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<!--DOCTYPE html PUBLIC "-//W3C//DTD XHTML 1.0 Transitional//EN" "http://www.w3.org/TR/xhtml1/DTD/xhtml1-transitional.dtd" -->
<html>
<head></head>
<body>
<!-- Begin Block Tagged Note 1 - hcbk:OrganizationTextBlock-->
<div style="font-family: 'Times New Roman',Times,serif">
<div align="center" style="font-size: 10pt; margin-top: 0pt">
</div>
<div align="left">
</div>
<div align="center" style="font-size: 10pt; margin-top: 0pt">
</div>
<!-- xbrl,ns -->
<div align="left" style="font-size: 10pt; margin-top: 12pt"><b>1. Organization</b>
</div>
<div align="left" style="font-size: 10pt; margin-top: 6pt">Hudson City Bancorp, Inc. (“Hudson City Bancorp” or the “Company”) is a Delaware corporation
organized in March 1999 by Hudson City Savings Bank (“Hudson City Savings”) in connection with the
conversion and reorganization of Hudson City Savings from a New Jersey mutual savings bank into a
two-tiered mutual savings bank holding company structure. Prior to June 7, 2005, a majority of
Hudson City Bancorp’s common stock was owned by Hudson City, MHC, a mutual holding company. On
June 7, 2005, Hudson City Bancorp, Hudson City Savings and Hudson City, MHC reorganized from a
two-tier mutual holding company structure to a stock holding company structure, and Hudson City MHC
was merged into Hudson City Bancorp.
</div>
</div>
</body>
</html>
<!--DOCTYPE html PUBLIC "-//W3C//DTD XHTML 1.0 Transitional//EN" "http://www.w3.org/TR/xhtml1/DTD/xhtml1-transitional.dtd" -->
<html>
<head></head>
<body>
<!-- Begin Block Tagged Note 2 - us-gaap:OrganizationConsolidationAndPresentationOfFinancialStatementsDisclosureTextBlock-->
<div style="font-family: 'Times New Roman',Times,serif">
<div align="left" style="font-size: 10pt; margin-top: 12pt"><b>2. Basis of Presentation</b>
</div>
<div align="left" style="font-size: 10pt; margin-top: 6pt">In our opinion, all the adjustments (consisting of normal and recurring adjustments) necessary for
a fair presentation of the consolidated financial condition and consolidated results of operations
for the unaudited periods presented have been included. The results of operations and other data
presented for the three and six month periods ended June 30, 2009 are not necessarily indicative of
the results of operations that may be expected for the year ending December 31, 2009. In preparing
the consolidated financial statements, management is required to make estimates and assumptions
that affect the reported amounts of assets and liabilities as of the date of the statements of
financial condition and the results of operations for the period. Actual results could differ from
these estimates. The allowance for loan losses is a material estimate that is particularly
susceptible to near-term change. The current economic environment has increased the degree of
uncertainty inherent in this material estimate.
</div>
<div align="left" style="font-size: 10pt; margin-top: 6pt">Certain information and note disclosures usually included in financial statements prepared in
accordance with U.S. generally accepted accounting principles have been condensed or omitted
pursuant to the rules and regulations of the Securities and Exchange Commission (“SEC”) for the
preparation of the Form 10-Q. The consolidated financial statements presented should be read in
conjunction with Hudson City Bancorp’s audited consolidated financial statements and notes to
consolidated financial statements included in Hudson City Bancorp’s December 31, 2008 Annual Report
on Form 10-K.
</div>
<!-- Folio -->
<!-- /Folio -->
</div>
<!-- PAGEBREAK -->
<div style="font-family: 'Times New Roman',Times,serif">
<div align="center" style="font-size: 10pt; margin-top: 0pt">
</div>
</div>
</body>
</html>
<!--DOCTYPE html PUBLIC "-//W3C//DTD XHTML 1.0 Transitional//EN" "http://www.w3.org/TR/xhtml1/DTD/xhtml1-transitional.dtd" -->
<html>
<head></head>
<body>
<!-- Begin Block Tagged Note 3 - hcbk:EarningsPerShareTextBlock-->
<div style="font-family: 'Times New Roman',Times,serif">
<div align="left" style="font-size: 10pt; margin-top: 12pt"><b>3. Earnings Per Share</b>
</div>
<div align="left" style="font-size: 10pt; margin-top: 6pt">The following is a summary of our earnings per share calculations and reconciliation of basic to
diluted earnings per share.
</div>
<div align="center">
<table style="font-size: 10pt; text-align: left" cellspacing="0" border="0" cellpadding="0" width="100%">
<!-- Begin Table Head -->
<tr valign="bottom">
<td width="28%"> </td>
<td width="5%"> </td>
<td width="1%"> </td>
<td width="5%"> </td>
<td width="1%"> </td>
<td width="5%"> </td>
<td width="1%"> </td>
<td width="5%"> </td>
<td width="1%"> </td>
<td width="5%"> </td>
<td width="1%"> </td>
<td width="5%"> </td>
<td width="1%"> </td>
<td width="5%"> </td>
<td width="1%"> </td>
<td width="5%"> </td>
<td width="1%"> </td>
<td width="5%"> </td>
<td width="1%"> </td>
<td width="5%"> </td>
<td width="1%"> </td>
<td width="5%"> </td>
<td width="1%"> </td>
<td width="5%"> </td>
<td width="1%"> </td>
</tr>
<tr style="font-size: 8pt" valign="bottom">
<td> </td>
<td> </td>
<td nowrap="nowrap" align="center" colspan="22" style="border-bottom: 1px solid #000000"><b>For the Three Months Ended June 30,</b></td>
<td> </td>
</tr>
<tr style="font-size: 8pt" valign="bottom">
<td> </td>
<td> </td>
<td nowrap="nowrap" align="center" colspan="10" style="border-bottom: 1px solid #000000"><b>2009</b></td>
<td> </td>
<td> </td>
<td nowrap="nowrap" align="center" colspan="10" style="border-bottom: 1px solid #000000"><b>2008</b></td>
<td> </td>
</tr>
<tr style="font-size: 8pt" valign="bottom">
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td nowrap="nowrap" align="center" colspan="2"><b>Per</b></td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td nowrap="nowrap" align="center" colspan="2"><b>Per</b></td>
<td> </td>
</tr>
<tr style="font-size: 8pt" valign="bottom">
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td nowrap="nowrap" align="center" colspan="2"><b>Average</b></td>
<td> </td>
<td> </td>
<td nowrap="nowrap" align="center" colspan="2"><b>Share</b></td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td nowrap="nowrap" align="center" colspan="2"><b>Average</b></td>
<td> </td>
<td> </td>
<td nowrap="nowrap" align="center" colspan="2"><b>Share</b></td>
<td> </td>
</tr>
<tr style="font-size: 8pt" valign="bottom">
<td> </td>
<td> </td>
<td nowrap="nowrap" align="center" colspan="2" style="border-bottom: 1px solid #000000"><b>Income</b></td>
<td> </td>
<td> </td>
<td nowrap="nowrap" align="center" colspan="2" style="border-bottom: 1px solid #000000"><b>Shares</b></td>
<td> </td>
<td> </td>
<td nowrap="nowrap" align="center" colspan="2" style="border-bottom: 1px solid #000000"><b>Amount</b></td>
<td> </td>
<td> </td>
<td nowrap="nowrap" align="center" colspan="2" style="border-bottom: 1px solid #000000"><b>Income</b></td>
<td> </td>
<td> </td>
<td nowrap="nowrap" align="center" colspan="2" style="border-bottom: 1px solid #000000"><b>Shares</b></td>
<td> </td>
<td> </td>
<td nowrap="nowrap" align="center" colspan="2" style="border-bottom: 1px solid #000000"><b>Amount</b></td>
<td> </td>
</tr>
<tr style="font-size: 8pt" valign="bottom">
<td> </td>
<td> </td>
<td nowrap="nowrap" align="center" colspan="22"><b>(In thousands, except per share data)</b></td>
<td> </td>
</tr>
<!-- End Table Head -->
<!-- Begin Table Body -->
<tr valign="bottom" style="background: #cceeff">
<td>
<div style="margin-left:15px; text-indent:-15px">Net income
</div></td>
<td> </td>
<td align="left">$</td>
<td align="right">127,919</td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td align="left">$</td>
<td align="right">110,703</td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
</tr>
<tr style="font-size: 1px">
<td>
<div style="margin-left:15px; text-indent:-15px"> 
</div></td>
<td> </td>
<td nowrap="nowrap" colspan="2" align="right" style="border-top: 3px double #000000"> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td nowrap="nowrap" colspan="2" align="right" style="border-top: 3px double #000000"> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
</tr>
<tr valign="bottom">
<td>
<div style="margin-left:15px; text-indent:-15px">Basic earnings per share:
</div></td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
</tr>
<tr valign="bottom" style="background: #cceeff">
<td>
<div style="margin-left:30px; text-indent:-15px">Income available to
common stockholders
</div></td>
<td> </td>
<td align="left">$</td>
<td align="right">127,919</td>
<td> </td>
<td> </td>
<td> </td>
<td align="right">486,985</td>
<td> </td>
<td> </td>
<td align="left">$</td>
<td align="right">0.26</td>
<td> </td>
<td> </td>
<td align="left">$</td>
<td align="right">110,703</td>
<td> </td>
<td> </td>
<td> </td>
<td align="right">483,886</td>
<td> </td>
<td> </td>
<td align="left">$</td>
<td align="right">0.23</td>
<td> </td>
</tr>
<tr style="font-size: 1px">
<td>
<div style="margin-left:15px; text-indent:-15px"> 
</div></td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td nowrap="nowrap" colspan="2" align="right" style="border-top: 3px double #000000"> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td nowrap="nowrap" colspan="2" align="right" style="border-top: 3px double #000000"> </td>
<td> </td>
</tr>
<tr valign="bottom">
<td>
<div style="margin-left:15px; text-indent:-15px">Effect of dilutive common
stock equivalents
</div></td>
<td> </td>
<td> </td>
<td align="right">—</td>
<td> </td>
<td> </td>
<td> </td>
<td align="right">2,462</td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td align="right">—</td>
<td> </td>
<td> </td>
<td> </td>
<td align="right">12,193</td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
</tr>
<tr style="font-size: 1px">
<td>
<div style="margin-left:15px; text-indent:-15px"> 
</div></td>
<td> </td>
<td nowrap="nowrap" colspan="2" align="right" style="border-top: 1px solid #000000"> </td>
<td> </td>
<td> </td>
<td nowrap="nowrap" colspan="2" align="right" style="border-top: 1px solid #000000"> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td nowrap="nowrap" colspan="2" align="right" style="border-top: 1px solid #000000"> </td>
<td> </td>
<td> </td>
<td nowrap="nowrap" colspan="2" align="right" style="border-top: 1px solid #000000"> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
</tr>
<tr valign="bottom" style="background: #cceeff">
<td>
<div style="margin-left:15px; text-indent:-15px">Diluted earnings per share:
</div></td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
</tr>
<tr valign="bottom">
<td>
<div style="margin-left:30px; text-indent:-15px">Income available to
common stockholders
</div></td>
<td> </td>
<td align="left">$</td>
<td align="right">127,919</td>
<td> </td>
<td> </td>
<td> </td>
<td align="right">489,447</td>
<td> </td>
<td> </td>
<td align="left">$</td>
<td align="right">0.26</td>
<td> </td>
<td> </td>
<td align="left">$</td>
<td align="right">110,703</td>
<td> </td>
<td> </td>
<td> </td>
<td align="right">496,079</td>
<td> </td>
<td> </td>
<td align="left">$</td>
<td align="right">0.22</td>
<td> </td>
</tr>
<tr style="font-size: 1px">
<td>
<div style="margin-left:30px; text-indent:-15px"> 
</div></td>
<td> </td>
<td nowrap="nowrap" colspan="2" align="right" style="border-top: 3px double #000000"> </td>
<td> </td>
<td> </td>
<td nowrap="nowrap" colspan="2" align="right" style="border-top: 3px double #000000"> </td>
<td> </td>
<td> </td>
<td nowrap="nowrap" colspan="2" align="right" style="border-top: 3px double #000000"> </td>
<td> </td>
<td> </td>
<td nowrap="nowrap" colspan="2" align="right" style="border-top: 3px double #000000"> </td>
<td> </td>
<td> </td>
<td nowrap="nowrap" colspan="2" align="right" style="border-top: 3px double #000000"> </td>
<td> </td>
<td> </td>
<td nowrap="nowrap" colspan="2" align="right" style="border-top: 3px double #000000"> </td>
<td> </td>
</tr>
<!-- End Table Body -->
</table>
</div>
<div align="center">
<table style="font-size: 10pt; text-align: left" cellspacing="0" border="0" cellpadding="0" width="100%">
<!-- Begin Table Head -->
<tr valign="bottom">
<td width="28%"> </td>
<td width="5%"> </td>
<td width="1%"> </td>
<td width="5%"> </td>
<td width="1%"> </td>
<td width="5%"> </td>
<td width="1%"> </td>
<td width="5%"> </td>
<td width="1%"> </td>
<td width="5%"> </td>
<td width="1%"> </td>
<td width="5%"> </td>
<td width="1%"> </td>
<td width="5%"> </td>
<td width="1%"> </td>
<td width="5%"> </td>
<td width="1%"> </td>
<td width="5%"> </td>
<td width="1%"> </td>
<td width="5%"> </td>
<td width="1%"> </td>
<td width="5%"> </td>
<td width="1%"> </td>
<td width="5%"> </td>
<td width="1%"> </td>
</tr>
<tr style="font-size: 8pt" valign="bottom">
<td> </td>
<td> </td>
<td nowrap="nowrap" align="center" colspan="22" style="border-bottom: 1px solid #000000"><b>For the Six Months Ended June 30,</b></td>
<td> </td>
</tr>
<tr style="font-size: 8pt" valign="bottom">
<td> </td>
<td> </td>
<td nowrap="nowrap" align="center" colspan="10" style="border-bottom: 1px solid #000000"><b>2009</b></td>
<td> </td>
<td> </td>
<td nowrap="nowrap" align="center" colspan="10" style="border-bottom: 1px solid #000000"><b>2008</b></td>
<td> </td>
</tr>
<tr style="font-size: 8pt" valign="bottom">
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td nowrap="nowrap" align="center" colspan="2"><b>Per</b></td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td nowrap="nowrap" align="center" colspan="2"><b>Per</b></td>
<td> </td>
</tr>
<tr style="font-size: 8pt" valign="bottom">
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td nowrap="nowrap" align="center" colspan="2"><b>Average</b></td>
<td> </td>
<td> </td>
<td nowrap="nowrap" align="center" colspan="2"><b>Share</b></td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td nowrap="nowrap" align="center" colspan="2"><b>Average</b></td>
<td> </td>
<td> </td>
<td nowrap="nowrap" align="center" colspan="2"><b>Share</b></td>
<td> </td>
</tr>
<tr style="font-size: 8pt" valign="bottom">
<td> </td>
<td> </td>
<td nowrap="nowrap" align="center" colspan="2" style="border-bottom: 1px solid #000000"><b>Income</b></td>
<td> </td>
<td> </td>
<td nowrap="nowrap" align="center" colspan="2" style="border-bottom: 1px solid #000000"><b>Shares</b></td>
<td> </td>
