NA

Don't Fret Over Hudson City's Impending Dividend Cut
http://www.fool.com/investing/general/2011/04/20/dont-fret-over-hudson-citys-impending-dividend-cut.aspx

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