SECURITIES AND EXCHANGE COMMISSION

(Mark One)

o Transition Report Pursuant to Section 13 or 15(d) of the Securities Exchange Act of 1934

Commission File Number: 0-26001

Hudson City Bancorp, Inc.

(201)967-1900

Indicate by check mark whether the registrant (1) has filed all reports required to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during the preceding 12 months (or for such shorter period that the registrant was required to file such reports), and (2) has been subject to such filing requirements for the past 90 days.

Yes x     No o

Indicate by check mark whether the registrant is an accelerated filer (as defined in Rule 12b-2 of the Exchange Act).

Yes x     No o

As of August 4, 2004, the registrant had 187,109,581 shares of common stock, $0.01 par value, outstanding. Of such shares outstanding, 122,576,600 shares were held by Hudson City, MHC, the registrant’s mutual holding company, and 64,532,981 shares were held by the public and directors, officers and employees of the registrant.

Hudson City Bancorp, Inc.
Form 10-Q

Contents of Report

Explanatory Note: This Form 10-Q contains 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 “believe,” “expect,” “anticipate,” “should,” “planned,” “estimated” and “potential.” 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, Inc. that are subject to various factors which could cause actual results to differ materially from these estimates. These factors include: changes in general, economic and market conditions, legislative and regulatory conditions, or the development of an interest rate environment that adversely affects Hudson City Bancorp’s interest rate spread or other income anticipated from operations and investments. As used in this Form 10-Q, “we” and “us” and “our” refer to Hudson City Bancorp, Inc. and its consolidated subsidiary Hudson City Savings Bank, depending on the context.

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PART I — FINANCIAL INFORMATION

Hudson City Bancorp, Inc. and Subsidiary

See accompanying notes to consolidated financial statements.

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Hudson City Bancorp, Inc. and Subsidiary

See accompanying notes to consolidated financial statements.

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Hudson City Bancorp, Inc. and Subsidiary

See accompanying notes to consolidated financial statements.

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Hudson City Bancorp, Inc. and Subsidiary

1. — Basis of Presentation

Hudson City Bancorp, Inc. is a Delaware corporation organized in 1999 by Hudson City Savings Bank in connection with the conversion and reorganization of Hudson City Savings from a mutual savings bank into a two-tiered mutual savings bank holding company structure.

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, 2004 are not necessarily indicative of the results of operations that may be expected for the year ending December 31, 2004.

Certain information and note disclosures usually included in financial statements prepared in accordance with accounting principles generally accepted in the United States of America have been condensed or omitted pursuant to the rules and regulations of the Securities and Exchange Commission 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, 2003 Annual Report on Form 10-K.

Statements of Cash Flow. For the purposes of reporting cash flows, cash and cash equivalents includes cash on hand, amounts due from banks and federal funds sold. Transfers of loans to foreclosed real estate of $1,312,000 and $2,596,000 for the six month periods ended June 30, 2004 and 2003, respectively, did not result in cash receipts or cash payments.

Stock Option Plans’ Fair Value Disclosure. The Hudson City stock option plans and the recognition and retention plans (“RRP”) are accounted for in accordance with the provisions of APB Opinion No. 25, “Accounting for Stock Issued to Employees” (“APB 25”), and related Interpretations. Accordingly, no compensation expense has been recognized for the stock option plans. Expense for the RRP in the amount of the fair value of the common stock at the date of grant is recognized ratably over the vesting period.

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Hudson City Bancorp, Inc. and Subsidiary
Notes to Consolidated Financial Statements

Had expense for Hudson City’s stock option plans been determined based on the fair value at the grant date for our stock options consistent with the method of SFAS No. 123, our net income and earnings per share would have been reduced to the pro forma amounts that follow.

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Hudson City Bancorp, Inc. and Subsidiary
Notes to Consolidated Financial Statements

The fair value of the option grants, for those grants issued during the following periods, was estimated on the date of grant using the Black-Scholes option-pricing model with the following weighted average assumptions:

2. — Comprehensive Income

Comprehensive income is comprised of net income and other comprehensive income. Other comprehensive income includes unrealized holding gains and losses on securities available for sale, net of tax. Total comprehensive income during the periods indicated is as follows.

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Hudson City Bancorp, Inc. and Subsidiary
Notes to Consolidated Financial Statements

3. — Earnings Per Share

The following is a reconciliation of the numerators and denominators of the basic and diluted earnings per share computations.

