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ADRIAN - TO HEAR Doug Kapnick tell it, his appointment as president of Pavilion Bancorp Inc. and the Bank of Lenawee wasn't exactly a voluntary thing.
Patrick Gill, who had been president of the bank and its sister, the Bank of Washtenaw, had left for another banking position and someone was needed to sign off on documents.
"So, they had a quick board meeting to select a new president and I was the only one not there because I was doped up in the hospital after surgery," said Mr. Kapnick, 61.
"Al Brittain, chairman of the board [of the bank] and Emory Schmidt, chairman of the executive committee, come in to my room and say, 'Congratulations, you're our new president.'●"
Mr. Kapnick waits a beat and then delivers the punch line: "Only someone who would be drugged would say yes."
The anecdote is typical of the way Mr. Kapnick, who is also chairman of the board and chief executive of the Adrian-based holding company, tells funny stories when asked a simple question. But it doesn't capture the dedication he brings to his job at Pavilion.
As head of the company which had a profit of $1.6 million and assets of $329 million through the end of June, he takes no paycheck.
"I'm not trying to set a new example, but it's a non-operating position, so that would not demand a salary," he said.
But, he added, he receives the traditional fees given to board members.
He also buys company stock, and said the company takes "very good care" of its shareholders. The company's latest proxy statement showed he owned nearly 95,000 shares last year, or 11 percent of total shares outstanding. The company's stock, which trades over-the-counter bulletin board, is priced at $56.
The Adrian bank firm has had two 2-for-1 stock splits in the past decade and paid a special 10 percent stock dividend in 1994 and a 5 percent stock dividend this year. Those were on top of quarterly dividends, which have been rising, mostly recently to 24 cents a share.
The Bank of Lenawee has been given the highest quality rating by BauerFinancial Inc., a national bank rating company from Florida. It has given the Bank of Washtenaw its next highest rating of "excellent."
Strong business savvy helped Mr. Kapnick grow his father's insurance firm from 15 employees when he took over in 1974 to one of the largest full-service insurance brokers in the Midwest, with more than 125 employees and offices in Adrian, Ann Arbor, and Southfield, Mich.
The insurance firm's fortunes have been bolstered by Pavilion. The bank firm's proxy notes that last year it and its subsidiaries purchased all of their insurance products through Mr. Kapnick's firm, Kapnick & Co. In 2003, that amounted to $204,000 in premiums.
Such relationships must be disclosed, but are not unusual, according to the Independent Community Bankers of America, a group of independent, locally owned and operated institutions.
"It is common for a director or even the chairman of a community bank to own an insurance agency in the community and to receive all the bank's insurance business," said Tim Cook, the trade group's spokesman. "That is often why the insurance agent serves on the bank's board."
Allan Brittain, chairman of the board of the Bank of Lenawee and the bank's retired chief executive officer, said Mr. Kapnick doesn't have the insurance business because of his Pavilion position.
"He's one of the largest independent brokers around and he's been able to provide with his connections the most economic package for the bank."
Mr. Brittain was instrumental in recruiting Mr. Kapnick for the bank board more than two decades ago, a decision he made based on the business skills he saw in the insurance executive that he said are even more pronounced today.
"He thinks well and he's a problem-solver. He's a leader and he just had it," he said.
Mr. Kapnick, a trim man who wears glasses and dresses impeccably, grew up in Adrian with three siblings and graduated from the local high school before attending the University of Michigan, graduating in 1965 with a bachelor of business administration degree and plans for law school. But he aborted those plans to join the family firm when his father, Elmer, fell ill.
The small-town nature of Adrian, the bank chief said, has kept him involved in the community. It is a great place to live and one can have an impact, he said. But it also means each person is expected to give back to the community, he added.
"I've done everything once in this community and some things twice."
Rick Artman, president of Siena Heights University in Adrian, said Mr. Kapnick has been a hands-on member for 19 years on the university board. Currently, he's the chairman.
"Some people build lists of boards just to have them, but when Doug makes a commitment, he's in it for the whole nine yards," Mr. Artman said. "He brings a great business acumen to the board and he's a community leader, so that means a great deal of prestige for us."
Mr. Kapnick's loyalty to the Adrian area was evident in recent months when the board decided to sell the 3-year-old Bank of Washtenaw so it could raise capital to expand the Bank of Lenawee, which was founded in 1869. A $15 million cash deal is being finalized to sell the Washtenaw bank, which has branches in Ann Arbor and Saline, to the holding company of the Community Bank of Dearborn.
Mr. Kapnick said he had someone question why the company would choose to keep a bank in the smaller town of Adrian and sell one in growing Ann Arbor, but the decision was a no-brainer because of the Bank of Lenawee's 135-year history in the area.
"I told him, 'because you don't shoot your lead dog,'●" said Mr. Kapnick, a non-hunter who admitted the saying was "just a good metaphor."
Pavilion sees opportunity for growth in Lenawee as well as in Hillsdale County and Fulton County in Ohio, he said. "But we need some money to do it right," he added.
The bank has launched an aggressive marketing campaign using a yellow hammer as a symbol of crushing the old, inefficient ways of doing business to better help customers build their life or company, said Richard DeVries, president and chief executive officer of the Bank of Lenawee.
Tags on the hammers urge new and existing customers to: "Crush and build. Hammer on. And have fun!"
"Fun" is how Mr. DeVries describes how it is to work with Mr. Kapnick.
"Fun doesn't mean you don't work hard," Mr. Kapnick said. "Success is fun. Failure is not fun."
Mr. Schmidt, the Pavilion board member who told Mr. Kapnick he had been named president, said there's one more attribute that sets his long-time friend apart from other businessmen.
"He has a lot of compassion," said Mr. Schmidt.
"He's the opposite of what people characterize as a mean-spirited corporate person. He wears his heart on his sleeve."
Mr. Kapnick said hiring the right people and trusting them to do their jobs is key to his business success.
"Treat people with the dignity and respect they deserve," he said, a lesson he learned when he was a young executive of his father's firm and didn't want to give a building key to a new employee.
"My dad said: 'If you don't trust him, fire him. If you do, give him a key,'●" Mr. Kapnick said.
"It makes all the sense in the world. We trust everyone until they give us a reason not to."
Mr. Kapnick this summer celebrated his 40th wedding anniversary with his wife Mary and he recently completed a 19-month renovation of the large brick farmhouse, built in 1858, where they live on a tree-lined street in Adrian.
Although son Jim is now the president of Kapnick & Co., and son Mike is the chief financial officer, the father isn't ready to consider retirement and said he doesn't think his wife is ready for it, either.
Getting in his last quip, he snaps off: "Mary says she married me for better or for worse, but not for lunch."
Contact Mary-Beth McLaughlin at