Hoosier Banker 37 this issue from the start. If there is a specific individual with a negative banking history proposed to be involved in the bank, the organizing group needs to have mitigating factors and likely a wealth of supporting information to justify that individual’s role in the new bank. Have an appropriate business plan. The core of any good de novo bank application requires the development of an appropriate business plan. Because of the heightened review from regulators, business plans that promise dramatic returns, rapid growth, immediate profitability, and unique products and services are likely to be viewed with a healthy dose of skepticism. More often than not, a “reasonable” business plan with moderate growth levels, appropriate consideration for loan losses, and honest evaluation of the market and associated competitive factors will be much better received as being “realistic” – i.e., more likely to result in heightened levels of capital – than will a business plan that promises the world. This type of planning may take more time and resources, but it will serve the application and your future bank well. Even banks that have been in existence for nearly a century can get caught in an unrealistic mindset when it comes to planning for the future. The regulators will be wary of a business plan that does not appear to take into account the real risks that face the banking industry. Be patient. Even with the FDIC’s Handbook and processes in place, organizing a new institution is going to take time. The Handbook states that applications will generally be acted on within four to six months after “acceptance,” but it could take one to two months or more after the initial filing to submit all of the supporting documentation the FDIC deems relevant in its review and have the filing formally accepted. This means that the approval process – excluding time spent preparing the application and related documents – would James Brown Correspondent Banking NOT FDIC INSURED MAY LOSE VALUE NO BANK GUARANTEE WEALTH MANAGEMENT & TRUST Retirement Plans 401K, PENSION & MORE Investment Management Insurance Financial & Estate Planning Trust Partnering MEMBER FDIC EQUAL HOUSING LENDER CORRESPONDENT BANKING LENDING SERVICES Holding Company Lending » Acquisition Financing BOTH WHOLE BANK & BRANCH » Stock Buy Back Financing » ESOP Financing » Additional Capital for Growth & etc. Fed Funds Lines of Credit Loan Participations Commercial Credit Cards & Purchasing Cards DEPOSIT & TREASURY SERVICES DDA Accounts Fed Funds Sweeps Accounts Certi cates of Deposit Wire Transfer / ACH INTERNATIONAL SERVICES Foreign Exchange BOTH CHECKS & WIRES Letters of Credit IMPORT, EXPORT & STANDBY Import & Export Advisory Services Count on us… JAMES BROWN James Brown has over 25 years of banking experience in Retail, Small Business, Corporate and Correspondent Banking. (502) 625-9330 james.brown@syb.com normally take at least six to nine months, assuming no hiccups or unforeseen issues. We encourage community banks across the nation with this same message, whether seeking to resolve a compliance issue or move an acquisition toward completion. While there are certainly times to press an issue, that time is often not when you are asking the regulator for something. Get help. Although the FDIC indicates that there is no need to have professional help associated with the application, our experience is that the de novo process is not one to tackle on your own. There is too much capital involved and too many moving pieces to waste time figuring it out as you go. That help could be on a start-to-finish turnkey basis, or assistance with any of the myriad individual tasks and projects involved. Regardless, in light of the current environment, we believe now is the perfect time to charter a new community bank. HB
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