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On the day First Michigan announced Ross’s cash infusion, it bought CF Bancorp, a bank in Port Huron, Mich., with 368 employees and $1.3 billion in assets. Its collapse had been the largest in the state. First Michigan, now known as Talmer Bank and Trust, has since bought three more failed banks. Provost aims to create a network of community banks that profit from problems in their larger rivals. It seems to be working. Talmer earned more than $40 million last year. “The Bank of Americas get picketed,” Provost says. “The customers close out their accounts. Then they come over and see us.”
In November, Ross crossed the Atlantic to check on his new investment in the Bank of Ireland. When it was time to leave, CEO Boucher offered Ross a ride to the airport. On the way, they made an unannounced visit to a Bank of Ireland branch in a Dublin suburb. Ross spent nearly an hour at the bank, wandering around and asking questions. “It went down extremely well,” says Boucher. “There was a lot of positive buzz among the employees afterwards.”
For his part, Ross can’t understand why anybody at the Bank of Ireland would be surprised by his interest. “We just put a big chunk of money into it,” he says. “It was kind of under the control of the government. I guess the employees weren’t used to the Prime Minister dropping by.”
There is one banking investment of which Ross is particularly proud. In September his firm pledged $50 million to Amalgamated Bank, which is controlled by unions representing hotel and garment industry workers and has become known as the financial institution guarding the deposits of Occupy Wall Street. On Dec. 8, Ross visits the bank’s art deco headquarters in New York to meet with Edward Grebow, its president. Sitting around a coffee table, the two explain how Ross, a loyal member of the 1 percent, came to be interested in the self-styled bank of the other 99 percent. “Well, the bank, like lots of others, made some bad real estate loans,” Grebow says. “That left us of short of capital.”
He knew there were private equity investors interested in banks. There weren’t many, though, who would put their cash into a bank that is not only union-owned but also has a unionized staff. He could think of only two. One was obvious: Ron Burkle, managing partner of Yucaipa and a major Democratic Party contributor. The other was Ross. Grebow knew Ross had good relationships with labor leaders representing steel and textile workers. “We never had a strike at any of our facilities,” says Ross. “For us, there is nothing strange about having breakfast with a labor leader. We do it all the time.” Together, they agreed to put $100 million in the bank. The deal is awaiting regulatory approval, but Grebow is already talking about using the new funds to create progressive products, such as prepaid credit cards for customers with “uncertain” immigration status and mortgages for city sanitation workers.
Then there are the benefits of being associated with the Occupy Wall Street protests that began in September. Grebow produces a chart showing that 131 new depositors signed up online in October, up from 13 the previous month. The influx of new customers was roughly the same in November. “That’s with no marketing,” he says. Ross listens, quiet as ever. He says he has no problem with Amalgamated Bank’s connection to Occupy Wall Street. It’s clearly good for the bank’s bottom line and therefore his investment. “The bank by its nature is a so-called progressive, liberal bank,” Ross says. “Ed Grebow even marched in one of its demonstrations.”
You won’t see the 74-year-old billionaire accompanying him anytime soon, however. Says Ross, “I myself wouldn’t have anything to do with Occupy Wall Street.” Nevertheless, he’s thinking about putting more money into Amalgamated Bank. Ross may not cotton to protesters who want to share his wealth, but his investments are strictly nonpartisan.
Leonard is a reporter for Bloomberg Businessweek in New York.
