MONTCO Today speaks with David E. Sparks, Chairman and Founder of First Priority Bank and Chairman and CEO of First Priority Financial Corporation about growing up in Upper Merion when farms, instead of malls and shopping plazas, lined Route 202, playing varsity basketball in high school and then college, running a string of 24 officers’ clubs along South Korea’s DMZ for the US Army, returning to civilian life and quickly climbing the corporate ladder to become CFO of Provident National Bank, Vanguard Group and Midlantic Bank before launching and running his own bank not once but twice, and the reason behind First Priority’s acquisition of the $65 million loan portfolio in July.

Where did you grow up, David?

I was born the second of two children in 1944 in Valley Stream Long Island, NY. My dad was a salesman, my mother a stay at home mom. When I was a year old, my father’s company transferred him to Upper Merion. I grew up in a neighborhood called Belmont Terrace near the intersection of Henderson Road and 202 in King of Prussia.

What memories do you have of growing up in Upper Merion in the 1950’s?

I remember when 202 was a two-lane road from King of Prussia all the way to Route 1 in Chadds Ford. The entire King of Prussia area was fields and farmland. There were several big farms where the Mall now sits.

One, the Walker Farm owned by my uncle, sat on the north side of 202 and stretched from nearly Henderson Road over to Allentown Road. He raised cattle on the farm and was the only family with a real swimming pool. The pool was a cement pool and was actually filled with creek water. Because there was no filtration systems then, the pool had to be emptied and scrubbed weekly.

Another uncle, Howard Beidler, owned a Farm on what is still Beidler Road and raised pigs and grew corn.

Where did you go to high school?

I went to elementary school in Swedeland, and to junior high school at South Gulph Road, which is now a medical office building, and then senior high at the new Upper Merion High School when it opened in 1959.

What music were you listening to back in high school and college?

Anything you hear today from the 50’s, 60’s or 70’s! It was all great music…and still is!

What was your first job?

From the summer of ninth grade on, I pumped gas at Cummings Esso gas station at the corner of Route 23 and 202. I did that every year through the summer of my Sophomore year in college.

What lessons did you take from that experience pumping gas that stay with you today?

If you want your own money, you have to work for it. The other thing I picked up on was, if I took care of the customer, I would occasionally get rewarded in the form of a tip.

After a couple of years, I was put in charge of the night shift, often working the day and night shift until closing. So the gas station was my first taste of business responsibility.

Did you play any sports in High school or college?

I played basketball, baseball and ran cross country. Our basketball team was unusual. Our class was small with just 115 kids, so we didn’t have a lot of talent to pull from.

While our class was small, the district’s elementary grades were very large and the total population was high so we had to play in Division 1 which put us against much larger high schools, like Norristown, Plymouth Whitemarsh and Springfield (Delco).

We lost a lot in our early years but then had an 18-4 record in our senior year and made the district playoffs.

Why did you decide to go to college at Furman University in Greenville, South Carolina?

For whatever reason, I wanted to go to school in the South. I wasn’t good enough to get a basketball scholarship but thought I was good enough to make Furman’s team as a walk-on, which I did.

What was that experience going to school in the South like for you?

It was a tough adjustment at first. The lifestyle was different and I couldn’t get home because Furman was at least a 15-hour drive from King of Prussia. It was also the first time I witnessed racial segregation.

At first, I felt like a misfit; a northern kid in a southern school. My nickname was ‘Yank.’ The Southsaid “Hey y’all” instead of “hi.” Also, I came from an environment where whites and blacks were teammates and friends and then all of the sudden, I’m in an environment where there were no black kids at my school, in a town where if the sun was shining on the north side of the street, the African-American people walked on the south side, allowing the whites to walk in the shade. Food counters were segregated as were the buses and trains.

What impression did that experience have on you?

I couldn’t believe it! It was the 1960’s and although whites and blacks liked and respected each other, they did not cross their respective lines.

Did you make the basketball team?

I did and played two years for Furman. My freshman year I averaged double figures and made the varsity my Sophomore year. In the middle of that season, the coaches wanted to redshirt me so I could mature and fill out a bit as I was tall and skinny.

When I informed my parents of the plan, they didn’t like the idea. One Saturday they asked me to call home. My mother, who was very straightforward, got on the line and asked me what NBA team I thought I would play for after college. She told me they didn’t have the money to pay for an extra year of college, even with the partial scholarship, and that if I was going to follow the coach’s plan, I better have a plan for what I would do after my college playing time was over.

I finished playing that year and that was the end of my varsity college basketball career.

Looking back, was Furman a good choice for you?

It was. I learned a new culture and made a lot of friends. While it had its downside, the Southern culture and mentality are very nationalistic, patriotic and they are very loyal. Furman has since evolved and today it is considered one of the top-rated schools in the country.

What did you do after college?

I was in ROTC in college so after graduation and training the Army shipped me off to the 2^nd infantry division in South Korea where initially I was the maintenance officer for the 4^th/7^th motorized cavalry unit right near the DMZ. After a couple of months, I had the opportunity to run all the Division Officers’ Clubs which totaled 20 different officers’ clubs and had over 250 employees, 10 Servicemen, and the rest Korean nationals, reporting to me.

Serving in the Army was a life-defining experience. I got to run a million-dollar business with a lot of employees and a lot of day-to-day issues. It was my first experience running a business.

After you got out of the Army, who gave you your big break in life?

