Hudson City Bancorp, Inc. (NASDAQ:HCBK), the bank holding company, ended the session with a loss of 0.82%, considerably lower than the 7% it lost in the previous session after the news broke out that the merger between the company and M&T Bank Corporation (NYSE:MTB) was going to be delayed though the responsibility for that must go to the Federal Reserve, which would not be able to review the proposed merger by the end of April. Hence the merger date of May 1 must be changed but the market should not act so surprised because the same delay from the same front has taken place multiple times in the last 3 years. The deal was announced in 2012 and was originally intended to be completed by 2013. This latest delay is but the latest one in a long series of delays caused by the Feds. Naturally, the board of Hudson City Bancorp, Inc. (NASDAQ:HCBK) will demand an explanation regarding the timing and the nature of the delay, which came in the weekend.
In the last quarter, Hudson City Bancorp, Inc. (NASDAQ:HCBK) revenues dropped by 5.7%, marginally underperforming the industry average of 5.5% and affecting the EPS. The net profit margin 12.39% isn’t going to encourage the investors too, as it is considerably lower than the industry average. The net operating cash flow has decreased to $21.27 million, a definite concern and the EPS came in $0.32 against the previous figure of $0.38, a decline of 11.1% in the last quarter on a y-o-y basis.
Technically, the current selloff may push the price down to the immediate support level of $9.20, below which the long term support area comes around the band of $8.80-$9.00. The chart shows all the price action in the last two years to be contained in a perfect long term channel and unless the lower boundary at $8.80 breaks down, expect the range to continue.