Mellon United Shakeup

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A veteran Miami banker who founded Mellon United National Bank 30 years ago was fired as chairman by its New York parent company, prompting three directors to resign in protest.

Fri. January 16, 2009  (The Miami Herald - McClatchy-Tribune Information Services via COMTEX) -- BK

 

At 82, Gerald Katcher liked to say he planned to keep running Miami's Mellon United National Bank "until I die -- and for a few months afterward." 

But on Tuesday, a top executive from its New York-based owner, Bank of New York Mellon, flew in on a corporate jet for a hastily called meeting and fired Katcher as chairman of the bank he helped found 30 years ago. Under Katcher's leadership, the commercial bank had grown to $2.3 billion in assets from less than $10 million."He told me to leave the bank immediately and turn in my key," Katcher said. "He said access to my computer was terminated and my personal belongings would be packed up and sent to me."Then, a BNY Mellon human-resources staffer, who flew down with David F. Lamere, vice chairman and CEO of BNY Mellon Wealth Management, escorted Katcher from the building, asking him to hand over his parking card.Katcher's relationship with the holding company appears to have soured after an investor group he organized to buy the Florida unit from Bank of New York Mellon shelved its plans late last year amid upheaval in the banking sector.

 

On Wednesday, at a special meeting of the Miami bank's board, two directors quit in protest. A third director, Dr. Jose Greer, resigned Thursday.

 

"This was an insult to all of us," said Sherwood M. "Woody" Weiser, who resigned at the board meeting Wednesday after 30 years as a director. "I was deeply opposed to the action [to terminate Katcher] and in good conscience could not stay on the board."Weiser is chairman and CEO of Continental Cos., which develops and operates hotels, including the Ritz-Carlton Key Biscayne. Mellon United was the lead lender on the Ritz-Carlton's construction loan.

 

"Jerry Katcher . . . created an incredible institution that was probably one of the most profitable banks.""It's one of the outrages of my life -- just stunning," said David Lawrence Jr., who also resigned at the meeting. Lawrence, a former publisher of The Miami Herald, is president of the Early Childhood Initiative Foundation, which Katcher and his wife, Dr. Jane Katcher, founded.

 

The New York bank named Mario Trueba, Katcher's longtime deputy who was regional president of BNY Mellon Wealth Management, as chairman and CEO of the Florida bank.In Boston, Lamere, chairman and CEO of BNY Mellon Wealth Management, referred calls to a spokeswoman, Susan Rivers. Rivers said Katcher's departure "is part of a change in the management team.""We wish Mr. Katcher well in all his future endeavors," she said. She said Trueba "has been with the bank for 20 years and is highly respected. We're pointing to that as continuity and a smooth transition at the bank. In fact, all the senior management is intact."Rivers declined to comment on whether the failed sale of the bank played a role in Katcher's ouster. "We really don't comment on market speculation," she said.

 

Katcher and a longtime business associate, Howard R. Scharlin, started the bank in 1978 by acquiring a tiny unit of Southeast Bank. It had one branch in Aventura and fewer than 10 employees. The bank flourished, largely by focusing on building relationships with local professionals and entrepreneurs and providing responsive service.Katcher, a Yale-educated lawyer, built a stable of customers among law firms such as Greenberg Traurig and Bilzin Sumberg Baena Price and Axelrod, and catered to doctors and small businesses.By 1998, Katcher and his partner had grown the bank to more than $800 million in assets with 12 branches and 325 employees. Scharlin wanted to cash out, Katcher said, so he reluctantly agreed to sell to Mellon Bank, the Pittsburgh giant. The bank fetched $400 million, more than three times its book value -- a full price.As it turned out, Mellon gave Katcher free rein to continue to run the bank locally, and he stayed on. But in July 2007, Mellon merged with Bank of New York.The merged banking giant, which primarily is focused on asset and wealth management, decided to shed its California and Florida banks, he said. "It was sad news, but good news. I wanted to buy back the bank," Katcher said.Katcher put together an investor group, including bank directors Lawrence and Weiser and other Miami heavyweights such as Dr. Phillip Frost, Armando Codina, Charles Stuzin, and Michael Weintraub.Last June, the buyout group agreed to a price for the Florida bank unit, Katcher said, but as the economy slid in the months that followed, the price was cut.By September, the banking sector was facing unprecedented challenges. Lehman Brothers filed for bankruptcy. Merrill Lynch rushed to be acquired by Bank of America. AIG sought a government bailout.Mellon United, which is heavy into commercial real estate lending, saw its problem loan portfolio growing, too, but not to an unmanageable level. The bank remains well capitalized and profitable.By October, Katcher's group canceled its purchase agreement, saying times were too turbulent in the banking sector."It had nothing to do with the loan portfolio," he said. "It had everything to do with the meltdown occurring globally and what impact that might have on all banking in Florida for the foreseeable future."In November, Katcher said, Lamere asked to meet with Katcher and informed him the parent company wanted him to resign, saying the bank was going to impose more central controls that executives anticipated he would likely resist. Katcher said he was offered the chance to spin his retirement as his own decision.

Last week, Katcher called a special board meeting for Wednesday to inform the Miami bank's directors he was being pushed out. But Lamere fired him Tuesday before he could do so and summoned a special meeting of his own, Katcher said. Katcher said the bank is giving him a severance package.
"I was almost trembling as I spoke to the board," said ex-director Lawrence. "How could you do this to a human being who built the bank from a teeny-tiny place to a successful bank with $2 billion in assets. He has particular wisdom in building relationships. It was stunning in its callousness."

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