<td> </td>
<td nowrap="nowrap" align="center" colspan="2" style="border-bottom: 1px solid #000000"><b>Amount</b></td>
<td> </td>
<td> </td>
<td nowrap="nowrap" align="center" colspan="2" style="border-bottom: 1px solid #000000"><b>Income</b></td>
<td> </td>
<td> </td>
<td nowrap="nowrap" align="center" colspan="2" style="border-bottom: 1px solid #000000"><b>Shares</b></td>
<td> </td>
<td> </td>
<td nowrap="nowrap" align="center" colspan="2" style="border-bottom: 1px solid #000000"><b>Amount</b></td>
<td> </td>
</tr>
<tr style="font-size: 8pt" valign="bottom">
<td> </td>
<td> </td>
<td nowrap="nowrap" align="center" colspan="22"><b>(In thousands, except per share data)</b></td>
<td> </td>
</tr>
<!-- End Table Head -->
<!-- Begin Table Body -->
<tr valign="bottom" style="background: #cceeff">
<td>
<div style="margin-left:15px; text-indent:-15px">Net income
</div></td>
<td> </td>
<td align="left">$</td>
<td align="right">255,582</td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td align="left">$</td>
<td align="right">199,372</td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
</tr>
<tr style="font-size: 1px">
<td>
<div style="margin-left:15px; text-indent:-15px"> 
</div></td>
<td> </td>
<td nowrap="nowrap" colspan="2" align="right" style="border-top: 3px double #000000"> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td nowrap="nowrap" colspan="2" align="right" style="border-top: 3px double #000000"> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
</tr>
<tr valign="bottom"><!-- Blank Space -->
<td>
<div style="margin-left:15px; text-indent:-15px"> 
</div></td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
</tr>
<tr valign="bottom">
<td>
<div style="margin-left:15px; text-indent:-15px">Basic earnings per share:
</div></td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
</tr>
<tr valign="bottom" style="background: #cceeff">
<td>
<div style="margin-left:30px; text-indent:-15px">Income available to
common stockholders
</div></td>
<td> </td>
<td align="left">$</td>
<td align="right">255,582</td>
<td> </td>
<td> </td>
<td> </td>
<td align="right">487,282</td>
<td> </td>
<td> </td>
<td align="left">$</td>
<td align="right">0.52</td>
<td> </td>
<td> </td>
<td align="left">$</td>
<td align="right">199,372</td>
<td> </td>
<td> </td>
<td> </td>
<td align="right">483,491</td>
<td> </td>
<td> </td>
<td align="left">$</td>
<td align="right">0.41</td>
<td> </td>
</tr>
<tr style="font-size: 1px">
<td>
<div style="margin-left:15px; text-indent:-15px"> 
</div></td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td nowrap="nowrap" colspan="2" align="right" style="border-top: 3px double #000000"> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td nowrap="nowrap" colspan="2" align="right" style="border-top: 3px double #000000"> </td>
<td> </td>
</tr>
<tr valign="bottom">
<td>
<div style="margin-left:15px; text-indent:-15px">Effect of dilutive common
stock equivalents
</div></td>
<td> </td>
<td> </td>
<td align="right">—</td>
<td> </td>
<td> </td>
<td> </td>
<td align="right">3,479</td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td align="right">—</td>
<td> </td>
<td> </td>
<td> </td>
<td align="right">11,872</td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
</tr>
<tr style="font-size: 1px">
<td>
<div style="margin-left:15px; text-indent:-15px"> 
</div></td>
<td> </td>
<td nowrap="nowrap" colspan="2" align="right" style="border-top: 1px solid #000000"> </td>
<td> </td>
<td> </td>
<td nowrap="nowrap" colspan="2" align="right" style="border-top: 1px solid #000000"> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td nowrap="nowrap" colspan="2" align="right" style="border-top: 1px solid #000000"> </td>
<td> </td>
<td> </td>
<td nowrap="nowrap" colspan="2" align="right" style="border-top: 1px solid #000000"> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
</tr>
<tr style="font-size: 10pt">
<td> </td>
</tr>
<tr valign="bottom" style="background: #cceeff">
<td>
<div style="margin-left:15px; text-indent:-15px">Diluted earnings per share:
</div></td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
</tr>
<tr valign="bottom">
<td>
<div style="margin-left:30px; text-indent:-15px">Income available to
common stockholders
</div></td>
<td> </td>
<td align="left">$</td>
<td align="right">255,582</td>
<td> </td>
<td> </td>
<td> </td>
<td align="right">490,761</td>
<td> </td>
<td> </td>
<td align="left">$</td>
<td align="right">0.52</td>
<td> </td>
<td> </td>
<td align="left">$</td>
<td align="right">199,372</td>
<td> </td>
<td> </td>
<td> </td>
<td align="right">495,363</td>
<td> </td>
<td> </td>
<td align="left">$</td>
<td align="right">0.40</td>
<td> </td>
</tr>
<tr style="font-size: 1px">
<td>
<div style="margin-left:30px; text-indent:-15px"> 
</div></td>
<td> </td>
<td nowrap="nowrap" colspan="2" align="right" style="border-top: 3px double #000000"> </td>
<td> </td>
<td> </td>
<td nowrap="nowrap" colspan="2" align="right" style="border-top: 3px double #000000"> </td>
<td> </td>
<td> </td>
<td nowrap="nowrap" colspan="2" align="right" style="border-top: 3px double #000000"> </td>
<td> </td>
<td> </td>
<td nowrap="nowrap" colspan="2" align="right" style="border-top: 3px double #000000"> </td>
<td> </td>
<td> </td>
<td nowrap="nowrap" colspan="2" align="right" style="border-top: 3px double #000000"> </td>
<td> </td>
<td> </td>
<td nowrap="nowrap" colspan="2" align="right" style="border-top: 3px double #000000"> </td>
<td> </td>
</tr>
<!-- End Table Body -->
</table>
</div>
<!-- Folio -->
<!-- /Folio -->
</div>
<!-- PAGEBREAK -->
<div style="font-family: 'Times New Roman',Times,serif">
<div align="center" style="font-size: 10pt; margin-top: 0pt">
</div>
</div>
</body>
</html>
<!--DOCTYPE html PUBLIC "-//W3C//DTD XHTML 1.0 Transitional//EN" "http://www.w3.org/TR/xhtml1/DTD/xhtml1-transitional.dtd" -->
<html>
<head></head>
<body>
<!-- Begin Block Tagged Note 4 - us-gaap:InvestmentsInDebtAndMarketableEquitySecuritiesAndCertainTradingAssetsDisclosureTextBlock-->
<div style="font-family: 'Times New Roman',Times,serif">
<div align="left" style="font-size: 10pt; margin-top: 12pt"><b>4. Fair Value and Unrealized Losses of Securities</b>
</div>
<div align="left" style="font-size: 10pt; margin-top: 6pt">The following table shows the gross unrealized losses and fair value of the Company’s investments
with unrealized losses that are not deemed to be other-than-temporarily impaired, aggregated by
investment
category and length of time that individual securities have been in a continuous unrealized loss
position at June 30, 2009 and December 31, 2008.
</div>
<div align="center">
<table style="font-size: 10pt; text-align: left" cellspacing="0" border="0" cellpadding="0" width="100%">
<!-- Begin Table Head -->
<tr valign="bottom">
<td width="28%"> </td>
<td width="5%"> </td>
<td width="1%"> </td>
<td width="5%"> </td>
<td width="1%"> </td>
<td width="5%"> </td>
<td width="1%"> </td>
<td width="5%"> </td>
<td width="1%"> </td>
<td width="5%"> </td>
<td width="1%"> </td>
<td width="5%"> </td>
<td width="1%"> </td>
<td width="5%"> </td>
<td width="1%"> </td>
<td width="5%"> </td>
<td width="1%"> </td>
<td width="5%"> </td>
<td width="1%"> </td>
<td width="5%"> </td>
<td width="1%"> </td>
<td width="5%"> </td>
<td width="1%"> </td>
<td width="5%"> </td>
<td width="1%"> </td>
</tr>
<tr style="font-size: 8pt" valign="bottom">
<td> </td>
<td> </td>
<td nowrap="nowrap" align="center" colspan="6" style="border-bottom: 1px solid #000000"><b>Less Than 12 Months</b></td>
<td> </td>
<td> </td>
<td nowrap="nowrap" align="center" colspan="6" style="border-bottom: 1px solid #000000"><b>12 Months or Longer</b></td>
<td> </td>
<td> </td>
<td nowrap="nowrap" align="center" colspan="6" style="border-bottom: 1px solid #000000"><b>Total</b></td>
<td> </td>
</tr>
<tr style="font-size: 8pt" valign="bottom">
<td> </td>
<td> </td>
<td nowrap="nowrap" align="center" colspan="2"><b>Fair</b></td>
<td> </td>
<td> </td>
<td nowrap="nowrap" align="center" colspan="2"><b>Unrealized</b></td>
<td> </td>
<td> </td>
<td nowrap="nowrap" align="center" colspan="2"><b>Fair</b></td>
<td> </td>
<td> </td>
<td nowrap="nowrap" align="center" colspan="2"><b>Unrealized</b></td>
<td> </td>
<td> </td>
<td nowrap="nowrap" align="center" colspan="2"><b>Fair</b></td>
<td> </td>
<td> </td>
<td nowrap="nowrap" align="center" colspan="2"><b>Unrealized</b></td>
<td> </td>
</tr>
<tr style="font-size: 8pt" valign="bottom">
<td> </td>
<td> </td>
<td nowrap="nowrap" align="center" colspan="2" style="border-bottom: 1px solid #000000"><b>Value</b></td>
<td> </td>
<td> </td>
<td nowrap="nowrap" align="center" colspan="2" style="border-bottom: 1px solid #000000"><b>Losses</b></td>
<td> </td>
<td> </td>
<td nowrap="nowrap" align="center" colspan="2" style="border-bottom: 1px solid #000000"><b>Value</b></td>
<td> </td>
<td> </td>
<td nowrap="nowrap" align="center" colspan="2" style="border-bottom: 1px solid #000000"><b>Losses</b></td>
<td> </td>
<td> </td>
<td nowrap="nowrap" align="center" colspan="2" style="border-bottom: 1px solid #000000"><b>Value</b></td>
<td> </td>
<td> </td>
<td nowrap="nowrap" align="center" colspan="2" style="border-bottom: 1px solid #000000"><b>Losses</b></td>
<td> </td>
</tr>
<tr style="font-size: 8pt" valign="bottom">
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td nowrap="nowrap" align="center" colspan="6"><b>(In thousands)</b></td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
</tr>
<!-- End Table Head -->
<!-- Begin Table Body -->
<tr valign="bottom" style="background: #cceeff">
<td>
<div style="margin-left:15px; text-indent:-15px"><b>June 30, 2009</b>
</div></td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
</tr>
<tr valign="bottom"><!-- Blank Space -->
<td>
<div style="margin-left:15px; text-indent:-15px"> 
</div></td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
</tr>
<tr valign="bottom">
<td>
<div style="margin-left:15px; text-indent:-15px">Held to maturity:
</div></td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
</tr>
<tr valign="bottom" style="background: #cceeff">
<td>
<div style="margin-left:30px; text-indent:-15px">Investment securities
</div></td>
<td> </td>
<td align="left">$</td>
<td align="right">1,576,901</td>
<td> </td>
<td> </td>
<td nowrap="nowrap" align="left">$</td>
<td align="right">(22,128</td>
<td nowrap="nowrap">)</td>
<td> </td>
<td align="left">$</td>
<td align="right">—</td>
<td> </td>
<td> </td>
<td align="left">$</td>
<td align="right">—</td>
<td> </td>
<td> </td>
<td align="left">$</td>
<td align="right">1,576,901</td>
<td> </td>
<td> </td>
<td nowrap="nowrap" align="left">$</td>
<td align="right">(22,128</td>
<td nowrap="nowrap">)</td>
</tr>
<tr valign="bottom">
<td>
<div style="margin-left:30px; text-indent:-15px">Mortgage-backed securities
</div></td>
<td> </td>
<td> </td>
<td align="right">371,731</td>
<td> </td>
<td> </td>
<td nowrap="nowrap" align="left"> </td>
<td align="right">(7,695</td>
<td nowrap="nowrap">)</td>
<td> </td>
<td> </td>
<td align="right">238,907</td>
<td> </td>
<td> </td>
<td nowrap="nowrap" align="left"> </td>
<td align="right">(3,403</td>
<td nowrap="nowrap">)</td>
<td> </td>
<td> </td>
<td align="right">610,638</td>
<td> </td>
<td> </td>
<td nowrap="nowrap" align="left"> </td>
<td align="right">(11,098</td>
<td nowrap="nowrap">)</td>
</tr>
<tr style="font-size: 1px">
<td>
<div style="margin-left:30px; text-indent:-15px"> 
</div></td>
<td> </td>
<td nowrap="nowrap" colspan="2" align="right" style="border-top: 1px solid #000000"> </td>
<td> </td>
<td> </td>
<td nowrap="nowrap" colspan="2" align="right" style="border-top: 1px solid #000000"> </td>
<td> </td>
<td> </td>
<td nowrap="nowrap" colspan="2" align="right" style="border-top: 1px solid #000000"> </td>
<td> </td>
<td> </td>
<td nowrap="nowrap" colspan="2" align="right" style="border-top: 1px solid #000000"> </td>
<td> </td>
<td> </td>
<td nowrap="nowrap" colspan="2" align="right" style="border-top: 1px solid #000000"> </td>
<td> </td>
<td> </td>
<td nowrap="nowrap" colspan="2" align="right" style="border-top: 1px solid #000000"> </td>
<td> </td>
</tr>
<tr valign="bottom" style="background: #cceeff">
<td>
<div style="margin-left:45px; text-indent:-15px">Total temporarily impaired
securities held to maturity
</div></td>
<td> </td>
<td> </td>
<td align="right">1,948,632</td>
<td> </td>
<td> </td>
<td nowrap="nowrap" align="left"> </td>
<td align="right">(29,823</td>
<td nowrap="nowrap">)</td>
<td> </td>
<td> </td>
<td align="right">238,907</td>
<td> </td>
<td> </td>
<td nowrap="nowrap" align="left"> </td>
<td align="right">(3,403</td>
<td nowrap="nowrap">)</td>
<td> </td>
<td> </td>
<td align="right">2,187,539</td>
<td> </td>
<td> </td>
<td nowrap="nowrap" align="left"> </td>
<td align="right">(33,226</td>
<td nowrap="nowrap">)</td>
</tr>
<tr style="font-size: 1px">
<td>
<div style="margin-left:30px; text-indent:-15px"> 
</div></td>
<td> </td>
<td nowrap="nowrap" colspan="2" align="right" style="border-top: 1px solid #000000"> </td>
<td> </td>
<td> </td>
<td nowrap="nowrap" colspan="2" align="right" style="border-top: 1px solid #000000"> </td>
<td> </td>
<td> </td>
<td nowrap="nowrap" colspan="2" align="right" style="border-top: 1px solid #000000"> </td>
<td> </td>
<td> </td>
<td nowrap="nowrap" colspan="2" align="right" style="border-top: 1px solid #000000"> </td>
<td> </td>
<td> </td>
<td nowrap="nowrap" colspan="2" align="right" style="border-top: 1px solid #000000"> </td>
<td> </td>
<td> </td>
<td nowrap="nowrap" colspan="2" align="right" style="border-top: 1px solid #000000"> </td>
<td> </td>
</tr>
<tr valign="bottom"><!-- Blank Space -->
<td>
<div style="margin-left:15px; text-indent:-15px"> 
</div></td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
</tr>
<tr valign="bottom">
<td>
<div style="margin-left:15px; text-indent:-15px">Available for sale:
</div></td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
</tr>
<tr valign="bottom" style="background: #cceeff">
<td>
<div style="margin-left:30px; text-indent:-15px">Investment securities
</div></td>
<td> </td>
<td> </td>
<td align="right">762,331</td>
<td> </td>
<td> </td>
<td nowrap="nowrap" align="left"> </td>
<td align="right">(12,163</td>
<td nowrap="nowrap">)</td>
<td> </td>
<td> </td>
<td align="right">498,711</td>
<td> </td>
<td> </td>
