Monte Redman has been with Astoria Financial Corp. through each recession since 1977, when he joined the parent of Astoria Federal Savings & Loan. He led the Lake Success-based bank through the last one as chief operating officer.
Now, as chief executive since 2011, the 62-year-old Queens native and his staff are trying to navigate through the weak recovery from the downturn that ended officially in 2009 but, for many, hasn't ended yet.
In an uncertain economy, made more so by the political impasse in Washington, Astoria is re-emphasizing what had been a core business for it -- multifamily and commercial real estate lending. It had pulled back from that business in 2009 because of the Great Recession's effects on real estate, especially in New York City.
And Astoria is trying hard to market its skills and its 85 branches to business customers, with a beefed-up staff and the pitch that a locally based bank can better serve the needs of local businesses than what Redman calls the "big box" banks, while also having the resources that smaller community banks lack.
Q. How are the new marketing efforts going?
A. In 2012, we closed on $1.6 billion in multifamily commercial real estate loans [versus $204 million in 2011], so we were very successful in that. In 2011 and 2012 we grew our business banking deposits by double digits. As of the end of last year, business banking deposits were over $490 million.
Q. Your bank and others have reported declining loan delinquencies since the end of the recession. Is that trend continuing?
A. Our delinquency trend has continued to get better. As of the end of 2012, our one- and two-month delinquencies were down, our total delinquencies were down, our charge-offs were down and our [real estate owned from foreclosure] was down.
Q. So that's a good sign for the housing market, right?
A. I think it is. I think probably the one negative in the housing market in New York is the fact that this is a judicial [foreclosure] state, and it takes in excess of three years to go through the entire foreclosure process. That puts a ceiling in terms of the housing recovery.
Q. How so?
A. There are so many loans that are backlogged in the foreclosure process that it creates uncertainty as to the effect on the market. How many more homes are coming onto the market and when is that going to happen? I think uncertainty in anything makes people hold off, whether it's buying a home or expanding their business.
Q. How do you assess the confidence of the local businesses you're targeting about taking on new debt?
A. It's been slow but steady improvement. I think the biggest thing holding back businesses is the uncertainty -- over regulations, taxes and the uncertainty about what the government is going to do in terms of dealing with the economy.
Q. What regulations are you referring to?
A. Take a look at Obamacare. It is a major uncertainty. I don't think even the federal government understands all the ramifications of it and how it affects businesses. We have 200,000 businesses with less than 50 people on Long Island, and people are uncertain about what they'll have to do.
Q/ How would you assess the Federal Reserve's stimulus efforts?
A. In terms of unemployment, I don't think they've done anything to help. I'm not sure they can show a direct connection ... [They have] kept mortgage rates down. That was one of their goals, and it's been successful; that's about it.
Q. They've kept all interest rates down, which is OK if you're financing a house or car. But what about people who have savings and are depending on some income from them?
A. Effectively, the government is refinancing its debt on the backs of seniors. That's part of the effects of keeping interest rates low for five years and telling the world it's going to do it for another couple of years. M>
Q. What will be the effect on the housing market when these Fed efforts end and mortgage rates start to rise again?
A. We are at a historic low, so, yes, rates will have to move up. I think that interest rates are less important in terms of the housing market than getting rid of the uncertainty. Once the uncertainty is gone or at least reduced significantly, people will make decisions on homes and will determine, based on whatever interest rates are at the time, what they can afford. Right now they're not looking.
Q. Mortgages can rise a couple of points or they can soar. Do you remember during the early '80s when people were paying 12 or 14 percent? If they rise to that extent, won't it choke off the housing recovery?
A. I remember, but we have a long way to go before we get back to the late '70s or early '80s.
Q. Are there any government stimulus efforts you think might have done more to ease unemployment?
A. I don't think what the government calls stimulus was really stimulus. Whatever it was, it was short-term. Although this wasn't part of the original stimulus bill, they reduced the payroll tax by 2 percent for a couple of years. But it's temporary. And when you're planning -- whether you own a business on Long Island or you're an employee getting a few bucks more a week -- you know it's temporary. I think that stimulus needs to be permanent.
Q. Can you give me an example of what you'd like to see as a permanent stimulus?
A. If you're looking to stimulate, you're looking at something related to taxes. A lot of people in Washington have talked about doing away with some of the loopholes and lowering the overall rates. There are times when you actually lower the rates because it generates more business and you get more revenues. And I think that's something that needs to be done.
Q. What loopholes are you suggesting eliminating? One that's talked about a lot is the deduction for mortgage interest. If they took that away, wouldn't it have a negative effect on the economy here?
A. When you're talking about the loopholes you're talking more about big business -- the loopholes in terms of putting money overseas, into the Cayman Islands -- to bring money earned in this country back into the country. There are lots of things that are related to specific industries, specific ... loopholes for those industries and companies.
Q. What do you see as the major challenges to improvement in the Long Island economy?
A. The private sector has grown a lot better than the total. The public sector is really bloated. Federal and local government have been reducing. So the economy is moving forward. I think what you need to do is reduce the uncertainty to let the local economy expand further.
WHAT IT DOES: Corporate parent of the 85-branch full service Astoria Federal Savings & Loan, one of the largest Long Island-based banks
EMPLOYEES: 1,530 full-time equivalents as of Dec. 31
ASSETS: $16.5 billion as of Dec. 31