Hudson City Bancorp in Paramus, N.J., reported a staggering plunge in earnings after an unexpected delay of its sale to M&T Bank.
The $36 billion-asset company's profit fell 86% from a year earlier, to $5.9 million. Earnings per share of 1 cent missed the average estimate of analysts that Bloomberg polled by a penny.
Hudson City said in a press release that it suspended the sale of certain securities in the first quarter in expectation of a May 1 closing; such sales have helped lift the company's results in prior quarters. Noninterest income fell 51%, to $8.7 million, largely because of a decrease in securities gains.
Management, which had taken other steps believing the sale would close, found out late on April 3 that the Federal Reserve Board was not ready to approve the deal. After reviewing its options, the company's board reaffirmed its support of the deal and the termination date was pushed back to October.
Net interest income fell 43%, to $75.6 million. The net interest margin compressed by 56 basis points, to 0.85%.
Noninterest expenses also decreased by 6%, to $74.8 million.
The company's efficiency ratio worsened to 87.97% at March 31, compared to 51.11% a year earlier.