<td nowrap="nowrap" align="left"> </td>
<td align="right">(1,229</td>
<td nowrap="nowrap">)</td>
<td> </td>
<td> </td>
<td align="right">1,261,042</td>
<td> </td>
<td> </td>
<td nowrap="nowrap" align="left"> </td>
<td align="right">(13,392</td>
<td nowrap="nowrap">)</td>
</tr>
<tr valign="bottom">
<td>
<div style="margin-left:30px; text-indent:-15px">Mortgage-backed securities
</div></td>
<td> </td>
<td> </td>
<td align="right">406,214</td>
<td> </td>
<td> </td>
<td nowrap="nowrap" align="left"> </td>
<td align="right">(3,192</td>
<td nowrap="nowrap">)</td>
<td> </td>
<td> </td>
<td align="right">92,576</td>
<td> </td>
<td> </td>
<td nowrap="nowrap" align="left"> </td>
<td align="right">(463</td>
<td nowrap="nowrap">)</td>
<td> </td>
<td> </td>
<td align="right">498,790</td>
<td> </td>
<td> </td>
<td nowrap="nowrap" align="left"> </td>
<td align="right">(3,655</td>
<td nowrap="nowrap">)</td>
</tr>
<tr style="font-size: 1px">
<td>
<div style="margin-left:30px; text-indent:-15px"> 
</div></td>
<td> </td>
<td nowrap="nowrap" colspan="2" align="right" style="border-top: 1px solid #000000"> </td>
<td> </td>
<td> </td>
<td nowrap="nowrap" colspan="2" align="right" style="border-top: 1px solid #000000"> </td>
<td> </td>
<td> </td>
<td nowrap="nowrap" colspan="2" align="right" style="border-top: 1px solid #000000"> </td>
<td> </td>
<td> </td>
<td nowrap="nowrap" colspan="2" align="right" style="border-top: 1px solid #000000"> </td>
<td> </td>
<td> </td>
<td nowrap="nowrap" colspan="2" align="right" style="border-top: 1px solid #000000"> </td>
<td> </td>
<td> </td>
<td nowrap="nowrap" colspan="2" align="right" style="border-top: 1px solid #000000"> </td>
<td> </td>
</tr>
<tr valign="bottom" style="background: #cceeff">
<td>
<div style="margin-left:45px; text-indent:-15px">Total temporarily impaired
securities available for sale
</div></td>
<td> </td>
<td> </td>
<td align="right">1,168,545</td>
<td> </td>
<td> </td>
<td nowrap="nowrap" align="left"> </td>
<td align="right">(15,355</td>
<td nowrap="nowrap">)</td>
<td> </td>
<td> </td>
<td align="right">591,287</td>
<td> </td>
<td> </td>
<td nowrap="nowrap" align="left"> </td>
<td align="right">(1,692</td>
<td nowrap="nowrap">)</td>
<td> </td>
<td> </td>
<td align="right">1,759,832</td>
<td> </td>
<td> </td>
<td nowrap="nowrap" align="left"> </td>
<td align="right">(17,047</td>
<td nowrap="nowrap">)</td>
</tr>
<tr style="font-size: 1px">
<td>
<div style="margin-left:30px; text-indent:-15px"> 
</div></td>
<td> </td>
<td nowrap="nowrap" colspan="2" align="right" style="border-top: 1px solid #000000"> </td>
<td> </td>
<td> </td>
<td nowrap="nowrap" colspan="2" align="right" style="border-top: 1px solid #000000"> </td>
<td> </td>
<td> </td>
<td nowrap="nowrap" colspan="2" align="right" style="border-top: 1px solid #000000"> </td>
<td> </td>
<td> </td>
<td nowrap="nowrap" colspan="2" align="right" style="border-top: 1px solid #000000"> </td>
<td> </td>
<td> </td>
<td nowrap="nowrap" colspan="2" align="right" style="border-top: 1px solid #000000"> </td>
<td> </td>
<td> </td>
<td nowrap="nowrap" colspan="2" align="right" style="border-top: 1px solid #000000"> </td>
<td> </td>
</tr>
<tr valign="bottom">
<td>
<div style="margin-left:75px; text-indent:-15px">Total
</div></td>
<td> </td>
<td align="left">$</td>
<td align="right">3,117,177</td>
<td> </td>
<td> </td>
<td nowrap="nowrap" align="left">$</td>
<td align="right">(45,178</td>
<td nowrap="nowrap">)</td>
<td> </td>
<td align="left">$</td>
<td align="right">830,194</td>
<td> </td>
<td> </td>
<td nowrap="nowrap" align="left">$</td>
<td align="right">(5,095</td>
<td nowrap="nowrap">)</td>
<td> </td>
<td align="left">$</td>
<td align="right">3,947,371</td>
<td> </td>
<td> </td>
<td nowrap="nowrap" align="left">$</td>
<td align="right">(50,273</td>
<td nowrap="nowrap">)</td>
</tr>
<tr style="font-size: 1px">
<td>
<div style="margin-left:30px; text-indent:-15px"> 
</div></td>
<td> </td>
<td nowrap="nowrap" colspan="2" align="right" style="border-top: 3px double #000000"> </td>
<td> </td>
<td> </td>
<td nowrap="nowrap" colspan="2" align="right" style="border-top: 3px double #000000"> </td>
<td> </td>
<td> </td>
<td nowrap="nowrap" colspan="2" align="right" style="border-top: 3px double #000000"> </td>
<td> </td>
<td> </td>
<td nowrap="nowrap" colspan="2" align="right" style="border-top: 3px double #000000"> </td>
<td> </td>
<td> </td>
<td nowrap="nowrap" colspan="2" align="right" style="border-top: 3px double #000000"> </td>
<td> </td>
<td> </td>
<td nowrap="nowrap" colspan="2" align="right" style="border-top: 3px double #000000"> </td>
<td> </td>
</tr>
<tr valign="bottom"><!-- Blank Space -->
<td>
<div style="margin-left:15px; text-indent:-15px"> 
</div></td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
</tr>
<tr valign="bottom" style="background: #cceeff">
<td>
<div style="margin-left:15px; text-indent:-15px"><b>December 31, 2008</b>
</div></td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
</tr>
<tr valign="bottom"><!-- Blank Space -->
<td>
<div style="margin-left:15px; text-indent:-15px"> 
</div></td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
</tr>
<tr valign="bottom">
<td>
<div style="margin-left:15px; text-indent:-15px">Held to maturity:
</div></td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
</tr>
<tr valign="bottom" style="background: #cceeff">
<td>
<div style="margin-left:30px; text-indent:-15px">Mortgage-backed securities
</div></td>
<td> </td>
<td align="left">$</td>
<td align="right">241,669</td>
<td> </td>
<td> </td>
<td nowrap="nowrap" align="left">$</td>
<td align="right">(1,873</td>
<td nowrap="nowrap">)</td>
<td> </td>
<td align="left">$</td>
<td align="right">628,203</td>
<td> </td>
<td> </td>
<td nowrap="nowrap" align="left">$</td>
<td align="right">(6,200</td>
<td nowrap="nowrap">)</td>
<td> </td>
<td align="left">$</td>
<td align="right">869,872</td>
<td> </td>
<td> </td>
<td nowrap="nowrap" align="left">$</td>
<td align="right">(8,073</td>
<td nowrap="nowrap">)</td>
</tr>
<tr style="font-size: 1px">
<td>
<div style="margin-left:30px; text-indent:-15px"> 
</div></td>
<td> </td>
<td nowrap="nowrap" colspan="2" align="right" style="border-top: 1px solid #000000"> </td>
<td> </td>
<td> </td>
<td nowrap="nowrap" colspan="2" align="right" style="border-top: 1px solid #000000"> </td>
<td> </td>
<td> </td>
<td nowrap="nowrap" colspan="2" align="right" style="border-top: 1px solid #000000"> </td>
<td> </td>
<td> </td>
<td nowrap="nowrap" colspan="2" align="right" style="border-top: 1px solid #000000"> </td>
<td> </td>
<td> </td>
<td nowrap="nowrap" colspan="2" align="right" style="border-top: 1px solid #000000"> </td>
<td> </td>
<td> </td>
<td nowrap="nowrap" colspan="2" align="right" style="border-top: 1px solid #000000"> </td>
<td> </td>
</tr>
<tr valign="bottom">
<td>
<div style="margin-left:45px; text-indent:-15px">Total temporarily impaired
securities held to maturity
</div></td>
<td> </td>
<td> </td>
<td align="right">241,669</td>
<td> </td>
<td> </td>
<td nowrap="nowrap" align="left"> </td>
<td align="right">(1,873</td>
<td nowrap="nowrap">)</td>
<td> </td>
<td> </td>
<td align="right">628,203</td>
<td> </td>
<td> </td>
<td nowrap="nowrap" align="left"> </td>
<td align="right">(6,200</td>
<td nowrap="nowrap">)</td>
<td> </td>
<td> </td>
<td align="right">869,872</td>
<td> </td>
<td> </td>
<td nowrap="nowrap" align="left"> </td>
<td align="right">(8,073</td>
<td nowrap="nowrap">)</td>
</tr>
<tr style="font-size: 1px">
<td>
<div style="margin-left:30px; text-indent:-15px"> 
</div></td>
<td> </td>
<td nowrap="nowrap" colspan="2" align="right" style="border-top: 1px solid #000000"> </td>
<td> </td>
<td> </td>
<td nowrap="nowrap" colspan="2" align="right" style="border-top: 1px solid #000000"> </td>
<td> </td>
<td> </td>
<td nowrap="nowrap" colspan="2" align="right" style="border-top: 1px solid #000000"> </td>
<td> </td>
<td> </td>
<td nowrap="nowrap" colspan="2" align="right" style="border-top: 1px solid #000000"> </td>
<td> </td>
<td> </td>
<td nowrap="nowrap" colspan="2" align="right" style="border-top: 1px solid #000000"> </td>
<td> </td>
<td> </td>
<td nowrap="nowrap" colspan="2" align="right" style="border-top: 1px solid #000000"> </td>
<td> </td>
</tr>
<tr style="font-size: 10pt">
<td> </td>
</tr>
<tr valign="bottom" style="background: #cceeff">
<td>
<div style="margin-left:15px; text-indent:-15px">Available for sale:
</div></td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
</tr>
<tr valign="bottom">
<td>
<div style="margin-left:30px; text-indent:-15px">Investment securities
</div></td>
<td> </td>
<td> </td>
<td align="right">594,907</td>
<td> </td>
<td> </td>
<td nowrap="nowrap" align="left"> </td>
<td align="right">(5,093</td>
<td nowrap="nowrap">)</td>
<td> </td>
<td> </td>
<td align="right">—</td>
<td> </td>
<td> </td>
<td> </td>
<td align="right">—</td>
<td> </td>
<td> </td>
<td> </td>
<td align="right">594,907</td>
<td> </td>
<td> </td>
<td nowrap="nowrap" align="left"> </td>
<td align="right">(5,093</td>
<td nowrap="nowrap">)</td>
</tr>
<tr valign="bottom" style="background: #cceeff">
<td>
<div style="margin-left:30px; text-indent:-15px">Mortgage-backed securities
</div></td>
<td> </td>
<td> </td>
<td align="right">408,040</td>
<td> </td>
<td> </td>
<td nowrap="nowrap" align="left"> </td>
<td align="right">(6,766</td>
<td nowrap="nowrap">)</td>
<td> </td>
<td> </td>
<td align="right">467,660</td>
<td> </td>
<td> </td>
<td nowrap="nowrap" align="left"> </td>
<td align="right">(18,109</td>
<td nowrap="nowrap">)</td>
<td> </td>
<td> </td>
<td align="right">875,700</td>
<td> </td>
<td> </td>
<td nowrap="nowrap" align="left"> </td>
<td align="right">(24,875</td>
<td nowrap="nowrap">)</td>
</tr>
<tr style="font-size: 1px">
<td>
<div style="margin-left:30px; text-indent:-15px"> 
</div></td>
<td> </td>
<td nowrap="nowrap" colspan="2" align="right" style="border-top: 1px solid #000000"> </td>
<td> </td>
<td> </td>
<td nowrap="nowrap" colspan="2" align="right" style="border-top: 1px solid #000000"> </td>
<td> </td>
<td> </td>
<td nowrap="nowrap" colspan="2" align="right" style="border-top: 1px solid #000000"> </td>
<td> </td>
<td> </td>
<td nowrap="nowrap" colspan="2" align="right" style="border-top: 1px solid #000000"> </td>
<td> </td>
<td> </td>
<td nowrap="nowrap" colspan="2" align="right" style="border-top: 1px solid #000000"> </td>
<td> </td>
<td> </td>
<td nowrap="nowrap" colspan="2" align="right" style="border-top: 1px solid #000000"> </td>
<td> </td>
</tr>
<tr valign="bottom">
<td>
<div style="margin-left:45px; text-indent:-15px">Total temporarily impaired
securities available for sale
</div></td>
<td> </td>
<td> </td>
<td align="right">1,002,947</td>
<td> </td>
<td> </td>
<td nowrap="nowrap" align="left"> </td>
<td align="right">(11,859</td>
<td nowrap="nowrap">)</td>
<td> </td>
<td> </td>
<td align="right">467,660</td>
<td> </td>
<td> </td>
<td nowrap="nowrap" align="left"> </td>
<td align="right">(18,109</td>
<td nowrap="nowrap">)</td>
<td> </td>
<td> </td>
<td align="right">1,470,607</td>
<td> </td>
<td> </td>
<td nowrap="nowrap" align="left"> </td>
<td align="right">(29,968</td>
<td nowrap="nowrap">)</td>
</tr>
<tr style="font-size: 1px">
<td>
<div style="margin-left:30px; text-indent:-15px"> 
</div></td>
<td> </td>
<td nowrap="nowrap" colspan="2" align="right" style="border-top: 1px solid #000000"> </td>
<td> </td>
<td> </td>
<td nowrap="nowrap" colspan="2" align="right" style="border-top: 1px solid #000000"> </td>
<td> </td>
<td> </td>
<td nowrap="nowrap" colspan="2" align="right" style="border-top: 1px solid #000000"> </td>
<td> </td>
<td> </td>
<td nowrap="nowrap" colspan="2" align="right" style="border-top: 1px solid #000000"> </td>
<td> </td>
<td> </td>
<td nowrap="nowrap" colspan="2" align="right" style="border-top: 1px solid #000000"> </td>
<td> </td>
<td> </td>
<td nowrap="nowrap" colspan="2" align="right" style="border-top: 1px solid #000000"> </td>
<td> </td>
</tr>
<tr valign="bottom" style="background: #cceeff">
<td>
<div style="margin-left:60px; text-indent:-15px">Total
</div></td>
<td> </td>
<td align="left">$</td>
<td align="right">1,244,616</td>
<td> </td>
<td> </td>
<td nowrap="nowrap" align="left">$</td>
<td align="right">(13,732</td>
<td nowrap="nowrap">)</td>
<td> </td>
<td align="left">$</td>
<td align="right">1,095,863</td>
<td> </td>
<td> </td>
<td nowrap="nowrap" align="left">$</td>
<td align="right">(24,309</td>
<td nowrap="nowrap">)</td>
<td> </td>
<td align="left">$</td>
<td align="right">2,340,479</td>
<td> </td>
<td> </td>
<td nowrap="nowrap" align="left">$</td>
<td align="right">(38,041</td>
<td nowrap="nowrap">)</td>
</tr>
<tr style="font-size: 1px">
<td>
<div style="margin-left:30px; text-indent:-15px"> 
</div></td>
<td> </td>
<td nowrap="nowrap" colspan="2" align="right" style="border-top: 3px double #000000"> </td>
<td> </td>
<td> </td>
<td nowrap="nowrap" colspan="2" align="right" style="border-top: 3px double #000000"> </td>
<td> </td>
<td> </td>
<td nowrap="nowrap" colspan="2" align="right" style="border-top: 3px double #000000"> </td>
<td> </td>
<td> </td>
<td nowrap="nowrap" colspan="2" align="right" style="border-top: 3px double #000000"> </td>
<td> </td>
<td> </td>
<td nowrap="nowrap" colspan="2" align="right" style="border-top: 3px double #000000"> </td>
<td> </td>
<td> </td>
<td nowrap="nowrap" colspan="2" align="right" style="border-top: 3px double #000000"> </td>
<td> </td>
</tr>
<!-- End Table Body -->
</table>
</div>
<div align="left" style="font-size: 10pt; margin-top: 6pt">The unrealized losses are primarily due to the changes in market interest rates subsequent to
purchase. We only purchase securities issued by U.S. Government-sponsored enterprises and do not
own any unrated or private label securities or other high-risk securities such as those backed by
sub-prime loans. Accordingly, it is expected that the securities would not be settled at a price
less than the Company’s amortized cost basis. We do not consider these investments to be
other-than-temporarily impaired at June 30, 2009 and December 31, 2008 since the decline in market
value is attributable to changes in interest rates and not credit quality and the Company has the
intent and ability to hold these investments until there is a full recovery of the unrealized loss,
which may be at maturity.