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Hudson City Bancorp, Inc. and Subsidiary
Notes to Consolidated Financial Statements

4. — Fair Value and Unrealized Losses of Securities

The following table summarizes the fair value and unrealized losses of those investment and mortgage-backed securities which reported an unrealized loss at June 30, 2004 and whether the unrealized loss position was continuous for the twelve months prior to June 30, 2004.

The unrealized losses are primarily due to the changes in interest rates during the life of the security. We have not classified these items as impaired as the coupon payments for the investment securities and the principal and interest payments for the mortgage-backed securities have been made in accordance with the terms of the agreement. We anticipate collecting the entire principal balance on these securities as scheduled.

5. — Stockholders’ Equity

Under our stock repurchase programs, shares of Hudson City Bancorp common stock may be purchased in the open market and through other privately negotiated transactions, from time-to-time, depending on market conditions. The repurchased shares are held as treasury stock for general corporate use. During the six-month period ended June 30, 2004, we purchased 3,259,000 shares of our common stock at an aggregate cost of $115.5 million. At June 30, 2004, there were 4,407,421 shares remaining to be repurchased under the existing stock repurchase program.

In the first quarter of 2004, Hudson City, MHC applied for and was granted approval from the Office of Thrift Supervision (“OTS”) to waive receipt of dividends declared by Hudson City Bancorp during 2004. This dividend waiver will provide additional operating capital and liquidity at Hudson City Bancorp. The $19.5 million cash dividend paid to common stockholders in the first six months of 2004 decreased $24.7 million from the $44.2 million cash dividend paid in the first six months of 2003 primarily due to this dividend waiver by Hudson City, MHC.

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Hudson City Bancorp, Inc. and Subsidiary
Notes to Consolidated Financial Statements

6. — Net Periodic Benefit Plans Expenses

Non-contributory retirement and post-retirement plans are maintained to cover all employees, 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 executive officers, is unfunded.

Net periodic benefit cost included the following components:

In 2004, Hudson City expects to fund its qualified retirement plan with the minimum contribution, which has not yet been determined.

7. — Subsequent Event

On July 20, 2004, the Board of Directors of Hudson City Bancorp declared a quarterly cash dividend of eighteen cents ($0.18) per common share outstanding. The dividend is payable on September 1, 2004 to

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Hudson City Bancorp, Inc. and Subsidiary
Notes to Consolidated Financial Statements

stockholders of record at the close of business on August 6, 2004. The Board of Directors of Hudson City, MHC has waived receipt of this dividend consistent with OTS approval.

8. — Recent Accounting Pronouncements

On January 12, 2004, The FASB issued Staff Position No. 106-1 “Accounting and Disclosure Requirements Related to the Medicare Prescription Drug, Improvement and Modernization Act of 2003,” which allows companies to recognize or defer recognizing the effects of the Medicare Prescription Drug Improvement and Modernization Act of 2003, or Medicare Act, for financial statements of fiscal years ending after December 7, 2003. The Medicare Act introduced both a Medicare prescription-drug benefit and a federal subsidy to sponsors of retiree health-care plans that provide a benefit at least “actuarially equivalent” to the Medicare benefit.

On May 19, 2004, the FASB issued Staff Position No. 106-2 which supersedes Staff Position No. 106-1, and is effective for the first interim or annual period beginning after June 15, 2004, or our interim period ending September 30, 2004. These provisions of the Medicare Act will affect accounting measurements. We have elected to defer accounting for the effects of the Medicare Act pending our determination of the impact of the Medicare Act on our financial condition or results of operations.

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Hudson City Bancorp, Inc.
Form 10-Q

Item 2. — Management’s Discussion and Analysis of Financial Condition and Results of Operations

Executive Summary

Our results of operations depend primarily on net interest income, which is a direct result of the interest rate environment. Net interest income is the difference between the interest income we earn on our interest-earning assets, primarily mortgage loans, mortgage-backed securities and investment securities, and the interest we pay on our interest-bearing liabilities, primarily time deposits, interest-bearing demand deposits and borrowed funds. Net interest income is directly impacted by the spread between long-term interest rates and short-term interest rates, as our interest-earning assets, particularly those with initial terms to maturity or repricing greater than one year, generally price off long-term rates while our interest-bearing liabilities generally price off short-term interest rates.

Our net interest income is also impacted by the shape of the market yield curve. A steep yield curve, where the difference in interest rates between time periods is greater in the long-term time periods, could be beneficial to our net interest income as the interest rate spread between our additional interest-earning assets and interest-bearing liabilities would be larger. Conversely, a flat or flattening yield curve, where the difference in rates is lesser in the long-term periods or is shrinking over time, could have an adverse impact on our net interest income as our interest rate spread would decrease.

