After puttering quietly for years in the shadows cast by bigger and flashier banks, First National Bank of Long Island lately has attracted the attention of financial analysts enamored with its success.
The bank, based in Glen Head, stood out in a study released last month by Bank Intelligence Solutions, a banking research company, that sought to identify the highest-performing banks in the country.
The research company sought to figure out how apparent success stories happened. Andy Grinstead, senior vice president of Bank Intelligence Solutions, said First National's success appeared to be the result of discipline and focus.
Even in the midst of a severe recession, the bank's credit quality remained exceptionally high. Bad loans have been among the lowest in the industry. In three of the last five years it wrote off no bad loans at all.
"They obviously know their customers very well," Grinstead said.
The bank, unlike many others, worked hard to control expenses, he said. Its employee count is lower than most others of similar size, and it pays less on deposits than most banks. Those efficiencies and the low default rate, in turn, allow it to charge less on loans to borrowers, who often are depositors as well.
"They appear to do a great job at gathering the entire [banking] relationship," Grinstead said.
Michael Vittorio, the bank's president and chief executive, said the recognition validates the bank's effort to choose carefully among would-be borrowers, and to grow solidly instead of quickly.
"We stayed with our knitting," Vittorio said. "We didn't reach for earnings to the detriment of quality. . . . We set up credit policies that had us more conservative than the market."
The bank has avoided making construction loans, which are viewed as shakier than most others, and focuses on seeking high-quality commercial and residential borrowers.
Other analysts have noticed, too.
Keefe, Bruyette & Woods, a Manhattan investment firm, praised the bank for avoiding involvement in risky securities and loans that have endangered many other banks. It and other analysts noted the bank raised about $30 million this month, strengthening its ability to grow.
And Vittorio said the bank is on the threshold of "dramatic" growth, particularly as big banks continue to turn off customers with impersonal service. First National now has $1.6 billion in assets and 33 branches on Long Island and in Manhattan.
"We put a tremendous amount of work into risk assessment," Vittorio said. "It's an old-fashioned approach. . . . We're not rushing out to play golf at our institution."