NEW YORK – In 2006, the New York Community Bancorp, Inc. (NYCB) acquired Atlantic Bank which started out in 1926 as a subsidiary of the Bank of Athens, which was acquired by the National Bank of Greece in 1953.
Joseph Ficalora joined NYCB as a teller at age 18 and was named President and CEO in 1993. Recently honored as the Man of the Year by the Associazione Culturale Italiana Di New York (the Italian Cultural Association of New York- ACINY), he is a member of numerous boards in Queens, including those of the Queens Chamber of Commerce, New York Presbyterian/Queens, the Flushing Cemetery, the New York Hall of Science and Pace University.
In addition, he serves on the Advisory Council of the Queens Museum of Art. Ficalora also serves as a director for the New York Bankers Association, the Federal Home Loan Bank of New York, Pentegra Services, Inc., the Foreign Policy Association, Pentegra Retirement Trust, Peter B. Cannell & Company, Inc., the New York Community Bank Foundation and the Richmond County Savings Foundation.
He is also a member of the American Bankers Association’s American Bankers Council and its Government Relations Council Administrative Committee. Ficalora is also a Vietnam veteran, having served for three years in the 1960s. His personal foundation, the Ficalora Family Foundation, primarily supports education and cultural initiatives. He has a degree from Pace’s Lubin School of Business. Ficalora and his wife, Alice, are well-known philanthropists.
Recently, The National Herald had an opportunity to meet with Ficalora to discuss how Atlantic Bank has evolved along with the community, about his life and work, and about the state of banking today. The interview follows.
TNH: Tell us about the 2006 acquisition of Atlantic Bank? In hindsight, was it a good decision?
JF: The transaction was executed extremely well and it was part and parcel of our ongoing business of acquiring banks and it fit in very nicely. What was unique about it was that it had a discernible identity that was worth preserving. Many of the other banks that we acquired, we just integrated them into the bigger bank. However, with Atlantic Bank, we established a commercial bank charter so it operated under that charter as to have all the same attributes that it had before.
TNH: What changes have you seen in the communities the Bank serves?
JF: Many of the communities have evolved and, the communities that had been Greek may now be Hispanic, or communities that were broadly mixed have become Asian. The change in the populace of New York City has constantly gone through movement. In some cases, whole populations move from a particular area in Queens – let’s say, to a particular area in Long Island – that has happened, but we’ve maintained a great deal of the relationships, particularly Greek relationships. Some of them are international relationships because this was a bank that had a very relevant parent that was established in 1926. The broader, larger relationships in the Greek community are still there but, like I said, the populace has changed. There are branches that might have been 80% Greek that are maybe 40% Greek or even less today because the neighborhood has changed. People have moved, in many cases diversely, and they wind up moving to many different places and, as a result of that, you basically have the likelihood of losing the deposit base, prospectively. That is not necessarily going to be as likely because of the use of telephones and the internet to do banking, but from the standpoint of the local bank, historically when people move from one of our branches to another community, they take on the local bank in that new community. Our Atlantic Bank Board is primarily made up of people from the Greek community. These are the same people that have been on the Board since the Bank had been established, so, as a result, there’s continuity and we have our relationships in Greece that we maintain. Jerry Voutsinas, who was the President of our Atlantic Bank Division, would travel to Greece every year prior to his passing. Now our current President, Nancy Papaioannou, maintains our Greek relationships and travels overseas to Greece every year.
TNH: How was your relationship with Jerry Voutsinas?
JF: It was a very good personal relationship as well as business relationship. He had been involved in banking for many years and he was on the Board of Roosevelt Savings Bank, which was originally acquired by our Roslyn Bank Division. Our Board did in fact include Jerry Voutsinas, and that worked out very well, so I decided that he was more than appropriately qualified to be the President of Atlantic Bank. Under normal circumstances, a board member would not take on this role, but I think it worked out very well and the community loved having him. I think he was good for us, for the bank itself, and he was good for the community.
TNH: What are your thoughts on the recent immigration issues with Greece?
JF: We see the issues, but you would think that given the circumstances in Greece, there would be large numbers. But, I say this as a distant observation, the Greek community is not coming in large numbers because they’re trying to come legally. Most of Europe is trying to come legally and the volumes that are coming illegally just make it harder for people to immigrate to the U.S. from Greece. The Greek legal immigration represents I think, the best example of success is how many of the people who have come over the course of the years have been very successful here.
TNH: What makes Atlantic Bank different from the other divisions of New York Community Bank?