I don’t think I had any “big” breaks. Instead, what helped me get to where I am was who I was able to work for and learn from. Shortly after I got out of the Army, I went to work for Coopers Lybrand, a Philadelphia-based national accounting firm. I was a young kid in their accounting practice when Roger Hillas, Chairman of Provident National Bank, and the architect of the merger with Pittsburgh National Bank that is now PNC, offered me a job to join his bank as chief auditor. I went in as the auditor and six months later, Roger promoted me to CFO.

What did Hillas see in you, a 28-year kid a few years out of college?

I knew the financial side of the business, and I was willing to work hard. Also, through my experiences at Coopers, you had to communicate verbally and in writing. Roger was a tremendous mentor. He believed in giving young people an opportunity, giving them plenty of responsibility and rope, but expecting them to communicate and not get too full of themselves.

I left Provident after the merger and after a stint as CFO of Midlantic Bank, I joined Vanguard Group as their CFO. The first day at Vanguard Jack Bogle, who was an unbelievable entrepreneur and by the way did all his math on an abacus, pulled me into his office and asked me to clean up some daily operational issues. We changed some process around and redesigned work responsibilities which prevented boredom and saved money. The CFO job at Vanguard was more operational than I wanted and I ended up returning to Midlantic Bank after a year.

Why did you go back to Midlantic?

Midlantic helped take my game up. Back in those days, the CFO of a bank wasn’t a strategist, but rather was more an accountant tasked with keeping track of the numbers. The Chairman, Bob Van Buren, expected his CFO to be more strategic and acquisition driven. Also, the power that Midlantic and First Fidelity Bank, New Jersey’s two biggest banks, had was mind-boggling. Both bank’s headquarters were right next to New York City, and both were expanding state-wide. Midlantic had a lot of deals going on including acquisitions, capital market activities was a growing organization and had a lot of Wall Street exposure.

I left Midlantic in 1990 and joined Meridian Bank in Reading as their CFO. I worked for Sam McCollough, who was one of the greatest leaders I have ever known. Sam taught and brought excitement, respect, a strong work ethic, diversity and teamwork.

Why did you start First Priority Bank?

At some point in my career I said to a close friend, ‘I would hate to end my career without trying to run my own business.’ He suggested I think about starting a bank. Shortly after that conversation, I started a bank focused on high net worth individuals and wealth management called Millennium Bank. I ran it for six years and we sold to Harleysville in 2004 when they offered us over three times book to buy it.

I was 59 years old, and the same friend said, ‘let’s do it again!’ We used the same strategy and business model to start First Priority Bank in 2006 right here in Chester County. Unfortunately, the markets and economy had changed a bit since the Millennium years and we decided against acquiring an asset management firm. So we decided to focus on high net worth banking and lending. The returns are lower, but so was the risk profile.

When the -financial crisis hit us in 2008, two years after we opened a new bank, growth stopped. We hunkered down, watched the credit markets carefully, conserved capital and kept ourselves clean. In 2012, when we started to grow again, we made the shift into small business lending and commercial real estate and acquired Affinity Bank in Berks County.

You just made a recent acquisition.

Knock on wood, credit profiles today are much better than they were eight years ago when the downturn hit. Although the economy is better, there’s not a lot of organic growth. What we needed was a larger loan portfolio. This acquisition buys us 25 strong relationships and a portfolio of 65 million dollars in loans. And, just as important, we do not need to add expenses to manage it. So, a win-win for First Priority.

What’s on the horizon for First Priority going forward?

The greatest challenge for a community banking company like ours is to have strong enough returns to be able to generate new capital inflow. We need to be bigger, have a larger marketplace profile in places like Chester County and more liquidity through deposits. We went public a little over a year ago, paid back most of the TARP money we borrowed in 2009 and with this acquisition, took our stature up another notch. We’re now better positioned in the marketplace.

It’s no secret that there’s been a tremendous amount of bank consolidation throughout the region over the last 18 months. On the heels of that activity, our small business customers and prospective customers, are telling us that they value that community bank relationship. We believe the demand for a First Priority experience will continue to resonate with the business community as the economy gets healthier and expands.

We are a relationship Bank! We are creative. We are competitive. We are responsive. Above all, we are loyal to our customers – they stay with us, leverage our services and expertise and value doing business with us.

What about you personally, what’s on your horizon?

My wife, Nance, and I have spent the last 26 years in Chester County, raised a family, and I’ve started and run two banks here. It’s a wonderful place to live and work. The growth of our region has been incredible. I love that we’re part of that and plan to stick with it into the foreseeable future. Truthfully, I don’t know what I would do with myself without an office to go to!

How do you spend your time outside the office?

I used to play golf, but not much anymore. Nance, and I have three granddaughters, four dogs – three boxers and a French bulldog and we have a home in Bethany Beach that we don’t get to nearly enough. What with all that, on top of operating the bank, there’s not a lot of time for golf.

Finally David, what was the best piece of advice you ever received?

I’ll go back to what Roger Hillas taught me when I worked at Provident National; surround yourself with the brightest and best people; give them plenty rope, authority, and responsibility; and listen to and make sure you really hear what they are saying. Too often middle and senior management push every decision up to the CEO. I remind myself and my team to avoid delegating tasks and decisions upward. Create a to-do list, delegate many of the things you like doing and spend your time on the more challenging and meaningful tasks.