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M&T had delayed plans to buy Hudson City Bancorp because of the Federal Reserve's compliance concerns, and an order made public Tuesday details what the Buffalo, N.Y., company has to fix.
June 18 -
M&T, in Buffalo, N.Y., is still comfortable with its decision to acquire the mortgage lender even though a recent rise in mortgage rates could crimp Hudson City's profits.
July 17 -
Investment gains helped M&T Bank Corp. in Buffalo, N.Y., record a spike in quarterly profits.
July 17
Profit fell 33% at Hudson City Bancorp (HCBK) in Paramus, N.J., as its interest margin continued to tighten.
The $39.7 billion-asset company reported a second-quarter profit of $48.7 million, down from $72.3 million in the second quarter of 2012. Earnings per share were 10 cents, in line with the average estimate of analysts polled by Bloomberg.
A steep drop in loan income hurt the bottom line. Net interest income fell 29%, to $159.9 million, as interest from first mortgages fell 16%, to $283.9 million. Net interest margin fell to 1.64% from 2.12%, and total assets declined by $899.9 million.
"The low market interest rates continue to affect our net interest margin as profitable growth opportunities remain scarce," Ronald Hermance, chairman and chief executive, said in a news release Wednesday. "As a result, we continued to decrease the size of our balance sheet and have maintained an elevated level of liquidity."
Noninterest income more than tripled, rising to $9.6 million.
The company made a $12.5 million provision for loan losses, after making a $25 million provision in the same period in 2012, and net chargeoffs fell 8%, to $16.3 million.
Hudson City earned a $7.2 million profit last quarter on the sale of $405.7 million of corporate bonds, after recording no gain on securities sales in the second quarter of 2012.
Its pending sale to M&T Bank (MTB) in Buffalo, N.Y., was delayed after regulators
M&T
M&T's second-quarter profit
