Florida-based digital de novo gets FDIC approval


Dive brief:

  • Locality Bank, a digital de novo first that aims to serve businesses in Miami-Dade, Broward and Palm Beach counties in Florida, obtained deposit insurance from the Federal Deposit Insurance Corp on Friday. (FDIC), a milestone as a start-up bank is gearing up for a planned launch in December.
  • The bank, which is organized by co-founders Keith Costello, Drew Saito and Corey LeBlanc, has met its capital requirement of $ 23 million and has more than $ 27 million in share subscriptions, according to a press release.
  • “We will be the first community bank in 10 years to open in South Florida and with the capital to lend, we invite the South Florida business community to use us as a resource,” said Costello, CEO of Locality Bank, in a statement.

Dive overview:

Locality, which in September received approval of the Florida Bureau of Financial Regulation to open a state chartered bank, plans to offer commercial banking, commercial real estate loans, Small Business Administration (SBA) loans, and deposit and treasury services business.

A key mission of the bank is to become a “modernized version of what a community bank should be,” LeBlanc, the bank’s chief technology officer, said in a fireside chat last month during the Money 20/20 conference in Las Vegas.

In partnership with Miami-based fintech Nymbus, the bank developed a cloud-native core banking system with an open application programming interface (API) architecture.

LeBlanc explained how the de novo, which has yet to be launched, had to overcome staff turnover early in its journey to become a chartered bank.

“Each of our employees took a pay cut for being here,” said LeBlanc, who was joined on stage by Liz High, executive vice president of marketing for Nymbus Labs. “We lost some of our employees just in the last year before we even opened up, either because their organizations were offering more money, or maybe they didn’t really feel like it. that the challenge before them was something they wanted to take on.

“As we went through that and lost some of these people, we filled that with people who we think will be stronger with us for a longer period of time,” added LeBlanc.

When High asked him to delve into the bank’s “not here for profit” philosophy, LeBlanc explained how that position shaped the mission de novo.

“If we are to honestly produce what we say we’re going to do, which is empowering our customers to maximize their potential, if we focus on profit first, that starts to change the conversation. about how we do it., “he said. “We’re starting to cut corners… we’re starting to look at cost savings and contracts versus the utopian possibilities of the environment. “

As the bank defines itself as a digital-focused community bank, LeBlanc said the goal is not just to focus on its mobile app.

“We are starting to talk about modernizing local banking, but what does that mean? he said. “You’re going to sit at some of these conferences, or these roundtables with industry peers, and it’s almost comical. We’re having the same damn conversation we were five years ago and we’re bragging about launching a new mobile app. really just the face of the same that we gave customers to begin with. We do it every five years and we think it keeps pace with the industry.

Locality’s goal is to fill the gap in community banking services, LeBlanc said, adding that the bank views problem solving through a “first principle lens.”

“How can we really go in and rethink and really start to fill those holes well, so that we can solve problems instead of talking about products?” he said.

Being hyper focused on providing the best services means Locality Bank won’t be for everyone, and that’s okay, LeBlanc said.

“We can’t be everything for everyone, but we have to be really good at what we do,” he said. “We can obviously evolve and move on to other things as we get these opportunities. However, we have to sit down until we get to the [minimum viable product]. I think most regional community banks don’t have the ‘What is MVP vs. production environment’ conversation? “

“Our strategy is this: let’s find that segment of the market where we can actually see the problem and find a solution to the problem,” said LeBlanc. “Then we figure out what the minimum viable product is and iterate it to continue to make sure we’re improving the lives of the people we actually work with.”


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