According to his webpage on the First Republic Bank website, James H. Herbert is the bank’s Founder and Executive Chairman:

Mr. Herbert founded First Republic Bank in 1985 and served as CEO for 37 years. From 2007, he also served as Chairman. He was appointed Executive Chairman in 2022.

Take the Money

In my last post I wrote that to loot a bank, lazy bank insiders “could just lend to a corporation they control, have it pay them a huge salary, then declare bankruptcy when the loan proceeds are all gone.”

I neglected to mention an even lazier strategy: hire your relatives and pay them a huge salary. I thought about writing this, but I didn’t because I find that nobody believes that anyone would do this. But now this:

First Republic Bank Founder Earned a Big Pay—as Did His Family Members

“A consulting company owned by Mr. Herbert’s brother-in-law earned $2.3 million for advisory work related to its “investment portfolio, risk management, interest rate and economic outlook and other financial matters” in 2021, it said in an annual proxy filing filed last spring. First Republic also paid Mr. Herbert’s son $3.5 million to oversee a lending unit at the bank, the disclosures said. The two family members were paid similar amounts in 2020.”

Fortuitous Stock Sales

You will not be surprised that Mr. Herbert was also able to sell lots of shares at prices that are about 10X today’s price of $12.36. According to Yahoo Finance, here are Herbert’s stock sales from the last two years:

                    Date        Share price     Quantity      Value 

                Feb 22, 2023       $124          15,000      $1,860,000
                Jan 17, 2023       $132          20,000      $2,640,000
                Oct 26, 2022       $116          20,000      $2,320,600	
                Mar 16, 2022       $167          35,000      $5,845,000
                Aug 02, 2021       $197          15,000      $2,955,000
                Apr 30, 2021       $185          25,000      $4,625,000

Loans to insiders

Still waiting to hear about these.