'Where everybody knows your name," is The First National Bank of Long Island's slogan as it markets itself to an upscale clientele of small-business owners, professionals and others who want VIP service.
That specialization gives bank chief executive Michael Vittorio the perspective on Long Island's business scene of both a lender and a business executive. These days, he says, that perspective reveals a small-business community nervous about the future.
Vittorio started in banking as a teller in 1975, joined First of Long Island in 2002 and was named chief executive in 2003. In an interview he talked about the banking business, small business, housing foreclosures and the Long Island economy.
Did you see in 2011 any evidence of renewed confidence on the part of businesses in their willingness to use their lines of credit for expanding or modernizing facilities?
Only to a limited degree. For the most part, most of the small-business and middle-market companies that bank with us are guarded. They do not feel they are operating in a friendly business environment in terms of government -- regulation has a lot to do with that. And they are suspicious of the sustainability of the economic recovery.
Is it as easy for small businesses to borrow today as it was, say, in 2007? You've indicated that you loaned conservatively before the recession. Have you tightened any further since the recession?
We've tightened up a tad more both on the small-business side and residential mortgage side. I think we still remain guarded about the possibility of a double dip [recession]. Economic data seems to indicate that will not happen, however the recovery is fragile. We want to lend money. That would help my organization, be good for my shareholders . . . but we don't want to put loans on the books that are going to go bad.
As a banker, do you think that the right approach at this point is to try to modify mortgages for people facing foreclosure or, as some people suggest, let the free market work -- let the market hit bottom, let it sort itself out, then start to grow again?
I think if you're dealing with sincere and honest [homeowners], it would be mutually beneficial to restructure the loans and give families a chance for a new start. I think it would benefit the bank, and it would benefit those families.
Let's define sincere and honest people.
People who don't want to take advantage of the system. They hit some hard times, and they really intend to pay you back. It's not a trick, so to speak.
Banks hate low interest rates, but don't they make homes and cars more affordable and stimulate the economy?
The answer is yes, OK? But we've had them for more than two years. How much [housing] inventory do you see moving on Long Island? Ask the local residential mortgage brokers what's been going on the past two years. So we've had these low interest rates, and it's really not working, is it? What really makes real estate inventories move and what really affects real estate values? Jobs. We have to create jobs.
Although the Federal Reserve says, "We're keeping interest rates low to spur economic activity," there are a lot of negatives involved in that. Think about Long Island and all those baby boomers who are retiring. Well, if you're getting [low rates of return] on your savings money and you probably had your 401(k) destroyed back in '08 and haven't quite recovered from that, how rich are you going to feel and how willing are you to spend money? That Baby Boom population stretches across the nation, and if they feel poor, they're not going to spend, and if they're not going to spend, we're not going to grow.
How would you increase jobs?
Capital improvements to our infrastructure in the tristate area would do a lot for the construction industry and for Long Island construction workers to create jobs. But we also should become more assertive in trying to attract private-sector companies to Long Island with tax incentives.
There has been a lot of ill feeling toward big banks because of the recession, foreclosures and the bank bailout. Has that affected smaller banks like yours?
First National of Long Island did not take [Troubled Asset Relief Program] money, does not have credit problems, was not involved in the predatory practices that have been written about, did not underwrite loans to sell as securities. Any loans we write, for the most part, we underwrite for our own portfolio. But the public tends to hear about problems and they say, "That's the banks."
Certainly there were a few very large banks that some say did inappropriate things. I think a bank like ours, the community bank-type organization, probably was tainted in the minds of the public with the same broad brush. And that's unfair. Life isn't always fair but we try to keep articulating the fact that we are different.
Company: The First of Long Island Inc., holding company for The First National Bank of Long Island.
Headquarters: Glen Head.
Stock price Friday: $26.20.
Assets at end of 2011: $2 billion.
Net income in 2011: $19.46 million, or $2.20 per share.
Allowance for loan losses at end of 2011: $16,572, or 1.68 percent of total loans.
Name: Michael N. Vittorio, president and chief executive, The First National Bank of Long Island.
Last book read: "The Big Short" by Michael Lewis.
Spends his spare time: With his family.
Education: Master of professional studies, LIU Post.
Raised in: North Massapequa.
Last vacation: St. Maarten.