Hudson City Bancorp (HCBK) announced yesterday its intention to change its regulator to the Office of the Comptroller of the Currency (OCC). Currently the bank is under the regulation of the Office of Thrift Supervision (OTS). The bank is planning to file an application with the OCC to change its organization from a savings bank to a nationalized bank.
The OCC regulates and supervises more than 1,500 national banks and 50 federal branches of foreign banks in the U.S., accounting for nearly two-thirds of the total assets of all U.S. commercial banks.
The motives behind such reorganization are ensuring safety and soundness of Hudson City Bank, continue with solid performance and growth in the banking industry and maintaining customers’ trust and confidence. The move by Hudson City comes as a “preemptive” action as reform proposals from the U.S. Treasury and Congress have offered to merge the OTS with the OCC.
Though the bank is planning to change its regulator, its business model will remain intact. The bank will continue to focus on attracting deposits and originating and purchasing first mortgage loans on residential properties.
Hudson City wants to stand on equal footing with its peers, most of which are regulated with the OCC. OTS supervises only a handful of thrifts, Hudson City being the biggest among them.
Hudson City has been able to maintain solid earnings and active capital management. For full year 2009, the bank posted a 19% year-over-year increase in earnings to $1.07 per share. Hudson City Bank remains well capitalized with tier-1 leverage ratio of 7.59% and a total risk-based capital ratio of 21.02%, compared to 7.09% and 23.25%, respectively, a year earlier. The strength of the bank is due to its focus on traditional banking.
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