After 10 years as an examiner with the Federal Deposit Insurance Corp., Marc Minish concluded he would be better off running a bank, though it took his wife, Chantel, to push Minish to take the plunge.
"I was talking to my wife saying, `Boy, I sure would love a bank. I know I could do it,'" Minish said. "She got tired of hearing me talk about that, because here I am."
Minish is now the primary organizer of the proposed Nova Bank in Huntsville, Alabama. The turning point came in fall 2019, when Chantel Minish arrived home with a new computer, as well as an ultimatum. "She told me, `Here's a computer for you to work on. Make this happen or shut up,'" Minish recalled.
The process hasn't been easy. COVID-19 slowed progress and regulators rejected Nova's initial charter application. Now, though, Minish and his colleagues, including veteran Alabama banker Shad Williams, who is slated to serve as Nova's CEO, appear well on their way to converting Minish's dream into solid reality. Indeed, Alabama's banking department gave conditional approval to Nova's charter application earlier this month. The FDIC did the same for the deposit insurance request in March.
The bank-in-formation is forecasting an opening date late in 2023.
According to Minish, the key difference between Nova's first charter application, which it withdrew in April, and the one state regulators ultimately approved was tapping Williams to serve as CEO in his place. "We had to build on our management team," Minish said. "The regulators weren't comfortable with me being CEO right out of the gate, never having had that experience. ... They wanted us to go out and find some folks who had that C-suite that we were missing."
Williams served as CEO at Cheaha Financial Group in Oxford, Alabama, prior to its acquisition by the Baton Rouge, Louisiana-based Investar Holding Corp. in April 2021. The $2.75 billion-asset Investar paid $41.6 million for Cheaha.
Minish, who serves as chief credit officer on the reorganized management team, said he has no regrets, and little doubt that Nova will succeed.
"I left my job expressly to pursue this," said Minish, who quit the FDIC in January 2020. "If you're paying attention, being vigilant, doing the right thing and staying in your lane, banking is a very profitable and stable industry to be in."
Nova is one of four de novo groups that have received conditional FDIC approval. Two other banks, Adelphi in Columbus, Ohio, and
One of the conditions Nova must satisfy before it wins final FDIC approval is raising at least $21.7 million of capital. That's less than half the capital raised by Alabama's last de novo bank, Birmingham-based CommerceOne, which opened in June 2018. Nova, however, may find the going tougher, according to CommerceOne CEO Kenneth Till.
"There was probably more capital available [in 2018] than there is now, so it probably is a little more difficult," Till said. CommerceOne's organizers were able to raise $48 million, "meaningfully more" than the $30 million target the FDIC set, Till added.
CommerceOne reached break-even after a year and has been increasingly profitable over the past four years. Net income totaled $7.6 million in 2022 and $2.2 million for the quarter ending March 31. The $597 million-asset CommerceOne's growth has been "right in line with our plan," Till said. "We may have been modestly ahead of our forecast, but not significantly."
Even with a less welcoming market for bank investment, Till still likes Nova's prospects, in no small part because of its Huntsville location.
"When you look at Huntsville, certainly it's a dynamic market," Till said. "They have had some consolidation within that market recently, so I have every expectation the team at Nova will do well."
Scott Latham, Alabama Bankers Association president and CEO, said Nova is opening at "an exceptional time," when Huntsville's economy and population are enjoying rapid growth. According to the Census Bureau, Huntsville's population grew by 23% between 2010 and 2022, allowing it to surpass Birmingham as Alabama's most populous city. Huntsville officials estimated the city's population to be 227,500 as of July 1, 2022. At 1.6% in April, unemployment seems virtually nonexistent.
"On our last group visit in Washington, we met with Sen. Richard Shelby," who has since retired, Latham said. "I heard him say Huntsville is on fire as it relates to jobs, growth and opportunity."
At the same time, Huntsville's largest hometown bank, the $1.7 billion-asset Progress Financial Corp,
For Nova, Minish is set to tackle the challenge of raising capital. "That's what we're doing, seven days a week," Minish said. "We expect to have 300 to 400 investors. When you do the math, we have a much lower threshold for entry than many de novo banks. It also means we've got to go talk to a lot more people. ...
"I never rubbed shoulders with the guys who could write a $1.5 million check," Minish jokingly added.
Latham said he was "so excited," about Nova's progress, adding that a few other groups in the state are considering seeking charters. "We hope to see more" de novo activity, Latham added.
Till, too, called the de novo activity good news for Alabama's banking sector. "Any time your industry is able to attract capital, that's a positive."
Once it does open its doors, Nova intends to pursue a classic community bank strategy, with a focus on small-business owners and customers who want what Minish termed "white-glove" service.
"We won't be the low-cost provider," Minish said. "We will provide good service. Business owners and borrowers will have access to decision-makers, and we can leverage our market knowledge to be able to do things a large bank wouldn't be able to do."
"We're not reinventing the wheel," Minish added. "We plan on being a very community-focused community bank."
