James H. Herbert, II

Jim Herbert, II
Born James H. Herbert, II
1944
Nationality American
Education Babson College (BS)
New York University (MBA)
Occupation Banker, entrepreneur, business executive, philanthropist
Years active 1970s-present
Employer First Republic Bank
Notable work Founding First Republic Bank
Board member of San Francisco Ballet Association,[1] Lincoln Center for the Performing Arts,[1] The Basic Fund[2]
Awards National Foundation for Teaching Entrepreneurship - Entrepreneurial Philanthropy Award (2000), American Banker - Banker of the Year (2014)
Website FirstRepublic.com

James "Jim" Herbert, II (born 1944) is an American banker, business executive, and philanthropist best known as the co-founder of First Republic Bank,[3] a San Francisco-based company that offers consumer lending, business banking, personal banking and residential lending.[4] After serving as founding president[5] and CEO of San Francisco Bancorp from 1980 until 1985,[5] that year Herbert co-founded First Republic Bank,[6] becoming CEO, president, and eventual chairman.[7] He took the bank public in 1986[8] and also oversaw First Republic's acquisition by Merrill Lynch in 2007.[9] Merrill Lynch was acquired by Bank of America in 2008,[10] which then sold First Republic to a constortium of investors[11] in "one of the only bank sales [in 2009] not to require assistance from the Federal Deposit Insurance Corporation."[11] That year the San Francisco Business Times recognized Herbert as a Most Admired CEO.[12] Herbert took First Republic public again in 2010,[13] and in 2014 American Banker named Herbert their Banker of the Year.[13]

Herbert has overseen a number of changes at First Republic, including the implementation of a $20 minimum wage, a paid volunteer program for all First Republic employees,[14] and homeowners and financial literacy programs for underserved neighborhoods in First Republic's markets.[14] Based in Manhattan and San Francisco,[15] Herbert has been involved with a number of non-profit organizations, arts organizations, and community initiatives since early in his career, serving on the boards of organizations such as the National Foundation for Teaching Entrepreneurship[5] and the Lincoln Center for the Performing Arts.[7][1] Previously a director of the National Foundation for Teaching Entrepreneurship (Northern California),[5] the organization awarded him their Entrepreneurial Philanthropy award in 2000.[16]

Early life and education

James "Jim" H. Herbert, II[7] was born 1944.[17] He attended Babson College in Wellesley, Massachusetts as an undergraduate student, graduating in 1966 with a Bachelor of Science degree.[7] In 1969 he graduated from New York University with an MBA.[7] He also graduated from the President's Leadership Program at Harvard Business School.[5]

Career

Bancorp and First Republic (1980s-2005)

James Herbert became founding president,[5] chief executive officer, and a director of San Francisco Bancorp[7][1] in 1980.[5] He retained the roles until June 1985,[5] and the following month[5] Herbert cofounded First Republic Bank.[17] Founded with ten employees,[17] Herbert became founding CEO and joined the board.[7] The bank went public in 1986.[18][8] Among other entities, General Atlantic was an early investor in the firm, putting up about $5 million in 1987.[11] Herbert was serving as president and CEO of First Republic Bancorp Inc as of 1997. That year company shareholders "approved the elimination of its existing holding company structure by merging into its sole subsidiary," with that subsidiary converted into a commercial bank.[8] At the time, the company had 13 locations and $2.2 billion in assets,[8] which had risen to roughly $2.5 billion in assets by the end of 1997.[19] By 1999, the company had branches in 19 locations[20] and remained "a publicly held bank specializing in luxury home lending, private banking and business banking," with "many clients in the entertainment industry."[20]

At First Republic, Herbert helped establish an atypical clawback provision in the bank's business model, where the "banker who made the loan takes the first hit if the mortgage goes bad in the first few years." According to Herbert, the policy makes loan agents personally invested in their client's portfolios.[12] American Banker called First Republic as a notable implementer of the strategy.[21] Among other initiatives, First Republic also implemented a fitness stipend and subsidized meal program for all its employees.[14] Herbert oversaw First Republic's implementation of ATM-fee rebates on checking accounts, allowing customers to use any ATM for free.[12] The company is also atypical in relying on "relationship-based service"[21] which it provides with "a single point of contact for all its services."[22]

Merrill Lynch (2006-2008)

