Big time banker has roots in Batavia
Slate profiles Ronald Hermance Jr., CEO of Hudson City Bancorp. Hudson is based in Jersey, but Hermance is originally from Batavia.
Despite the proximity to Manhattan, Hermance and his 140-year-old bank have never been part of the fast-money Wall Street scene. And thanks to its geographic and cultural distance, this bridge-and-tunnel bank has thrived amid the mortgage debacle.
Hudson City in late July reported that second-quarter profits were up 52.3 percent. In the 2008 first half, mortgage originations rose 50 percent from 2007. And yet its balance sheet is pristine. "Only 328 out of 79,929 loans are nonperforming at the end of the second quarter," he said. (But who's counting?) Last Thursday, Hudson City sported a market capitalization of $9.46 billion, twice the size of the Blackstone Group.
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Hudson City banks the old-fashioned way: It takes deposits and makes mortgages to people who buy homes in which they plan to live. And then it hangs on to them. No subprime, no securitization. Hudson City's bankers are steady daters in a wham-bam-thank-you-ma'am era. "We don't have Wall Street bundle up the mortgages and sell them to someone in Norway," Hermance says. "We're going to live with those loans."
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CNBC's motormouth James Cramer has dubbed Hermance a modern-day George Bailey. And while it has been a wonderful life of late for Hermance (last year he was paid a total of $8.45 million, and his shares in the bank are worth about $114 million, according to Hudson City's 2007 proxy), comparisons between the balding, mustachioed banker and Jimmy Stewart only go so far.
It's a fascinating story even if the world of high finance isn't your thing. Read the whole thing.
