Paradise Bank executives: (front row, l-r) William J. Burke, Dennis Gavin, (back row, l-r) Ward Kellogg and David Englert.
Tim Stepien/ The Coastal Star
By Thomas R. Collins
Bill Burke walks through the main lobby of Paradise Bank’s Boca Raton branch — you could call it a lounge — on North Federal Highway, and sees a customer sitting at a desk with a teller.
“Hello, Michael,” he says.
Burke, the bank’s president and chief operating officer, and a few other top banking executives will be having lunch later with Michael. The customer mentions a doctor’s appointment he has that day. That’s how tight he is with the top management.
“Don’t forget to give the doctor some help,” Burke quips.
Burke then continues giving his tour of the bank: the vault door made in 1899, the kitchen that is quite possibly nicer than yours at home, the exercise room, the pool table upstairs and the varied but somehow seamless array of artwork, including some by the Florida Highwaymen.
He gives the tour as if he’s showing people around his own home — which makes sense, because this bank is clearly close to his heart. His work ethic shows it, he says.
“There’s no such thing as bankers’ hours,” Burke says. That’s got to be a popular line in the banking field, but you get the sense that Burke means it.
As mergers and mega-banks have become the norm, the number of banks based in Florida has plummeted from more than 800 in the 1970s to fewer than 200 today, Paradise CEO Ward Kellogg says. He and the other founders are not involved with the bank in order to part with it, they say.
“This concept — it has a long-term horizon,” Burke says. “Our intent is not to grow it in order to sell it.”
Burke — along with 13 other board members — founded the bank in 2005, along with the pledge that it would not be yet another bank that would grow inexorably larger and larger until it was bought by an even bigger bank. It was going to be a community bank that ranked service and a personal touch above size, and it was going to stay a community bank for the long haul.
So don’t tell anyone … but Paradise Bank is growing. It just raised $4.3 million in capital through employees buying stock options. And it just became the largest Palm Beach County-based bank, after Boca Raton-based 1st United Bank was sold to Valley National Bank. It’s almost an awkward fact for a bank that is based on a small-is-best philosophy. “It’s an honor,” Burke says. “It wasn’t a goal.”
The bank does have an intensely local flavor. Burke has been in South Florida since 1974, and now lives in Davie. Ward Kellogg, the CEO and chairman, lives in east Boca Raton and met Burke when they were both in business school at Florida International University. David Englert and Dennis Gavin, who are managing directors and live in Boynton Beach and Boca Raton respectively, have been in South Florida since the 1980s.
Board members also include James Comparato and Thomas McMurrain, two Palm Beach County developers; Allen McGee, CEO and chairman of Radiology Corporation of America, and an east Boca Raton resident. Board members David Dickenson and Lisa Wheeler also are Boca Raton residents.
Burke, Kellogg, Englert and Gavin are the four board members who are most active with the daily operations of the three-branch bank.
No owner holds more than 6 percent of the bank’s shares, so a decision to sell would need a lot of votes.
Paradise is a Subchapter S bank — meaning it must have fewer than 100 shareholders.
Its connection with the local community and the local culture is its defining characteristic. The logo — which is even stitched into the starched business shirts of the executives — is a palm tree and sun rising over the ocean. There’s even a pair of green and orange flip-flops at the bottom of every page of the company’s website.
Given the connotation of leisure, it’s a little funny to hear the top executives say that everyone associated with the bank has been “hand picked” largely because of a tireless work ethic.
“We’re also the executives and we handle customer relationships,” Kellogg says.
“We’re sitting on the board and we’re turning the lights on in the morning,” Englert says.
Despite that hard work, the bank is not seeking growth, they say.
“It’s easier to manage a smaller bank and customers get better service,” Kellogg says. The bank’s return on assets is close to 2 percent and its return on equity approaches 20 percent, two impressive figures they say would be imperiled if the bank grew much beyond $500 million total assets. It is now at about $312 million.
Dividends, rather than the prospect of a handsome payment once the bank sells for an enormous sum to a bigger bank, are what keep shareholders happy, the executives say. That lends stability to the idea of the bank remaining a manageable size and remaining off the market.
Even as the top executives obsess over customer service and maximizing returns, they maintain a surprisingly playful spirit. They joke with each other freely, and take a “work hard, play hard” approach, Gavin says.
As their lunch with the customer Michael approaches, Gavin says it wasn’t a calculated attempt to please a client who needs pampering. It’s much more casual than that.
“It’s not necessarily that they have a need,” he says. “It’s, ‘Let’s have lunch.’ ” Ú
Paradise Bank has offices at 2420 N. Federal Highway in Boca Raton, 1351 N. Federal Highway in Delray Beach and 540 N. Federal Highway in Fort Lauderdale.
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