</div>
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<body>
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<div style="font-family: 'Times New Roman',Times,serif">
<div align="left" style="font-size: 10pt; margin-top: 12pt"><b>5. Stock Repurchase Programs</b>
</div>
<div align="left" style="font-size: 10pt; margin-top: 6pt">Under our previously announced stock repurchase programs, shares of Hudson City Bancorp common
stock may be purchased in the open market and through other privately negotiated transactions,
depending on market conditions. The repurchased shares are held as treasury stock, which may be
reissued for general corporate use. During the six months ended June 30, 2009, we purchased 4.0
million shares of our common
stock at an aggregate cost of $43.5 million. As of June 30, 2009,
there remained 50,123,550 shares to be purchased under the existing stock repurchase programs.
</div>
</div>
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<head></head>
<body>
<!-- Begin Block Tagged Note 6 - us-gaap:FairValueDisclosuresTextBlock-->
<div style="font-family: 'Times New Roman',Times,serif">
<div align="left" style="font-size: 10pt; margin-top: 12pt"><b>6. Fair Value Measurements</b>
</div>
<div align="left" style="font-size: 10pt; margin-top: 6pt">     <b><i>a) Fair Value Measurements</i></b>
</div>
<div align="left" style="font-size: 10pt; margin-top: 6pt">Statement of Financial Accounting Standards (“SFAS”) No. 157, “Fair Value Measurements,” defines
fair value, establishes a framework for measuring fair value and expands disclosures about fair
value measurements. SFAS No. 157 applies only to fair value measurements already required or
permitted by other accounting standards and does not impose requirements for additional fair value
measures. SFAS No. 157 was issued to increase consistency and comparability in reporting fair
values.
</div>
<div align="left" style="font-size: 10pt; margin-top: 6pt">We use fair value measurements to record fair value adjustments to certain assets and to determine
fair value disclosures. We did not have any liabilities that were measured at fair value at June
30, 2009. Our securities available-for-sale are recorded at fair value on a recurring basis.
Additionally, from time to time, we may be required to record at fair value other assets or
liabilities on a non-recurring basis, such as foreclosed real estate owned, certain impaired loans
and goodwill. These non-recurring fair value adjustments generally involve the write-down of
individual assets due to impairment losses.
</div>
<div align="left" style="font-size: 10pt; margin-top: 6pt">In accordance with SFAS No. 157, we group our assets at fair value in three levels, based on the
markets in which the assets are traded and the reliability of the assumptions used to determine
fair value. These levels are:
</div>
<div align="left" style="font-size: 10pt; margin-top: 6pt"><b>•</b> Level 1 — Valuation is based upon quoted prices for identical instruments traded in active
markets.
</div>
<div align="left" style="font-size: 10pt; margin-top: 6pt"><b>•</b> Level 2 — Valuation is based upon quoted prices for similar instruments in active markets,
quoted prices for identical or similar instruments in markets that are not active and model-based
valuation techniques for which all significant assumptions are observable in the market.
</div>
<div align="left" style="font-size: 10pt; margin-top: 6pt"><b>•</b> Level 3 — Valuation is generated from model-based techniques that use significant assumptions
not observable in the market. These unobservable assumptions reflect our own estimates of
assumptions that market participants would use in pricing the asset or liability. Valuation
techniques include the use of option pricing models, discounted cash flow models and similar
techniques. The results cannot be determined with precision and may not be realized in an actual
sale or immediate settlement of the asset or liability.
</div>
<div align="left" style="font-size: 10pt; margin-top: 6pt">We base our fair values on the price that would be received to sell an asset in an orderly
transaction between market participants at the measurement date. SFAS No. 157 requires us to
maximize the use of observable inputs and minimize the use of unobservable inputs when measuring
fair value.
</div>
<div align="left" style="font-size: 10pt; margin-top: 6pt">Assets that we measure on a recurring basis are limited to our available-for-sale securities
portfolio. Our available-for-sale portfolio is carried at estimated fair value with any unrealized
gains and losses, net of taxes, reported as accumulated other comprehensive income or loss in
shareholders’ equity. Substantially all of our available-for-sale portfolio consists of
mortgage-backed securities and investment securities issued by government-sponsored enterprises.
The fair values for substantially all of these securities are obtained from an independent
nationally recognized pricing service. Based on the nature of our securities, our independent
pricing service provides us with prices which are categorized as Level 2 since quoted
prices in
active markets for identical assets are generally not available for the majority of securities in
our portfolio. Various modeling techniques are used to determine pricing for our mortgage-backed
securities, including option pricing and discounted cash flow models. The inputs to these models
include benchmark yields, reported trades, broker/dealer quotes, issuer spreads, two-sided markets,
benchmark securities, bids, offers and reference data. We also own equity securities with a
carrying value of $7.1 million for which fair values are obtained from quoted market prices in
active markets and, as such, are classified as Level 1.
</div>
<div align="left" style="font-size: 10pt; margin-top: 6pt">The following table provides the level of valuation assumptions used to determine the carrying
value of our assets measured at fair value on a recurring basis at June 30, 2009.
</div>
<div align="center">
<table style="font-size: 10pt; text-align: left" cellspacing="0" border="0" cellpadding="0" width="100%">
<!-- Begin Table Head -->
<tr valign="bottom">
<td width="42%"> </td>
<td width="5%"> </td>
<td width="1%"> </td>
<td width="5%"> </td>
<td width="1%"> </td>
<td width="8%" nowrap="nowrap">    </td>
<td width="1%"> </td>
<td width="5%"> </td>
<td width="1%"> </td>
<td width="5%"> </td>
<td width="1%"> </td>
<td width="5%"> </td>
<td width="1%"> </td>
<td width="5%"> </td>
<td width="1%"> </td>
<td width="5%"> </td>
<td width="1%"> </td>
</tr>
<tr style="font-size: 8pt" valign="bottom">
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td nowrap="nowrap" align="center" colspan="10" style="border-bottom: 1px solid #000000"><b>Fair Value Measurements at June 30, 2009</b></td>
<td> </td>
</tr>
<tr style="font-size: 8pt" valign="bottom">
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td nowrap="nowrap" align="center" colspan="2"><b>Quoted Prices in Active</b></td>
<td> </td>
<td> </td>
<td nowrap="nowrap" align="center" colspan="2"><b>Significant Other</b></td>
<td> </td>
<td> </td>
<td nowrap="nowrap" align="center" colspan="2"><b>Significant</b></td>
<td> </td>
</tr>
<tr style="font-size: 8pt" valign="bottom">
<td> </td>
<td> </td>
<td nowrap="nowrap" align="center" colspan="2"><b>Carrying</b></td>
<td> </td>
<td> </td>
<td nowrap="nowrap" align="center" colspan="2"><b>Markets for Identical</b></td>
<td> </td>
<td> </td>
<td nowrap="nowrap" align="center" colspan="2"><b>Observable Inputs</b></td>
<td> </td>
<td> </td>
<td nowrap="nowrap" align="center" colspan="2"><b>Unobservable Inputs</b></td>
<td> </td>
</tr>
<tr style="font-size: 8pt" valign="bottom">
<td nowrap="nowrap" align="left" style="border-bottom: 1px solid #000000"><b>Description</b></td>
<td nowrap="nowrap" align="center" colspan="3" style="border-bottom: 1px solid #000000"><b>Value</b></td>
<td> </td>
<td> </td>
<td nowrap="nowrap" align="center" colspan="2" style="border-bottom: 1px solid #000000"><b>Assets (Level 1)</b></td>
<td> </td>
<td> </td>
<td nowrap="nowrap" align="center" colspan="2" style="border-bottom: 1px solid #000000"><b>(Level 2)</b></td>
<td> </td>
<td> </td>
<td nowrap="nowrap" align="center" colspan="2" style="border-bottom: 1px solid #000000"><b>(Level 3)</b></td>
<td> </td>
</tr>
<tr style="font-size: 8pt" valign="bottom">
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td align="center" colspan="2">(In thousands)</td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
</tr>
<!-- End Table Head -->
<!-- Begin Table Body -->
<tr valign="bottom" style="background: #cceeff">
<td>
<div style="margin-left:15px; text-indent:-15px">Available for sale:
</div></td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
</tr>
<tr valign="bottom">
<td>
<div style="margin-left:30px; text-indent:-15px">Mortgage-backed securities
</div></td>
<td> </td>
<td align="left">$</td>
<td align="right">9,796,644</td>
<td> </td>
<td> </td>
<td align="left">$</td>
<td align="right">—</td>
<td> </td>
<td> </td>
<td align="left">$</td>
<td align="right">9,796,644</td>
<td> </td>
<td> </td>
<td align="left">$</td>
<td align="right">—</td>
<td> </td>
</tr>
<tr valign="bottom" style="background: #cceeff">
<td>
<div style="margin-left:30px; text-indent:-15px">Investment securities
</div></td>
<td> </td>
<td> </td>
<td align="right">2,209,470</td>
<td> </td>
<td> </td>
<td> </td>
<td align="right">7,069</td>
<td> </td>
<td> </td>
<td> </td>
<td align="right">2,202,401</td>
<td> </td>
<td> </td>
<td> </td>
<td align="right">—</td>
<td> </td>
</tr>
<tr style="font-size: 1px">
<td>
<div style="margin-left:30px; text-indent:-15px"> 
</div></td>
<td> </td>
<td nowrap="nowrap" colspan="2" align="right" style="border-top: 1px solid #000000"> </td>
<td> </td>
<td> </td>
<td nowrap="nowrap" colspan="2" align="right" style="border-top: 1px solid #000000"> </td>
<td> </td>
<td> </td>
<td nowrap="nowrap" colspan="2" align="right" style="border-top: 1px solid #000000"> </td>
<td> </td>
<td> </td>
<td nowrap="nowrap" colspan="2" align="right" style="border-top: 1px solid #000000"> </td>
<td> </td>
</tr>
<tr valign="bottom">
<td>
<div style="margin-left:45px; text-indent:-15px">Total available for sale
</div></td>
<td> </td>
<td align="left">$</td>
<td align="right">12,006,114</td>
<td> </td>
<td> </td>
<td align="left">$</td>
<td align="right">7,069</td>
<td> </td>
<td> </td>
<td align="left">$</td>
<td align="right">11,999,045</td>
<td> </td>
<td> </td>
<td align="left">$</td>
<td align="right">—</td>
<td> </td>
</tr>
<tr style="font-size: 1px">
<td>
<div style="margin-left:30px; text-indent:-15px"> 
</div></td>
<td> </td>
<td nowrap="nowrap" colspan="2" align="right" style="border-top: 3px double #000000"> </td>
<td> </td>
<td> </td>
<td nowrap="nowrap" colspan="2" align="right" style="border-top: 3px double #000000"> </td>
<td> </td>
<td> </td>
<td nowrap="nowrap" colspan="2" align="right" style="border-top: 3px double #000000"> </td>
<td> </td>
<td> </td>
<td nowrap="nowrap" colspan="2" align="right" style="border-top: 3px double #000000"> </td>
<td> </td>
</tr>
<!-- End Table Body -->
</table>
</div>
<div align="left" style="font-size: 10pt; margin-top: 6pt">Assets that were measured at fair value on a non-recurring basis at June 30, 2009 were limited
to non-performing commercial and construction loans that are collateral dependent and foreclosed
real estate. Collateral dependent loans evaluated for impairment amounted to $11.5 million at June
30, 2009. Based on this evaluation, we established an allowance for loan losses of $1.3 million
for such impaired loans. The provision for loan losses related to these loans amounted to $484,000
for the first six months of 2009. These impaired loans are individually assessed to determine that
the loan’s carrying value is not in excess of the fair value of the collateral, less estimated
selling costs. Since all of our impaired loans at June 30, 2009 are secured by real estate, fair
value is estimated through current appraisals, where practical, or an inspection and a comparison
of the property securing the loan with similar properties in the area by either a licensed
appraiser or real estate broker and, as such, are classified as Level 3.
