New York Community Bancorp (NYSE:NYCB) has been one of the best-performing bank stocks over the past few decades, producing an incredible 4,593% total return over its 21-year public life -- more than 10 times that of the U.S. banking index. Even after such amazing performance, there are still several reasons to love this bank, such as its outstanding credit quality and ultra-efficient operations, but I'm concerned about growth going forward. Here's a look at some of the pros and cons of investing in New York Community Bancorp.

A rock-solid loan portfolio
New York Community Bancorp's primary focus is originating and refinancing mortgages on rent-controlled or rent-stabilized apartment buildings in the New York City metropolitan area. With 61.1% of all New York City rental properties subject to some type of rent regulation, this is a large market.

As of the first quarter, the bank's loan portfolio consisted of $23.5 billion of these loans, which made up more than 71% of the total. The rest of the portfolio is mainly commercial real estate loans (23.7%), with a small contribution from other loan types.

There are two reasons this business model has created a solid loan portfolio. First, the bank has strict underwriting guidelines, requiring more than 120% debt coverage and low loan-to-value ratios, as well as a rigorous appraisal and approval process. In addition to this, the nature of rent-controlled apartment buildings creates stability. Since tenants pay below-market rent, these properties maintain occupancy rates of nearly 100% in any economic environment; therefore, the revenue streams they produce remain intact.

The high credit quality of New York Community Bancorp is easily seen by comparing the company's track record to its peers. The company has averaged an extremely low charge-off rate of just 0.04% throughout its history, and it dramatically outperformed the overall banking sector during the financial crisis, as seen in the chart below.

Nycb Charge Offs

Source: NYCB investor presentation (NYCB statistics are in dark blue, and the industry averages are in light blue).

Highly efficient and consistent profitability in any market
Another reason to love New York Community Bancorp is that it is a consistently efficient and profitable bank. Multi-family loans are less costly to originate and service than other types of mortgages, and the bank does an excellent job of controlling its expenses. In fact, New York Community Bancorp maintains an efficiency ratio (the amount of money it spends to generate revenue) far superior to that of its peers.

In the most recent quarter, the bank spends just $0.45 to generate each dollar of revenue, while the average bank spends more than $0.62.

Nycb Efficiency

Source: NYCB investor presentation.

This produces consistent profitability and gives the bank more "wiggle room" to absorb adverse economic conditions. New York Community Bancorp didn't have a single year of negative earnings during the financial crisis years, and it didn't have to cut its dividend. How many other banks can say the same?

Where do we go from here?
The main concern I have with New York Community Bancorp is its ability to grow while maintaining its advantages (efficiency, credit quality, and consistency).

The bank has ventured into traditional (1-4 family) mortgages, which has produced more than $600 million in income since 2010, but the bank is still highly dependent on its core business. Most of the portfolio (94.8%) consists of multi-family and commercial real estate loans, and the vast majority, or 86%, of these are backed by properties in the New York metro area.

Historically, the bank has grown through acquisitions. Most of the acquisitions have been of New York-based banks and have served to expand the company's core business, but recently the bank has begun to expand geographically into states such as Ohio and Arizona. If you take another look at the efficiency chart above, you'll notice that the gap between the bank's efficiency and that of the sector has begun to narrow in recent years.

The problem is that expanding its branch network and its non-core lending programs are not nearly as cost-effective as the multi-family and commercial real estate lending business, and they have the potential to erode New York Community Bancorp's competitive advantages of efficiency and a near-zero charge-off rate.

The bank's biggest challenge going forward is to find ways to grow and expand without compromising its business model, which has proven to be extremely successful.

Still a buy, despite the concerns
Despite the concerns about growth, I still consider New York Community Bancorp to be a solid long-term investment. However, I wouldn't expect the historical annual returns of 20% or more to continue going forward, as I feel the growth rate of the past isn't sustainable if the bank is to maintain its efficiency and consistency.

Having said that, I think the bank is an excellent dividend stock to own for decades to come.

Matthew Frankel has no position in any stocks mentioned. The Motley Fool has no position in any of the stocks mentioned. Try any of our Foolish newsletter services free for 30 days. We Fools may not all hold the same opinions, but we all believe that considering a diverse range of insights makes us better investors. The Motley Fool has a disclosure policy.