See also: Merrill Lynch

First Republic began expanding in the Northeast United States in 2000, as well as along the west coast and the Pacific Northwest. That year First Republic also purchased the Bank of Walnut Creek near San Francisco.[23] First Republic was financially involved with industries such as "wine, venture capital and nonprofits" by 2006, and served as a banker and "luxury-home mortgage lender to many wealthy individuals."[23] Under James Herbert, First Republic underwent a series of ownership changes starting in 2007, beginning with its announced purchase by Merrill Lynch on January 29, 2007 for $1.8 billion.[23] The company was to be operated as a separate business of Merrill Lynch,[6] with Herbert retaining his positions.[24] Headquarters were to remain in San Francisco,[23] with First Republic's approximately 60 offices to remain operational without interference.[17] First Republic's stock value rose significantly after the announcement,[23] and the Merrill transaction was finalized on September 21, of 2007.[9] First Republic controlled approximately $10 billion in banking assets as of 2007,[17] with Herbert taking on the additional role of senior vice president of Merrill Lynch.[5]

Bank of America and IPO (2009-2010)

Merrill Lynch was acquired by Bank of America[10] in late 2008,[17] and Herbert continued to run First Republic while it was a Bank of America subsidiary.[24] Serving mainly customers in California, New York, and Nevada,[11] by late 2009, First Republic had $19 billion in total assets.[11] Under James Herbert, First Republic had also avoided significant difficulties in the 2008 financial crisis.[11] Explained The New York Times in 2009, First Republic "largely stayed clear of subprime mortgages and other toxic assets that have crippled other banks."[11] That year, the San Francisco Business Times recognized Herbert as a Most Admired CEO.[12] In October 2009, Bank of America sold First Republic to a constortium of investors for about $1 billion.[11] Herbert led the sale,[25] explaining that “Bank of America decided [First Republic] was duplicative to its own very sophisticated" banking methods.[17]

The Bank of America sale closed on July 1, 2010.[17] According to the New York Times, the sale was "one of the only bank sales [in 2009] not to require assistance from the Federal Deposit Insurance Corporation."[11] First Republic had around 1,400 employees by the summer of 2010,[17] with approximately 60 offices[17] in California and cities such as Portland, Boston, New York City, and Greenwich, Connecticut.[17] Continuing to specialize in "luxury-home loans and provides banking, brokerage, trust and investment services,"[17] First Republic controlled banking assets of around $20 billion, with $18 billion in deposits and $15 billion in wealth-management assets.[17] In late 2010 James Herbert took First Republic public again, with First Republic's equity shareholders making about a 70% return in five months as a result.[25]

Growth and new initiatives (2011-2015)

With Herbert as CEO, in 2011 First Republic began working with the San Francisco Housing Development Corporation (SFHDC), an organization seeking to foster home ownership and economic stability in predominantly African-American neighborhoods.[26] Beyond providing financial support to SFHDC, First Republic also began collaborating on a number of local home ownership programs.[26] Herbert signed to a deal in 2012 to retire as CEO in 2016, while serving as First Republic's chairman until late 2019.[24] First Republic Bank ranked No. 3 on Forbes Best Banks in 2012.[27] By early 2014, First Republic was making preparations in anticipation of reaching $50 billion in assets."[28] American Banker named Herbert their Banker of the Year in late 2014, opining that "James Herbert's bank is thriving by delivering top-notch service and maintaining strict underwriting standards at a time when many banks are struggling."[13] The San Francisco Business Times stated the win was for "achieving dramatic growth at the San Francisco-based bank while keeping credit losses low."[12]

As of January 2015, First Republic[12] had a client roster that included high-profile Americans such as Quincy Jones, Larry King, and Craig Sullivan.[12] First Republic began offering paid six-week parental leave for all of its employees in early 2015,[14] and also that year[29] founded the First Republic Scholars Program, a financial literacy program[14] provided for free to schools in First Republic's markets.[14] Under James Herbert, First Republic launched an employee volunteer program in 2015, where all employees are offered 16 hours of annual paid time to volunteer for local charities.[30] First Republic purchased Constellation Wealth Advisors for $115 million in June 2015,[31] and that quarter the bank surpassed its goal of $50 billion in total assets, soon reaching $52 billion.[28][29] Herbert explained that First Republic's growth rate resulted from its "simple structure and operating model," which allowed the company to maintain a non-bank holding company status and only four bank subsidiaries.[28] First Republic had assets valued at USD $55.4 billion by late 2015.[24]

Recent developments (2016)