</div>
<div align="left" style="font-size: 10pt; margin-top: 6pt">Foreclosed real estate represents real estate acquired as a result of foreclosure or by deed in
lieu of foreclosure and is carried, net of an allowance for losses, at the lower of cost or fair
value less estimated selling costs. Fair value is estimated through current appraisals, where
practical, or an inspection and a comparison of the property securing the loan with similar
properties in the area by either a licensed appraiser or real estate broker and, as such,
foreclosed real estate properties are classified as Level 3. Foreclosed real estate at June 30,
2009 amounted to $11.8 million. During the first six months of 2009, charge-offs to the allowance
for loan losses related to loans that were transferred to foreclosed real estate amounted to $1.8
million. Write downs and net loss on sale related to foreclosed real estate that were charged to
non-interest expense amounted to $1.6 million for that same period.
</div>
<!-- Folio -->
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</div>
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<div style="font-family: 'Times New Roman',Times,serif">
<div align="center" style="font-size: 10pt; margin-top: 0pt">
</div>
<div align="left" style="font-size: 10pt; margin-top: 6pt">The following table provides the level of valuation assumptions used to determine the carrying
value of our assets measured at fair value on a non-recurring basis at June 30, 2009.
</div>
<div align="center">
<table style="font-size: 10pt; text-align: left" cellspacing="0" border="0" cellpadding="0" width="100%">
<!-- Begin Table Head -->
<tr valign="bottom">
<td width="44%"> </td>
<td width="10%"> </td>
<td width="3%"> </td>
<td width="1%"> </td>
<td width="3%"> </td>
<td width="5%"> </td>
<td width="3%"> </td>
<td width="1%"> </td>
<td width="3%"> </td>
<td width="5%"> </td>
<td width="3%"> </td>
<td width="1%"> </td>
<td width="3%"> </td>
</tr>
<tr style="font-size: 8pt" valign="bottom">
<td> </td>
<td> </td>
<td nowrap="nowrap" align="center" colspan="11" style="border-bottom: 1px solid #000000"><b>Fair Value Measurements at June 30, 2009</b></td>
</tr>
<tr style="font-size: 8pt" valign="bottom">
<td> </td>
<td> </td>
<td nowrap="nowrap" align="center" colspan="3"><b>Quoted Prices in Active</b></td>
<td> </td>
<td nowrap="nowrap" align="center" colspan="3"><b>Significant Other</b></td>
<td> </td>
<td nowrap="nowrap" align="center" colspan="3"><b>Significant</b></td>
</tr>
<tr style="font-size: 8pt" valign="bottom">
<td> </td>
<td> </td>
<td nowrap="nowrap" align="center" colspan="3"><b>Markets for Identical</b></td>
<td> </td>
<td nowrap="nowrap" align="center" colspan="3"><b>Observable Inputs</b></td>
<td> </td>
<td nowrap="nowrap" align="center" colspan="3"><b>Unobservable Inputs</b></td>
</tr>
<tr style="font-size: 8pt" valign="bottom">
<td nowrap="nowrap" align="left" style="border-bottom: 1px solid #000000"><b>Description</b></td>
<td> </td>
<td nowrap="nowrap" align="center" colspan="3" style="border-bottom: 1px solid #000000"><b>Assets (Level 1)</b></td>
<td> </td>
<td nowrap="nowrap" align="center" colspan="3" style="border-bottom: 1px solid #000000"><b>(Level 2)</b></td>
<td> </td>
<td nowrap="nowrap" align="center" colspan="3" style="border-bottom: 1px solid #000000"><b>(Level 3)</b></td>
</tr>
<tr style="font-size: 8pt" valign="bottom">
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td align="center" colspan="3">(In thousands)</td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
</tr>
<!-- End Table Head -->
<!-- Begin Table Body -->
<tr valign="bottom">
<td>
<div style="margin-left:15px; text-indent:-15px">Impaired loans
</div></td>
<td> </td>
<td align="right">$</td>
<td align="right">—</td>
<td> </td>
<td> </td>
<td align="right">$</td>
<td align="right">—</td>
<td> </td>
<td> </td>
<td align="right">$</td>
<td align="right">11,497</td>
<td> </td>
</tr>
<tr valign="bottom">
<td>
<div style="margin-left:15px; text-indent:-15px">Foreclosed real estate
</div></td>
<td> </td>
<td> </td>
<td align="right">—</td>
<td> </td>
<td> </td>
<td> </td>
<td align="right">—</td>
<td> </td>
<td> </td>
<td> </td>
<td align="right">11,798</td>
<td> </td>
</tr>
<!-- End Table Body -->
</table>
</div>
<div align="left" style="font-size: 10pt; margin-top: 12pt">     <b><i>b) Fair Value Disclosures</i></b>
</div>
<div align="left" style="font-size: 10pt; margin-top: 6pt">The fair value of financial instruments represents the estimated amounts at which the asset or
liability could be exchanged in a current transaction between willing parties, other than in a
forced liquidation sale. These estimates are subjective in nature, involve uncertainties and
matters of judgment and, therefore, cannot be determined with precision. Changes in assumptions
could significantly affect the estimates. Further, certain tax implications related to the
realization of the unrealized gains and losses could have a substantial impact on these fair value
estimates and have not been incorporated into any of the estimates.
</div>
<div align="left" style="font-size: 10pt; margin-top: 6pt">Carrying amounts of cash, due from banks and federal funds sold are considered to approximate fair
value. The carrying value of Federal Home Loan Bank of New York (“FHLB”) stock equals cost. The
fair value of FHLB stock is based on redemption at par value.
</div>
<div align="left" style="font-size: 10pt; margin-top: 6pt">The fair value of one- to four-family mortgages and home equity loans are generally estimated using
the present value of expected future cash flows, assuming future prepayments and using market rates
for new loans with comparable credit risk.
</div>
<div align="left" style="font-size: 10pt; margin-top: 6pt">For time deposits and fixed-maturity borrowed funds, the fair value is estimated by discounting
estimated future cash flows using currently offered rates. Structured borrowed funds are valued
using an option valuation model which uses assumptions for anticipated calls of borrowings based on
market interest rates and weighted-average life. For deposit liabilities payable on demand, the
fair value is the carrying value at the reporting date. There is no material difference between
the fair value and the carrying amounts recognized with respect to our off-balance sheet
commitments.
</div>
<div align="left" style="font-size: 10pt; margin-top: 6pt">Other important elements that are not deemed to be financial assets or liabilities and, therefore,
not considered in these estimates include the value of Hudson City Bancorp’s retail branch delivery
system, its existing core deposit base and banking premises and equipment.
</div>
<!-- Folio -->
<!-- /Folio -->
</div>
<!-- PAGEBREAK -->
<div style="font-family: 'Times New Roman',Times,serif">
<div align="center" style="font-size: 10pt; margin-top: 0pt">
</div>
<div align="left" style="font-size: 10pt; margin-top: 6pt">The estimated fair value of Hudson City Bancorp’s financial instruments are summarized as follows:
</div>
<div align="center">
<table style="font-size: 10pt; text-align: left" cellspacing="0" border="0" cellpadding="0" width="100%">
<!-- Begin Table Head -->
<tr valign="bottom">
<td width="52%"> </td>
<td width="5%"> </td>
<td width="1%"> </td>
<td width="5%"> </td>
<td width="1%"> </td>
<td width="5%"> </td>
<td width="1%"> </td>
<td width="5%"> </td>
<td width="1%"> </td>
<td width="5%"> </td>
<td width="1%"> </td>
<td width="5%"> </td>
<td width="1%"> </td>
<td width="5%"> </td>
<td width="1%"> </td>
<td width="5%"> </td>
<td width="1%"> </td>
</tr>
<tr style="font-size: 8pt" valign="bottom">
<td> </td>
<td> </td>
<td nowrap="nowrap" align="center" colspan="6" style="border-bottom: 1px solid #000000"><b>June 30, 2009</b></td>
<td style="border-bottom: 1px solid #000000"> </td>
<td style="border-bottom: 1px solid #000000"> </td>
<td nowrap="nowrap" align="center" colspan="6" style="border-bottom: 1px solid #000000"><b>December 31, 2008</b></td>
<td> </td>
</tr>
<tr style="font-size: 8pt" valign="bottom">
<td> </td>
<td> </td>
<td nowrap="nowrap" align="center" colspan="2"><b>Carrying</b></td>
<td> </td>
<td> </td>
<td nowrap="nowrap" align="center" colspan="2"><b>Estimated</b></td>
<td> </td>
<td> </td>
<td nowrap="nowrap" align="center" colspan="2"><b>Carrying</b></td>
<td> </td>
<td> </td>
<td nowrap="nowrap" align="center" colspan="2"><b>Estimated</b></td>
<td> </td>
</tr>
<tr style="font-size: 8pt" valign="bottom">
<td> </td>
<td> </td>
<td nowrap="nowrap" align="center" colspan="2" style="border-bottom: 1px solid #000000"><b>Amount</b></td>
<td style="border-bottom: 1px solid #000000"> </td>
<td style="border-bottom: 1px solid #000000"> </td>
<td nowrap="nowrap" align="center" colspan="2" style="border-bottom: 1px solid #000000"><b>Fair Value</b></td>
<td style="border-bottom: 1px solid #000000"> </td>
<td style="border-bottom: 1px solid #000000"> </td>
<td nowrap="nowrap" align="center" colspan="2" style="border-bottom: 1px solid #000000"><b>Amount</b></td>
<td style="border-bottom: 1px solid #000000"> </td>
<td style="border-bottom: 1px solid #000000"> </td>
<td nowrap="nowrap" align="center" colspan="2" style="border-bottom: 1px solid #000000"><b>Fair Value</b></td>
<td> </td>
</tr>
<tr style="font-size: 8pt" valign="bottom">
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td nowrap="nowrap" align="center" colspan="6">(In thousands)</td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
</tr>
<!-- End Table Head -->
<!-- Begin Table Body -->
<tr valign="bottom" style="background: #cceeff">
<td align="center">
<div style="margin-left:15px; text-indent:-15px"><b>Assets:</b>
</div></td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
</tr>
<tr valign="bottom">
<td>
<div style="margin-left:15px; text-indent:-15px">Cash and due from banks
</div></td>
<td> </td>
<td align="left">$</td>
<td align="right">281,376</td>
<td> </td>
<td> </td>
<td align="left">$</td>
<td align="right">281,376</td>
<td> </td>
<td> </td>
<td align="left">$</td>
<td align="right">184,915</td>
<td> </td>
<td> </td>
<td align="left">$</td>
<td align="right">184,915</td>
<td> </td>
</tr>
<tr valign="bottom" style="background: #cceeff">
<td>
<div style="margin-left:15px; text-indent:-15px">Federal funds sold
</div></td>
<td> </td>
<td> </td>
<td align="right">330,735</td>
<td> </td>
<td> </td>
<td> </td>
<td align="right">330,735</td>
<td> </td>
<td> </td>
<td> </td>
<td align="right">76,896</td>
<td> </td>
<td> </td>
<td> </td>
<td align="right">76,896</td>
<td> </td>
</tr>
<tr valign="bottom">
<td>
<div style="margin-left:15px; text-indent:-15px">Investment securities held to maturity
</div></td>
<td> </td>
<td> </td>
<td align="right">2,289,869</td>
<td> </td>
<td> </td>
<td> </td>
<td align="right">2,269,082</td>
<td> </td>
<td> </td>
<td> </td>
<td align="right">50,086</td>
<td> </td>
<td> </td>
<td> </td>
<td align="right">50,512</td>
<td> </td>
</tr>
<tr valign="bottom" style="background: #cceeff">
<td>
<div style="margin-left:15px; text-indent:-15px">Investment securities available for sale
</div></td>
<td> </td>
<td> </td>
<td align="right">2,209,470</td>
<td> </td>
<td> </td>
<td> </td>
<td align="right">2,209,470</td>
<td> </td>
<td> </td>
<td> </td>
<td align="right">3,413,633</td>
<td> </td>
<td> </td>
<td> </td>
<td align="right">3,413,633</td>
<td> </td>
</tr>
<tr valign="bottom">
<td>
<div style="margin-left:15px; text-indent:-15px">Federal Home Loan Bank of New York stock
</div></td>
<td> </td>
<td> </td>
<td align="right">877,017</td>
<td> </td>
<td> </td>
<td> </td>
<td align="right">877,017</td>
<td> </td>
<td> </td>
<td> </td>
<td align="right">865,570</td>
<td> </td>
<td> </td>
<td> </td>
<td align="right">865,570</td>
<td> </td>
</tr>
<tr valign="bottom" style="background: #cceeff">
<td>
<div style="margin-left:15px; text-indent:-15px">Mortgage-backed securities held to maturity
</div></td>
<td> </td>
<td> </td>
<td align="right">10,322,782</td>
<td> </td>
<td> </td>
<td> </td>
<td align="right">10,614,747</td>
<td> </td>
<td> </td>
<td> </td>
<td align="right">9,572,257</td>
<td> </td>
<td> </td>
<td> </td>
<td align="right">9,695,445</td>
<td> </td>
</tr>
<tr valign="bottom">
<td>
<div style="margin-left:15px; text-indent:-15px">Mortgage-backed securities available for sale
</div></td>
<td> </td>
<td> </td>
<td align="right">9,796,644</td>
<td> </td>
<td> </td>
<td> </td>
<td align="right">9,796,644</td>
<td> </td>
<td> </td>
<td> </td>
<td align="right">9,915,554</td>
<td> </td>
<td> </td>
<td> </td>
<td align="right">9,915,554</td>
<td> </td>
</tr>
<tr valign="bottom" style="background: #cceeff">
<td>
<div style="margin-left:15px; text-indent:-15px">Loans
</div></td>
<td> </td>
<td> </td>
<td align="right">30,718,887</td>
<td> </td>
<td> </td>
<td> </td>
<td align="right">31,223,956</td>
<td> </td>
<td> </td>
<td> </td>
<td align="right">29,440,761</td>
<td> </td>
<td> </td>
<td> </td>
<td align="right">29,743,919</td>
<td> </td>
</tr>
<tr valign="bottom">
<td align="center">
<div style="margin-left:15px; text-indent:-15px"><b>Liabilities:</b>
</div></td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
</tr>
<tr valign="bottom" style="background: #cceeff">
<td>
<div style="margin-left:15px; text-indent:-15px">Deposits
</div></td>
<td> </td>
<td> </td>
<td align="right">21,692,265</td>
<td> </td>
<td> </td>
<td> </td>
<td align="right">21,795,516</td>
<td> </td>
<td> </td>
<td> </td>
<td align="right">18,464,042</td>
<td> </td>
<td> </td>
<td> </td>
<td align="right">18,486,681</td>
<td> </td>
</tr>
<tr valign="bottom">
<td>
<div style="margin-left:15px; text-indent:-15px">Borrowed funds
</div></td>
<td> </td>
<td> </td>
<td align="right">30,025,000</td>
<td> </td>
<td> </td>
<td> </td>
<td align="right">32,595,682</td>
<td> </td>
<td> </td>
<td> </td>
<td align="right">30,225,000</td>
<td> </td>
<td> </td>
<td> </td>
<td align="right">34,156,052</td>
<td> </td>
</tr>
<!-- End Table Body -->
</table>
</div>
</div>
</body>
</html>
<!--DOCTYPE html PUBLIC "-//W3C//DTD XHTML 1.0 Transitional//EN" "http://www.w3.org/TR/xhtml1/DTD/xhtml1-transitional.dtd" -->
<html>
<head></head>
<body>
<!-- Begin Block Tagged Note 7 - us-gaap:PensionAndOtherPostretirementBenefitsDisclosureTextBlock-->
<div style="font-family: 'Times New Roman',Times,serif">
<div align="left" style="font-size: 10pt; margin-top: 12pt"><b>7. Postretirement Benefit Plans</b>
</div>
<div align="left" style="font-size: 10pt; margin-top: 6pt">We maintain non-contributory retirement and post-retirement plans to cover employees hired prior to
August 1, 2005, including retired employees, who have met the eligibility requirements of the
plans. Benefits under the qualified and non-qualified defined benefit retirement plans are based
primarily on years of service and compensation. Funding of the qualified retirement plan is
actuarially determined on an annual basis. It is our policy to fund the qualified retirement plan
sufficiently to meet the minimum requirements set forth in the Employee Retirement Income Security
Act of 1974. The non-qualified retirement plan, which is maintained for certain employees, is
unfunded.
