615 Merrick Avenue
Established in 1993 to serve as the holding company for New York Community Bank, we have evolved from a $900 million institution at the time of our conversion to stock form to a $26.3 billion institution at December 31, 2005. Over the years, our growth has been fueled by organic loan production, and by a series of successful merger transactions.
Listed on the New York Stock Exchange, New York Community Bancorp, Inc. (NYCB) is a holding company for New York Commercial Bank and New York Community Bank. The latter, formerly known as Long Island Commercial Bank, serves small and medium-sized businesses and consumers in Long Island and Brooklyn, while the former is one of the five largest thrifts in the United States, boasting some 140 branch offices and assets of more than $26 billion. New York Community Bank has been cobbled together by the acquisition of several New York metropolitan-area community banks, the names of which the thrift continues to use as a way to connect with local residents. They include Queens County Savings Bank, serving the borough of Queens with 34 branches; Roslyn Savings Banks, whose 60 locations serve residents of New York's Nassau and Suffolk Counties; Richmond County Savings Bank, a Staten Island thrift with 23 branches; Roosevelt Savings Bank, maintaining nine branches in Brooklyn; CFS Bank, with single branches in Manhattan and the Bronx and four branches in Westchester County; First Savings Bank of New Jersey, operating four branches in Bayonne, New Jersey; and Ironbound Bank, operating four branches in New Jersey's Essex and Union Counties. In addition, NYCB launched New York Community Bank in 2005 by opening a branch under that name in The Bronx. NYCB mostly focuses on multifamily residential mortgages, which accounts for about 80 percent of all loans, but it also offers to consumers checking, savings, investment, and insurance products as well as online banking; and checking, cash management, lending, property management, and other services to business customers.
Origins Dating to 19th Century
NYCB considers Queens County Savings Bank as its founding institution. It was chartered by the state of New York in April 1859, becoming the first bank in Queens, the residents of which were grateful they no longer had to venture into Manhattan to take care of their banking needs. It remained a community bank, focused on the borough of Queens, and it was not until the early 1990s that Queens County Savings, under the leadership of NYCB's chief executive officer, Joseph R. Ficalora, began its transformation.
Ficalora was born and raised in Queens. He first came to work for Queens County Savings in 1965 at the age of 18. He began taking night classes at Queensboro Community College and went to work as a part-time teller, considering a job at the bank as a better option than the drugstore and grocery store where he had been employed previously. He did not intend to devote his life to banking. Rather, Ficalora considered becoming a psychiatrist. In 1968 he joined the military, serving one year in Vietnam and three years as an occupational service psychiatric specialist, an experience that soured him on a career in psychology. He returned to work at Queens County Savings in the early 1970s and decided that he preferred to serve people through community banking. He earned degrees from Pace University and the American Institute of Banking and began to work his way up through the bank's management ranks, becoming president and chief operating officer in 1989. Four years later he was named chief executive officer.
Ficalora quickly convinced the board of directors that the bank should make a public offering of stock, not only to grow the business but also to increase shareholder value. In July 1993 Queens County Bancorp, Inc. was incorporated and Ficalora was named president and chief executive officer. The corporation then acquired all of the capital stock of Queens County Savings Banks and subsequently made an initial public offering of stock. The shares began trading on the NASDAQ. Ficalora took an early stab at expansion through acquisition, but his attempt to add Bayside Federal Savings was thwarted by North Fork Bancorp, which made a higher bid. Five years later North Fork outbid him again in picking up Jamaica Savings Bank. Despite these disappointments, Ficalora was not desperate enough to overpay for a property, preferring to bide his time and grow Queens County internally, taking advantage of the consolidation that was taking place in New York City's banking industry. According to Business Week in a 2004 profile of Ficalora, "One by one, rivals such as Chemical Bank, Manufacturers Hanover, and Dime Savings were swallowed up by even bigger banks. Their names disappeared and branches closed. Disgruntled customers flocked to Ficalora's bank." Along the way, he also fended off a takeover bid from Emigrant Savings Bank, which according to press accounts was looking to make itself more attractive to big bank suitors.
