Just How Healthy Is NYCB?

In the past months, we’ve met with New York Community Bank several times in order to discuss what we perceive to be a serious problem of overleveraging in their New York City multi-family portfolio. Each time, the bank has claimed that foreclosure housing is a merely a minuscule part of their overall healthy portfolio. In their 2010 Annual Report New York Community Bank claimed they had a successful year thanks to their conservative, risk-averse underwriting standards.

We know a different story: NYCB frequently makes unsustainable loans and their underwriting is shaky at best. They have many mortgages in default or in foreclosure. Many buildings that they lend on are in terrible physical condition. For months, we’ve been fighting to draw attention to the ways in which NYCB loans put tenants and low-income housing at risk. The bank has attempted to discredit our research, stating that they are a responsible lender with roots in New York City communities. They claim that their high underwriting standards have protected their portfolio and allowed them to be healthy and profitable throughout financial crisis.

But in late September, research analysts at Susquehanna downgraded NYCB shares. And last week, the Long Island Business News published “Mass Layoffs at New York Community Bank.” The article indicates that NYCB laid off 30 branch staff last week, a significant number for the relatively small bank that nonetheless is a major employer on Long Island. Typical of New York Community Bank, layoffs occurred in a barely legal and seemingly dishonest fashion. The bank’s compliance with the NYS Worker Adjustment and Retraining Notification Act was questionable. The WARN Act requires 90 days notice to workers if 25 or more employees of a certain company are to be laid off. New York Community Bank got away with their recent round of layoffs through a loophole: they fired employees at separate branches across Long Island and Staten Island.

All this begs the question: Just how healthy is New York Community Bank? Layoffs and lowered credit ratings are hardly indications of institutional health. It seems that there is a large discrepancy between their words and their actions.  Could they be getting ready to admit that they have made some mistakes? Are they ready to take responsibility for their non-performing loans?

Update, 10/20/2011:  Many reports now indicate that the number laid off was far higher than 30 employees, in the 300-500 area region-wide.

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15 thoughts on “Just How Healthy Is NYCB?

  1. I can assure you, the number thirty is a huge underestimate. I’m pretty sure there were more than thirty alone, in the meeting I attended. These so called “meetings” were happening at the same time across several banking regions. We were told in this meeting that our position had been eliminated and our employment has ended. I have heard speculation of the number of people going above three hundred. I understand an undisclosed number were also let go in the banks Ohio region

  2. This posting is amongst the most ridiculous nonsense I’ve seen in a while.

    You claim that “The bank has attempted to discredit our research;” but you have presented no evidence whatsoever for your assertions. In contrast, the bank has (and is of course required to by accounting standards) presented documentation of its loan portfolio, on a quarterly basis. That data shows it to be of high quality overall. There may be clunkers and ‘many mortgages in default or in foreclosure” and the portfolio may include “[m]any buildings… in terrible physical condition” but many, many more that are not.

    You present a link to a downgraded recommendation without mentioning that in the very same link there is an upgraded recommendation to NYCB.

    You reference a headline claiming ‘mass layoffs’ while mentioning that only 30 or so persons were laid off. You claim that the layoff was ‘barely legal’ with ‘compliance…questionable’ despite admitting that the law for advance notice only pertains to large layoffs at a single job site which does not apply to the situation.

    As an investor as well as an activist, I would welcome real information instead of the BS you have provided in this blog post. You have chosen instead to throw around slurs.

    1. To Jerold and others, I’m a reporter working on a story about the residential real estate market in the Bronx and NYCB has a significant presence there. I’d be interested in speaking some more about your and others perspective. Would you be interested in weighing in? You can reach me at michael.mccutcheon (at) journalism.cuny.edu or by replying to this comment.

  3. This company is so full of sh*t. Not only did they let so many loyal&dedicated people go, they had the nerve not to pay them correctly. This company & all the Ceo’s should b ashemed of themselves.

  4. Actually, the number laid off is well above 600. Also, the employees, or old employees…, were hung out to dry in more ways than one…..really poor administration ethically, morally, and economically.

  5. Jerold
    If you were on the receiving end of this sentence you would not think that it is BS. Is your head up in your a** You know that this lay off was done unethically and without any morals….this is something as an employee I strived to up keep for NYCB and I also thought that they were an ethical company to work for but boy was I wrong… I found this out in les than 5 minutes. My group about 25 of us were summoned to a Westchester location as well, yes I said it…it’s was not just done in SI. NYCB found all the loop holes to screw their dedicated employees. They did it by regions so that they don’t raise red flags about the “WARN” Labor act. NYCB as a Company laid off well over 500 employees without any notice and I don’t understand how the law is not on our side. The FDIC really need to take a closer look at their business practices. The big stink about it is that our Time off which we were entitled to were taken back and the salary in my thought was not calculated accurately either, I don’t know if any one else had this issue. An employee for over 15 years received a big transition pay of 1 month salary and was told by HR that that was our severents pay. Whoo Hoooo. NYCB. Way to go.
    Managers replaced by Assistant Managers, FSAs replaced by PT employees, why didnt they offer the employees a demotion instead firing and then rehiring ….and you expect dedication and productivity. This act shows total greed by the CEO and all his cronies.
    What will NYCB do next?
    Customers, please keep up with the news otherwise you will be screwed too.

    1. I’ll tell you what they did next. The declared their dividend for November. So roughly 1 month after you guys were told to hit the bricks, with your big 30 day pay package, the CEO will be receiving almost $600,000 (.25 x @ 2.3mm shares) dividend check….Merry Christmas suckers.

  6. I have been a dedicated employee of NYCB for over 10 yrs & the way they laid us off is unethical. They looked for loop holes to avoid paying us correctly. I thought I was working for an honest company, but come to find out they are very corrupt. I think NYCB should be investigated by all entities that govern & regulate banks.

    1. Idk what you did or where you workd that you thought you worked for an honest company, but allow me to shed a little light if you please. Even before the unethical terminations, I found it terribly dishonest to charge customers $15 for returned mail bc of an error on the part of the post office. It never quite seemed decent to base whether a mgr grants a fee reversal on how much the customer has w/ the bank, to clarify: giving fee reversals to those w/ high balances and denying those without. Or heres a favorite, emailing all branches to inquire the employees’ personal charitable work, that nycb might purport them to be part their establishment to Sen Schumer… well when you put it this way, terminating hundreds of employees all at once for no clear reason and refusing to disclose the number of those terminated seems typical.

  7. I myself have been n the company for almost 15 years. One month pay is incorrect. We were told on the Friday if u called into payroll, that the transition check was taxed 25%. So we ended up with nothing. Also we received one week of pay. 40 hours not the 80 we were entitled to.I no when I started n the company that they held 1 week depending on when u started. Now they r saying , oh so me where down the line u must have been giving 40 hours extra. NYCB gives u nothing!!! We work hard for every $$$ust have been paid an extra 40 hours of pay.

  8. When reporting where we were told to report they told us not to use the front book. Go into the branch using the back door. That is how sneaker they were. Shame on them. What goes around comes around so i sit back and wait. I will have the last laugh believe. All those higher up are very miserable people and only care about them self. From the Regional and all the way up.

  9. Let’s skip ahead two years and look at the results of this mass layoff. NYCB charged me $895.77 in nonsense fees from Jan-July 2014.

    The vast majority of these fees were under $40 and many were doubled down on the same issue. Their overdraft protection is a joke and lack of social networking shows they’re afraid of criticism. I just exported my data and did the math for the first time.

    These guys have no accountability; you can no longer contact corporate by phone and they hide in Westbury like a bunch of little rats.

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