</div>
<div align="left" style="font-size: 10pt; margin-top: 6pt">In 2005, we limited participation in the non-contributory retirement plan and the post-retirement
benefit plan to those employees hired on or before July 31, 2005. We also placed a cap on paid
medical expenses at the 2007 rate, beginning in 2008, for those eligible employees who retire after
December 31, 2005. As part of our acquisition of Sound Federal Bancorp (“Sound Federal”) in 2006,
participation in the Sound Federal retirement plans and the accrual of benefits for such plans were
frozen as of the acquisition date.
</div>
<!-- Folio -->
<!-- /Folio -->
</div>
<!-- PAGEBREAK -->
<div style="font-family: 'Times New Roman',Times,serif">
<div align="center" style="font-size: 10pt; margin-top: 0pt">
</div>
<div align="left" style="font-size: 10pt; margin-top: 6pt">The components of the net periodic expense for the plans were as follows:
</div>
<div align="center">
<table style="font-size: 10pt; text-align: left" cellspacing="0" border="0" cellpadding="0" width="100%">
<!-- Begin Table Head -->
<tr valign="bottom">
<td width="52%"> </td>
<td width="5%"> </td>
<td width="1%"> </td>
<td width="5%"> </td>
<td width="1%"> </td>
<td width="5%"> </td>
<td width="1%"> </td>
<td width="5%"> </td>
<td width="1%"> </td>
<td width="5%"> </td>
<td width="1%"> </td>
<td width="5%"> </td>
<td width="1%"> </td>
<td width="5%"> </td>
<td width="1%"> </td>
<td width="5%"> </td>
<td width="1%"> </td>
</tr>
<tr style="font-size: 8pt" valign="bottom">
<td> </td>
<td> </td>
<td nowrap="nowrap" align="center" colspan="14" style="border-bottom: 1px solid #000000"><b>For the Three Months Ended June 30,</b></td>
<td> </td>
</tr>
<tr style="font-size: 8pt" valign="bottom">
<td> </td>
<td> </td>
<td nowrap="nowrap" align="center" colspan="6" style="border-bottom: 1px solid #000000"><b>Retirement Plans</b></td>
<td> </td>
<td> </td>
<td nowrap="nowrap" align="center" colspan="6" style="border-bottom: 1px solid #000000"><b>Other Benefits</b></td>
<td> </td>
</tr>
<tr style="font-size: 8pt" valign="bottom">
<td> </td>
<td> </td>
<td nowrap="nowrap" align="center" colspan="2" style="border-bottom: 1px solid #000000"><b>2009</b></td>
<td> </td>
<td> </td>
<td nowrap="nowrap" align="center" colspan="2" style="border-bottom: 1px solid #000000"><b>2008</b></td>
<td> </td>
<td> </td>
<td nowrap="nowrap" align="center" colspan="2" style="border-bottom: 1px solid #000000"><b>2009</b></td>
<td> </td>
<td> </td>
<td nowrap="nowrap" align="center" colspan="2" style="border-bottom: 1px solid #000000"><b>2008</b></td>
<td> </td>
</tr>
<tr style="font-size: 8pt" valign="bottom">
<td> </td>
<td> </td>
<td nowrap="nowrap" align="center" colspan="14"><b>(In thousands)</b></td>
<td> </td>
</tr>
<!-- End Table Head -->
<!-- Begin Table Body -->
<tr valign="bottom" style="background: #cceeff">
<td>
<div style="margin-left:15px; text-indent:-15px">Service cost
</div></td>
<td> </td>
<td align="left">$</td>
<td align="right">1,003</td>
<td> </td>
<td> </td>
<td align="left">$</td>
<td align="right">881</td>
<td> </td>
<td> </td>
<td align="left">$</td>
<td align="right">234</td>
<td> </td>
<td> </td>
<td align="left">$</td>
<td align="right">253</td>
<td> </td>
</tr>
<tr valign="bottom">
<td>
<div style="margin-left:15px; text-indent:-15px">Interest cost
</div></td>
<td> </td>
<td> </td>
<td align="right">1,863</td>
<td> </td>
<td> </td>
<td> </td>
<td align="right">1,682</td>
<td> </td>
<td> </td>
<td> </td>
<td align="right">529</td>
<td> </td>
<td> </td>
<td> </td>
<td align="right">544</td>
<td> </td>
</tr>
<tr valign="bottom" style="background: #cceeff">
<td>
<div style="margin-left:15px; text-indent:-15px">Expected return on assets
</div></td>
<td> </td>
<td nowrap="nowrap" align="left"> </td>
<td align="right">(1,939</td>
<td nowrap="nowrap">)</td>
<td> </td>
<td nowrap="nowrap" align="left"> </td>
<td align="right">(2,135</td>
<td nowrap="nowrap">)</td>
<td> </td>
<td> </td>
<td align="right">—</td>
<td> </td>
<td> </td>
<td> </td>
<td align="right">—</td>
<td> </td>
</tr>
<tr valign="bottom">
<td>
<div style="margin-left:15px; text-indent:-15px">Amortization of:
</div></td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
</tr>
<tr valign="bottom" style="background: #cceeff">
<td>
<div style="margin-left:30px; text-indent:-15px">Net loss
</div></td>
<td> </td>
<td> </td>
<td align="right">824</td>
<td> </td>
<td> </td>
<td> </td>
<td align="right">81</td>
<td> </td>
<td> </td>
<td> </td>
<td align="right">128</td>
<td> </td>
<td> </td>
<td> </td>
<td align="right">141</td>
<td> </td>
</tr>
<tr valign="bottom">
<td>
<div style="margin-left:30px; text-indent:-15px">Unrecognized prior service cost
</div></td>
<td> </td>
<td> </td>
<td align="right">85</td>
<td> </td>
<td> </td>
<td> </td>
<td align="right">82</td>
<td> </td>
<td> </td>
<td nowrap="nowrap" align="left"> </td>
<td align="right">(391</td>
<td nowrap="nowrap">)</td>
<td> </td>
<td nowrap="nowrap" align="left"> </td>
<td align="right">(391</td>
<td nowrap="nowrap">)</td>
</tr>
<tr style="font-size: 1px">
<td>
<div style="margin-left:15px; text-indent:-15px"> 
</div></td>
<td> </td>
<td nowrap="nowrap" colspan="2" align="right" style="border-top: 1px solid #000000"> </td>
<td> </td>
<td> </td>
<td nowrap="nowrap" colspan="2" align="right" style="border-top: 1px solid #000000"> </td>
<td> </td>
<td> </td>
<td nowrap="nowrap" colspan="2" align="right" style="border-top: 1px solid #000000"> </td>
<td> </td>
<td> </td>
<td nowrap="nowrap" colspan="2" align="right" style="border-top: 1px solid #000000"> </td>
<td> </td>
</tr>
<tr valign="bottom"><!-- Blank Space -->
<td>
<div style="margin-left:15px; text-indent:-15px"> 
</div></td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
</tr>
<tr valign="bottom" style="background: #cceeff">
<td>
<div style="margin-left:45px; text-indent:-15px">Net periodic benefit cost
</div></td>
<td> </td>
<td align="left">$</td>
<td align="right">1,836</td>
<td> </td>
<td> </td>
<td align="left">$</td>
<td align="right">591</td>
<td> </td>
<td> </td>
<td align="left">$</td>
<td align="right">500</td>
<td> </td>
<td> </td>
<td align="left">$</td>
<td align="right">547</td>
<td> </td>
</tr>
<tr style="font-size: 1px">
<td>
<div style="margin-left:15px; text-indent:-15px"> 
</div></td>
<td> </td>
<td nowrap="nowrap" colspan="2" align="right" style="border-top: 3px double #000000"> </td>
<td> </td>
<td> </td>
<td nowrap="nowrap" colspan="2" align="right" style="border-top: 3px double #000000"> </td>
<td> </td>
<td> </td>
<td nowrap="nowrap" colspan="2" align="right" style="border-top: 3px double #000000"> </td>
<td> </td>
<td> </td>
<td nowrap="nowrap" colspan="2" align="right" style="border-top: 3px double #000000"> </td>
<td> </td>
</tr>
<!-- End Table Body -->
</table>
</div>
<div align="center">
<table style="font-size: 10pt; text-align: left" cellspacing="0" border="0" cellpadding="0" width="100%">
<!-- Begin Table Head -->
<tr valign="bottom">
<td width="52%"> </td>
<td width="5%"> </td>
<td width="1%"> </td>
<td width="5%"> </td>
<td width="1%"> </td>
<td width="5%"> </td>
<td width="1%"> </td>
<td width="5%"> </td>
<td width="1%"> </td>
<td width="5%"> </td>
<td width="1%"> </td>
<td width="5%"> </td>
<td width="1%"> </td>
<td width="5%"> </td>
<td width="1%"> </td>
<td width="5%"> </td>
<td width="1%"> </td>
</tr>
<tr style="font-size: 8pt" valign="bottom">
<td> </td>
<td> </td>
<td nowrap="nowrap" align="center" colspan="14" style="border-bottom: 1px solid #000000"><b>For the Six Months Ended June 30,</b></td>
<td> </td>
</tr>
<tr style="font-size: 8pt" valign="bottom">
<td> </td>
<td> </td>
<td nowrap="nowrap" align="center" colspan="6" style="border-bottom: 1px solid #000000"><b>Retirement Plans</b></td>
<td> </td>
<td> </td>
<td nowrap="nowrap" align="center" colspan="6" style="border-bottom: 1px solid #000000"><b>Other Benefits</b></td>
<td> </td>
</tr>
<tr style="font-size: 8pt" valign="bottom">
<td> </td>
<td> </td>
<td nowrap="nowrap" align="center" colspan="2" style="border-bottom: 1px solid #000000"><b>2009</b></td>
<td> </td>
<td> </td>
<td nowrap="nowrap" align="center" colspan="2" style="border-bottom: 1px solid #000000"><b>2008</b></td>
<td> </td>
<td> </td>
<td nowrap="nowrap" align="center" colspan="2" style="border-bottom: 1px solid #000000"><b>2009</b></td>
<td> </td>
<td> </td>
<td nowrap="nowrap" align="center" colspan="2" style="border-bottom: 1px solid #000000"><b>2008</b></td>
<td> </td>
</tr>
<tr style="font-size: 8pt" valign="bottom">
<td> </td>
<td> </td>
<td nowrap="nowrap" align="center" colspan="14"><b>(In thousands)</b></td>
<td> </td>
</tr>
<!-- End Table Head -->
<!-- Begin Table Body -->
<tr valign="bottom" style="background: #cceeff">
<td>
<div style="margin-left:15px; text-indent:-15px">Service cost
</div></td>
<td> </td>
<td> </td>
<td align="right">2,006</td>
<td> </td>
<td> </td>
<td> </td>
<td align="right">1,762</td>
<td> </td>
<td> </td>
<td> </td>
<td align="right">468</td>
<td> </td>
<td> </td>
<td> </td>
<td align="right">506</td>
<td> </td>
</tr>
<tr valign="bottom">
<td>
<div style="margin-left:15px; text-indent:-15px">Interest cost
</div></td>
<td> </td>
<td> </td>
<td align="right">3,726</td>
<td> </td>
<td> </td>
<td> </td>
<td align="right">3,364</td>
<td> </td>
<td> </td>
<td> </td>
<td align="right">1,058</td>
<td> </td>
<td> </td>
<td> </td>
<td align="right">1,088</td>
<td> </td>
</tr>
<tr valign="bottom" style="background: #cceeff">
<td>
<div style="margin-left:15px; text-indent:-15px">Expected return on assets
</div></td>
<td> </td>
<td nowrap="nowrap" align="left"> </td>
<td align="right">(3,878</td>
<td nowrap="nowrap">)</td>
<td> </td>
<td nowrap="nowrap" align="left"> </td>
<td align="right">(4,270</td>
<td nowrap="nowrap">)</td>
<td> </td>
<td> </td>
<td align="right">—</td>
<td> </td>
<td> </td>
<td> </td>
<td align="right">—</td>
<td> </td>
</tr>
<tr valign="bottom">
<td>
<div style="margin-left:15px; text-indent:-15px">Amortization of:
</div></td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
</tr>
<tr valign="bottom" style="background: #cceeff">
<td>
<div style="margin-left:30px; text-indent:-15px">Net loss
</div></td>
<td> </td>
<td> </td>
<td align="right">1,648</td>
<td> </td>
<td> </td>
<td> </td>
<td align="right">162</td>
<td> </td>
<td> </td>
<td> </td>
<td align="right">256</td>
<td> </td>
<td> </td>
<td> </td>
<td align="right">282</td>
<td> </td>
</tr>
<tr valign="bottom">
<td>
<div style="margin-left:30px; text-indent:-15px">Unrecognized prior service cost
</div></td>
<td> </td>
<td> </td>
<td align="right">170</td>
<td> </td>
<td> </td>
<td> </td>
<td align="right">164</td>
<td> </td>
<td> </td>
<td nowrap="nowrap" align="left"> </td>
<td align="right">(782</td>
<td nowrap="nowrap">)</td>
<td> </td>
<td nowrap="nowrap" align="left"> </td>
<td align="right">(782</td>
<td nowrap="nowrap">)</td>
</tr>
<tr style="font-size: 1px">
<td>
<div style="margin-left:15px; text-indent:-15px"> 
</div></td>
<td> </td>
<td nowrap="nowrap" colspan="2" align="right" style="border-top: 1px solid #000000"> </td>
<td> </td>
<td> </td>
<td nowrap="nowrap" colspan="2" align="right" style="border-top: 1px solid #000000"> </td>
<td> </td>
<td> </td>
<td nowrap="nowrap" colspan="2" align="right" style="border-top: 1px solid #000000"> </td>
<td> </td>
<td> </td>
<td nowrap="nowrap" colspan="2" align="right" style="border-top: 1px solid #000000"> </td>
<td> </td>
</tr>
<tr valign="bottom"><!-- Blank Space -->
<td>
<div style="margin-left:15px; text-indent:-15px"> 
</div></td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
</tr>
<tr valign="bottom" style="background: #cceeff">
<td>
<div style="margin-left:45px; text-indent:-15px">Net periodic benefit cost
</div></td>
<td> </td>
<td> </td>
<td align="right">3,672</td>
<td> </td>
<td> </td>
<td> </td>
<td align="right">1,182</td>
<td> </td>
<td> </td>
<td> </td>
<td align="right">1,000</td>
<td> </td>
<td> </td>
<td> </td>
<td align="right">1,094</td>
<td> </td>
</tr>
<tr style="font-size: 1px">
<td>
<div style="margin-left:15px; text-indent:-15px"> 
</div></td>
<td> </td>
<td nowrap="nowrap" colspan="2" align="right" style="border-top: 3px double #000000"> </td>
<td> </td>
<td> </td>
<td nowrap="nowrap" colspan="2" align="right" style="border-top: 3px double #000000"> </td>
<td> </td>
<td> </td>
<td nowrap="nowrap" colspan="2" align="right" style="border-top: 3px double #000000"> </td>
<td> </td>
<td> </td>
<td nowrap="nowrap" colspan="2" align="right" style="border-top: 3px double #000000"> </td>
<td> </td>
</tr>
<!-- End Table Body -->
</table>
</div>
<div align="left" style="font-size: 10pt; margin-top: 6pt">We made no contributions to the pension plans during the first six months of 2009 or 2008.
