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Startup banks outline the costs, time and regulatory scrutiny of opening new banks
Summary
Two recently formed banks described multi-year startup timelines, large capital needs and frequent regulatory exams, and said mission-driven aims and community partnerships help secure support.
Columbus — Executives from two de novo banks told a Columbus Metropolitan Club audience that launching a bank requires years of preparation, millions in capital and steady regulatory oversight.
“What does it take to start a bank? It takes probably three years. A 500-page application to the regulators. $20,000,000 to $25,000,000 here in Central Ohio. And a community that believes in what we're trying to do,” said Eleria Rawlings, chief executive officer of Fortuna Bank.
Jordan Miller, chairman and CEO of Adelphi Bank, described the workload and scrutiny that follow opening: “We had a CRA exam. We weren't even open for eight months. The first time they came into our bank, they had 16 regulators.” Both executives said earlier support from established banks — technical assistance, capital introductions and vendor help — eased startup steps.
Why it matters: De novo banks signaled that their missions — including serving female entrepreneurs and neighborhoods beyond central commercial corridors — drive their strategy and capital-raising efforts. Panelists said mission focus matters because public sentiment and political debates (for example, around diversity, equity and inclusion) can affect deposit-raising and public support.
DEI and public sentiment: Miller said Adelphi formed after momentum following George Floyd's death and that the political environment has changed since then, creating some fundraising challenges. “A lot of initiatives around DEI — you're not even allowed to say the word in some places. So it has caused some challenges in raising some deposits,” he said, but added that many supporters remain committed.
Regulatory and credit risks: New-bank speakers said credit and cybersecurity are top operational concerns. “The loan is typically the customer that we're seeing can't be served by a certain their bridal. That's the one we're seeing. And that's the one we're helping. We're helping people at the lower end of the economic,” Rawlings said, describing the risk profile of some borrowers new banks serve. Panelists said local underwriting and the ability to adjust policy quickly give small banks an advantage when tailoring solutions.
Audience questions focused on deposit-raising and whether DEI controversies had meaningfully affected operations. Panelists said the practical impact on day-to-day operations has been manageable but noted fundraising can be more complicated in certain markets.
What’s next: Both de novo banks said they hope to exit the de novo phase within a few years and deepen community ties by expanding small-business lending, mentorship, and financial-education programs.
