Park’s approach was paying off. After 18 months in business, the bank broke even — two months ahead of his projection. But the big break came when Westfield Insurance supported Park’s proposal to deposit the profit sharing money of the company’s independent agents — some $20 to $40 million at the time — in Westfield Bank. It was a free account and agents could opt out.
“Much to our surprise, most of the money went in and stuck. For a little bank, when you’re starting at zero and all of a sudden you have $40 million kind of wash in and stick, you’re starting to get pretty decent traction,” he says.
Divide and conquer
Fast-forward 12 years. Westfield Bank, once the wily startup, makes its first acquisition, Western Reserve Bank. One year later, it brings in Valley Savings Bank. The two banks offered a profitable return and more customers and branch locations, which compared to starting from scratch, was a more attractive way to get presence and location in a city.
Those acquisitions were the logical next steps to growth once Park set his sights on being a $1 billion bank.
“And to get to a $1 billion bank we were probably, I don’t know, $500 million at the time, you have to double, which is kind of unheard of in banks,” he says. “So acquisitions have to be part of the formula. You can grow fast, but to double in five years without doing acquisitions is really hard to do.”
Valley Savings Bank was a 93-year-old institution at the time Westfield Bank acquired it. Over the course of its existence it had accumulated some $130 million in assets, something Westfield Bank had accomplished in a fraction of the time. For Phillips, there was a sense of pride attached to the acquisition.
“It felt great,” Phillips says. “It feels great to be a part of any organization that has the ability to not just strike an agreement with Valley, but to actually execute on it and all of the things that go along with it.”
In 2011, another significant change occurred. Park became Chairman and CEO of Westfield Bank, assigning the presidency to Phillips. This move, in essence, signaled that the bank had become more complicated, had greater scale and needed more people to help it continue and grow.
Park also saw the appointment as a divide and conquer strategy, with Phillips managing the day-to-day, freeing Park to think bigger picture. And Park is certainly thinking big.
“Our vision and our aspiration is to double our size in five years,” Park says. “So we’ve reached $1 billion, we’d like to get to $2 billion.”
Today, the bank has 150 employees, eight branches and 10 times the assets under management it had 15 years ago. Looking back, Park says it’s hard to believe the bank has come so far so quick.
“The growth and success and scale of the bank is much more than I would have thought, and faster,” he says.
“When you start as an entrepreneur at zero, you’re first hoping for survival, and then you’re trying to overcome obstacles and get competitive advantage. You always hope for kind of getting to be bigger, but you never quite know for sure.”
Takeaways
- Determine what distinguishes your services and build on it.
- Capitalize on your existing relationships.
- Turn a disadvantage into an advantage.
