Hudson City Bancorp in Paramus, N.J., reported lower quarterly profitsas its loan book keeps shrinking.

The $36.6 billion-asset company's fourth-quarter earnings slid 15% from a year earlier, to $39.1 million. Earnings per share were 8 cents, beating a Bloomberg analyst estimate by 4 pennies.

Hudson City has been waiting for more than two years to finalize its agreement to sell itself to the $99 billion-asset M&T Bank. That deal, which was announced in August 2012, was once againdelayed in December as M&T works to strengthen its anti-money-laundering controls. The companies now expect the transaction to close by April 30.

Hudson City's fourth-quarter profits were squeezed by lower lending. Total loans fell 11%, to $21.6 billion.

The company attributed the drop to its "limited appetite" for long-term loans in a low-rate environment. Loan production has also been affected by qualified-mortgage regulations from the Consumer Financial Protection Bureau, Hudson City said in a press release Wednesday.

Net interest income fell 36%, to $87.2 million, as a result of the shrinking balance sheet. Meanwhile, the net interest margin narrowed 46 basis points, to 1.01%.

Profits were buoyed, in part, by fee-based revenue. Noninterest income climbed more than threefold, to $47.5 million, primarily from the sale of mortgage-backed securities.

Noninterest expenses dipped 5%, to $70.2 million.

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