New Century Bringing First Major Acquisition
By the end of the 1990s Queens County operated 14 branches. Although it was doing well as a multifamily apartment lender in the metropolitan area, it lacked a sufficient amount of low-cost deposits to help it fund additional loans. As a result, it had to borrow from the Federal Home Loan Bank, a far more expensive approach to doing business because the interest rates were 5 to 6 percent, rather than the 2 to 3 percent of checking accounts. This situation was the catalyst for Ficalora's first acquisition, which came in 2000 when Queens County acquired Haven Bancorp for a reported $196 million in stock. Haven was the holding company for CFS Bank, founded in 1889 as Columbia Building & Loan Association. In the 1930s it became Columbia Savings and Loan, and after receiving a federal charter in 1938 became Columbia Federal Savings Bank. It adopted the CFS Bank name in 1997, which it applied to the 62 supermarket branches it opened--but unfortunately at too rapid a pace. Earnings suffered and Haven's board members urged a sale of CFS. Queens County and CFS were a perfect fit, as the former gained the low-cost deposits it needed to expand its loan portfolio and CFS gained the financial security it needed. Following the completion of the deal, Queens County changed its name to reflect its geographic expansion, becoming New York Community Bancorp, Inc.
In 2001 NYCB elected to sell seven of the CFS supermarket branches located in northern New Jersey and southern Connecticut that were outside of its core market. The rest of the year was dominated by further expansion, as NYCB completed the acquisition of Staten Island-based Richmond County Financial Corporation in an all-stock deal valued at $802 million, a steep price but one that Ficalora believed was warranted in order to achieve a much needed increase in size. Like NYCB, Richmond traced its history to the 19th century, with its founding in 1886. It was also a fast-growing thrift, bringing with it other banking brands. In addition to Richmond County Savings Bank, NYCB added First Savings Bank of New Jersey, founded in 1889, and of more recent origin, Ironbound Bank, founded in 1988 in the Ironbound section of Newark, New Jersey. NYCB also picked up South Jersey Bank, the eight branches of which it would sell off in 2003. All told, Richmond brought with it 33 branches in Staten Island, Brooklyn, and New Jersey and increased NYCB's assets from $4.7 billion to $8.7 billion, and deposits from $3.2 billion to $5.6 billion--essentially doubling NYCB's size and making it one of the United States top 15 thrifts. There were other tangible benefits as well. NYCB achieved a strong presence in a rapidly growing Staten Island, attractive because of its high percentage of upper-middle-class families; gained a larger footprint in the New York metropolitan area and added Richmond's seasoned management team, which could help NYCB fill in the market with additional branches; and received a 47 percent interest in well-respected investment adviser Peter B. Cannell & Co., which had $650 million in assets under management. NYCB subsequently acquired a 100 percent stake in the firm. As a result, Ficalora told US Banker, "We can provide an array of products and financial services equal to any megabank."
NYCB's growth in the early 2000s was impressive. Total assets increased from $4.7 billion in 2000 to more than $11.3 billion in 2002, and net income during this period soared from less than $25 million to nearly $230 million. After digesting the Richmond acquisition in 2002, NYCB was ready in 2003 to expand even further.
In October 2003 NYCB completed the acquisition of Nassau County's Roslyn Savings Bank in a stock transaction valued at $1.58 billion. Roslyn was another venerable institution in the area, established in 1876. Ficalora was in Europe on business when bidding began on the Long Island thrift in June 2003. He hurried home and in a matter of days he and his team put together a winning offer, which was not the highest bid but Roslyn believed represented the best possibility for improving shareholder value. Ficalora also was helped to some extent by longstanding ties between the two banks. Back in the 1960s Queens County Savings and Roslyn teamed up with Richmond County Savings and Roosevelt Savings Bank to form a consortium called CompuThrift, which provided technology assistance to the member banks. After CompuThrift shut down in the late 1980s, the banks became clients of The BISYS Group Inc. and continued to work together on technology issues. Roslyn then acquired Roosevelt in 1999 and two years later NYCB acquired Richmond. It was fitting in a way that the four banks would be brought together when NYCB acquired Roslyn.