The impact on our interest income due to changes in interest rates is generally felt in later periods than the impact on our interest expense due to the timing of the recording on the balance sheet of our interest-earning assets and interest-bearing liabilities. The recording of interest-earning assets on the balance sheet generally lags the current market rate due to commitment periods of up to three months, while the recording of interest-bearing liabilities on the balance sheet generally times the current market. This timing difference could have an adverse impact on our net interest income in a rising interest rate environment.

Also impacting our net interest income and net interest rate spread is the level of prepayment activity on our mortgage-related assets. The actual amount of time before mortgage loans and mortgage-backed securities are repaid can be significantly impacted by changes in market interest rates and mortgage prepayment rates. Mortgage prepayment rates will vary due to a number of factors, including the regional economy where the underlying mortgages were originated, seasonal factors, demographic variables and the assumability of the underlying mortgages. However, the major factors affecting prepayment rates are prevailing interest rates, related mortgage refinancing opportunities and competition. Generally, the level of prepayment activity directly affects the yield earned on those assets, as the payments received on the interest-earning assets will be reinvested at the prevailing market interest rate.

Our results of operations may also be affected significantly by general and local economic and competitive conditions, particularly those with respect to changes in market interest rates, government policies and actions of regulatory authorities. Our results are also affected by the price of our stock, as the expense of certain of our employee stock compensation plans are related to the current price of our common stock.

Market interest rates generally increased during the second quarter of 2004 following a period of general stability in interest rates during the second half of 2003 and the first quarter of 2004, notwithstanding the slight long-term interest rate decrease in the first quarter of 2004. The market yield curve has remained relatively steep during this period. The Federal Open Market Committee increased the overnight lending

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Hudson City Bancorp, Inc.
Form 10-Q

rate 25 basis points at the end of June 2004. It is anticipated that overall market interest rates will continue to increase in future periods, and that the short-term interest rates may increase faster than the long-term interest rates, thus flattening the yield curve. If this occurs, the resulting interest rate environment is likely to have a negative impact on our results of operations as our interest-bearing liabilities generally price off short-term interest rates, while our interest-earning assets generally price off long-term interest rates and the spread between the rates we earn on our interest-earning assets and the rates we pay on our interest-bearing liabilities will decrease. If both long- and short-term interest rates increase by the same amount, and the yield curve does not change, the resulting environment is also likely to have a negative impact on our results of operations, as our interest-bearing liabilities will reprice faster than our interest-earning assets.

The stabilization of and overall increase in interest rates slowed the prepayment activity on our mortgage-related assets during the first six months of 2004 when compared to the activity experienced during the first six months of 2003. The slowing of the prepayment activity in turn decreased the amount of related premium amortized on these assets during the first six months of 2004. The decrease in the prepayment activity and the slowing of the premium amortization generally had a positive impact on our net interest income, net interest rate spread and net interest margin for the periods reported in 2004 when compared to the periods reported in 2003.

The low interest rate environment of 2003 afforded us the opportunity to realize gains on certain of our mortgage-backed securities prior to interest rate changes, such as the long-term interest rate increase seen in the second quarter of 2004, which would have adversely affected their fair market value. The low market interest rates caused increases in the fair market value of the fixed-rate mortgage-backed securities sold. The increases in long-term market interest rates in 2004 decreased the fair value of our primarily fixed-rate available for sale portfolio resulting in less sale transactions during 2004 when compared to 2003. The decrease in the fair market value of our available for sale portfolio also resulted in the reporting of an unrealized loss on these assets on our statement of financial condition, as required by generally accepted accounting principals. Although we have the flexibility to sell available for sale securities, we do not anticipate the need to sell any of these assets.

During the first six months of 2004, we continued to grow our balance sheet consistent with our traditional thrift business model and the growth initiatives we have employed during recent periods. Our balance sheet growth, primarily due to increases in residential first mortgage loans and callable government-sponsored agency securities classified as held to maturity, was funded principally by customer deposits and borrowed funds. The growth in our core investment of residential first mortgage loans was due to our continued strong levels of loan purchases. The growth in customer deposits was primarily due to the continued success of our interest-bearing High Value Checking account. Borrowed funds were increased to meet the goals of our growth initiatives and to take advantage of the still historically low interest rate environment, notwithstanding the recent increases in market interest rates. Our ability to grow our business with low cost interest-bearing liabilities resulted in the increase in our net interest income during the three- and six-month periods ended June 30, 2004.