In December 2015, First Republic extended Herbert's contract until December 31, 2017, with Herbert continuing to serve as both chairman and CEO.[3] After that date, it was announced that he would relinquish the CEO title while remaining executive chairman until December 31, 2021.[24] American Banker opined that First Republic's recent stock value was likely a reason for the extension, reporting that "since First Republic was spun off from Bank of America its assets have nearly tripled and the value of its stock has increased roughly 140%."[24] In February 2016, Private Asset Management Magazine announced that First Republic had been named Best Private Wealth Manager, in what was the sixth consecutive year the magazine had given First Republic an award.[32] Under James Herbert, in 2016 First Republic focused on a number of employee and community initiatives. First Republic announced in April that it would voluntarily raise its minimum wage to $20 per hour, as well as expand its fitness stipend and subsidized meal program for employees.[14] The bank furthermore debuted its Eagle Community loan program to help borrowers in "underserved minority neighborhoods" afford mortgages,[14] and also expanded its First Republic Scholars Program,[14] bringing the program to new locations such as inner city elementary schools in Oregon.[29] First Republic had offices primarily in Californian cities by the spring of 2016, with other offices in Portland, Boston, New York City, Greenwich, and Palm Beach, Florida.[3][26]

Personal life

Herbert married his wife Cecilia in 1977, and together they have three grown children.[5] As of 2005, the couple maintained residences in both Manhattan and San Francisco.[15]

Awards and recognition

Year Award Nominee Category Result
2000 National Foundation
for Teaching Entrepreneurship		 Jim
Herbert		 Entrepreneurial Philanthropy Award[16] Won
2009 San Francisco Business Times Most Admired CEO[12] Won
2014 American Banker Banker of the Year[13] Won

Boards and philanthropy

James Herbert has been involved with a number of non-profit organizations, arts organizations, and community initiatives since early in his career. In 1998 he became a founding boardmember of The Basic Fund, which provides scholarships to underserved families in the San Francisco Bay Area.[2] For close to a decade, The Basic Fund was housed in the basement of First Republic Bank, with Herbert remaining on the board as of 2016.[2] Herbert has been a director of the National Foundation for Teaching Entrepreneurship (Northern California),[5] with the organization awarding Herbert their Entrepreneurial Philanthropy award in 2000 for "assistance given to teenagers in designing business plans and seed money provided to those with the most promising strategies."[16]

A trustee for his alma mater Babson College,[7][1] as of 2010 he was offering students the James H. Herbert II ’66/First Republic Bank Scholarship at the college.[33] In 2008, Herbert was on the board of the San Francisco Film Society.[5] After serving as a chair and co-chair from 2002 to 2008 for the San Francisco Ballet Association, he is currently a trustee[7][1] and boardmember for the organization.[34] Herbert and his wife Cecilia financed the performance and television broadcast of the San Francisco Ballet's Nutcracker Ballet in 2010.[35] Jim and Cecilia Herbert & Family also funded the special telecast of the Nutcracker in 2014, which had been performed by the San Francisco Ballet in December 2007.[36] Also involved with the arts in New York City, Herbert was a producer for the 2014 Broadway production of An American in Paris,[34] and is on the board of directors for the Lincoln Center for the Performing Arts.[7][1] He was previously a director[5] and is currently a trustee for the Joyce Theater of New York.[1]

