The Rockefeller Protege Who's Polishing The DimeVeronica Byrd
Ever since he joined New York's Dime Savings Bank in 1988, many have expected Richard D. Parsons to leave the thrift at any moment. Politics, after all, was said to be his first love; law, a close second. Parsons had distinguished himself during the 1970s both as a valued Vice-Presidential aide to the late Nelson A. Rockefeller and as a member of President Gerald R. Ford's domestic-policy team. A black Republican who had soared during the 1980s as a respected attorney, Parsons, it seemed, could write his own ticket.
Six years later, though, the 46-year-old executive is still at Dime's helm. And, for an erstwhile lawyer, he has done a solid job of turning around a left-for-dead savings bank that lost $92.3 million in 1989. Last month, Parsons merged Dime with rival Anchor Bancorp Inc. to create the nation's fourth-largest thrift. As chairman of the new Dime Bancorp, an institution with combined assets of $20 billion, he will be banking's highest-ranking African American.
FICKLE RATES. So why are close observers still convinced he isn't long for Dime? Because even Parsons balks at referring to himself as a banker. "This is not my highest calling," he says readily. "It doesn't call upon my best abilities." While he insists he harbors "no secret plan to go into politics," he would like to return to public service someday. "I think it's a question of taking care of some professional and personal commitments first," says New York Mayor Rudolph W. Giuliani, who in 1993--to no avail--offered Parsons a job as deputy mayor for economic development.
Parsons' chief commitment is to steer the new Dime to calm waters. The problem is, the bank's future is uncertain at best. Parsons and former Anchor Chairman James M. Large Jr. (now Dime's chief operating officer) both turned around ailing thrifts over the past few years by cutting costs and cleaning out problem loans. But they got a big boost from low interest rates--rates that have since turned up sharply, threatening to squeeze profits.
Moreover, even though the new bank will likely be stronger than Anchor or Dime would be alone--assuming the new partners can merge without turmoil--it remains a shrimp in its market. New York is overcrowded with such giants as Citibank, Chemical Bank, and Chase Manhattan Bank. Dime brings little to the party that they don't have. Indeed, many analysts think Dime's only real future lies in selling out to a bigger bank. Says Thomas F. Theurkauf at Keefe, Bruyette & Woods Inc.: "In a couple of years, it's not inconceivable for Dime to be a takeover candidate."
Dime's chairman, not surprisingly, prefers to look on the bright side. Sitting in his office overlooking Manhattan's Rockefeller Center, he points out confidently that Dime and Anchor have both had strong followings among working-class depositors--conservative investors who like to put their nest eggs in a safe place. Parsons insists Dime can target them with a full range of financial services, "whether it's bonds, mutual funds, insurance, annuities, or financial planning." Citi and Chase have those things, too, he admits. But Dime can build a niche as New York's community bank.
Analysts say adding services is harder than it looks. But Parsons does know a lot about the working-class denizens of New York's outer boroughs. He was born in Brooklyn's Bedford-Stuyvesant section and raised with his three sisters and brother in Jamaica, Queens. His father, a graduate of Hampton University, was a radio technician for the former Pan American World Airways Inc. His mother was a homemaker and nurse.
Parsons was a smart kid--he moved ahead two grades in school and headed for the University of Hawaii when he was only 16. At that age, he lacked the discipline college required. He walked on the basketball team (earning a scholarship), but "I had miserable grades," he says, "and was the social chairman of my fraternity for two years in a row." Parsons left college six credits short of his history degree. But he did meet his wife, Laura, in Hawaii and says pointedly that marriage stabilized his life. "I got serious. About my education, about my career, about life. I realized that it was up to me to accomplish what I wanted."
His Law School Admission Test scores were good enough to earn admission to Albany Law School, where he finished first in his class in 1971. That attracted the attention of Robert R. Douglass, then counsel to New York Governor Rockefeller (and later vice-chairman of Chase). Parsons joined the team and was a hit. When Rockefeller went to Washington in 1974 as Gerald Ford's Vice-President, Parsons went, too. A year later, he became general counsel of Ford's domestic council.