We expect to continue to grow through internal expansion primarily through the origination and purchase of mortgage loans, while purchasing investment and mortgage-backed securities as a supplement to our mortgage loans. The primary funding for our growth is expected to come from customer deposits, using borrowed funds to supplement our deposit initiatives as a means to extend the maturity of our liabilities. We intend to grow customer deposits by continuing to offer desirable products at competitive rates and by opening new branch offices. We have opened three branch offices during 2004, expect to open an

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Hudson City Bancorp, Inc.
Form 10-Q

additional two during the remainder of 2004, and will continue to explore branch expansion opportunities. Although new branching results in additional expenses, we continue to maintain a low level of operating expenses.

Comparison of Financial Condition at June 30, 2004 and December 31, 2003

During the first six months of 2004, our total assets increased $1.64 billion, or 9.6%, to $18.67 billion at June 30, 2004 from $17.03 billion at December 31, 2003. Loans increased $1.25 billion, or 14.2%, to $10.05 billion at June 30, 2004 from $8.80 billion at December 31, 2003. The increase in loans reflected an increase in our loan purchase activity as well as our continued focus on the origination of one- to four-family first mortgage loans. For the first six months of 2004, we purchased first mortgage loans of $1.59 billion and originated first mortgage loans of $768.5 million, compared with purchases of $851.4 million and originations of $940.9 million for the first six months of 2003. The larger volume of purchased mortgage loans in the first six months 2004, when compared to originated loans, allowed us to grow and diversify our mortgage loan portfolio at a relatively low overhead cost while maintaining our traditional thrift business model. We will continue to purchase mortgage loans to grow and diversify our portfolio as opportunities and funding are available. The lower volume of origination activity was due to a decline in refinancings.

These first mortgage loan originations and purchases were exclusively in one-to four-family mortgage loans and were primarily fixed-rate loans. At June 30, 2004, fixed-rate mortgage loans accounted for 92.8% of our first mortgage loan portfolio compared with 90.9% at December 31, 2003. This percentage of fixed-rate loans to total loans may have an adverse impact on our earnings in a rising rate environment as the interest rate on these loans would not reprice, while our interest-bearing deposits and callable borrowed funds would reprice to the higher market interest rates.

During the first six months of 2004, $87.8 million of our loan originations were the result of refinancing of our existing mortgage loans compared with $255.7 million during the first six months of 2003. The dollar amount of refinancing of existing mortgage loans was included in total loan originations. We allow certain customers to modify, for a fee, their existing mortgage loans with the intent of maintaining customer relationships in periods of extensive refinancing due to low long-term interest rates. In general, all terms and conditions of the existing mortgage loan remain the same except the adjustment of the interest rate to the currently offered fixed-rate product with a similar term to maturity or to a reduced term at the request of the borrower. Modifications of our existing mortgage loans during the first six months of 2004 were approximately $194.6 million compared with $878.8 million during the first six months of 2003. These loan modifications were not reflected in loan origination totals. We feel loan refinancing and modification activity are inversely related to the level of interest rates. If long-term rates increase or remain relatively stable, we expect the amount of loan refinancings and modifications to remain at these levels or decrease during 2004.

The loan purchases were made pursuant to our wholesale loan purchase program established to supplement our retail loan originations. The purchasing agreements, as established with each seller/servicer, contain parameters as to the loans that can be included in each package. These parameters, such as maximum loan size and maximum loan-to-value ratio, conform to parameters generally utilized by us to originate mortgage loans. Purchased loan packages are subject to internal due diligence procedures that may include review of individual loan files. This review subjects the purchased loan file to substantially the same underwriting standards used in our own loan origination process. Loan packages

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Hudson City Bancorp, Inc.
Form 10-Q

purchased include mortgage loans secured by properties located primarily in the east coast corridor states between Massachusetts and North Carolina, and in Michigan and Illinois.

Investment securities held to maturity increased to $1.10 billion at June 30, 2004 from $1.4 million at December 31, 2003. During 2004 we began to classify certain of our government-sponsored agency security purchases as held to maturity. This increase in investment securities held to maturity primarily reflected the reinvestment of the cash flows from the $561.3 million decrease in investment securities available for sale during the first six months of 2004 due to calls during this low interest rate environment. The increase also represented a strategy to shorten the overall final maturity of our interest-earning assets, while continuing to grow our balance sheet. Of the agency securities purchased and classified as held to maturity, $496.6 million have step-up features, where the interest rate is increased on scheduled future dates. These securities have call options that are generally effective prior to the initial rate increase but after an initial non-call period of three months to one year. The initial rate for the securities purchased was higher than interest rates on similar agency securities offered at the time of purchase without the step-up feature. The rate increases are at least one percent per adjustment and are fixed over the life of the security.

