It’s taken 15 decades for New York Community Bank to go from a single savings bank in Flushing to the second largest thrift institution in the nation – and it’s a “made in Queens” success story.
On April 14, 1859 the Queens County Savings Bank was established by members of the closely-knit Bowne and Parsons families and began conducting business from the second floor of the old Municipal Hall in Flushing.
At the end of that first day, the bank had 18 depositors and $600 in deposits.
It was the first state-charted savings bank in Queens County, which at the time stretched almost to Cold Spring Harbor and Amityville. Before that, Queens’s residents had to travel to Manhattan Island to conduct their banking business
Queens was 39 years away from becoming part of New York City and needed to grow on its own.
Things were a far cry from what they are today.
Newspapers announced the arrival of the overland mail from California. New York (Manhattan) was a city of roughly 500,000 (records are lost) with teeming, gang-ridden slums, opulent mansions and farms within its limits.
By 1863, the country was in the midst of the Civil War and New York City was burning at the hands of anti-draft rioters.
Queens County Savings Bank, with 875 depositors and $40,000 in deposits, moved to what is now Flushing Town Hall, continuing to grow its assets and the community by providing a stable bank and financing home construction.
December 10, 1923 is a milestone – Queens County opened its second branch, at the corner of 103rd Street and 39th Avenue in Corona.
Seventy years later, another milestone was reached when Queens County Bancorp was established and with six branches in Queens, one in Nassau and $1 billion in assets, its stock began trading on NASDAQ.
With the new millennium came a new name: New York Community Bank. Today, there are 33 branches throughout Queens, more than 1 million customers and a total of 215 branches throughout the New York/New Jersey Metro region. Included in this number are 37 branches of New York Commercial Bank, which was established on December 30, 2005. The Commercial Bank has 10 branches in Queens.
Corona is woven into the bank’s history in more ways than one. Its current chairman, Joseph Ficalora, was born there, and his philosophy and experience is reflected in New York Community Bancorp today.
Ficalora began as a teller at the Corona branch after returning from Vietnam. “Even during my earliest days with the bank,” he recalled, “we were given access to the decision-making. It made me feel a part of the company.”
He rose as the company grew, and the open management philosophy meant that Ficalora was a seasoned banker when he became the youngest ever member of the board and chairman in 1994.
Despite economic crises and Congress “changing the rules of the game” every 20 years or so, Ficalora remains “an optimist, but a realist.”
To him, the current crisis is a challenge that can’t supercede sound banking principles and steady management. The revision of some sound banking rules established after the Great Depression and risky accounting practices set the stage for it. “Enron was destroyed by Arthur Andersen,” he concluded.
One of the sound principles Ficalora embraces most closely is that the bank doesn’t just do business in the community; it’s part of the community and not just in name only.
He takes a direct interest in the bank’s support of institutions such at the Queens Public Library, which has benefited by over $600,000 in just the last few years thanks to the bank’s matching funds.
And when the press conference announcing a matching fund challenge is over, a smiling Joe Ficalora can usually be found sitting precariously on the tiniest of chairs, reading a book to children.
The bank’s name can be found among corporate supporters of many of the cultural and other institutions that make Queens a great place – Ficalora’s and the names of many other bank officers and personnel can be found on their contributor lists as well.
Ficalora’s business model is simple. The bank maintains strict underwriting standards, and conservative valuations when making loans, so they rarely have to worry about defaults.
This model has helped the bank to weather adverse conditions that have hurt other banks. Figures indicate that at the end of last year, net charge-offs for bad loans were 60 times lower than at Wells Fargo Bank, for example.
Over the years, Ficalora’s philosophy has enabled the take-over of underperforming banks and made them grow as profitable community banks. “Being more stable has made us more viable,” he said.
That stability meant that when the worst of the credit crisis was shaking the banking industry last year, New York Community Bancorp qualified for almost $600 million in government investment.
A lifetime of experience as bankers in the community also led Ficalora and the board to a decision not to take the “bailout” money – a decision that other corporate boards are regretting as they scramble to find ways to pay the loans back and get out from under onerous conditions.
With a return to the “responsible capitalism that made America great,” Ficalora sees “a normal evolution of the credit cycle that will be very robust.”
“We designed our business model back in 1992-93 for the purpose of dealing with the next credit cycle turn. We just didn’t expect it to be this far out,” he said.
It’s hard to argue with Ficalora’s opinions.
As a result of nine stock splits and price appreciation, a shareholder who invested $2,500 in 100 shares back in 1993 now has 2,700 shares worth well over $31,000, in addition to having received regular quarterly cash dividends since 1994.
“Defining our objectives and limiting risk will allow us to continue,” he said.
