Hudson City Bancorp Continues Growth Strategy With Projected Branch Openings

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Hudson City Bancorp, Inc., the largest savings bank headquartered in New Jersey and the third largest thrift in the country, will open its 111th branch on December 16.

It makes no risky home equity or auto loans, concentrating on lucrative jumbo mortgages to affluent individuals in the New York City suburbs.

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Hudson City Bancorp, Inc. (NASDAQ: HCBK), the largest savings bank headquartered in New Jersey and the third largest thrift in the country, will open its 111th branch on December 16.

Capitalizing on a successful strategy of expanding its footprint from its home base in New Jersey to contiguous high potential growth markets, Hudson City's total assets have grown from $11.4 billion (December 2001) to over $33 billion (September 2006); its deposits per branch ($116 million as of September 2006) dwarf the national average of FDIC-insured institutions ($64 million); and its market share in New Jersey continues its upward trajectory. According to a recent news report, "FDIC data showed Hudson City Savings Bank was among the biggest local market share gainers."

Hudson City embarked on its winning growth strategy in 2004 and since then has increased the number of branches by 37%--from 81 branches in 2004 to 111 branches in 2006. "The Bank's strategy is to expand our footprint to contiguous markets representing high potential," said Ronald E. Hermance, Jr., Hudson City's Chairman, President and Chief Executive Officer. "This strategy attracts customers looking for value in the aftermath of mergers. More times than not, when a commercial bank buys a thrift, the new management claims that the transaction will result in cost efficiencies. The reality, however, is that oftentimes those cost reductions are passed on to customers in the form of fewer branches, personnel turnover, lower deposit yields, and higher fees. As The Most Efficient Bank in America, Hudson City views these underserved markets as an excellent opportunity to introduce its traditional thrift model of 'Bank on Better Values.' "

According to a recent Fortune magazine article, Matthew Kelley, an analyst at Sterne, Agee and Leach, argues that the Bank stands out from its peers. "It makes no risky home equity or auto loans, concentrating on lucrative jumbo mortgages to affluent individuals in the New York City suburbs." Morningstar analyst Jaime Black agrees, writing in a recent report: "Hudson City knows what it is good at-prime mortgage lending-and sticks to it profitably."

The ability of Hudson City to replicate success in new markets is exemplified with the success it has experienced in the Long Island marketplace. Hudson City opened a branch in Southold, NY in late 2004 and less than a year later, the Southold branch broke a 138-year-old Bank branch record with $85 million in deposits--by paying the same deposit rates as in New Jersey. Since then, Hudson City has met significant success with the opening of its other Long Island branches in Hampton Bays, Southampton, Riverhead, and Westhampton.

Earlier this year, Hudson City announced the acquisition of Sound Federal Savings Bank. The combination provided the Bank with an opportunity to expand its franchise into Westchester County with eight branches, Fairfield County with four branches, and one branch in both Rockland and Putnam counties.

These four markets in New York and Connecticut are very similar to the existing markets of Hudson City in Bergen, Morris, and Suffolk counties--all considered among the nation's top 50 markets in median household income.

Furthermore, on Saturday, December 16, Hudson City will celebrate the opening of its 111th branch by opening its flagship branch on Staten Island, New York located at 4106 Hylan Boulevard in the Great Kills section of Staten Island, NY. This marks Hudson City's fourth branch opening in that market since making its debut there in August 2005.

There are currently nine more branch openings anticipated in 2007. The planned branches will be in Monroe, CT; Fairfield, CT; White Plains, NY; Greenport, NY; Center Moriches, NY; East Hampton, NY; Kendall Park, NJ; Old Bridge, NJ; and Aberdeen, NJ.

Hudson City Savings Bank, among the top fifty banks in the United States by asset size, is recognized as The Most Efficient Bank in the country. This enables Hudson City to deliver significant values to customers in the form of higher deposit yields, competitive mortgage rates, lower fees, and a straightforward, streamlined loan process. Hudson City, the largest savings bank headquartered in New Jersey, also serves customers throughout the surrounding metropolitan area with branches located in Westchester, Fairfield, Putnam, and Rockland counties, as well as in Long Island, Staten Island, and the New Jersey suburbs of Philadelphia. Deposit accounts at Hudson City are FDIC insured to the maximum allowed by law.

This release may contain certain "forward-looking statements" within the meaning of the Private Securities Litigation Reform Act of 1995, and may be identified by the use of such words as "may," "believe," "expect," "anticipate," "should," "plan," "estimate," "predict," "continue," and "potential" or the negative of these terms or other comparable terminology. Examples of forward-looking statements include, but are not limited to, estimates with respect to the financial condition, results of operations and business of Hudson City Bancorp and statements about the benefits of the merger between Hudson City Bancorp and Sound Federal Bancorp that are subject to various factors which could cause actual results to differ materially from these estimates. Any or all of the forward-looking statements in this release and in any other public statements made by Hudson City may turn out to be wrong. They can be affected by inaccurate assumptions Hudson City might make or by known or unknown risks and uncertainties. Consequently, no forward-looking statement can be guaranteed. Hudson City does not intend to update any of the forward-looking statements after the date of this release or to conform these statements to actual events.


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Tom Phillips
Hudson City Bancorp, Inc.
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