TROUBLESHOOTER. Since joining Dime in 1988, his job has been an exercise in crisis control. Soon after he arrived, a plunge in Northeast real estate drove the thrift to the edge of collapse. "I had no idea the depth to which the whole industry would plunge," Parsons recalls. "I didn't think I was signing up for a pleasure cruise. Nor did I think we'd have to sail through a hurricane."
Parsons cut costs by closing weak branches and slashing half of the 4,000-employee payroll. Then, he tackled the thousands of "low documentation" mortgages Dime had made without verifying the applicant's employment or income. At the end of the first quarter, nonperforming loans were 3.5% of assets, down from 11% in 1993. Anchor's rate is much better at 0.5%. The thrift industry average, analyst Theurkauf says, is 2.8%.
Parsons will continue to clean up his portfolio while better managing the new Dime's 94 banking offices in New York and New Jersey. (It has five in Florida, too.) One goal is to acquire smaller banks in the New York area to keep growing. Of course, success in putting Dime on a more solid footing--or selling it--would only enhance Parsons' stock as a candidate for the public sector. He isn't saying what sort of position he would seek, but there's little doubt he'll eventually put his hat in the ring. "I don't know that he will go into elective politics, but he certainly will go back into government," says retired federal Judge Harold R. Tyler Jr., Parsons' mentor at Patterson, Belknap, Webb & Tyler, the New York law firm he joined after his stint in Washington.
Parsons acknowledges that being a black Republican makes him stand out. But he insists it is "not something I think of as having special meaning or significance. More and more, black Americans are finding that it is not good to be in a position where you can be taken for granted, as black Americans are by the Democrats."
Parsons brands himself a Rockefeller Republican: fiscally conservative, socially less so. Early on, he recoiled at what he saw as the Democratic dogma: that the world was unfair because it conferred more benefits on some than on others, and that making it fair meant taking from the rich and giving to the poor.
He acknowledges that he himself owes a great debt to the Rockefeller organization for taking him in. "The old-boy network lives," he says. "Everybody I knew as a kid, or half of them, were in jail or killed, and the other half were hiding out. So I didn't grow up with any of the old boys. The Rockefeller entourage created a fetwork for me." (Interestingly, Parsons' grandfather was a caretaker on the Rockefeller estate in Pocantico Hills, N.Y., where, in 1986, the family sold Parsons a home.)
Once given the connections Parsons created his own opportunity. "My own experience in life," he says, "has suggested to me that you cannot give somebody something of enduring value; those things have to be earned. If you just give something to somebody who has not invested in obtaining it, they have no respect for it."
Parsons is all for commercial investment in the inner city as a way to cure social ills. To help urban citizens help themselves, he advocates that banks team with pension funds and others to spread the risk of funding ostensibly risky projects. He has also spent time heading a skills-training program for released prison inmates, drug addicts, and others.
But politics will have to wait. Parsons and Large have a job to do to make Dime competitive. "We're confident we'll have enough muscle," Parsons says. Given the power of rivals like Citi and Chase, some luck would help, too.
THE PARSONS TALE
Brooklyn, N.Y., 1948
-- Attended University of Hawaii, 1964-68
-- J.D., Albany Law School, 1971
-- Assistant Counsel and First Assistant Counsel to New York Governor Nelson Rockefeller, 1971-73
-- First Assistant Counsel to New York Governor Malcolm Wilson, 1973-74
-- Deputy Counsel to Vice-President Rockefeller, 1974-75
-- General Counsel and Associate Director of the White House Domestic Council, 1975-77
Patterson, Belknap, Webb & Tyler, New York, 1977-88
Dime Savings, president, 1988; chairman, 1990-present
NEW YORK CITY
-- Head of Mayor Rudolph Giuliani's transition team, 1992
-- Chairman of NYC Economic Development Corp.