Dive Brief:
- The FDIC gave Washington, D.C.-based Founders Bank conditional approval for deposit insurance, the bank’s organizers told the Washington Business Journal last week.
- The organizers, who plan to open the bank in the first half of 2020, said they are raising $25 to $30 million. The bank would become the first de novo chartered in the nation’s capital in 15 years.
- De novo activity reached a 10-year high in 2018, when the FDIC received 24 applications and approved 15. Approvals fell to nine last year.
Dive Insight:
FDIC Chairwoman Jelena McWilliams bemoaned a decrease in de novo activity in a December 2018 op-ed in American Banker. "With 14 million American adults without a bank account, we want to see more banks, not fewer," she wrote, noting small bank disappearance in particular. "Today, 627 counties are only served by community banking offices, 122 counties have only one banking office, and 33 counties have no banking offices at all."
A November 2019 report by another regulator, the Federal Reserve, reinforced McWilliams’s concerns, highlighting 44 counties — the vast majority rural — that had been "deeply affected" by the closure of more than half of their bank branches between 2012 and 2017.
De novo activity in the Washington area has been rather unpredictable over the past year. Great Falls, Virginia-based Trustar Bank opened in July and hit $100 million in assets by September. But Washington-based MOXY Bank is looking less likely. Under the conditional approval it received from the FDIC in January 2019, it must open by this month. But its CEO, Casey Mauldin, left in August to become chief lending officer at another de novo in the region, NXG Bank. Another of the region’s proposed banks, Tysons Corner, Virginia-based VisionBank, dropped its bid to open in August. Its leaders instead joined Tysons neighbor Old Dominion National Bank.
The group working to open Founders Bank consists largely of former executives at Bank of Georgetown, which was sold to United Bancshares in 2016.
"We greatly appreciated the transparency and open communication that we have had with the FDIC throughout the application and approval process, and we look forward to continuing the great relationship we’ve developed going forward," Martin McCarthy, Founders’ proposed president and CEO, said in a release. "This approval allows us to focus on the next phase of completing our capital raise and building a strong community of employees, customers and stakeholders."
The bank also announced its hiring of a new CFO, Karen Grau. Grau has 35 years of banking experience, including as CFO of Monument Bank until its sale to Revere Bank in 2016. She replaces Domingo Rodriguez, a former CFO at Bank of Georgetown who is scaling back his role for health-related reasons, but is still listed as a director on Founders Bank’s website.
