Independent Banker - July 2017 - 36

Are de novo applications picking up?
Banks opened since 2011
Name
Bank of Bird-in-Hand
Primary Bank
International Bank of
Commerce
Blue Gate Bank
Location
Bird-in-Hand, Pa.
Bedford, N.H.
Oklahoma City, Okla.
Costa Mesa, Calif.
Location
Application
received
Date opened
Nov. 29, 2013
July 28, 2015
Jan. 1, 2017
Jan. 23, 2017
De novo applications received in 2016 and 2017
Name
Infi nity Bank Santa Ana, Calif. July 7, 2016
Endeavor Bank San Diego, Calif. Aug. 12, 2016
Tennessee Bank
& Trust
Winter Park
National Bank
Beacon
Community Bank
SoFi Bank
Bank of Austin Austin, Texas
Nashville, Tenn. Oct. 3, 2016
Dec. 14, 2016
Winter Park, Fla. Dec. 15, 2016
Charleston, S.C. June 6, 2017
Salt Lake City,
Utah
June 6, 2017
Status
Pending
Pending
Pending
Approved
Pending
Pending
Pending
Source: FDIC . Correct as of June 9, 2017
" If you don't have that, the regulators
are not going to approve you, "
says Dotherow.
Maley says the collective experience
that she and other teammates
brought to the table made the planning
process much smoother, because
they knew the nitty-gritty of setting
up a bank and how to work productively
with regulators. " It is critical to
bring in people who know how to do
this, " she says.
In addition to having a competent
team of workers, Dotherow advises
de novo hopefuls to pick directors
and investors who will not only
provide the bank with capital to get
started but who can also bring in
future business. Although a startup
bank is under the gun to raise capital
before it can open, fi nding the right
investors is time well spent. If you
only get passive investors, it makes it
harder to build the bank's business in
the future, he explains.
Management also needs to be
entrenched in the community and
able to bring in future business.
" You could have all the great
operations people in the world, but if
you don't have any business for them
to service, you won't be profi table, "
Dotherow says.
carefully consider the vast amount of
legwork involved in creating a functional
bank. The behind-the-scenes
work encompasses everything from
picking a core processor to setting up
operations and technology to compliance
to picking third-party providers,
buying offi ce furniture and more.
" When you start out, it's a blank
slate. You have nothing, " says Maley.
" Setting up a new bank is a laborintensive
process. I think people are
surprised by the amount of work. "
Every person you bring in at the
beginning is a critical hire; everyone
has to be hands-on and willing to take
on multiple jobs, Maley contends. She
was chief fi nancial offi cer in Bank of
Bird-in-Hand's early days and used
to joke with coworkers that everyone
needed to take their vitamins so they
didn't get sick.
" There's so much you take for
granted with an established bank, "
she says.
Picking the right management
team and an experienced board
of directors with a proven history
of running, owning and operating
a community bank is critical-
especially today, given the heightened
regulatory scrutiny, according to
bankers experienced with the de
novo process.
36 ICBA IndependentBanker July 2017
Warning signs
There are a number of
hurdles along the way
that could derail the
de novo process. You
might not be able to
raise all the required
capital, management
could pull out, market
conditions could change
or any number of other
situations could throw a
wrench into things.
Already a few applicants have
pulled out for one reason or
another. Core Commercial Bank
was approved in December 2015,
but it won't be opening, according
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