Nantucket restaurant startup gets Charles 'Chuck' Schwab in its court after Franklin Templeton scion sues it in court; FDIC sticks it to the too-big-to-fail crowd as smallest banks skate; Peter Mallouk liked his 'base case' for re-homing $15.9 billion 'Boston Private' assets but never got to make it

Billionaire Charles “Chuck” Schwab is all for a new restaurant on Nantucket's super-exclusive Old North Wharf, not far from his home there, but San Francisco Giants owner Charles Johnson is trying to strike out the clam shack in court.  

Johnson lives next door!

He's suing the would-be restaurateurs, Gabriel Frasca and his partner Kevin Burleson, to block their 62-seat love shack and outdoor restaurant, claiming it's a nuisance and out of character with the historic waterfront, the Boston Globe reports.

Johnson's house is a mere 18-inches from the property line. Schwab lives a stone's throw farther than San Francisco Giants slugger Jon Gray's massive 480-foot homerun in 2021. 

Johnson, 90, is heir to the Franklin Templeton fortune. He took his father's company public in 1971, pushing his net worth north of $6 billion. He became the largest shareholder of the San Francisco Giants (26%) in 1992.  

To block the restaurant, he' s filed an appeal opposing a liquor license transfer that had  already been approved by the local government.

Schwab's house, which he bought for $10 million in 2021, is 785 feet away. A report says that Schwab was initially concerned but changed his tune when rumors were dispelled that music and dancing were on the menu. 

Schwab, whose net worth clocks in at around $11 billion, may also have some fatherly sympathy for restaurateurs. 

Chuck's son, Michael, helped open a restaurant in San Francisco called Charlie’s in 1999 when he was just 24. “Charlie's is not named for the elder Schwab but rather after Michael Schwab's nephew Charlie,” reported the San Francisco Chronicle at the time.

Nantucket is increasingly a place where ultra-high-net-worth people go for sea breezes, elbow rubbing with their like and avoidance of the madness of Cape Cod and the celebrity redoubt on Martha's Vineyard. 

Think Bill Belichick, Amy Poehler, Joe Biden, Ben Stiller, James Franco and Drew Barrymore, in addition to nameless hedgies and bankers.

The madding mass affluent like to go there to have a look around and sit at a restaurant tucked amid billionaires' $10-million beach cottages with a Samuel Adams beer and lobster roll – if only for an afternoon.

Feds side with Davids against Goliath banks on new insurance premiums 

The Federal Deposit Insurance Corporation (FDIC) is taking sides with banks too small to succeed over banks too big to fail in raising premiums on default insurance.

The FDIC will levy an estimated $16 billion in extra service fees on a proportional basis from the second quarter of 2024 – a bump of roughly 12.5 basis points, according to the bank's size. The largest lenders, namely those with $50 billion-plus of deposits, will pay 95% of the total costs.

Banks with less than $5 billion in deposits will pay nothing, barring a U-turn during a 60 day comment period. See: Silicon Valley Bank's demise means $15.8 billion Boston Private is firesale kindling, and maybe at a sweet price.

The Treasury authorized $700 billion in TARP funds to bail out Wall Street banks in 2008, an amount slimmed to $475 billion later.

“The special assessment is at the discretion of the FDIC, which voted 3-to-2 on the method by which it is to be implemented," explains former banking consultant Jonathan Holtoway, now president and manager of Ategra Capital Management, a private equity firm and asset manager in Vienna, Va., via email.

The move comes in the wake of several high-profile bank failures, including Silicon Valley Bank (SVB) in Santa Clara, Calif., First Republic Bank in San Francisco and Signature Bank in New York City. 

“As 95% of SVB’s deposits were uninsured, the loss although currently on the books of the FDIC cannot actually reside there as there is no dedicated funding for it.  The special assessment to cover the loss is only allowed because of a determination of systemic risk was made by the Treasury.”

And big banks may not – lobbyists aside – be dripping in good graces.

"It reflects a certain amount of political leaning," Holtaway says. 

Peter Mallouk liked his relative chances with $15.9 billion Boston Private – even if those chances were ‘very low’

Peter Mallouk made a very low ante bet on a very low-probability positive outcome – with the predicted result. 

The founder, president and CEO of Overland Park, Kan., roll-up Creative Planning, 53, bid for Silicon Valley Bank's $15.9 billion of assets (AUM) RIA, né Boston Private, after SVB went into receivership in March, according to an FDIC bid summary seen by Citywire.

“Our bid was only for the RIA business, though it was clear they wanted to sell the entire thing together, so our expectations were very low," he said, via email.

Indeed, First Citizens Bank nabbed the majority of SVB's assets, but Mallouk said his odds would have been better if he had been given a chance to pitch his RIA as the best shelter for the rescue.

"We had confidence we could execute well on our base case,” he explains.

Other opportunistic bidders included:  alternative assets marketplace CAIS, private equity shop, Reverence Capital Partners,and Los Angeles RIA Lido Advisors, which manages $13 billion.

The $16 billion deal might have bumped Creative Planning's current $220 billion of AUM by 7% .