As the banking behemoths teeter and beg, and the taxpayers shovel out hundreds of billions to save them, it is always nice to see a reminder of the way capitalism is supposed to work:
NY Post: With the future of big banks in question, tiny new start-ups like Heritage Bank are playing vulture to hobbled giants like Citigroup, UBS and Merrill Lynch.
Boasting pristine balance sheets and none of the toxic-mortgage headaches of its larger and more-established peers, New York-based Heritage and other start-ups are hoping to gobble up market share and top talent at a time when others are struggling to stay afloat.
Heritage CEO David Bagatelle, who helped launch Signature Bank about seven years ago, said the time is ripe for new, well-capitalised banks.
“It might be the best time ever to start [a bank],” Bagatelle told The Post.
Heritage, which got its national charter from the Office of the Comptroller of the Currency and caters to small and midsize businesses, has about $62 million in seed capital and is aiming to bag $25 million more from institutional investors over the coming months.
Its capital, already raised from institutional funds including Morgan Stanley subsidiary FrontPoint Partners, marks a record for a start-up bank.
Its strong start has helped Heritage poach top executives, including Larry Gore, former managing director of UBS Wealth Management, banker Marshall Perrin from Citigroup and John Hotchkiss, who’s worked at Merrill and the former Fleet Bank. All three bring with them large Rolodexes filled with middle-market clients. Read more >
Maybe the Treasury should stop throwing so much money down the TARP rat hole and start investing it in new banks instead?
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