The Chicago area-based bank started when its three founders, Michael “Mick” O’Rourke, Bryan Duncan and Kevin Bastuga, saw the big banks they worked at increasingly pursue what Bastuga calls “bigger and bigger deals.”
“We thought that represented an opportunity to have a community-focused bank where relationship are stressed,” he told Illinois Business Daily. “That approach is taking our big bank training and bringing it to that lower-middle market of privately held companies within the Chicago area.”
The three began the effort to found the bank in June 2005 and, having never gone through the process of establishing a new bank, spent the next year jumping the hurdles needed to get up and running. In addition to regulator challenges, this also meant raising capital - and lots of it.
Signature managed to raise what Bastuga called “just shy” of $25 million.
“We had the most successful de novo bank raise in the state’s history,” he said. “Then you get the bank open and it’s time to put that capital to work.”
The group immediately set about selling to old customers who felt neglected by their previous bank as well as new customers. But while it was “en vogue” in the banking industry at the time to attract customers with an explosion of brick-and-mortar locations, Signature limited itself to one branch and focused heavily on technology. Even today, the company maintains only two physical locations within Chicago, with Bastuga noting that nearly 90 percent of its transactions are conducted online.
“It was written in our business plan that our branch presence would be pretty much minimal,” Bastuga said. “We kind of thought, in our first 10 years, that branches would just dissipate in numbers.”
No less than a year into its opening, and banks around the nation started feeling the pinch of the recession. Bastuga said Signature did not feel the pinch as other banks did due, in part, to an emphasis on privately held, often family-owned businesses. Signature did not make heavy investment in the real estate market, which was most affected by the recession, and even managed to grow through the worst of it.
“Interestingly enough, in 2009, while a lot of institutions were accepting bailouts … we actually went back to our shareholders and got another $9.8 million to further fund growth,” Bastuga said. “We were the only private capital raise for any bank in the country that year.”
And now, with the recession fading into the past, Signature has begun to reflect on the landscape of Chicago mid-level banking. For Bastuga, it means more opportunities - similar banks are starting to be acquired, such as MB Financial’s purchase of American Chartered. As such acquisitions heat up, Signature sees opportunity to grow the same customer base that made for its founding a decade ago.
“The velocity of those transactions are speeding up; that in turn should create more opportunity for those companies that are banking with smaller institution as they get swallowed up by larger ones, that might lose that small bank feel,” he said. “That should present a pretty decent opportunity to acquire more customers.”
True to its model, Signature has only grown to encompass two physical buildings.
To find out more, Bastuga encourages visitors to visit the bank's website at www.Signature-Bank.com. A spokesperson for the bank said the anniversary would be celebrated all year, particularly recognizing employees who have been with the company since its founding and the opening of a time capsule.