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New York Community Bancorp. said late Tuesday that it has named Dominick Ciampa as its chairman. CEO Joseph R. Ficalora had held the chairman's title for nearly four years.
December 21 -
It's a good thing for Joseph Ficalora that New York Community Bancorp tops a list of the most reputable banks in America. The chief executive of the Westbury lender has been telling investors and analysts that for years.
May 14 - New York
Ficalora's outlook on the Westbury company's prospects is bullish, to say the least. He said the next three years could be the most promising ever for doing what NYCB does best — buying other banks and using their deposits to fund its main business of lending money to the owners of rent-controlled apartments in New York.
March 22
Joseph Ficalora capped a big year with some milestones this week.
Shares of his New York Community Bancorp Inc. hit a two-year high this week as two developments solidified the Westbury lender's ascension to the upper tier of banking: It joined Keefe Bruyette & Woods Inc.'s 24-member KBW Bank Index — the marquee index for bank stocks — and Ficalora relinquished the chairmanship of the $42 billion-asset company while keeping the titles of president and chief executive.
New York Community's peers in the KBW index include JPMorgan Chase & Co., Bank of America Corp. and such super-regionals as Fifth Third Bancorp. The heads of those companies only have two titles, which is becoming custom at large banks per the preference of regulators and investors.
By letting go of the chairmanship, Ficalora says he is recognizing that New York Community now has more in common with JPMorgan Chase than the small bank he took over in 1993. It's gone from seven branches in New York to 276 in five states under his watch.
"Jamie Dimon chose to be chairman and CEO. But there's a president. I chose to be president and CEO and have a chairman. This is a nonexecutive position," Ficalora said in an interview with American Banker. "It is very rare that a bank as large as we are has an individual identified as chairman, president and CEO."
In December 2009, New York Community bought the failed AmTrust Bank of Cleveland, which had $11 billion of assets, a highly lucrative mortgage arm, and offices in Arizona, Florida and Ohio. Ficalora described that purchase — the bank's ninth bank acquisition in 10 years and its first outside its home market of New York — as "the largest and best deal we ever did." One thing it is not: the last.
"It's fair to say" the company will be getting bigger, he said.
In the following edited transcript, Ficalora cited overreach by regulators as a main hindrance to his company's growth and to the industry's recovery.
It was your recommendation that current board member and Queens real estate developer Dominick Ciampa be named nonexecutive chairman. Why?
FICALORA: I'm not looking at changing anything with regard to how the bank operates. As chairman he will conduct the business of chair, and he will participate ex officio in the various committees of the board. There are those that believe that in good corporate governance the chairman of the board should be separate from the chief executive officer or the president.
You're not getting ready to retire, are you?
I have no contemplation of going anywhere. I constantly am told I look much younger than I am, but I'm actually 64. I've been with the bank 45 years. But that doesn't mean anything given that we have directors as old as 92. I have time.
What does it mean that New York Community has joined the KBW Index? What are the benefits?
That's a very positive thing. Index funds would likely look to the KBW index as a place where they would want to be invested. I think it really means that there are additional investors who will invest in our business model.
What is your take on the recent flurry of bank acquisitions?
It is indicative of the period we're in as well of the future period. There is no question that there is an awful lot of difficult regulation on the horizon. Priorities of decision makers in Washington and elsewhere are not driven by a rational understanding of the business in which they intrude.
There is no escaping the fact that boards are fully aware of the pressures that are in the market that come from regulators. When you think about banks being devalued substantially as a result of public information suggesting that the institution is troubled, a lot of boards are no longer saying: "I want the highest price I ever got if I'm going to sell." They want the best price they can get.
What is your outlook for bank mergers in 2011?
In general, 2011 and 2012 will represent the transition to trades being sales rather than buys. You go back over the last decade, banks were bought, meaning that the buyer was pushing the seller to actually agree to terms. In the future, for the first time actually since we're a public company, you're going to see boards literally going out of their way to sell rather than to force somebody to buy them. That is a huge change in valuations and expectations. So whereas, let's just say in 2000, it might have been very difficult to buy banks without substantial premiums being paid. In 2011 or 2012, banks will be taken under. That doesn't happen that frequently. But that has happened most recently.
What can we expect from New York Community on deals?
We will grow by acquisition. We have in fact demonstrated the capacity to do that highly effectively. There is no reason for us to believe that the period in front of us isn't going to present more opportunity than the period behind us.
What are you looking for?
"It depends. We have the ability to make decisions — the flexibility to make choices is always very positive. … I wouldn't exclude or include any particular deal other than the fact that we will not use our equity to create a nonaccretive deal. We don't grow for size. … One of the things about the deals we announced is that it's readily discernible to investors that it's a good deal.
AmTrust's mortgage arm generated a surprising amount of fee income last quarter. Has that got you thinking about going after more business-line targets, rather than just deposits?
No it does not. Clearly any income stream that we're willing to buy into would have to be discernibly beneficial over a reasonable period of time, with reasonable assumptions. Our basic business model is to grow by acquisition of banks so as to acquire deposit franchise growth, to fund the growth of our basic loan product. There is always the possibility that we will buy business lines that are also accretive if we believe they are sustainable and desirable to supplement what we are doing.