JF: There are no other populations with which we have such unique relationships. We have acquired many banks, but they’re all U.S.-based banks and their deposit base is generally U.S.-based citizens. Atlantic Bank is primarily U.S.-based citizens, but they have strong ties to Greece and there is no other population that it serves. There are branches that might be located in a Hispanic community, a very high percentage of the people in that community may be even from the same country, but not anything like Atlantic Bank. The more important thing with regard to Atlantic Bank is the relationships that were established by Jerry Voutsinas in the more recent era. The historical relationships were very real because they all came from Greece, but he maintained some of those and established additional ones which were all very good. I think it is highly desirable for us to maintain that identity and that relationship so we would be inclined and, in a variety of ways even through our Board representation, our manager representation, participate in the Greek community’s activities. There is no reason that I would suggest that we’re moving away from the Greek identity of Atlantic Bank.
TNH: You started out at 18 as a teller at Queens County Savings Bank. Tell us about this remarkable career, this American dream.
JF: I’m 72 years old, and I started at the bank in 1965, so I’ve been at the bank 53 years. Same bank – just couldn’t get another job. The reality is that in those earlier years, I had the opportunity to work through many of the operational areas of the bank in a relatively short period of time, so I was exposed greatly to the bank as a whole because I became the deputy auditor very early and of course, auditors get to see everything and we never lose money. And, we actually had a bad loan in Georgia and I wrote up the loan and then got exposed to the mortgage committee which consists of trustees. So, there were opportunities that were unique that worked out extraordinarily well in establishing a foundation from which I grew into. Within that world, an ever more relevant executive, and various organizations that I joined, I wound up becoming the president or chairman of those organizations and that worked out well too. Over the course of time, and it is a lot of time, I was exposed to ever greater responsibilities in a bank that was otherwise relatively small, but it was a well-established, well-regarded community bank. When we became a public company we changed dramatically into a relevant bigger bank. Literally, the first three deals we did were banks bigger than we were and we did it in a very short period of time.
TNH: Tell us about your military background.
JF: I served in the military for three years during the Vietnam era. My first assignment was Vietnam and I served for one year as a psychiatric specialist. At that time, I was majoring in psychology in college. I was assigned to Vietnam because it was the year of the Tet Offensive, 1968. The number of soldiers going into Vietnam was explosive and so the need was there. I wound up in the 4th Infantry Division in Pleiku along the Cambodian border. When I returned from Vietnam, I worked at a facility in Fort Monmouth, New Jersey, where I carried the second largest patient load consisting of wives, children, and draftees. I was offered jobs from three different psychiatrists who had operating businesses – two in Manhattan and one in northern New Jersey — but I couldn’t possibly do that. In order to do what I was doing in the military, I would have to go to school for at least seven more years and certainly that was not something I wanted to do, so I went into banking. I’m very happy with what I do here.
TNH: Tell us about your family. Did your parents immigrate to the U.S. from Italy?
JF: My father was born on the Lower West Side and my mother was born on Mount Aetna in Sicily, but she came here when she was three, and my grandparents obviously were born in Sicily. Both my parents started school only speaking Italian, and the unusual thing was that my mother actually graduated from high school. Women generally didn’t graduate from high school [at that time] and she was starting at a huge disadvantage in that she only spoke Italian when she started and she was a woman. She went to school in Manhattan as did my father.
TNH: Do you speak Italian?
JF: My parents would tell us all the time, you’re American, you’re American, you’re American, you speak and do everything you can do American. They would only speak Italian when they didn’t want us to know what they were saying, so we never learned Italian. To some degree, one of my grandparents I could occasionally understand, my other grandparent she did speak a little bit of English so it was a little easier to speak with her, but that is the environment we grew up in. English was the primary language of our household and, lo and behold, we evolved differently than some of the other people I grew up with in the neighborhood. It wasn’t so much the language as the crime. The area was not a great area.
TNH: Where did you grow up? Was there any ethnic diversity?
JF: I grew up in Corona, when it was primarily an Italian neighborhood, but it evolved. When I was at the back end of my time in Corona, it was becoming more Hispanic but still when I left it was Italian and I only had one Greek friend whose family had owned the local candy store. In the environment I was in, of the thirteen friends with whom I played football and hockey, and other sports, only four of them were not in prison or dead by the time I left Corona, so that’s not a good ratio. Corona is where Tiffany’s was [located]. The area where I grew up, there were six-story apartment buildings which, when they were built, they were good buildings. The community was German and Jewish, then Italian, and then Hispanic. So as is the case with New York, communities evolve, same thing with Greek communities. And, over the course of those decades, the community evolved, so some of the housing that was along that number 7 [train] line was accommodating newer housing, as that 7 line was being built much of that housing was new, and Tiffany’s was a viable business along the line but that was many, many years ago.
