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Signature Bank, the New York subsidiary of Bank Hapoalim, became the first Israeli bank to float on Wall Street Monday night and gained 26 percent during its first day of trading on the Nasdaq exchange yesterday, under the symbol SBNY.

The New York-based commercial bank sold 21.6 percent of its shares in the initial public offering (IPO), raising $83.7 million at a share price of $15.5. The stock gained nearly $4 yesterday, reflecting a value of about $500 million, or $100 million more than the IPO price.

Hours after the IPO was completed, Bank Hapoalim chairman Shlomo Nehama boarded a plane from New York to Miami to celebrate with Shari Arison, the bank's controlling shareholder who is living in Florida.

The past months have been tough for Arison. Her current husband is the subject of an investigation for alleged sexual harassment and she is waging a custody battle for her seven-year-old son.

The Signature flotation is considered the greatest strategic success recorded by Bank Hapoalim since the bank was acquired in 1997 by a team of investors led by Shari's father, Ted Arison. While Nehama and his American partners, Scott Shay and Lewis Ranieri were responsible for the Signature IPO, it was Ted Arison who defined international expansion as the bank's principal direction for growth.

In 1999, the question of how to realize this international vision was the subject of much debate at the bank. The American investors, led by Shay and Ranieri, pushed for the establishment of a bank in New York. Nehama supported this view.

But bank executives, headed by the late CEO Amiram Sivan, did not believe that Israeli banks had any relative advantage abroad and thought that conducting operations in New York might turn into a risky adventure. Other Israeli managers at the bank, including Eli Yones, who went on to succeed Sivan, and Zvi Ziv, the current CEO, were also skeptical.

The skeptics pointed to previous failures by Israeli banks abroad, including the $400 million in losses racked up by Bank Leumi on real estate loans on the East Coast of the United States, as well as Leumi's smaller-scale debacle in Hungary and United Mizrahi Bank's losses in London.

But the controlling shareholders took notice instead at the success of Israel Discount Bank in New York and Leumi's success in some of its European branches. From the perspective of Nehama, vice chairman Dan Dankner and the American investors, this was a chance to make their mark and not merely serve as a rubber stamp for the bank's management.

They chanced upon an outstanding opportunity when the Jewish banker Edmond Safra decided to sell Republic National Bank of New York to the British banking group HSBC. A group of Republic managers who worked with affluent private clients joined forces with Bank Hapoalim officials to plan the formation of a new bank.

Signature Bank opened with six branches in New York state in 2001. The former bank executives from Republic succeeded in bringing hundreds of their former clients - and hundreds of millions in assets - over to Signature. The coup was so swift that HSBC responded with a lawsuit against Signature for swiping employees and customers. A compromise was finally reached, but this did not prevent Signature from continuing to attract new customers, typically bringing portfolios of $1 million to $20 million. The bank now has 225 employees in nine branches, with plans to open six more branches by the end of 2004.

Signature moved out of the red for the first time in 2003, posting a net profit of $4.2 million. Fourth-quarter net earnings were $1.8 million, almost double its earnings in the first nine months of 2003.