A small bank in an affluent part of New York State is using residential mortgages to solidify relationships with area businesses.
Commercial loan officers at First National Bank of Long Island would just as soon offer a company owner a home mortgage as a line of credit.
The officers are trained to look for opportunities for additional business, and home mortgages are high on the priority list.
"It's a way we do business," said J. William Johnson, chairman of First of Long Island, which has $425 million of assets.
The strategy is apparently paying off. One of every five residential mortgages that First of Long Island wrote last year was to business owners with commercial accounts at the bank.
First of Long Island is 130 miles east of New York City on a spit of land jutting into Long Island Sound. With its headquarters in the hamlet of Glen Head, First of Long Island is in the heart of Long Island's "Gold Coast," an expanse of multimillion-dollar homes and high-tech businesses.
Knowing its customers' penchant for expensive real estate, First of Long Island offers a number of jumbo mortgage products. And, recognizing that business owners may prefer faster equity buildup, the bank has introduced nine-year and 12-year residential mortgages.
Analysts say smaller banks such as First of Long Island are well positioned to expand relationships with customers. Typically, employees at these institutions handle a number of duties, which can encourage cross- selling.
Larger banks have more segregated operations that can leave employees focused on just one particular area, analysts said.
First of Long Island said the cross-marketing strategy has had a positive impact on dealings with business accounts.
"We get a pretty good degree of satisfaction from our customers," said Richard Kick, senior vice president who oversees mortgages.
Mr. Kick said the program's success comes from proving to business owners that their personal needs can be as well cared for as their professional requirements. Once a commercial loan officer has determined the business owner is interested, the customer is referred to one of the bank's mortgage specialists.
Bernie Yatauro, who has long relied on First of Long Island to assist his telecommunications business, Cass Inc., initially planned to deal with another bank for his jumbo residential mortgage.
He reasoned that a larger, more consumer-oriented institution would offer him a better deal. But, Mr. Yatauro said, First of Long Island's "personalized service and competitive rates" won him over.
"I gave them a chance," Mr. Yatauro said. "And I was very pleasantly surprised."
