Hudson City Bancorp Inc., Paramus, N.J., earned $84 million in the third quarter, in what its top executive called a “difficult environment facing portfolio lenders."
Compared to the same period a year ago, earnings fell 32%.
Company CEO and chairman Ronald Hermance noted that “With mortgage rates hitting all-time lows and reinvestment rates for mortgage securities below 3.0%, we believe balance sheet growth does not make sense in this environment.”
Hermance added that, “We anticipate continuing to restrain our balance sheet growth while the Federal Reserve and U.S. Treasury department continue their on-going attempts to spur economic growth by, among other things, keeping interest rates at historical lows."
For the first nine months of the year, Hudson City originated $3.8 billion of mortgages, compared to $4.3 billion in the comparable period last year.
Its purchase of mortgages in the secondary market fell to $339 million, a 41% decline.
The thrift suffered principal repayments of $4.9 billion versus $4.8 billion for the same period.
At Sept. 30, it had 2,719 nonperforming mortgages on its books, including six construction and one commercial loan. The NPLs have a total UPB of $943 million. It also is carrying $4.2 million of delinquent home equity loans.
