Dear Mr. Berko:

I’m a conservative investor and would like to buy 150 shares of New York Community Bank. What is your opinion on this thrift? I know it has had very impressive results in the past five years, but do you think it can do almost as well in the next five years? Would you recommend this stock for the growth portion of my portfolio?

W.K., Galesburg, Ill.

Dear W.K.:

New York Community Bancorp Inc. (NYB-$22) was born in 1993 as the holding company for Queens County Savings Bank, which has been doing business in Queens since 1859. Since then Joe Ficalora, president and chief executive officer, has acquired six banks and 110 banking office locations in the New York City area. Each bank has retained its original name: Queens County Savings, CFS Bank, First Savings Bank of New Jersey, Ironbound Bank, Richmond County Savings Bank, Roosevelt Savings Bank and Roslyn Savings Bank.

Ficalora has built NYB into the third-largest thrift in the United States, with $23 billion in assets from just $2 billion in 2000. Ficalora will only buy a bank if it’s a good, solid, comfortable fit. His overhead costs are less than half those of his rivals and NYB’s credit quality may be the best in the nation.

Ficalora’s company will report its 38th consecutive quarter (that’s nine years and six months) of not dipping into its loan loss reserves. Ficalora exercises very tight cost controls and spends less than 40 percent of what his competitors spend to bring in new customers and deposits.

The bulk of NYB’s loan portfolio is insulated from the cyclical swings in the economy. Its loans are made primarily to owners of Manhattan apartment buildings and it lends an average of 60 percent of the value of a property. The company also keeps most of its loans so it can depend on an attractive portfolio of attractive loans and good service fees. As a result, NYB hasn’t had a loss in 11 years.

Ficalora’s banks emphasize personal service. All NYB branches are open on weekends and he did this long before his rivals even dreamed it. Ficalora also knows the value of a good neighborhood name. He is the grandson of a Sicilian immigrant, grew up in a blue-collar neighborhood near La Guardia Airport and in 1965 was a teller at Queens County Savings.

Ficalora has created an amazing moneymaking machine. Since going public in 1993, NYB has increased its earnings each year, starting at 13 cents a share, reaching an expected $2.05 this year and hitting a projected $2.40 in 2005. NYB’s dividend, initiated at a penny a share in 1994, has zoomed to $1 this year. Meanwhile, NYB’s 4.5 percent return is quite attractive and its low price-earnings ratio of 13 is compelling. In the past 11 years, NYB has split its stock eight times so that a 100-share purchase in 1993 at $20 is now 1,500 shares at $22, worth $33,000.

Ficalora’s salary is $749,000, a pittance compared to the compensation of most of his colleagues. He also owns 1 percent of the outstanding stock, worth over $80 million, and has never sold a share.

NYB has no preferred shares or funny stock on its balance sheet. There’s just a clean 271 million shares. The company bought back 11 million shares in 2003 and expects to repurchase 5 million shares this year.

New York Community Bancorp’s return on assets of 2.2 percent has doubled in the past 11 years and return on equity, which was 6.3 percent in 1993, has increased in 10 of those years and now stands at an impressive 22 percent. Book value has increased more than sixfold. The company is a rags-to-riches story and Joe Ficalora is the driving energy behind that success.

NYB has been a top performer in almost every statistical category for the past seven years. So if Ficalora doesn’t change his management style, it’s not unlikely that NYB’’s future performance might imitate its past successes.

In the coming three to four years, Ficalora may take a few more thrifts into his fold. If he employs his unique talents as he has in the past, those potential acquisitions could make NYB the No. 2 thrift in the nation.

Then again, he may not. On May 9, New York Community Bancorp announced it was “undertaking a review of its strategic alternatives.” In other words, the company may be put up for sale.

Please address your financial questions to Malcolm Berko, P.O. Box 1416, Boca Raton, Fla. 33429 or e-mail him at malber@adelphia.net.