Hudson City Bancorp
| Company type | Public |
|---|---|
| Industry | Banking |
| Predecessor | Hudson City Savings Bank |
| Founded | March 27, 1868 (as Hudson City Savings Bank) |
| Fate | Acquired by M&T Bank |
| Headquarters | Paramus, New Jersey , United States |
Area served | New Jersey, New York, Connecticut |
Key people | Ronald E. Hermance, Jr. (former CEO and Chairman), Denis J. Salamone (CEO after 2014) |
| Products | Savings bank services, mortgage loans |
Number of employees | 1,300+ (2007) |
Hudson City Bancorp, Inc., headquartered in Paramus, New Jersey, served as the holding company for Hudson City Savings Bank, its only subsidiary and the largest savings institution in New Jersey, managing assets totaling US$50 billion. The company was publicly listed and included in the S&P 500 index. In 2005, it completed a secondary common stock offering valued at US$3.93 billion, marking the largest such transaction in U.S. banking history and ranking seventh among all domestic public offerings. During the housing market surge, the bank maintained a conservative risk profile and was recognized by Forbes as the "best bank of 2007". On August 27, 2012, M&T Bank announced its acquisition of Hudson City.
The corporate offices were situated at West 80 Century Road in Paramus, New Jersey.
Hudson City Savings Bank
Established by the New Jersey Legislature on March 27, 1868, Hudson City Savings Bank commenced operations in what was then the small community of Hudson City, New Jersey. Garrett D. Van Reipen, who served as Hudson City's first mayor, was appointed as the bank's initial president.
Following the incorporation of Hudson City into Jersey City, New Jersey during the early 1870s, the bank experienced steady growth, surpassing $1 million in combined assets and deposits by the end of the 19th century. Robert J. Rendall assumed the presidency in 1918 and maintained this role until his death in 1950, representing one of the longest leadership tenures in the bank’s history.
During the 1920s, expansion included opening a second branch and relocating headquarters to 587 Summit Avenue in Jersey City. The institution withstood the stock market crash of 1929 and emerged from the Great Depression with $11 million in assets and reserves amounting to $800,000. By the late 1940s, Hudson City Savings Bank operated at least three branches within Jersey City and held assets exceeding $26 million.
After Rendall’s passing in 1950, the bank leveraged New Jersey’s rapid postwar development throughout the 1950s. By 1959, total assets had grown beyond $50 million. Kenneth L. Birchby became president and CEO in 1968. Following legislative changes permitting banking operations across county lines in New Jersey, Hudson City opened its fifth branch—and its first outside its founding county—in Waldwick, Bergen County in 1969; total assets reached $175 million.
Despite economic difficulties during the 1970s, Hudson City Savings expanded to encompass 37 branches across 12 counties within New Jersey. In 1978, headquarters were relocated to Bergen County as both assets and deposits surpassed $1.1 billion. Leonard S. Gudelski took over as president in 1981 and steered the bank through periods of high inflation, an early-1980s recession, and the 1980s Savings and Loan crisis, a time when many competitors failed.
In 1988, Ronald E. Hermance, Jr., formerly CFO of Southold Savings Bank on Long Island, joined as senior executive vice president and chief operating officer. By 1989, Hudson City Savings operated a network of 69 branches with assets totaling $3.2 billion. After recovering from the recession of 1990-1991, it became New Jersey’s largest savings bank by 1992. Gudelski was elected chairman in 1996 while continuing to serve as president.
Hermance succeeded Gudelski as president in January 1997; Gudelski retained his chairman position. As of January 1, 2011, Hudson City Savings Bank maintained 136 branches: nine located in Fairfield County, Connecticut; twenty-nine throughout New York State; and ninety-eight spread across multiple counties in New Jersey including Bergen, Passaic, Morris, Warren, Essex, Hudson, Union, Somerset, Middlesex, Mercer, Monmouth, Ocean, Burlington, Camden, Atlantic, and Gloucester.
Hudson City Bancorp
In February 1999, the institution restructured itself as a fully owned subsidiary of Hudson City Bancorp, Inc. and successfully raised more than US$500 million through its initial stock offering. At that point, the bank's assets surpassed $8 billion. The Federal Reserve officially designated Hudson City Bancorp as the bank holding company on July 13, 1999. Ronald E. Hermance, Jr. continued as president and advanced from chief operating officer to chief executive officer of the holding company.
Effective January 1, 2004, the organization shifted its status from a bank holding company to a Domestic Entity Other under Federal Reserve regulations, in preparation for a significant stock issuance and conversion from mutual to stock ownership. On January 1, 2005, Hermance succeeded Gudelski as chairman while maintaining his positions as president and CEO. Additionally, in 2004, he joined the board of directors at the Federal Home Loan Bank of New York.
On June 8, 2005, Hudson City executed what was then the largest public stock offering in U.S. banking history by selling 393 million shares at $10 apiece and completing its transition to a fully public company. The shares began trading on NASDAQ under the ticker symbol HCBK.
By 2007, Hudson City Savings Bank had grown to become New Jersey’s largest savings bank and ranked as the third-largest savings and loan association nationwide. It managed assets exceeding $35 billion, operated over 100 branch locations across New Jersey, New York, and Connecticut, and employed more than 1,300 staff members. The company was added to the S&P 500 Index on February 14, 2007.
Financial and legal challenges
Throughout the subprime mortgage crisis, Hudson City earned a reputation for cautious management by upholding stringent credit criteria and steering clear of high-risk mortgage products. Forbes recognized it as the "best managed bank of 2007." Notably, it was the largest U.S. bank to decline federal bailout assistance; however, this decision resulted in a heavier debt burden compared to rivals who transferred troubled loans to government programs. By 2012, falling mortgage rates triggered waves of refinancing that weakened the bank’s financial position.
Despite avoiding collapse through conservative lending practices, government actions eventually eroded Hudson City’s competitive standing. The Federal Reserve’s aggressive interest rate reductions post-2008 enabled borrowers with prime jumbo loans to refinance into conforming loans at lower rates, diminishing the stability of Hudson City’s long-term assets. Moreover, protracted foreclosure timelines contributed to an increase in non-performing loans. These pressures—along with loss of prime clients and an inability to offer competitive mortgage products—pushed the institution toward acquisition.
Following Ronald Hermance’s passing in September 2014, Denis J. Salamone assumed the CEO role as outlined in succession plans.
In September 2015, Hudson City reached a $5.5 million settlement concerning allegations of discriminatory lending practices predominantly impacting Black and Latin-American communities.
M&T acquisition
On August 27, 2012, Hudson City Bancorp consented to a $3.7 billion acquisition by Buffalo-based M&T Bank. This transaction incorporated $25 billion in deposits, $28 billion in outstanding loans, and 135 branches—including 97 located in New Jersey—into M&T’s holdings. The merger experienced delays exceeding three years due to Federal Reserve scrutiny over M&T’s compliance with anti-money laundering regulations.
Federal Reserve approval was granted in September 2015, and on November 1, 2015, Hudson City officially became a subsidiary of M&T Bank. The merger’s duration of 1,129 days set a record for the longest postponed bank acquisition in history. Since then, Hudson City has operated under M&T’s umbrella with complete branch consolidation and rebranding targeted for completion by February 16.