Rebirth: The de novo bank class of 2018
February 6, 2018 10:00 PM
Rebirth: The de novo bank class of 2018
De novo activity is slowly picking up steam, ending a lengthy lull that followed the financial crisis. While new charter activity is nowhere near as brisk as it was during the pre-crisis days, at least eight banks are in various stages of formation. In comparison, five new banks opened their doors between 2013 and 2017.
The applications are from markets across the country, including Miami; Nashville, Tenn.; New York and Las Vegas.
This new pack of de novos seeks to raise a combined $280 million, ranging from $20 million for Sterling Bank in Las Vegas to around $100 million for Grasshopper Bank in New York. Many of them are aiming to serve very precise niches, including a focus on New York’s “innovation economy” at Grasshopper and a plan at Marathon International Bank to focus on Washington’s growing Ethiopian-American community.
While there is no guarantee that these groups will get approval and open this year, it is certainly an encouraging sign for many in the industry to see attempts being made. Here is a closer look at the 2018 class, which includes two banks that recently opened and six others that have filed applications.
The applications are from markets across the country, including Miami; Nashville, Tenn.; New York and Las Vegas.
This new pack of de novos seeks to raise a combined $280 million, ranging from $20 million for Sterling Bank in Las Vegas to around $100 million for Grasshopper Bank in New York. Many of them are aiming to serve very precise niches, including a focus on New York’s “innovation economy” at Grasshopper and a plan at Marathon International Bank to focus on Washington’s growing Ethiopian-American community.
While there is no guarantee that these groups will get approval and open this year, it is certainly an encouraging sign for many in the industry to see attempts being made. Here is a closer look at the 2018 class, which includes two banks that recently opened and six others that have filed applications.
Beacon Community Bank, Endeavor Bank
These two banks are already in business.
Beacon Community in Charleston, S.C., opened on Jan. 8. CEO Brooks Melton previously served as a market executive at CommunityOne Bancorp, which was bought by Capital Bank Financial in Charlotte, N.C. (Capital was subsequently acquired by First Horizon National.)
Beacon is expected to follow a traditional community bank strategy, focusing on small businesses, entrepreneurs, real estate developers and retail customers that value working with a local institution, Melton said.
Endeavor, led by CEO Dan Yates (pictured),debuted on Jan. 22 after raising $27 million from more than 450 investors; it brought in 8% more capital than it needed. The bank, which focuses on small businesses around San Diego, will have a downtown branch and a loan production office in Carlsbad, Calif.
“The response from the local community has been overwhelming," Yates said. "Word of mouth spread like wildfire. Our phones started ringing and never stopped.”
Beacon Community in Charleston, S.C., opened on Jan. 8. CEO Brooks Melton previously served as a market executive at CommunityOne Bancorp, which was bought by Capital Bank Financial in Charlotte, N.C. (Capital was subsequently acquired by First Horizon National.)
Beacon is expected to follow a traditional community bank strategy, focusing on small businesses, entrepreneurs, real estate developers and retail customers that value working with a local institution, Melton said.
Endeavor, led by CEO Dan Yates (pictured),
“The response from the local community has been overwhelming," Yates said. "Word of mouth spread like wildfire. Our phones started ringing and never stopped.”
Coastal Community Bank
Florida markets are attracting the interest of bank organizers. Winter Park National Bank opened last summer after obtaining a national charter from the Office of the Comptroller of the Currency.
Another group is looking to form a bank about 20 miles north of Miami. The proposed founders of Coastal Community Bank aim to raise about $22 million to open in Hollywood, Fla. Joe Dorsey is listed as the proposed bank’s CEO. It is unclear where his group is in the formation process.
Interestingly, the proposed institution shares a name with a Panama City, Fla., bank that failed in July 2010. That earlier Coastal Community was bought by a unit of Home BancShares in Conway, Ark.
Another group is looking to form a bank about 20 miles north of Miami. The proposed founders of Coastal Community Bank aim to raise about $22 million to open in Hollywood, Fla. Joe Dorsey is listed as the proposed bank’s CEO. It is unclear where his group is in the formation process.
Interestingly, the proposed institution shares a name with a Panama City, Fla., bank that failed in July 2010. That earlier Coastal Community was bought by a unit of Home BancShares in Conway, Ark.
Sterling Bank
Sterling Bank, which organizers hope to open in Las Vegas , would feature a first-time bank CEO. John Miller is no stranger to banking, though; he is a veteran investor who serves on the boards of Pioneer Bank in Austin, Texas, and Mission Valley Bank in Sunland, Calif.
Miller would have an experienced team around him. Donald Murray, a former CEO of Commerce Bank of Temecula Valley in Murrieta, Calif., would be Sterling’s president. LouEllen Ficke, Commerce's former chief financial officer, is also among the proposed bank’s organizers. The group is looking to raise $20 million.
"We want to build a business bank where we put the business first, the owner second and the employees next," Murray said. "We'll offer old-fashioned service with high-tech delivery systems."
Miller would have an experienced team around him. Donald Murray, a former CEO of Commerce Bank of Temecula Valley in Murrieta, Calif., would be Sterling’s president. LouEllen Ficke, Commerce's former chief financial officer, is also among the proposed bank’s organizers. The group is looking to raise $20 million.
"We want to build a business bank where we put the business first, the owner second and the employees next," Murray said. "We'll offer old-fashioned service with high-tech delivery systems."
Grasshopper Bank
One proposed bank has already announced a rebranding. Organizers of New York Venture Bank recently filed a public notice that they now plan to open as Grasshopper Bank.
