Old-time banking pays off for Astoria
For nearly two years, George Engelke, chief executive of Lake Success-based Astoria Financial Corp., has occupied what one former competitor, John Kanas, used to call “banking hell.”
Now things are looking up — and for an ironic reason. Turmoil in the mortgage market, caused by defaults on home loans, has led to a new appreciation of traditional savings institutions, especially one such as Astoria that specializes in large mortgages, experts say.
The upturn follows a period in which an unusually narrow gap, or spread, between long-term and short-term interest rates made it hard for banks to earn much more money on long-term loans than they have to pay for deposits and other funds lent out.