The specialty investment banking firms Sandler ONeill & Partners LP and Keefe, Bruyette & Woods Inc. were pulling their businesses back together in temporary offices on Friday, despite the loss of about one-third of their staffs in last weeks World Trade Center attack.
The list of missing and presumed dead includes Herman Sandler, who founded Sandler in 1988, and Joseph J. Berry, Keefes chairman and co-chief executive, as well as other senior executives who helped build the rival firms into respected financiers and advisers to the banking industry. (See Keefe Bruyette, Sandler Face Devastating Losses, American Banker, Sept. 13.)
As of Friday morning 64 employees and two outside consultants were still unaccounted for at Sandler ONeill. Ninety of its 170 employees worked on the 104th floor of Two World Trade Center, the south tower. A Keefe Bruyette spokesman said 67 people were missing from among the 171 who worked on the 88th and 89th floors in the south tower. Keefe had a total of 225 employees.
Even as survivors dealt with the pain of losing so many co-workers, some were trading bonds, laying plans for the reopening of the stock markets (which was scheduled to take place Monday), and in at least one case, even pushing forward with a securities offering already in the works.
On Wednesday, Sandler filed a registration statement with the Securities and Exchange Commission for an $18.5 million stock offering by Southern Financial Bancorp Inc. of Warrenton, Va., west of Washington, D.C. Sandler is the sole underwriter for the offering. Investment banker Thomas W. Killian contacted bank officials on Tuesday, and they determined to go ahead with the offering, even as the tragedy continued to unfold.
Despite our grief, we remain strong, and we will emerge more resolute and determined than ever, Jimmy J. Dunne 3d, managing principal of Sandler, said in a letter Thursday to employees, clients, and friends of the firm. Sandler employees, who are working out of two temporary offices in Manhattan, have already resumed some bond trading. A spokesman said the firm expects equity trading systems to operate Monday.
Keefe Bruyette board members and senior staff members met Thursday and Friday in office space borrowed from their midtown Manhattan law firm, Wachtell, Lipton, Rosen & Katz, to look at different aspects for a plan going forward, according to a spokesman. The company planned to resume bond and equities trading Monday, most likely from branch offices outside New York.
Tim Matz, a lawyer and managing partner at Elias, Matz, Tiernan & Herris LLP in Washington, Sandlers law firm for the Southern Financial offering, said Sandler should be able to proceed with the offering because its investment banking unit was largely spared.
Its a people business. Its the people they know, the investment community they go to. Theyre intact, with one exception, Mr. Matz said. (Among those still missing is Sandlers merger chief, Christopher Quackenbush.)Even though Sandler is trying to get back to business, the losses will hit hard, Mr. Matz said. I think its going to affect everyone. Its an incredible tragedy. You can replace equipment, but you cant replace individuals, and some extraordinary individuals were lost.
Sandler and Keefe Bruyette are friendly rivals in providing equity and fixed-income underwriting, mergers and acquisitions advice, and other services, particularly for small and midsize banks. Both also have solid reputations in the industry for their research, often covering smaller financial services firms overlooked by analysts at larger firms.
David P. Lazar, a Philadelphia investment banker who has often worked opposite Keefe Bruyette and Sandler bankers on merger negotiations, said the firms may find it difficult to bounce back. Its devastating to them. I dont know how you rebuild from this.