Further reading

See also

References

  1. 1 2 3 4 5 6 7 8 "First Republic Bank (FRC)". Reuters. Retrieved 2016-05-28.
  2. 1 2 3 "First Republic Bank and James Herbert: Making a difference for the Bay Area". The Basic Fund. February 16, 2016. Retrieved 2016-05-28.
  3. 1 2 3 "First Republic Bank Announces Contract Extension". PR Newswire. December 3, 2015. Retrieved 2016-05-28.
  4. ↑ "First Republic Bank Company Information". Hoovers. Retrieved 2016-05-29.
  5. 1 2 3 4 5 6 7 8 9 10 11 12 13 14 "San Francisco Film Society Elects New Board Members". filmfestivals.com. February 2, 2008. Retrieved 2016-05-28.
  6. 1 2 "Merrill Lynch to Acquire First Republic Bank for $1.8 Billion". First Republic. January 29, 2007. Archived from the original on March 9, 2012. Retrieved 2016-05-28.
  7. 1 2 3 4 5 6 7 8 9 10 "James H. Herbert, II". First Republic. Retrieved 2016-05-28.
  8. 1 2 3 4 "Thrift plans to expand in valley". Las Vegas Sun. September 9, 1997. Retrieved 2016-05-28.
  9. 1 2 "Merrill Lynch and First Republic Bank Successfully Close Merger". First Republic. September 21, 2007. Archived from the original on March 9, 2012. Retrieved 2016-05-28.
  10. 1 2 Appelbaum, Binyamin (September 15, 2008). "Weekend Merger Struck With Bank of America". Washington Post. Retrieved 2016-05-28.
  11. 1 2 3 4 5 6 7 8 9 "Bank of America Sells First Republic Bank". New York Times. October 21, 2009. Retrieved 2016-05-28.
  12. 1 2 3 4 5 6 7 8 Calvey, Mark (January 12, 2015). "'Banker of the Year' at First Republic Bank keeps credit losses low with clawbacks". San Francisco Business Times. Retrieved 2016-05-28.
  13. 1 2 3 4 Kline, Alan (December 21, 2014). "Banker of the Year: First Republic's James Herbert". American Banker. Retrieved 2016-05-28.
  14. 1 2 3 4 5 6 7 8 9 Lane, Ben (April 21, 2016). "First Republic Bank invests in community, ups minimum wage to $20 per hour". HousingWire. Retrieved 2016-05-13.
  15. 1 2 Neuman, William (July 17, 2005). "The Apartment Monologues". The New York Times. Retrieved 2016-05-28.
  16. 1 2 3 Reosti, John (August 2000). "San Francisco Banker Honored for Mentoring Young Entrepreneurs". American Banker. Vol. 165, p20A. Retrieved 2016-05-13.
  17. 1 2 3 4 5 6 7 8 9 10 11 12 13 Coyle, Thomas (July 1, 2010). "First Republic Regains Its Independence". Wall Street Journal. Retrieved 2016-05-28.
  18. ↑ "Merrill spin-off First Republic files for IPO". Reuters. November 29, 2010. Retrieved 2016-05-13.
  19. ↑ "First Republic Bank invades valley". Silicon Valley Business Journal. August 9, 1998. Retrieved 2016-05-13.
  20. 1 2 "First Republic Bank Opens Valley Branch". The Los Angeles Times. February 16, 1999. Retrieved 2016-05-13.
  21. 1 2 Hochstein, Marc (December 29, 2014). "Discussion: Should Loan Officers Have More Skin in the Game?". American Banker. Retrieved 2016-05-13.
  22. ↑ "First Republic Bank". Bloomberg. Retrieved 2016-05-13.
  23. 1 2 3 4 5 "Merrill Lynch buys First Republic". San Francisco Examiner. January 30, 2007. Retrieved 2016-05-29.
  24. 1 2 3 4 5 6 Kline, Alan (December 3, 2015). "First Republic's Herbert to Remain CEO Through 2017". American Banker. Retrieved 2016-05-28.
  25. 1 2 Kim, Jim (June 14, 2013). "James Herbert II capably leads First Republic Bank". FierceFinanceIT. Retrieved 2016-05-29.
  26. 1 2 3 "First Republic Bank Executive Honored By San Francisco Housing Development Corporation". First Republic Bank. May 3, 2016. Retrieved 2016-05-29.
  27. ↑ "Jim Herbert, chief executive officer and director at First Republic Bank, will speak Sept.21". Colorado State University. September 14, 2012. Retrieved 2016-05-29.
  28. 1 2 3 "First Republic Bank's (FRC) CEO Jim Herbert on Q3 2015 Results - Earnings Call Transcript". Seeking Alpha. October 15, 2015. Retrieved 2016-05-29.
  29. 1 2 3 Dullum, Justin (December 8, 2015). "First Republic swells past $50 billion". The Northwest Weekly. Retrieved 2016-05-29.
  30. ↑ "Employee Volunteer Program". firstrepublic.com. Retrieved 2016-05-29.
  31. ↑ Southall, Brooke (June 17, 2015). "First Republic buys an eight-year-old RIA for $115 million". RIABiz. Retrieved 2016-05-29.
  32. ↑ "First Republic Named Best Private Wealth Manager". firstrepublic.com. February 24, 2016. Retrieved 2016-05-29.
  33. ↑ "Named Scholarship Support, 2010–2011". Babson College. Retrieved 2016-05-28.
  34. 1 2 "Jim Herbert (Producer)". An American in Paris - Broadway. 2014. Retrieved 2016-05-29.
  35. ↑ "San Francisco Ballet's Nutcracker". KQED. 2010. Retrieved 2016-05-29.
  36. ↑ "Introduction". PBS. 2012. Retrieved 2016-05-29.

External links

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