Daniel Sheehan, President, Vista Bancshares, Inc.

Daniel Sheehan, president of Vista Bancshares, Inc., sat down with Invest: to discuss what financial products and services are driving demand, current trends that are shaping the banking landscape in Palm Beach and South Florida, and how Vista Bank is attracting and retaining top talent. “We put a lot of time into cultivating an atmosphere and platform where high performers want to be,” Sheehan said.

What are some of the current trends that are shaping the banking landscape in Palm Beach and South Florida at the moment?
Generally speaking, the county remains relatively healthy. About 90% of our credit assets are in Florida and Texas, however since we occasionally do deals outside of those markets, I speak with a lot of folks across the country and it appears S. Florida continues to outperform most markets. Residential sales have slowed quite a bit with the latest inventory of homes for sale in May indicating a more balanced supply versus what has been considered hyperactive in recent years. The local economy right now is relatively healthy and the State unemployment is below 4%, better than the national average. Looking at our local GDP and the billions of dollars in risk capital formation geared towards new development – we are probably one of the most (relatively) active markets in the country. There are many derivative effects stemming from that for the local economy with more and more people moving choosing to call this region home. I firmly believe Palm Beach County remains an above average market for both economic growth and overall health.

What banking services and financial products are driving growth, demand and profitability for Vista Bank in South Florida?
Vista Bank has been competitive in a number of verticals including primary residence and second home mortgages, construction loans for single family homes, commercial real estate, special use properties, and lower middle market corporate finance commercial lending. Since coming out of the pandemic, the county’s economy has become much more diverse which, in turn, creates more job diversity. Thirty years ago, this was a town that was primarily doctors, lawyers, and real estate developers and the further South one traveled there was a greater reliance on tourism. Moreover, there was real seasonality for local business and in the sales cycle of residential real estate assets. Relatively speaking, nothing would happen during the summer. However, once it got cold up north in October we would begin to see things spike until May, then go back down again.
Today, the seasonality has flattened out because there is a much lower concentration in real estate and tourism-related commerce. Many Fortune 500 companies have relocated down here, which has created an increasingly diversified real estate base. This has made it a much more resilient, strong, and opportunistic market for banks. Instead of banks having 90% of their local/regional loan book in real estate assets, we are lending more to companies that provide services and sell products.

What opportunities for growth and expansion are there for Vista Bank in South Florida?
Vista has been looking to add more bankers to the team. We have also been looking South in both Broward and Miami-Dade County. There are plenty of net new credit opportunities for banks in this market due to the growing economy. Vista has a fairly broad product and service offering right now and there is a market for more community banks in the region.

How is Vista Bank leveraging technology, digital integration, and the use of AI to streamline operations and provide better customer service?
There are a couple of internal ways we are utilizing new technologies and are actively working to leverage it in more customer-facing ways. Internally, we are using AI and machine learning in cyber security to broadly cover certain risk elements of our business. One example of that is within spending or behavioral patterns in accounts. Frequency, location, time of day, amount and recipient are all factors used to determine whether a transaction is out of the norm. More and more banks are adopting some of these things and they have been very helpful.

We are actively pursuing further automation around securely managing data and reporting. There are many important process components in running a successful bank and having technology to bring all of these components together removes certain human error risks and busywork tasks, allowing our team members to focus on tasks that are more fulfilling.

On the front end, we have continued to invest and further develop the user experience, seeking to remove any friction, resistance or anxiety that folks may experience when interacting with their money. With people spending as much time as they do on their phones, we aim to make the banking process as easy as possible on our apps and digital channels.

What regulatory measures would help protect clients and operations?
For the time being, the banking industry is not suffering from any meaningful credit losses. The economy appears to be doing OK currently, but I suspect we will be facing some real challenges over the next couple of years. One of the issues that small banks face right now is the industry’s need for deposit reform. The FDIC (Federal Deposit Insurance Corporation) only covers $250,000 in deposit insurance per account holder. During the pandemic, there was a huge rush of deposit flight to the bigger banks because people assumed that they were ‘too big to fail’ and the government would bail them out if needed. This exacerbated the problem of “too big to fail” and generates even more concern today. Thankfully, Vista was proactive to offer ICS and CDARS coverage when our clients requested it, which they greatly appreciated.

That said, I do think that if there was some real deposit reform, it would level the playing field and result in more optionality and credit availability for the consumer market and small business in particular. Doing so would also inspire more risk taking for smaller banks, which will, in turn, help small business formation and support. Small businesses contribute about 43% to the US GDP, and small and midcap banks provide the majority of small business credit. Providing unlimited guarantees on certain deposit accounts could help small banks to recapture market share on deposits.

How does Vista Bank promote financial literacy and education programs?
We opened a bank and Financial Literacy Center ecosystem in South Dallas last year, a location that had essentially been a financial desert for three decades. We committed half of that space to the Dallas Black Chamber of Commerce and the South Dallas Fair Park Innovation Center.
Working with those community partners, we created the Vista Bank Academy. Through that offering, we host Business, Banking and Breakfast, a monthly networking event for local business owners, entrepreneurs, professionals, and industry experts to strengthen the community through the power of small business.

Understanding that most small businesses fail for lack of capital, we also created the Path to Yes program. Offered in-person on a semi-annual basis, industry banking and business experts teach classes across four tracks including Business Ideation, Business Innovation, Funding Pre-Qualification and Finance Exploration. Last semester, we had a 94% graduation rate.

Regarding workforce development, what measures is Vista Bank implementing to attract and retain a skilled labor force?
We put a lot of time into cultivating and fostering an atmosphere and platform where high performers want to be. It is a respectful environment, where trust is the primary currency. Our “People First” culture based on a reverse pyramid where leadership puts our team members first, trusting that thriving colleagues better care for our clients, which ultimately produces results for our stakeholders, carries a lot of weight within the organization. We are flexible in our thinking and believe in having intelligent generalists (vs creating silos among specialists) with broader bandwidth and the ability to capture and service much more deal flow.