Plans for the first de novo bank in Connecticut in a dozen years were nixed.
Organizers of the planned The New Canaan Bank — named after the Connecticut town in which it was to be based — scuttled their effort, citing worries about looming economic weakness. Amid high inflation and aggressive Federal Reserve interest rate hikes to combat it, economists increasingly are warning of a recession in 2023.
New Canaan Bank's leaders — including Louis Garcia, who would have been the lender's CEO — formally withdrew their application on Dec. 14, according to Connecticut's
Garcia and several other organizers had applied in December 2021 to form the start-up bank. They had planned to raise up to $40 million of initial capital and open during the fourth quarter of this year.
In their business plan, the organizers said they "identified an unfilled niche." As "large banks acquired smaller ones and personal service was subjected to consolidation strategies, the opportunity has increased for locally-owned, operated and highly personal service-oriented banks."
It would have been the first new bank in Connecticut since the 2010 opening of Start Community Bank, which now has $168 million of assets and operates as New Haven Bank.
Startup banks became increasingly rare nationally over the past several years. Regulatory hurdles grew in number and complication after the 2008 financial crisis exposed deep vulnerabilities in the banking system. For many, difficulties raising capital
Nationally, fewer than 50 startup banks opened in the U.S. in the past decade, according to the Fed. That was far below the average of 100 per year before the 2008 financial crisis.
