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De Novo Banking Success Story: Herald National Bank President and CEO Explains Why Now Is the Time to Launch a New Bank

Posted by Wendell Brock on Tue, Apr 07, 2009

Herald National Bank President and CEO David Bagatelle recently made an appearance on FOX Business News to discuss the banking environment with correspondent Connell McShane. Herald National opened its doors last November and currently operates three bank branches in the state of New York.

During the interview, Bagatelle asserted that now is a great time to establish a de novo bank—despite the turmoil in the financial markets and in the banking industry. A new bank competitor in this environment automatically has the striking advantage of a clean balance sheet. Unencumbered by toxic assets and rising defaults, the de novo bank can deliver its products and services at a much higher level of efficiency.

Bagatelle indicated that Herald National has realized some success in recruiting top talent from other banks. Many of these relationship managers were frustrated by the inability to serve their customers in this extremely tight lending environment. Herald National represented a great opportunity for those relationship managers to get back to the business of making loans.

Herald National is a balance sheet lender, and is therefore less impacted by the shutdown of the securitization market.

Looking ahead, Bagatelle was cautiously optimistic about programs initiated at the federal level to loosen up the securitization market. He did express concern about the state of the commercial real estate market, which may still be a ways from the bottom.

Click here to see the Bagatelle interview.

Topics: de novo success, Herald National Bank

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