Now that his Customers Bancorp has raised $100 million from Fidelity Investments, Wellington Management, and other pro investors in a stock offering last week, founder Jay Sidhu says he is ready to open offices in Philadelphia.
Not on Market Street in Center City, where all the other banks in Philly have flagship branches.
He's thinking Cottman Avenue, up in the Northeast.
Sidhu says he's bypassing the kind of downtown high-rise that his former $50 billion bank, Sovereign Bancorp, used to base its Philly operations before activist investors forced him from power six years ago. That bank was later sold to Spain's Banco Santander.
"We don't believe we need a Taj Mahal branch in downtown Philadelphia serving high-income, high-net-worth people," Sidhu told me. Too many banks are already fighting over Rittenhouse Square.
Instead, his current bank, $3.5 billion Customers Bank, "will be catering to the African American and Hispanic commmunity," Sidhu says. Besides the Northeast, he plans a smaller business center in West Philadelphia and a branch at a Germantown-area community center.
Catering, how? Sidhu says he is not interested in high-interest, subprime mortgage loans, high-fee, secured credit cards, or the other financial weapons by which American banks tend to separate people of modest means, damaged credit, or more greed than sense, from their cash.
Instead, Sidhu says he is looking for small depositors, homebuyers with good credit, neighborhood apartment landlords, bodega owners, cleaning-service crews, and other small- and medium-sized businesses whose owners would rather bank by smartphone than crowd into branch offices.
The bank already has about a dozen offices spread across Bucks, Berks, and Chester Counties, plus outposts near Trenton and New York.
It's also making wholesale loans to mortgage investors nationwide, through a warehouse lending unit headed by former GE Capital executive Glen Hedde.
"We're not putting our costs into brick and mortar, but into people," Sidhu says. His staff banks by appointment. "We'll have offices, but very few. We can operate the company more and more efficiently."
He is not going to copy his old rival TD Bank (formerly Commerce) in building "on the most expensive street corner," or opening early and shutting late, he says.
Sidhu has rehired Dick Ehst, Jim Hogan, and other former Sovereign lieutenants. Customers' staff topped 250 as of Dec. 31, up from 200 the year before, according to federal bank regulators.
If Wall Street gives him time, this time, Sidhu plans to grow the company to as much as $10 billion over the next five years, with profits approaching $100 million a year - up from $25.6 million in 2012 - and a market value of more than $1 billion.
When junk-bond king Michael Milken was sent to prison in the early 1990s, his name was stricken from a donors' wall at the University of Pennsylvania's Wharton School.
In contrast, since South Philly native Frank Quattrone's 2004 conviction on federal charges that he urged others to destroy potentially incriminating e-mails amid a stock-trading investigation was overturned by a federal appeals court three years later, the University of Pennsylvania Law School was able to accept $15 million from Quattrone to set up the Quattrone Center for the Fair Administration of Justice. The center is described by Penn as "a national research and policy hub created to catalyze longterm structural improvements to the U.S. criminal justice system."
Quattrone, son of a garment workers' union officer, attended Stella Maris parish school and St. Joseph's Prep, and made lifelong friends - who have stuck by him - before heading off to Wharton. He rose through the crowd of tech bankers taking companies public in the dot.com bubble to collect a fortune estimated at more than $100 million before the market flamed out in 2001.