</div>
</div>
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<head></head>
<body>
<!-- Begin Block Tagged Note 8 - us-gaap:DisclosureOfCompensationRelatedCostsShareBasedPaymentsTextBlock-->
<div style="font-family: 'Times New Roman',Times,serif">
<div align="left" style="font-size: 10pt; margin-top: 12pt"><b>8. Stock-Based Compensation</b>
</div>
<div align="left" style="font-size: 10pt; margin-top: 6pt"><i>Stock Option Plans</i>
</div>
<div align="left" style="font-size: 10pt; margin-top: 6pt">A summary of the changes in outstanding stock options is as follows:
</div>
<div align="center">
<table style="font-size: 10pt; text-align: left" cellspacing="0" border="0" cellpadding="0" width="100%">
<!-- Begin Table Head -->
<tr valign="bottom">
<td width="52%"> </td>
<td width="5%"> </td>
<td width="1%"> </td>
<td width="5%"> </td>
<td width="1%"> </td>
<td width="5%"> </td>
<td width="1%"> </td>
<td width="5%"> </td>
<td width="1%"> </td>
<td width="5%"> </td>
<td width="1%"> </td>
<td width="5%"> </td>
<td width="1%"> </td>
<td width="5%"> </td>
<td width="1%"> </td>
<td width="5%"> </td>
<td width="1%"> </td>
</tr>
<tr style="font-size: 8pt" valign="bottom">
<td> </td>
<td> </td>
<td nowrap="nowrap" align="center" colspan="14" style="border-bottom: 1px solid #000000"><b>Six Months Ended June 30,</b></td>
<td> </td>
</tr>
<tr style="font-size: 8pt" valign="bottom">
<td> </td>
<td> </td>
<td nowrap="nowrap" align="center" colspan="6" style="border-bottom: 1px solid #000000"><b>2009</b></td>
<td> </td>
<td> </td>
<td nowrap="nowrap" align="center" colspan="6" style="border-bottom: 1px solid #000000"><b>2008</b></td>
<td> </td>
</tr>
<tr style="font-size: 8pt" valign="bottom">
<td> </td>
<td> </td>
<td nowrap="nowrap" align="center" colspan="2"><b>Number of</b></td>
<td> </td>
<td> </td>
<td nowrap="nowrap" align="center" colspan="2"><b>Weighted</b></td>
<td> </td>
<td> </td>
<td nowrap="nowrap" align="center" colspan="2"><b>Number of</b></td>
<td> </td>
<td> </td>
<td nowrap="nowrap" align="center" colspan="2"><b>Weighted</b></td>
<td> </td>
</tr>
<tr style="font-size: 8pt" valign="bottom">
<td> </td>
<td> </td>
<td nowrap="nowrap" align="center" colspan="2"><b>Stock</b></td>
<td> </td>
<td> </td>
<td nowrap="nowrap" align="center" colspan="2"><b>Average</b></td>
<td> </td>
<td> </td>
<td nowrap="nowrap" align="center" colspan="2"><b>Stock</b></td>
<td> </td>
<td> </td>
<td nowrap="nowrap" align="center" colspan="2"><b>Average</b></td>
<td> </td>
</tr>
<tr style="font-size: 8pt" valign="bottom">
<td> </td>
<td> </td>
<td nowrap="nowrap" align="center" colspan="2" style="border-bottom: 1px solid #000000"><b>Options</b></td>
<td> </td>
<td> </td>
<td nowrap="nowrap" align="center" colspan="2" style="border-bottom: 1px solid #000000"><b>Exercise Price</b></td>
<td> </td>
<td> </td>
<td nowrap="nowrap" align="center" colspan="2" style="border-bottom: 1px solid #000000"><b>Options</b></td>
<td> </td>
<td> </td>
<td nowrap="nowrap" align="center" colspan="2" style="border-bottom: 1px solid #000000"><b>Exercise Price</b></td>
<td> </td>
</tr>
<!-- End Table Head -->
<!-- Begin Table Body -->
<tr valign="bottom" style="background: #cceeff">
<td>
<div style="margin-left:15px; text-indent:-15px">Outstanding at beginning of period
</div></td>
<td> </td>
<td> </td>
<td align="right">26,728,119</td>
<td> </td>
<td> </td>
<td align="left">$</td>
<td align="right">10.35</td>
<td> </td>
<td> </td>
<td> </td>
<td align="right">29,080,114</td>
<td> </td>
<td> </td>
<td align="left">$</td>
<td align="right">7.91</td>
<td> </td>
</tr>
<tr valign="bottom">
<td>
<div style="margin-left:30px; text-indent:-15px">Granted
</div></td>
<td> </td>
<td> </td>
<td align="right">3,375,000</td>
<td> </td>
<td> </td>
<td> </td>
<td align="right">12.11</td>
<td> </td>
<td> </td>
<td> </td>
<td align="right">4,025,000</td>
<td> </td>
<td> </td>
<td> </td>
<td align="right">15.96</td>
<td> </td>
</tr>
<tr valign="bottom" style="background: #cceeff">
<td>
<div style="margin-left:30px; text-indent:-15px">Exercised
</div></td>
<td> </td>
<td nowrap="nowrap" align="left"> </td>
<td align="right">(2,564,264</td>
<td nowrap="nowrap">)</td>
<td> </td>
<td> </td>
<td align="right">2.18</td>
<td> </td>
<td> </td>
<td nowrap="nowrap" align="left"> </td>
<td align="right">(1,133,031</td>
<td nowrap="nowrap">)</td>
<td> </td>
<td> </td>
<td align="right">3.78</td>
<td> </td>
</tr>
<tr valign="bottom">
<td>
<div style="margin-left:30px; text-indent:-15px">Forfeited
</div></td>
<td> </td>
<td> </td>
<td align="right">—</td>
<td> </td>
<td> </td>
<td> </td>
<td align="right">—</td>
<td> </td>
<td> </td>
<td> </td>
<td align="right">—</td>
<td> </td>
<td> </td>
<td> </td>
<td align="right">—</td>
<td> </td>
</tr>
<tr style="font-size: 1px">
<td>
<div style="margin-left:15px; text-indent:-15px"> 
</div></td>
<td> </td>
<td nowrap="nowrap" colspan="2" align="right" style="border-top: 1px solid #000000"> </td>
<td> </td>
<td> </td>
<td nowrap="nowrap" colspan="2" align="right" style="border-top: 0px solid #000000"> </td>
<td> </td>
<td> </td>
<td nowrap="nowrap" colspan="2" align="right" style="border-top: 1px solid #000000"> </td>
<td> </td>
<td> </td>
<td nowrap="nowrap" colspan="2" align="right" style="border-top: 0px solid #000000"> </td>
<td> </td>
</tr>
<tr valign="bottom"><!-- Blank Space -->
<td>
<div style="margin-left:15px; text-indent:-15px"> 
</div></td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
</tr>
<tr valign="bottom" style="background: #cceeff">
<td>
<div style="margin-left:15px; text-indent:-15px">Outstanding at end of period
</div></td>
<td> </td>
<td> </td>
<td align="right">27,538,855</td>
<td> </td>
<td> </td>
<td align="left">$</td>
<td align="right">11.33</td>
<td> </td>
<td> </td>
<td> </td>
<td align="right">31,972,083</td>
<td> </td>
<td> </td>
<td align="left">$</td>
<td align="right">9.07</td>
<td> </td>
</tr>
<tr style="font-size: 1px">
<td>
<div style="margin-left:15px; text-indent:-15px"> 
</div></td>
<td> </td>
<td nowrap="nowrap" colspan="2" align="right" style="border-top: 3px double #000000"> </td>
<td> </td>
<td> </td>
<td nowrap="nowrap" colspan="2" align="right" style="border-top: 0px double #000000"> </td>
<td> </td>
<td> </td>
<td nowrap="nowrap" colspan="2" align="right" style="border-top: 3px double #000000"> </td>
<td> </td>
<td> </td>
<td nowrap="nowrap" colspan="2" align="right" style="border-top: 0px double #000000"> </td>
<td> </td>
</tr>
<!-- End Table Body -->
</table>
</div>
<!-- Folio -->
<!-- /Folio -->
</div>
<!-- PAGEBREAK -->
<div style="font-family: 'Times New Roman',Times,serif">
<div align="center" style="font-size: 10pt; margin-top: 0pt">
</div>
<div align="left" style="font-size: 10pt; margin-top: 6pt">In June 2006, our shareholders approved the Hudson City Bancorp, Inc. 2006 Stock Incentive
Plan (the “SIP Plan”) authorizing us to grant up to 30,000,000 shares of common stock. In July
2006, the Compensation Committee of the Board of Directors of Hudson City Bancorp (the
“Committee”), authorized grants to each non-employee director, executive officers and other
employees to purchase shares of the Company’s common stock, pursuant to the SIP Plan. Grants were
made in 2006, 2007 and 2008 pursuant to the SIP Plan for 7,960,000, 3,527,500 and 4,025,000
options, respectively, at an exercise price equal to the fair value of our common stock on the
grant date, based on quoted market prices. Of
these options, 5,035,000 have vesting periods ranging from one to five years and an expiration
period of ten years. The remaining 10,477,500 shares have vesting periods ranging from two to
three years if certain financial performance measures are met. Subject to review and verification
by the Committee, we believe we attained these performance measures and have therefore recorded
compensation expense for the 2006, 2007 and 2008 grants.
</div>
<div align="left" style="font-size: 10pt; margin-top: 6pt">During 2009, the Committee authorized stock option grants (the “2009 grants”) pursuant to the SIP
Plan for 3,375,000 options at an exercise price equal to the fair value of our common stock on the
grant date, based on quoted market prices. Of these options, 2,875,000 will vest in January 2012 if
certain financial performance measures are met and employment continues through the vesting date.
The remaining 500,000 options will vest between January 2010 and April 2010. The 2009 grants have
an expiration period of ten years. We have determined it is probable these performance measures
will be met and have therefore recorded compensation expense for the 2009 grants.
</div>
<div align="left" style="font-size: 10pt; margin-top: 6pt">The fair value of the 2009 grants was estimated on the date of grant using the Black-Scholes
option-pricing model with the following weighted average assumptions. The per share
weighted-average fair value of the options granted during the six months ended June 30, 2009 was
$1.94.
</div>
<div align="center">
<table style="font-size: 10pt; text-align: left" cellspacing="0" border="0" cellpadding="0" width="100%">
<!-- Begin Table Head -->
<tr valign="bottom">
<td width="88%"> </td>
<td width="5%"> </td>
<td width="3%"> </td>
<td width="1%"> </td>
<td width="3%"> </td>
</tr>
<tr style="font-size: 8pt" valign="bottom">
<td> </td>
<td> </td>
<td nowrap="nowrap" align="center" colspan="3" style="border-bottom: 1px solid #000000"><b>2009</b></td>
</tr>
<!-- End Table Head -->
<!-- Begin Table Body -->
<tr valign="bottom" style="background: #cceeff">
<td>
<div style="margin-left:15px; text-indent:-15px">Expected dividend yield
</div></td>
<td> </td>
<td nowrap="nowrap" align="right"> </td>
<td align="right">4.80</td>
<td nowrap="nowrap">%</td>
</tr>
<tr valign="bottom">
<td>
<div style="margin-left:15px; text-indent:-15px">Expected volatility
</div></td>
<td> </td>
<td nowrap="nowrap" align="right"> </td>
<td align="right">29.72</td>
<td nowrap="nowrap">%</td>
</tr>
<tr valign="bottom" style="background: #cceeff">
<td>
<div style="margin-left:15px; text-indent:-15px">Risk-free interest rate
</div></td>
<td> </td>
<td nowrap="nowrap" align="right"> </td>
<td align="right">1.68</td>
<td nowrap="nowrap">%</td>
</tr>
<tr valign="bottom">
<td>
<div style="margin-left:15px; text-indent:-15px">Expected option life
</div></td>
<td> </td>
<td colspan="2" nowrap="nowrap" align="right">5.3 years</td>
<td> </td>
</tr>
<!-- End Table Body -->
</table>
</div>
<div align="left" style="font-size: 10pt; margin-top: 6pt">Compensation expense related to our outstanding stock options amounted to $3.2 million and $3.8
million for the three months ended June 30, 2009 and 2008, respectively, and $6.9 million and $7.5
million, for the six months ended June 30, 2009 and 2008, respectively.