Overall, the mortgage-backed securities portfolio remained relatively stable, with an aggregate balance of $5.34 billion at June 30, 2004 compared with $5.42 billion at December 31, 2003. The $29.3 million increase in other assets primarily reflected an increase in our deferred tax asset for our investment and mortgage-backed securities available for sale, as required by generally accepted accounting principles.

Total liabilities increased $1.68 billion, or 10.7%, to $17.38 billion at June 30, 2004 compared with $15.70 billion at December 31, 2003. Total deposits increased $622.7 million, or 6.0%, to $11.08 billion at June 30, 2004 from $10.45 billion at December 31, 2003. The increase in total deposits was primarily used to fund our growth initiatives. Interest-bearing deposits increased $553.6 million primarily due to an increase of $771.1 million in our interest-bearing High Value Checking account product, partially offset by a $190.9 million decrease in time deposits. We believe the increase in interest-bearing deposits was due primarily to our consistent offering of competitive rates on our interest-bearing High Value Checking account product. The balance in the High Value Checking account at June 30, 2004 was $3.48 billion compared with $2.71 billion at December 31, 2003.

Borrowed funds increased $1.05 billion, or 20.4%, to $6.20 billion at June 30, 2004 from $5.15 billion at December 31, 2003. The additional borrowed funds were primarily used to supplement our deposit growth. Borrowed funds were comprised of $4.25 billion of securities sold under agreements to repurchase and $1.95 billion of FHLB advances. The $1.85 billion in new borrowings, which had initial call dates of one month to four years from the date of borrowing, were partially offset by calls and maturities of borrowed funds in an aggregate amount of $800.0 million.

Total stockholders’ equity decreased $42.1 million, or 3.2%, to $1.29 billion at June 30, 2004 from $1.33 billion at December 31, 2003. The decrease in stockholders’ equity was primarily due to repurchases of 3,259,000 shares of our common stock at an aggregate cost of $115.5 million, purchases of 200,000 shares of common stock for our recognition and retention plan at an aggregate cost of $7.3 million and cash dividends declared and paid to common stockholders of $19.5 million. As of June 30, 2004 there remained approximately 4,407,421 shares authorized to be purchased under our current stock repurchase program. The amount of the cash dividend paid to common stockholders reflected the waiver of receipt of the dividend by Hudson City, MHC, the majority stockholder of Hudson City Bancorp. The decrease in stockholders equity also reflected a $41.6 million decrease in accumulated other comprehensive income,

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Hudson City Bancorp, Inc.
Form 10-Q

primarily due to a decrease in the fair value of our fixed-rate available for sale investment portfolio, reflecting increases in longer term interest rates during the second quarter of 2004.

These decreases to stockholders equity were partially offset by net income of $114.6 million for the first six months of 2004, a $4.1 million increase due to the exercise of 579,834 stock options, a $13.1 million permanent tax benefit due to the exercise of stock options and a $10.1 million increase due to the commitment of shares for our employee stock benefit plans.

At June 30, 2004, the ratio of total stockholders’ equity to total assets was 6.89% compared with 7.80% at December 31, 2003. For the six-month period ended June 30, 2004, the ratio of average stockholders’ equity to average assets was 7.62% compared with 8.73% for the year ended December 31, 2003. Stockholders’ equity per common share was $7.19 at June 30, 2004 compared with $7.33 at December 31, 2003. The decrease in these ratios was primarily due to our capital management strategy of planned asset growth, and a slower percentage growth in stockholders’ equity as compared to the percentage growth in assets, due to payment of cash dividends and stock repurchases. The decrease in these ratios also reflected the decrease in accumulated other comprehensive income due to the lower fair market value of our available for sale securities.

Average Balance Sheets for the Three- and Six-Month Periods Ended June 30, 2004 and 2003

The tables on the following pages present certain information regarding Hudson City Bancorp’s financial condition and net interest income for the three- and six-month periods ended June 30, 2004 and 2003. The tables present the annualized average yield on interest-earning assets and the annualized average cost of interest-bearing liabilities. We derived the yields and costs by dividing annualized income or expense by the average balance of interest-earning assets and interest-bearing liabilities, respectively, for the periods shown. We derived average balances from daily balances over the periods indicated. Interest income includes fees that we considered adjustments to yields. Yields on tax-exempt obligations were not computed on a tax equivalent basis.

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Hudson City Bancorp, Inc
Form 10-Q

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Hudson City Bancorp, Inc
Form 10-Q