On Mar 26, 2014, we issued an updated research report on New
Jersey based Savings & Loan institution
Hudson City Bancorp, Inc.
). The company reported impressive fourth-quarter 2013 results
aided by increased non-interest income, lower expenses along with
no provision for loan-losses in the quarter.
On Jan 29, Hudson City came out with its fourth-quarter 2013
operating earnings of 9 cents per share, beating the Zacks
Consensus Estimate by 28.6%. While the company's non interest
income increased significantly and non-interest expenses declined
16% year over year, lower net interest income led to a 23.4%
decline in total revenue to $149.4 million.
Following the earnings release, the analysts' bullish stance on
the stock is evident from the rise in the Zacks Consensus
Estimate for 2014 and 2015. Over the past 60 days, the Zacks
Consensus Estimate advanced 3.8% to 27 cents per share for 2014
and rose 3.2% to 32 cents per share for 2015.
Additionally, Hudson City has consistently exhibited efforts in
restructuring its balance sheet, as seen from continued fall in
interest expenses since 2011. Further, the company's Strategic
Plan looks promising which is expected to start from mid-2014.
This includes origination of residential mortgage loans that
fulfill GSE (Government Sponsored Enterprises) guidelines for
sale to the GSEs and purchase and origination of commercial real
estate loans. Such initiatives will lead to a diverse loan
portfolio and reduce concentration risk.
Despite the positives, we remain cautious owing to several issues
faced by Hudson City. These include declining net interest
margin, absence of credible improvement in asset quality and the
prevailing stringent regulatory landscape. Further, the recent
announcement of further delay of the proposed merger with
M&T Bank Corporation
) owing to regulatory issues have cast a shadow upon the
company's future prospects.
Hudson City currently carries a Zacks Rank #2 (Buy).
Stocks That Warrant a Look in the Sector
Meridian Interstate Bancorp, Inc.
WSFS Financial Corp.
) are better-ranked stocks in this space. Both the stocks hold a
Zacks Rank #1 (Strong Buy).
MERIDIAN INTRST (EBSB): Free Stock Analysis
HUDSON CITY BCP (HCBK): Free Stock Analysis
M&T BANK CORP (MTB): Free Stock Analysis
WSFS FINL CORP (WSFS): Free Stock Analysis
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