Wall Street Veteran Joins Resolutions Unit at FDIC
Robert H. Hartheimer belongs to an emerging breed of bureaucrat: the investment banker who trades Wall Street for Washington.
Having relinquished a post at Smith Barney, Harris Upham & Co., Mr. Hartheimer starts work today at the Federal Deposit Insurance Corp. as an associate director in the division of resolutions.
His job is to bail out big banks. His motto: the earlier and the cheaper the sale, the better.
Division Is Just Coming Together
Though the FDIC has handled the failures of Bank of New England, Southeast Bank, and a handful of others in New Hampshire this year, its resolutions division is just coming together.
Mr. Hartheimer, 34, reports to the division director, Harrison Young, another Wall Street veteran who joined the agency early this year. Other recent imports from New York are Steve Willard, a lawyer from Sherman and Sterling, and Kevin Stein, an investment banker from Dean Witter Reynolds Inc. Both will report to Mr. Hartheimer and work on large bank rescues.
"His design is to get a few of us down there to help improve on what's been done in the past," Mr. Hartheimer said of Mr. Young's hiring from Wall Street.
And improve Mr. Young has. In the Southeast deal, the FDIC got First Union to absorb 15% of the losses on Southeast's sagging loan portfolio. The agency moved in quickly, cutting the deal's cost by preserving the franchise's value.
Mr. Hartheimer's experience ought to help improve the resolution process even more.
"The FDIC is not that different from the private sector," he said. "You don't make as much money, but you still try to act as quickly and efficiently as you can."
After graduating from the University of Pennsylvania's Wharton business school in 1982, Mr. Hartheimer went to work at A.G. Becker, an investment banking firm that was bought by Merrill Lynch in 1984. He stayed at Merrill until December 1986, when he joined Smith Barney.
On Wall Street, Mr. Hartheimer primarily did corporate finance work for financial institutions. He has structured and priced asset sales, such as bank credit card portfolios. He has priced and sold bank and thrift debt and equity. In the mid-1980s, he launched a number of initial public offerings for mutual savings banks converting to stock ownership.
Worked on Unloading Continental
The FDIC first hired Mr. Hartheimer as a consultant in 1988 to help it unload $1 billion in common and preferred stock in Continental Bank Corp.
For his new post, he has moved with his wife and two-year-old son from a cramped Manhattan apartment to a three-bedroom house in northwest Washington. "It has a porch," Mr. Hartheimer said proudly.