An Excerpt from the Book:
“The most important thing – and the most difficult –
is to live a life with intention: to find our true authentic self”
Along with a group of Polish – American immigrants, Michael Burdzy founded Pulaski Bank in 1922. The bank focused on serving the financial needs of the Polish community who found it difficult to obtain loans. Bill joined the bank in 1992, becoming the 3rd generation in his family to run the bank. Over his twelve-year tenure, Pulaski grew eight-fold, from a privately-held “Thrift Bank” to a publicly-traded bank with assets of $1.4 billion. He is very active in the local St. Louis Community, serving on multiple boards and initiatives. The second edition of his book, “Thought Revolution,” released by Simon and Schuster in August 2014, is on the New York Times Best Seller List.
If you are lucky, there are those rare times in your life when your own unique talents and abilities align with a company’s interests. This happened for me when I returned to be with my family at Pulaski. My arrival dovetailed with what the company needed in its evolution, and the broader evolution of the banking industy in St. Louis.
I spent the previous fourteen years in California, working in multiple industries (television, management consulting sales and marketing). Those experiences gave me a range of expertise that I was able to draw upon as I stepped into my role at the bank. Had I worked for Pulaski straight out of college, both the bank’s success and my own personal success would have been compromised.
Going into the family business is not as easy as you might think: certainly, these are opportunities not everyone is given, but I also felt a higher burden to perform: I was keenly aware of my family’s 70-year legacy that was integral with the bank, and did not want to fail.
In the 1990’s, the conventional wisdom was that St. Louis was overbanked: counting all of the brokers, thrifts, commercial banks, and so on, it was a crowded space with more than 500 competitors. Pulaski had carved a successful niche in the communities we were serving, with four well-established locations; we were stable and well capitalized, with a track record of customers going back generations. We had to make a decision to sustain what we had with smaller incremental growth, or to be more ambitious, and thereby compete with the bigger players. This would necessitate an IPO to raise capital, and all of the associated risks that comes along with it.
In 1998, Pulaski Financial Corporation chose to go public and raised $30 million in the process. Although banking processes were tightly regulated, the holding company had much greater flexibility in how much risk we could take: we could have invested in everything from Dairy Queens to environmentally sustained forests in Vermont. It was at the discretion of the board.
What would have made us a fortune in the short term, but would have cost us the company in the long term, was the opportunity to originate subprime loans. Ten years before the housing bubble burst, we had multiple opportunities to partner with or acquire subprime lenders, where the profitability on each closing was ten times higher than a conventional mortgage. It was clear that the debt was leveraged against a set of assumptions – that housing values would indefinitely increase – which went against our understanding of the mechanics of the marketplace – and so we passed on these opportunities. In 2008, when the music stopped, I felt validated: many of those who had been seduced by the double-digit returns of the sub prime lending business collapsed, as this asset class lost 90% of its value in a very short time frame.
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