Bank of the Ozarks wanted to cut costs, so it ditched the Fed! To do it the bank shed its holding-company structure, an umbrella corporation regulated by the Fed. CEOs are now actively cutting costs with self-administered regulatory relief.
San Francisco-based First Republic Bank for example, has grown to $84 billion in assets from $33 billion five years ago. Although it crossed the $50 billion line, First Republic doesn’t undergo Fed stress testing. First Republic executives declined to comment but have bragged about their structure in calls with analysts and investors. “We keep it very, very simple,” CEO James Herbert told an industry conference in late 2015. “We don’t even have a holding company.” New York-based Signature Bank is another lender that doesn’t have a holding company. Although at $41 billion in assets it hasn’t crossed the $50 billion mark, executives note the benefit of a streamlined structure. “We’re so heavily regulated to begin with—why would you add on to that?” said Executive Vice President