Fast-growing Florida bank sets an expansive solar-lending goal

Climate First Bank says it has facilitated installation of solar panels on more than 2,000 homes since 2022, all in its home state of Florida.

But now that it has completed its three-year de novo phase, during which new banks undergo more stringent supervision by federal regulators, Climate First is primed to pursue a more ambitious goal for the solar lending program it rolled out in May 2022. The St. Petersburg-based institution wants to push the operation beyond the boundaries of the Sunshine State.

"We are thrilled to have fulfilled the necessary requirements to reach this monumental achievement, as it allows us to continue our momentum and expand our footprint nationwide," CEO Ken LaRoe said Tuesday in a press release. "This opens doors to so many new opportunities and possibilities, including setting a national standard for community-first sustainable finance."

The $650 million-asset Climate First, which opened June 1, 2021, ranks as the largest of the nine community banks that debuted that year. First-quarter net income of $401,000 also made Climate First the most profitable. 

Climate First's solar-lending goals track closely with plans LaRoe, who founded two other Florida-based banks prior to organizing Climate First, discussed in an August 2023 interview with American Banker. According to LaRoe, Climate First was working with a South Carolina bank interested in solar lending while also eyeing growth in the Southeast and Texas. "We're gearing up now to launch throughout the Southeast," LaRoe told American Banker. 

Solar lending originations have surpassed $100 million, Climate First reported in an April 30 press release. Climate First joins several other banks that have moved recently to expand solar lending. In March, the $21.4 billion-asset Atlantic Union Bancorp in Richmond, Virginia, disclosed a $30 million line of credit to SolaReit, a Vienna, Virginia-based firm that offers financing solutions for solar and battery energy storage real estate projects. Atlantic Union closed a $15 million line of credit with SolaReit in 2023.

In April, the $215.1 billion-asset M&T Bancorp in Buffalo, New York, announced a partnership with New York-based Sunstone Credit aimed at expanding Sunstone's commercial solar financing operation. 

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Not every bank's entry into solar lending has been without incident. The $215 billion-asset Fifth Third Bancorp in Cincinnati acquired renewable energy lender Dividend Finance in May 2022. The following year, in November 2023, Fifth Third disclosed at least 17 state attorney general offices were investigating Dividend's lending practices. In March, Minnesota Attorney General Keith Ellison filed suit against Dividend and three other solar lenders for imposing undisclosed fees amounting to $35 million on borrowers. 

Climate First is also laying plans to widen its Florida footprint. The company, which maintains existing locations in St. Petersburg, Mt. Dora and Winter Park, plans to add branches in Jacksonville, Orlando and Tampa. Climate First serves more than 10,700 customers through its brick-and-mortar network and national digital efforts.   

"Climate First Bank's success as a de novo demonstrates the potential of values-based banks not just in Florida but across the United States," Senior Vice President Chris Cucci said Tuesday in the press release.