ABA Banking Journal - December 2008 - (Page 27) The bank that hates “customers” Signature Bank, thrives in a too-big-to-fail market by giving veteran bankers breathing room and a chance to stick around oe DePaolo hates customers—not the people, of course, but the term “customer.” “I can’t stand it when someone refers to a ‘customer’.” says the president and CEO of New York City’s Signature Bank. “A customer is somebody who goes to the grocery store. We have clients—someone you have a deep relationship with. You never hear a lawyer refer to a ‘customer’.” He points out that the private, middle-market businesses on which the bank focuses have more of a relationship on a daily basis with their banker than with their lawyer, accountant, or doctor. Signature Bank is a small New York City player with big ideas about what a bank should be, and a compensation approach that makes them work. Calling a $6.9 billion-assets bank “small” is relative. Compared to JPMorgan Chase, Citibank, Bank of America, Capital One, HSBC, and other megabanks stalking the canyons of Manhattan and its suburbs, Signature Bank is a blip. The only reason it might get on their radar is when it lifts out a team of veteran bankers—which it has been doing regularly for seven and a half years. Hiring people from the big guys is a standard operating procedure for small and midsize banks, but in Signature’s case, the practice is combined with an unusual operating philosophy that so far has propelled its growth from $50 million in assets to nearly $7 billion since 2001, without an acquisition. It also allowed the bank to go public three years after opening, and to take out its initial capital partner, Bank Hapoalim, in four years. This September, the bank raised $140 million in an oversubscribed secondary offering, bringing its Tier 1 capital to 9.64%. (The bank applied for $120 million under the “TARP” Capital Purchase Program, which, if approved, would bring its Tier 1 capital to a pro forma 11.49%.) Maintaining high levels of capital, says DePaolo, is the only way a $6.9 billion bank can compete for deposits against the toobig-to-fail banks, all of which it competes against. Signature focuses on privately owned small businesses. It provides every client a single point of contact at one of its dozens of By Bill Streeter, editor-in-chief J private client groups. It concentrates more on deposits than loans, and it puts everyone on incentive compensation balanced to pay for sustainable business and client support. The bank’s growth comes from the business brought in by the teams of bankers it hires away from the big banks, and from the new business that these teams develop. It does not advertise. The bank is the brainchild of DePaolo, a 49-year-old former CPA, and two colleagues, Scott Shay, chairman, and John Tamberlane, vice-chairman. DePaolo and Tamberlane formerly Signature Bank CEO Joseph DePaolo runs the bank as a professional services firm worked for the old Republic Bank of New York, where parts of the strategy described above were used. But when Republic was acquired by HSBC Bank, the two joined with Shay, a client, and set out on their own. Attracting the “fiercely loyal” There have a been a raft of mergers in the New York market in the last decade in which middle market banks were swallowed by larger institutions. What typically happens, says DePaolo, is that the big banks take private business clients and homogenizes them, often moving them into the retail group. “Now, all of a sudden, if you have a question,” says DePaolo, referring to clients, “you can’t call the banker that you’ve Subscribe at www.ababj.com ABA BANKING JOURNAL/DECEMBER 2008 27 http://www.signatureny.com http://www.ababj.com Table of Contents for the Digital Edition of ABA Banking Journal - December 2008 ABA Banking Journal - December 2008 Contents Editor’s Column Cover Story ABA Resources ABA Chairman’s Position Community Banking Pass the Aspirin The Bank that Hates "Customers" "Ivan the Terrible"Wreaks Havoc, but Adds New Business Line New Twist on Philanthropy:the "Second-Chance" Account Risk Management Tech Topics Webnotes Compliance Clinic MailBox Banker’s Mart To Advertise/Index of Advertisers The Economy ABA Banking Journal - December 2008 http://www.nxtbook.com/naylor/BAKS/BAKS0515 http://www.nxtbook.com/naylor/BAKS/BAKS0415 http://www.nxtbook.com/naylor/BAKS/BAKS0315 http://www.nxtbook.com/naylor/BAKS2/BAKS1014 http://www.nxtbook.com/naylor/BAKS2/BAKS0914 http://www.nxtbook.com/naylor/BAKS2/BAKS0814 http://www.nxtbook.com/naylor/BAKS2/BAKS0714 