Investment Banker Confident Of Revitalizing NJ's Carteret
Richard A. Bianco was a stranger to the thrift industry until he became chairman, president, and chief executive officer of Carteret Savings Bank three weeks ago.
But the 43-year-old investment banker says he is up to the task of turning around New Jersey's largest thrift. Based in Morristown, with $5.3 billion in assets, Carteret has been plagued by real estate losses and rattled by troubles at its holding company, AmBase Corp.
"Gee whiz, we're not sending a man to Mars," Mr. Bianco said in a telephone interview last week. "It's very basic, what we're trying to accomplish. We've got to get better before we get bigger. We've got to be good, smart bankers and weather the real estate economic storm in the Northeast."
Brash talk aside, Mr. Bianco faces formidable odds.
Audit Raises Red Flag
KPMG Peat Marwick sounded the alarm about the Carteret's viability in its 1990 independent audit of New York-based AmBase. With the Office of Thrift Supervision suing to strip $168 million in supervisory goodwill from Carteret's books, and deep losses at both Carteret and AmBase, there is "substantial doubt about [the firms'] ability to continue as going concerns," KPMG Peat Marwick said in the March 25 report.
In 1990, Carteret Bancorp. booked pretax losses of $73 million, compared with $47 million in earnings in 1989. Plagued by rising nonperforming loans, last year Carteret added $122 million to reserves against sour loans and real estate investments. That is 4 1/2 times the $27 million provision Carteret made in 1989.
Mr. Bianco, who owns 246,000 shares of AmBase stock, was one of five disgruntled shareholders who sought a seat on AmBase's board in January. The OTS approved his appointment in late May.
A massive corporate overhaul completed in February left Carteret as the sole holding of AmBase, which had insurance and securities subsidiaries. Horrified stockholders watched the company's value plunge below $1 a share, from a high of more than $16 in mid-1989. Last Friday, AmBase shares closed at 75 cents.
"If there's anybody who can turn this company around, Dick Bianco will do it," said I.W. Bader, a White Plains, N.Y., attorney who represents the Lindner Fund, a mutual fund that owns 7% of AmBase. "He's our only hope to get some value into the company."
Mr. Bianco was a managing director of Dillon Read & Co. from 1980 to 1989. He reported to Nicholas Brady, who was affiliated with the investment bank before becoming Treasury secretary in 1988.
Led Morgan Unit in London
From 1975 to 1980, Mr. Bianco was a bond trader at Morgan Stanley & Co. and headed its international fixed-income unit in London. He was a vice president of Bankers Trust Co. from 1970 to 1975.
"His ability to assess his environment and the institution and get people to change and adapt is pretty extraordinary," said C. Austin Fitts, a former Dillon Read colleague who heads the Hamilton Group, a fledgling investment banking firm in Washington.
Mr. Bianco will not reveal whether he is lining up new investment capital for Carteret, saying only that "there's not a bank in America that wouldn't like to have more capital."