3.12 | First Republic Bank

Tending the Entrepreneurial Flame

7 min read

The First Republic leadership team embodied the entrepreneurial spirit and approached strategic and structural decisions with the intention of promoting the same throughout the enterprise. Everyone pitched in to get the job done, with Herbert and August- deWilde divvying up projects and shifting resources as needed. “Jim and Katherine are doers as well as managers,” said Dyann Tresenfeld, who joined First Republic in May 1986, switching from a career as a successful real estate agent to that of a realestate banker. “Everybody’s producing and has their feet on the ground and their hands on whatever they need to do to take care of issues.”¹

Herbert and August-deWilde recruited professionals with a “can do” attitude, like David Lichtman and Margaret Mak, along with First Republic’s first Relationship Managers, Dyann Tresenfeld and Carmen Castro-Franceschi. What these new hires had in common was a desire to work hard and learn, and the ability to be part of a team of fast-moving, ambitious entrepreneurs. That entrepreneurial spirit and agility in decision-making was already distinguishing First Republic in the marketplace from its larger, slower-moving rivals. And the tenure of these key hires helped sustain this spirit and assisted in shaping the growth to come at First Republic.

Dyann Tresenfeld
Dyann Tresenfeld, Executive Managing Director, used a desk in a conference room as her first office at First Republic Bancorp when she joined in May 1986. When someone needed the conference room for a client meeting, she slipped her files into her briefcase and took her work to a nearby coffeehouse. She did not spend much time in the office, in any case. This was not much of a transition from her previous career as a real estate agent, where she spent much of her time in her car or meeting with clients and visiting properties.

Tresenfeld was most often out in the field working with the real estate agents she knew and telling the First Republic story: This little storefront thrift on Pine Street, committed to providing extraordinary levels of service, was making decisions on loan opportunities before many large banks had even returned a client’s call.

“We’d take our notes, meet the customer, see the property, run back downtown, sketch out the information to Jim and Katherine, say this is what we want to do, this is who the customer is,” Tresenfeld said. If the loan met First Republic’s stringent lending standards, Tresenfeld and other loan officers got their answer on the spot: Approved. “We just had the charge of offering the most incredible service, the fastest response anybody could possibly imagine. We just blew the socks off the real estate community because we got it done.”² She quickly became, and remains, one of First Republic’s biggest producers.

David Lichtman
The development of First Republic’s credit culture of personal responsibility and ownership in a collective success is due to a significant extent to its Chief Credit Officer, David Lichtman. Lichtman joined First Republic at age 22, in June 1986, when there were still fewer than 20 employees. He studied economics at Vassar College and was interested in business. A job right out of school with a large corporation, however, had not seemed right for him.

Lichtman learned about First Republic from his father, a lawyer, who was an associate of Roger Walther, and he was attracted to the start-up atmosphere. “You did everything that was asked ofyou, from answering the phones and delivering the mail to going to FedEx before there was FedEx pickup,” he said. “I started learning and doing lots of different things on the lending side and grew from there.” One of Lichtman’s early assignments was as a loan processor for Dyann Tresenfeld. Balancing work and school, in 1990 he obtained an MBA from the University of California, Berkeley.³ He became the Bank’s Chief Credit Officer in 1995 atthe age of 32, and remains in thatposition to this day.

Margaret Mak
Margaret Mak, Executive Director of Preferred Banking, was glad she did not take her finance professor’s advice regarding her first job after college. He told her to go with one of the Big Eight accounting firms, or with Citibank or Bank of America if she wanted a banking career. Definitely not First Republic. Too small, not enough opportunities to advance. Then she met Jim Herbert. “He told me, ‘This is not a bank. This is a marketing organization that just happens to be a bank.’ I trusted the guy, and I took the job,” she said.⁴

Mak worked in the first-floor deposit-taking office at Pine Street, while the Relationship Managers worked upstairs on the second floor. They were often serving a separate clientele, but the success of one side of the business quite clearly benefited the other. “At that time, the savers and the borrowers were different. The savers were much older, the borrowers were much younger. We didn’t merge the two until we started the Preferred Banking division,” she noted.

Mak, who has focused on innovations to attract more deposits throughout her career at First Republic, feels as much of an entrepreneurial spark at First Republic today as the day she joined. The Bank and accounts may have expanded, but as far as Mak is concerned, “We are always in start-up mode. If you look at our history and you think about the growth, I don’t think that’s ever changed,” she said. “You’ve got to make it on your own, entrepreneurially.”⁵

Carmen Castro-Franceschi
Carmen Castro-Franceschi, Executive Managing Director, also joined First Republic in 1986, only a few months after Tresenfeld. Castro-Franceschi was an accomplished banker at San Francisco’s Crocker National Bank, which had recently been acquired by Wells Fargo Bank. The difference between First Republic and the large banks where she worked previously was immediately apparent.

“There was this absolute spark. There was this energy level that you could never feel in another organization,” Castro-Franceschi said. “I noticed one thing. Nobody was walking. Everybody was running. Everyone ran from one office to another. I thought it was unusual, but I liked it. I thought, ‘Wow, this is amazing!’”⁶

Castro-Franceschi, whose background did not include mortgage lending, worked closely with Tresenfeld at the start in order to gain a better understanding of mortgages and the business of real estate. Then she was off on her own. “I got in my car and I basically drove to Silicon Valley five days a week. I never was in the office. If Jim Herbert saw me in the office, he actually wouldn’t like it,” she said. “He would get very upset. He would knock on my window. He said, ‘What are you doing here? Why aren’t you out in the street with clients?’ I said, ‘You’re right. I’m on my way to Menlo Park and Palo Alto.’”

By the end of her first year at First Republic, Castro-Franceschi had made inroads into the Silicon Valley investment banking community. “I did all their loans. I drove the documents to their homes. I met their children, their spouses. I literally parked myself in Menlo Park,” she said. Then she asked them to help her build her business. “I need to get this bank to become the best private bank in the industry. Will you help me?” she asked. “They would actually call and say, ‘I’ve got two hours for you. I’ll set you up in the conference room. Bring your business cards and your rate sheets and you will meet all my colleagues.’ That’s how it began.”⁷