</div>
<div align="left" style="font-size: 10pt; margin-top: 12pt"><i>Stock Awards</i>
</div>
<div align="left" style="font-size: 10pt; margin-top: 6pt">During 2009, the Committee authorized performance-based stock awards (the “2009 stock awards”)
pursuant to the SIP Plan for 847,750 shares of our common stock. These shares were issued from
Treasury Stock and will vest in annual installments over a three-year period if certain performance
measures are met and employment continues through the vesting date. None of these shares may be
sold or transferred before the January 2012 vesting date. We have determined that it is probable
these performance measures will be met and have therefore recorded compensation expense for the
2009 stock awards. Expense for the 2009 stock awards is recognized over the vesting period and is
based on the fair value of the shares on the grant date which was $12.03. In addition to the 2009
stock awards, we have 84,201 shares of unvested stock awards that were granted in prior years.
Total compensation expense for stock awards amounted to $1.1 million and $330,000 for each of the
three months ended June 30, 2009 and 2008, respectively, and $2.3 million and $701,000, for the six
months ended June 30, 2009 and 2008, respectively.
</div>
<!-- Folio -->
<!-- /Folio -->
</div>
<!-- PAGEBREAK -->
<div style="font-family: 'Times New Roman',Times,serif">
<div align="center" style="font-size: 10pt; margin-top: 0pt">
</div>
</div>
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<div style="font-family: 'Times New Roman',Times,serif">
<div align="left" style="font-size: 10pt; margin-top: 12pt"><b>9. Recent Accounting Pronouncements</b>
</div>
<div align="left" style="font-size: 10pt; margin-top: 6pt">In June 2009, the Financial Accounting Standards Board (“FASB”) issued SFAS No. 168,
“The FASB Accounting Standards Codification<sup style="font-size: 85%; vertical-align: text-top">TM </sup>(“Codification”) and the Hierarchy of
Generally Accepted
Accounting Principles—a replacement of FASB Statement No. 162”. The Codification will become the
source of authoritative U.S. generally accepted accounting principles (“GAAP”) recognized by the
FASB to be applied by non-governmental entities. Rules and interpretive releases of the SEC under
authority of federal securities laws are also sources of authoritative GAAP for SEC registrants. On
the effective date of this Statement, the Codification will supersede all then-existing non-SEC
accounting and reporting standards. All other non-grandfathered non-SEC accounting literature not
included in the Codification will become non-authoritative. This Statement is effective for
financial statements issued for interim and annual periods ending after September 15, 2009.
</div>
<div align="left" style="font-size: 10pt; margin-top: 6pt">In June 2009, the FASB issued SFAS No. 167, “Amendments to FASB Interpretation No. 46(R)”. SFAS No.
167 amends FASB Interpretation No. 46(R) to require an enterprise to perform an analysis to
determine whether the enterprise’s variable interest or interests give it a controlling financial
interest in a variable interest entity. This analysis identifies the primary beneficiary of a
variable interest entity as the enterprise that has both of the following characteristics:
</div>
<div style="margin-top: 6pt">
<table width="100%" border="0" cellpadding="0" cellspacing="0" style="font-size: 10pt; text-align: left">
<tr valign="top" style="font-size: 10pt; color: #000000; background: transparent">
<td width="4%" style="background: transparent"> </td>
<td width="3%" nowrap="nowrap" align="left">a.</td>
<td width="1%"> </td>
<td>The power to direct the activities of a variable interest entity that most
significantly impact the entity’s economic performance.</td>
</tr>
</table>
</div>
<div style="margin-top: 6pt">
<table width="100%" border="0" cellpadding="0" cellspacing="0" style="font-size: 10pt; text-align: left">
<tr valign="top" style="font-size: 10pt; color: #000000; background: transparent">
<td width="4%" style="background: transparent"> </td>
<td width="3%" nowrap="nowrap" align="left">b.</td>
<td width="1%"> </td>
<td>The obligation to absorb losses of the entity that could potentially be
significant to the variable interest entity or the right to receive benefits from the
entity that could potentially be significant to the variable interest entity.</td>
</tr>
</table>
</div>
<div align="left" style="font-size: 10pt; margin-top: 6pt">Additionally, an enterprise is required to assess whether it has an implicit financial
responsibility to ensure that a variable interest entity operates as designed when determining
whether it has the power to direct the activities of the variable interest entity that most
significantly impact the entity’s economic performance. This Statement is effective as of the
beginning of each reporting entity’s first annual reporting period that begins after November 15,
2009, for interim periods within that first annual reporting period, and for interim and annual
reporting periods thereafter. We do not expect that SFAS 167 will have a material impact on our
financial condition, results of operations or financial statement disclosures.
</div>
<div align="left" style="font-size: 10pt; margin-top: 6pt">In June 2009, the FASB issued SFAS No. 166, “Accounting for Transfers of Financial Assets—an
amendment of FASB Statement No. 140”. This Statement defines the term “participating interest” to
establish specific conditions for reporting a transfer of a portion of a financial asset as a sale.
If the transfer does not meet those conditions, a transferor should account for the transfer as a
sale only if it transfers an entire financial asset or a group of entire financial assets and
surrenders control over the entire transferred asset(s) in accordance with the conditions in
paragraph 9 of Statement 140, as amended by this Statement. The special provisions in FASB
Statement No. 140 and FASB Statement No. 65, Accounting for Certain Mortgage Banking Activities<i>,</i>
for guaranteed mortgage securitizations are removed to require those securitizations to be treated
the same as any other transfer of financial assets within the scope of FASB Statement No. 140, as
amended by this Statement. If such a transfer does not meet the requirements for sale accounting,
the securitized mortgage loans should continue to be classified as loans in the transferor’s
statement of financial position. This Statement requires that a transferor recognize and initially
measure at fair value all assets obtained (including a transferor’s beneficial interest) and
liabilities incurred as a result of a transfer of financial assets accounted for as a sale. This
Statement is effective as of the beginning of each reporting entity’s first annual reporting period
that begins after November 15, 2009, for interim periods within that first annual reporting period,
and for interim and annual reporting periods
thereafter. We do not expect that SFAS No. 166 will
have a material impact on our financial condition, results of operations or financial statement
disclosures.
</div>
<div align="left" style="font-size: 10pt; margin-top: 6pt">In May 2009, the FASB issued SFAS No. 165, “Subsequent Events”. SFAS No. 165 establishes general
standards of accounting for and disclosure of events that occur after the balance sheet date but
before financial statements are issued or are available to be issued. SFAS No. 165 sets forth (a)
the period after the balance sheet date during which an entity should evaluate events or
transactions that may occur for potential recognition or disclosure in the financial statements,
(b) the circumstances under which an entity should recognize events or transactions occurring after
the balance sheet date in its financial statements and (c) the disclosures that an entity should
make about events or transactions that occurred after the balance sheet date. SFAS No. 165 does
not result in significant changes in the subsequent events an entity reports, either through
recognition or disclosure, in the financial statements. SFAS No. 165 requires the disclosure of
the date through which an entity has evaluated subsequent events and the basis for that date, that
is, whether that date represents the date the financial statements were issued or were available to
be issued. SFAS No. 165 was effective for interim and annual periods after June 15, 2009. Our
adoption of SFAS No. 165 did not have any effect on our financial condition, results of operations
or financial statement disclosures.
</div>
<div align="left" style="font-size: 10pt; margin-top: 6pt">In April 2009, the FASB issued Staff Position, or FSP, FAS 157-4, “Determining Fair Value When the
Volume and Level of Activity for the Asset or Liability Have Significantly Decreased and
Identifying Transactions That Are Not Orderly”. This FSP provides additional guidance for
estimating fair value in accordance with FASB Statement No. 157, “Fair Value Measurements”, when
the volume and level of activity for the asset or liability have significantly decreased. This FSP
notes that a reporting entity should evaluate various factors to determine whether there has been a
significant decrease in the volume and activity for the asset or liability when compared with
normal activity for the asset or liability. These factors include, but are not limited to: few
recent transactions (based on volume and level of activity in the market), price quotations are not
based on current information, price quotations vary substantially over time or among market makers,
indexes that previously were highly correlated with the fair values of the asset are demonstrably
uncorrelated with recent fair values, abnormal liquidity risk premiums or implied yields for quoted
prices when compared with reasonable estimates of credit and other non-performance risk for the
asset class, abnormally wide bid-ask spread or significant increases in the bid-ask spread, and
little information is released publicly. If the reporting entity concludes there has been a
significant decrease in the volume or activity for the asset or liability in relation to normal
market activity, then further analysis of the transactions or quoted prices is needed. This would
include a change in valuation technique or the use of multiple valuation techniques to assist in
the determination of a fair value of the asset or liability. This FSP was effective for interim and
annual periods ending after June 15, 2009 and is to be applied prospectively. Early adoption is
permitted for periods ending after (but not before) March 15, 2009. Our adoption of FSP FAS 157-4
effective April 1, 2009, did not have a material impact on our financial condition, results of
operations or financial statement disclosures.
</div>
<div align="left" style="font-size: 10pt; margin-top: 6pt">In April 2009, the FASB issued FSP FAS 107-1 and Accounting Principles Board (“APB”) No. 28-1,
“Interim Disclosures about Fair Value of Financial Instruments”. This FSP amends the disclosure
requirements in SFAS No. 107, “Disclosures about Fair Value of Financial Instruments”, to require
disclosures about fair value of financial instruments in interim financial statements as well as in
annual financial statements. This FSP also amends APB No. 28, “Interim Financial Reporting”, to
require such disclosures in all interim financial statements. This FSP requires an entity to
disclose in the body or in the accompanying notes of its interim financial statements and its
annual financial statements the fair value of all financial instruments, whether recognized or not
recognized in the statements of financial position, as required by SFAS No. 107. Fair value
information disclosed in the interim period notes will be presented
together with the related
carrying amount in a form that makes it clear whether the fair value and carrying amount represent
assets or liabilities and how the carrying amount relates to what is reported in the statements of
financial position. An entity will also disclose the methods and significant assumptions used
to estimate the fair value of financial instruments. This FSP was effective for interim reporting
periods ending after June 15, 2009, with early adoption permitted for periods ending after March
15, 2009. We adopted this FSP in the second quarter of 2009 and have provided the required
interim period disclosures.
</div>
<div align="left" style="font-size: 10pt; margin-top: 6pt">In April 2009, the FASB issued FSP FAS 115-2 and FAS 124-2, “Recognition and Presentation of
Other-Than-Temporary Impairments”. This FSP amends the other-than-temporary impairment guidance in
U.S. generally accepted accounting principles for debt securities to make the guidance more
operational and to improve the presentation and disclosure of other-than-temporary impairments on
debt and equity securities in the financial statements. This FSP requires that an entity assess
whether an impairment of a debt security is other-than-temporary and, as part of that assessment,
determine its intent and ability to hold the security. If the entity intends to sell the debt
security, an other-than-temporary impairment shall be considered to have occurred. In addition, an
other-than-temporary impairment shall be considered to have occurred if it is more likely than not
that it will be required to sell the security before recovery of its amortized cost.
Other-than-temporary impairments that are attributable to credit losses are to be recognized in
income with the remaining decline in the fair value of a security recognized in other comprehensive
income. This FSP was effective for interim and annual reporting periods ending after June 15,
2009, with early adoption permitted for periods ending after (but not before) March 15, 2009. We
adopted FSP FAS 115-2 and FAS 124-2 effective April 1, 2009 which did not have a material impact on
our financial condition, results of operations or financial statement disclosures.
</div>
<div align="left" style="font-size: 10pt; margin-top: 6pt">In January 2009, the FASB issued FSP No. EITF 99-20-1 which amends the guidance in Issue No. 99-20
“Recognition of Interest Income and Impairment on Purchased Beneficial Interests and Beneficial
Interests That Continue to Be Held by a Transferor in Securitized Financial Assets,” to achieve
more consistent determination of whether an other-than-temporary impairment has occurred. This FSP
retains and emphasizes the other-than-temporary impairment assessment guidance and required
disclosures in SFAS No. 115, FSP FAS 115-1 and FAS 124-1, “The Meaning of Other-Than-Temporary
Impairment and Its Application to Certain Investments”, SEC Staff Accounting Bulletin Topic 5M,
“Other Than Temporary Impairment of Certain Investments in Debt and Equity Securities”, and other
related literature. This FSP was effective for interim and annual reporting periods ending after
December 15, 2008. FSP No. EITF 99-20-1 did not have any effect on our financial condition,
results of operations or financial statement disclosures.
</div>
<div align="left" style="font-size: 10pt; margin-top: 6pt">In June 2008, FASB issued FSP No. EITF 03-6-1, “Determining Whether Instruments Granted in
Share-Based Payment Transactions are Participating Securities,” which addresses whether such
instruments are participating securities prior to vesting and, therefore, need to be included in
the earnings allocation in computing earnings per share (“EPS”) under the two-class method
described in SFAS No. 128, “Earnings per Share.” The FSP concluded that unvested share-based
payment awards that contain nonforfeitable rights to dividends or dividend equivalents are
participating securities and shall be included in the computation of EPS pursuant to the two-class
method. Our restricted stock awards are considered participating securities. FSP No. EITF 03-6-1
is effective for fiscal years beginning after December 15, 2008 and interim periods within those
years. All prior-period EPS data presented shall be adjusted retrospectively to conform with the
provisions of the FSP. FSP No. EITF 03-6-1 did not have a material impact on our computation of
EPS.
</div>
<div align="left" style="font-size: 10pt; margin-top: 6pt">In December 2007, the FASB issued SFAS No. 160, “Non-controlling Interests in Consolidated
Financial Statements — an amendment of ARB No. 51”, which establishes accounting and reporting
standards for the
non-controlling interest in a subsidiary and for the deconsolidation of a
subsidiary. SFAS No. 160 clarifies that a non-controlling interest in a subsidiary is an ownership
interest in the consolidated entity that should be reported as equity in the consolidated financial
statements. SFAS No. 160 requires that a
parent recognize a gain or loss in net income when a subsidiary is deconsolidated. A parent
deconsolidates a subsidiary as of the date the parent ceases to have a controlling financial
interest in the subsidiary. If a parent retains a non-controlling equity investment in the former
subsidiary, that investment is measured at its fair value. The gain or loss on the deconsolidation
of the subsidiary is measured using the fair value of the non-controlling equity investment. SFAS
No. 160 requires expanded disclosures in the consolidated financial statements that clearly
identify and distinguish between the interests of the controlling (parent) and the non-controlling
owners of a subsidiary. This includes a reconciliation of the beginning and ending balances of the
equity attributable to the parent and the non-controlling owners and a schedule showing the effects
of changes in a parent’s ownership interest in a subsidiary on the equity attributable to the
parent. SFAS No. 160 is effective for fiscal years, and interim periods within those fiscal years,
beginning on or after December 15, 2008 (that is, January 1, 2009, for Hudson City Bancorp). The
adoption of SFAS No. 160 did not have any impact on our financial condition or results of
operations.
</div>
</div>
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--12-31
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