In our discussion of Northeast Banks this week, there has been a lot of “doom and gloom” due to the recent subprime issue causing a slowdown on all fronts.  In spite of all that, however, our analysts have found  a company they are excited about: Hudson City Bancorp (HCBK).

“Hudson City…stands out for the obvious reasons. Here these guys are able to take advantage of the disruption in the mortgage market. They operate a very clean and simple portfolio lender model in a great market with a very disciplined management team, and have the benefit of an excess capital base. “

“I think there still is a lot of value to be had in this company, probably on the mortgage side; I’ve got projected growth to exceed 30% this year and next year. And given the overhead, it costs them virtually nothing to add an additional dollar of loans. So they have the structure in place to really let the increased volumes add substantially to their bottom line. So the model I think is there. And then, longer term, I think one of the other hidden gems is what they have the potential of doing on the deposit side.”

For the full Northeast Banks issue, complete with more stock picks and a full overview of the sector, click here.

This entry was posted on Thursday, October 25th, 2007 at 10:11 am and is filed under Financial Services Stocks. You can follow any responses to this entry through the RSS 2.0 feed.