The president of Signature Bank, a $1.4 billion-asset institution that was founded 18 months ago, says it is looking to grow on Long Island by offering an array of private-client services to the island's wealthy.
The New York City bank, a subsidiary of Israel's Bank Hapoalim, this week hired 14 executives to start a private-client group on Long Island. Joseph J. DePaolo, the bank's president and chief executive officer, said nine of the new executives had worked for European American Bank in that market and that this would let Signature's new private-client group hit the ground running.
"This is not a mass market initiative," said Mr. DePaolo. "With the wealthy it isn't, 'If you build it they will come.' " Signature opened a branch office in Garden City, Long Island, last June and since then has gathered $120 million of core deposits there.
"There are significant … middle-market and small businesses in this area, and there are principals and owners that need private banking attention," Mr. DePaolo said. The bank was started early last year, he said, to "fill a vacuum" for a smaller bank to offer banking and investment management services to wealthy people in New York.
Lucy Iannucci, one of the 14 just hired, is a senior vice president and the group director of Signature's private-client unit. Ms. Iannucci is a former executive at EAB and Citigroup Inc. (which bought EAB in February 2001), Mr. DePaolo said.
"People are loyal to their bankers and to their financial advisers, not to the buildings, not to the banks," he said. "Loyalty to banks went away when banks were bought and bought and bought."
"I know that I cannot compete with the Citibank brand," he added, "so why should I advertise? We know our strength has to be in our people. We are the people we hire."
By hiring teams of bankers for strategic sites, Mr. DePaolo said, Signature has grown significantly since it opened with six offices, five in Manhattan and one in Brooklyn, and $42.5 million of assets. Today, its $1.4 billion of assets are spread through nine offices, five in Manhattan, two in Brooklyn, one in Westchester County, N.Y., and one in Garden City.
He said Signature may eventually expand outside New York state but that for the immediate future its focus remains in-state.
Competition for Long Island's wealthy customers comes from large banking companies such as North Fork, Commerce of New Jersey, Washington Mutual, J.P. Morgan Chase, FleetBoston, and Citigroup. Ann M. Limberg, Fleet's regional market leader for Long Island, agreed that the market is attractive because of its sophisticated and wealthy customer base.
"If you want to grow along Long Island, you have to have a committed and grounded staff based here for a long time," she said. "As we have grown in size and stature, our commitment to Long Island has always remained strong."
Fleet has 20 officers in its Melville, N.Y., office. It announced this month that it had hired a former Morgan Chase executive to help it expand in private banking on Long Island. Ms. Limberg said seven of the Melville officers develop private-client business.
"We are still one of the fastest-growing private banks out here, and we are gaining in scope and stature," Ms. Limberg said. "Our stability has allowed us to grow in this market," she said, referring to Fleet's decades-old banking presence on Long Island.
Analysts agreed that a bank needs executives with strong community contacts to expand a private-client base in any market.
"You can't succeed with just a satellite office or a team that is imported from one of your other offices," said Burton Greenwald, an analyst in Philadelphia. "A home-grown team is always the best recipe for success in a market."
Ms. Limberg said Fleet will continue to look to expand on Long Island, and Mr. DePaolo said Signature will open a second Long Island office by next March 31.
"Right now our focus is on growing inside of this market," he said. "Other banks build first and grow later, but we will never open a location without a team to generate business in that location first."