http://www.nxtbook.com/naylor/BAKS2/BAKS0614 http://www.nxtbook.com/naylor/BAKS2/BAKS0514 http://www.nxtbook.com/naylor/BAKS2/BAKS0414 http://www.nxtbook.com/naylor/BAKS2/BAKS0314 http://www.nxtbook.com/naylor/BAKS2/BAKS0214 http://www.nxtbook.com/naylor/BAKS2/BAKS0114 http://www.nxtbook.com/naylor/BAKS2/BAKS1213 http://www.nxtbook.com/naylor/BAKS2/BAKS1113 http://www.nxtbook.com/naylor/BAKS2/BAKS1013 http://www.nxtbook.com/naylor/BAKS2/BAKS0913 http://www.nxtbook.com/naylor/BAKS2/BAKS0813 http://www.nxtbook.com/naylor/BAKS2/BAKS0713 http://www.nxtbook.com/naylor/BAKS2/BAKS0613 http://www.nxtbook.com/naylor/BAKS2/BAKS0513 http://www.nxtbook.com/naylor/BAKS2/BAKS0413 http://www.nxtbook.com/naylor/BAKS2/BAKS0313 http://www.nxtbook.com/naylor/BAKS2/BAKS0213 http://www.nxtbook.com/naylor/BAKS2/BAKS0113 http://www.nxtbook.com/naylor/BAKS2/BAKS1212 http://www.nxtbook.com/naylor/BAKS2/BAKS1112 http://www.nxtbook.com/naylor/BAKS2/BAKS1012 http://www.nxtbook.com/naylor/BAKS2/BAKS0912 http://www.nxtbook.com/naylor/BAKS2/BAKS0812 http://www.nxtbook.com/naylor/BAKS2/BAKS0712 http://www.nxtbook.com/naylor/BAKS2/BAKS0612 http://www.nxtbook.com/naylor/BAKS2/BAKS0512 http://www.nxtbook.com/naylor/BAKS2/BAKS0412 http://www.nxtbook.com/naylor/BAKS2/BAKS0312 http://www.nxtbook.com/naylor/BAKS2/BAKS0212 http://www.nxtbook.com/naylor/BAKS2/BAKS0112 http://www.nxtbook.com/naylor/BAKS2/BAKS1211 http://www.nxtbook.com/naylor/BAKS2/BAKS1111 http://www.nxtbook.com/naylor/BAKS2/BAKS1011 http://www.nxtbook.com/naylor/BAKS2/BAKS0911 http://www.nxtbook.com/naylor/BAKS2/BAKS0811 http://www.nxtbook.com/naylor/BAKS2/BAKS0711 http://www.nxtbook.com/naylor/BAKS2/BAKS0611 http://www.nxtbook.com/naylor/BAKS2/BAKS0511 http://www.nxtbook.com/naylor/BAKS2/BAKS0411 http://www.nxtbook.com/naylor/BAKS2/BAKS0311 http://www.nxtbook.com/naylor/BAKS2/BAKS0211 http://www.nxtbook.com/naylor/BAKS2/BAKS0111 http://www.nxtbook.com/naylor/BAKS2/BAKS1210 http://www.nxtbook.com/naylor/BAKS2/BAKS1110 http://www.nxtbook.com/naylor/BAKS2/BAKS1010 http://www.nxtbook.com/naylor/BAKS2/BAKS0910 http://www.nxtbook.com/naylor/BAKS2/BAKS0810 http://www.nxtbook.com/nxtbooks/sb/ababj0710 http://www.nxtbook.com/nxtbooks/sb/ababj0610 http://www.nxtbook.com/nxtbooks/sb/ababj0510 http://www.nxtbook.com/nxtbooks/sb/ababj0410 http://www.nxtbook.com/nxtbooks/sb/ababj0310 http://www.nxtbook.com/nxtbooks/sb/ababj0210 http://www.nxtbook.com/nxtbooks/sb/ababj0110 http://www.nxtbook.com/nxtbooks/sb/ababj1209 http://www.nxtbook.com/nxtbooks/sb/ababj1109 http://www.nxtbook.com/nxtbooks/sb/ababj1009 http://www.nxtbook.com/nxtbooks/sb/ababj0909 http://www.nxtbook.com/nxtbooks/sb/ababj0809 http://www.nxtbook.com/nxtbooks/sb/ababj0709 http://www.nxtbook.com/nxtbooks/sb/ababj0609 http://www.nxtbook.com/nxtbooks/sb/ababj0509 http://www.nxtbook.com/nxtbooks/sb/ababj0409 http://www.nxtbook.com/nxtbooks/sb/ababj0309 http://www.nxtbook.com/nxtbooks/sb/ababj0209 http://www.nxtbook.com/nxtbooks/sb/ababj0109 http://www.nxtbook.com/nxtbooks/sb/ababj1208 http://www.nxtbook.com/nxtbooks/sb/ababj1108 http://www.nxtbook.com/nxtbooks/sb/ababj1008 http://www.nxtbook.com/nxtbooks/sb/ababj0908 http://www.nxtbook.com/nxtbooks/sb/ababj0808 http://www.nxtbook.com/nxtbooks/sb/ababj0708 http://www.nxtbook.com/nxtbooks/sb/ababj0608 http://www.nxtbook.com/nxtbooks/sb/ababj0508 http://www.nxtbook.com/nxtbooks/sb/ababj0408 http://www.nxtbook.com/nxtbooks/sb/ababj0308 http://www.nxtbook.com/nxtbooks/sb/ababj0208 http://www.nxtbook.com/nxtbooks/sb/ababj-compsurv08 http://www.nxtbook.com/nxtbooks/sb/ababj0108 http://www.nxtbook.com/nxtbooks/sb/ababj1207 http://www.nxtbook.com/nxtbooks/sb/ababj1107 http://www.nxtbook.com/nxtbooks/sb/ababj1007 http://www.nxtbook.com/nxtbooks/sb/ababj0907 http://www.nxtbook.com/nxtbooks/sb/ababj0807 http://www.nxtbook.com/nxtbooks/sb/ababj0707 http://www.nxtbook.com/nxtbooks/sb/ababj0607 http://www.nxtbook.com/nxtbooks/sb/ababj-jackhenry http://www.nxtbook.com/nxtbooks/sb/ababj0507 http://www.nxtbook.com/nxtbooks/sb/ababj0407 http://www.nxtbook.com/nxtbooks/sb/ababj0307 http://www.nxtbook.com/nxtbooks/sb/ababj-compsurv07 http://www.nxtbook.com/nxtbooks/sb/ababj0207 http://www.nxtbook.com/nxtbooks/sb/ababj0107 http://www.nxtbook.com/nxtbooks/sb/ababj1206 http://www.nxtbook.com/nxtbooks/sb/ababjcompsurv2006 http://www.nxtbookMEDIA.com
For optimal viewing of this digital publication, please enable JavaScript and then refresh the page. If you would like to try to load the digital publication without using Flash Player detection, please click here.