The group, which is planning to raise up to $100 million in initial capital, intends to focus on New York’s “innovation economy,” according to its application with the Federal Deposit Insurance Corp.
Judith Erwin, a former executive at Square 1 Financial in Durham, N.C., would be its president and CEO.
Raj Date (pictured), former deputy director of the Consumer Financial Protection Bureau; David Munio, a former chief credit officer at Wells Fargo; and William Grant, who spent nearly three decades at the OCC, are among the high-profile members of the proposed bank’s board.
The group, which is planning to raise up to $100 million in initial capital, intends to focus on New York’s “innovation economy,” according to its application with the Federal Deposit Insurance Corp.
Judith Erwin, a former executive at Square 1 Financial in Durham, N.C., would be its president and CEO.
Raj Date (pictured), former deputy director of the Consumer Financial Protection Bureau; David Munio, a former chief credit officer at Wells Fargo; and William Grant, who spent nearly three decades at the OCC, are among the high-profile members of the proposed bank’s board.
Marathon International Bank
Marathon International Bank, which is being planned for Washington, would have a special purpose: Serving the area’s Ethiopian-American population .
Marathon, which seeks to raise $22 million to $25 million, would have a “particular emphasis on serving the banking needs of U.S. residents of Ethiopian origin,” organizers said in their FDIC application.
Gregory Garrett, a former CEO at Platinum Bank in Lubbock, Texas, would serve as the bank’s CEO. Zekarias Tamrat, a former banker with PNC and Bank of America, would become its president. Several prominent Ethiopian-Americans would join Marathon’s board, including Tekalign Gedamu, a retired economist and former managing director of the Development Bank of Ethiopia, who is set to serve as chairman.
“The organizers' passion for this … proposed bank is unmatched,” said Steven Lanter, a Luse Gorman lawyer who is handling the application for the organizers. “For some of the organizers, to create an insured financial institution that caters to the Ethiopian-American community, and the broader market, will be a dream come true.”
Marathon, which seeks to raise $22 million to $25 million, would have a “particular emphasis on serving the banking needs of U.S. residents of Ethiopian origin,” organizers said in their FDIC application.
Gregory Garrett, a former CEO at Platinum Bank in Lubbock, Texas, would serve as the bank’s CEO. Zekarias Tamrat, a former banker with PNC and Bank of America, would become its president. Several prominent Ethiopian-Americans would join Marathon’s board, including Tekalign Gedamu, a retired economist and former managing director of the Development Bank of Ethiopia, who is set to serve as chairman.
“The organizers' passion for this … proposed bank is unmatched,” said Steven Lanter, a Luse Gorman lawyer who is handling the application for the organizers. “For some of the organizers, to create an insured financial institution that caters to the Ethiopian-American community, and the broader market, will be a dream come true.”
Studio Bank
A group of former Avenue Financial and Metropolitan Bank executives are looking to form Studio Bank in Nashville, Tenn. Avenue sold itself in 2016 to Pinnacle Financial, while Metropolitan was sold in July to Renasant.
“A studio is a place where creators do their thing … and we want to be the bank for Nashville’s creators,” the group states on itswebsite .
Studio, which hopes to raise $40 million from a wide range of investors, would operate in several sectors, including music, arts, health care, mortgages and residential construction and development. Organizers have already leased more than 10,000 square feet of office space in The Gulch, a trendy part of the city that is exploding with new development.
“A studio is a place where creators do their thing … and we want to be the bank for Nashville’s creators,” the group states on its
Studio, which hopes to raise $40 million from a wide range of investors, would operate in several sectors, including music, arts, health care, mortgages and residential construction and development. Organizers have already leased more than 10,000 square feet of office space in The Gulch, a trendy part of the city that is exploding with new development.
CommerceOne Bank
A group of bankers with ties to First Partners Bank, which was sold to Progress Bank in Birmingham, Ala., last year, is eager to start another bank in the same city. Organizers of CommerceOne Bank aim to raise $30 million to $50 million in initial capital.
“Client service will be a cornerstone of the bank’s business strategy,” organizers said in their FDIC application. The bank would focus on commercial clients, commercial real estate and private clients, offering loan and deposit products and treasury management services.
Kenneth Till, a former chief financial officer at First Partners, would become the proposed bank’s CEO. Arthur Freeman IV, who was First Partners’ chief lending officer, would serve as president. Ronald Jackson, a retired executive at Oakworth Capital, would be one of the bank’s directors.
“Client service will be a cornerstone of the bank’s business strategy,” organizers said in their FDIC application. The bank would focus on commercial clients, commercial real estate and private clients, offering loan and deposit products and treasury management services.
Kenneth Till, a former chief financial officer at First Partners, would become the proposed bank’s CEO. Arthur Freeman IV, who was First Partners’ chief lending officer, would serve as president. Ronald Jackson, a retired executive at Oakworth Capital, would be one of the bank’s directors.
Dime Municipal Bank
Dime Community Bancshares in Brooklyn, N.Y., seems poised to withdraw its application for a separately chartered bank that would have focused on municipal clients.
Management, which has looked atways to reduce Dime’s reliance on commercial real estate lending , realized after filing the application for Dime Municipal Bank that there was more red tape involved that it originally thought.
Rising deposit rates would also make it more daunting for a new venture to compete, CEO Kenneth Mahon said in a recent interview. “We’re going to take a step back ,” he said.
Management, which has looked at
Rising deposit rates would also make it more daunting for a new venture to compete, CEO Kenneth Mahon said in a recent interview. “