TNH: Did you go back to college after serving in the military?
JF: Yes, I went to school at night for many years. I graduated from the American Institute of Banking which was located in Woolworth building next to City Hall and across the park from Pace University. After getting a banking degree, I continued on and got a degree from Pace. I currently sit on the board of Pace University.
TNH: What are the qualifications of a good banker in today’s world?
JF: It’s probably no more complicated than to be a person involved with science and technology. It’s probably no more complicated than being a good leader of anything. Being a good banker does necessitate a facility to understand finance, the economics, the relationships and consequences of financial matters. But, many, many CEOs wind up having not only that responsibility but the technical capacity to understand the business that they’re in and some of those businesses are very diverse and have very focused needs that are different than yours or my daily expectations. Being a banker necessitates understanding the rules of banking, the opportunities and various burdens of banking, but making good decisions and having good people facilitate decision making is what makes success of any company, so there’s no special need. I’ve been Chairman of CBANYs [Community Bankers Association of New York] where I was also Chairman of their Auditors and Comptrollers Forum. That kind of accounting background is a good thing to have when you’re in banking. So in our executive suite, the 4 or 5 executives are either CPAs or have accounting backgrounds. Understanding finance and understanding numbers, the relationship of a tax code change or rules that impact how you can or can’t make money, financially is all relevant the technical expertise of figuring out how the finances work and how the taxes work and whether an opportunity is a good deal or a bad deal.
TNH: What are your thoughts on Dodd-Frank?
JF: The Dodd-Frank Wall Street Reform and Consumer Protection Act, passed in 2010, is a United States federal law that places regulation of the financial industry in the hands of the government. The consequence of Dodd-Frank was bad law and that bad law took years for them to even figure out what it meant. Right now, we’re in the process of seeing positive change. I’ve been involved on the Board of the American Bankers Association, the New York Bankers Association and other banking organizations through the years, and currently there’s no question that the degree to which the regulatory environment actually has relevance over what we do is extraordinarily important.
TNH: How has Dodd-Frank affected the Bank?
JF: The complexity of a deal changes who we are, every time we do a deal. When we do deals, we just build a better bank, and we’ve had now nine years of not being able to do a deal because of Dodd-Frank due to the consequence of being bigger than $50 billion. So we’ve spent over $200 million in the last several years, preparing to become a SIFI (Systematically Important Financial Institution) which is Dodd-Frank. So with Dodd-Frank, it sees an institution at $50 billion becoming something that is a risk to the entire banking system, and it sets new parameters as to what you must do. Those rules may be applicable to Citi or Chase, but are inappropriate for a bank at $50 billion. Governor Tarullo [former member of the Board of Governors of the United States Federal Reserve Board] who was the regulatory governor at the Fed explicitly understood that and chose us as the poster child. When I laid it out we were 50 times larger than we were when we became a public company and our business model was the same. We were still doing the same thing that we did all those years ago – 25 years ago – but the reality is our risk profile had not changed. So just because we were going to be $50 billion we didn’t represent an unreasonable, new risk. We in fact were doing the same thing that we were doing when we were less than $1 billion in size. We are poised here for positive change because President Trump has made many, many changes with regard to restrictive regulations throughout all of corporate America. One of the places they’re making changes is in banking. So we’re on the verge of positive change.
TNH: What are your thoughts on the American economy today?
JF: The American economy is doing extremely well, the metrics are beyond historical comparison, so there are many very good things happening in the American economy, but there’s no question if things politically go wrong, where people literally dismiss right and wrong and just play politics things could get worse. The world economy is cyclical, it goes through cycles, and adverse cycles occur within reasonable time frames. The next one should have occurred two or three years ago. The disruption can be extreme. The likelihood is that there will be a value depleting cycle in the period ahead. All assets at value will be depleted. Recovery can also come rapidly, it depends on where you’re coming from, when the new opportunity presents itself. It is common psychological reality that when things are good, people just don’t worry about the problems of tomorrow and they kind of believe things will always be good and they won’t. The reality is decisions that are made in the best of times are often not the best economic decisions.