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Seven years ago, 65 HSBC execu- tives simultaneously jumped ship to embark on an unlikely adventure: launching a brand new bank at a time when most financial institutions were consolidating. HSBC would later point to Joseph DePaolo, the former Republic National Bank of New York managing director who became CEO of New York City-based Signature Bank, as the "mastermind" behind that launch-and the resulting HSBC exodus.
It's a charge DePaolo, 49, doesn't contest. "We started putting together a business plan the day HSBC announced they were taking over Republic," he recounts. "We didn't even give them a chance."
To DePaolo, the very concept driving the rash of mergers sweeping the banking sector? that bigger translated to better? was anathema. At a time when globalization was being heralded as the great growth opportunity du jour, his view was very different. Rather than global reach and international brand recognition, he felt that Republic's prized private banking clients wanted a more intimate relationship with their bank. "HSBC was too large, too global and wouldn't have allowed us to function the way we needed to handle Republic's New York clientele," he says.
As it happened, HSBC didn't get a chance. DePaolo and four other former Republic executives, including vice chairman John Tamberlane, departed shortly after the merger to assemble what would become Signature Bank. Raising the funds to launch-Bank Hapoalim of Israel provided startup and operating capital-and luring employees took the better part of a year. Then Signature staged a coup by orchestrating that now-legendary simultaneous resignation. The 65 former Republic Bank employees, representing 12 client teams, left HSBC on April 27 of 2001 and picked up their Signature business cards that same evening.
"We were constantly talking to those team members, and there were a lot of big bets going on that not everyone would resign," says DePaolo. "But we had a cocktail reception that night and every single one came. As they left we handed them their business cards. We opened the bank on May 1."
The hope was that each team would bring with it a roster of clients in Signature's primary target market: owners and managers of privately owned businesses. And Signature (trading on NASDAQ at $29.80 at press time) continues to follow that growth...