The advantages of NYCB and Roslyn joining forces were manifold. According to Crain's New York Business, the thrifts were "different in just the right places. New York Community excels at generating loans, while Roslyn is strong in deposit gathering. Moreover, the two have different strengths within commercial lending. Roslyn does extremely well at construction lending. ... New York Community is strong in making real estate loans to owners of rent-controlled buildings, a highly stable and dependable niche." According to American Banker, "Roslyn's hidden jewel is a portfolio of mortgage-backed securities that, when liquidated, could give New York Community cash flow to boost its real estate lending."
The Roslyn deal moved NYCB into a new level of prominence. Previously the eleventh largest holder of deposits in the New York region, it now only trailed J.P. Morgan Chase & Co. and Citigroup Inc. Moreover, with assets of more than $23.4 billion by the end of 2003, NYCB was now one the country's 50 largest banks.
Ficalora remained committed to pursuing a community banking approach, relying on long-term customer loyalty to familiar names. In early 2004 NYCB applied the Roslyn name to 30 CFS supermarket-based branches and a pair of Queens County branches in Nassau and Suffolk counties. It also revived the Roosevelt Savings name, which Roslyn had retired after acquiring the thrift, and used it on Brooklyn operations. Roosevelt's connection to the borough dated to 1895 when it was founded as Eastern District Savings Bank. It assumed the Roosevelt name in 1920 as a way to honor Theodore Roosevelt, former governor of New York and the 26th President of the United States.
Up for Sale in 2004
NYCB's spectacular growth made Ficalora something of a cult hero in some investment circles, but his reputation would be tarnished somewhat in 2004 when NYCB stumbled. It raised $400 million in a secondary stock offering in order to acquire GreenPoint Finance Corp., only to see Ficalora's old nemesis, North Fork, take the prize. In order to make use of the cash, Ficalora invested it along with short-term borrowings to buy $2.6 billion in securities. However, when interest rates increased, NYCB was exposed to significant losses. According to American Banker, "The leverage shocked investors when it was revealed in April." With a sudden loss in investor confidence, the price of its stock plummeted, and NYCB hired Bear Stearns Cos., Citigroup Inc., and Sandler O'Neill & Partners LP to consider strategic options, essentially putting itself up for sale. Although there was interest from a number of quarters, no bids were tempting enough for the bank to give up its independence. Instead, NYCB sold off investment securities to pay down debt, wrote off losses, and restructure its balance sheet. It was bitter medicine to swallow, but NYCB was soon ready to resume its growth. Now, however, it was looking at commercial lending, a move intended to offset declining profits in retail lending.
In 2005 NYCB used $69.8 million in stock to acquire commercial bank Long Island Financial Corp., founded in 1989 by former New York State Assembly speaker Perry B. Duryea, Jr. The firm became available after loan defaults caused net income in 2003 to drop by nearly 50 percent. Long Island Financial had $539.7 million in assets and operated 12 branches in Suffolk, Nassau, and Brooklyn. NYCB then renamed it New York Commercial Bank to form the foundation for a commercial banking unit. To bolster its push into commercial lending, NYCB agreed in October 2005 to pay $400 million for Atlantic Bank of New York, owned by the National Bank of Greece. In the deal that was still pending in 2006, New York Commercial Bank would add five branches in Queens and Manhattan, one in Brooklyn, four in Westchester County, and two on Long Island. Also of note, in 2005 NYCB launched a new banking brand, New York Community Bank, opening its first branch in the Co-Op City section of the Bronx.
New York Commercial Bank; New York Community Bank.
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