Business owners may worry that one drawback of signing up with a de novo bank is that it's built to flip. And in some cities, there are already well-known serial bank entrepreneurs. Of course, any business you work with can be sold at any time. But according to the FDIC, only 5% of de novo banks are acquired in their first five years of business. Meanwhile, more de novos are chartered every week. Consider the extraordinary case of Square 1 Bank, based in Durham, N.C., which was formally established last August. Initially, a group led by CEO Richard Casey set out to raise $105 million, the amount specified in its charter and an unusually large sum for a de novo bank. In fact, the offering was oversubscribed at $200 million. Like other de novos, Square 1 was set on course by a merger. Casey had been an executive at Imperial Bank, where he initiated a program for lending to venture capital-backed companies. Imperial was then taken over by Detroit-based Comerica Bank. Casey left after ...
By: Dan Ackman Business owners have always had a love-hate relationship with their bankers--and these relationships have only become more strained as local banks have been gobbled up by large corporations in recent years. Sure, Citigroup and Bank of America offer their clients ubiquitous branches and online banking and even prestige--and there's nothing wrong with that. But try getting a line of credit extended quickly, let alone getting one of the bank's higher-ups on the phone. It rarely happens. And yet there's hope. As the total number of banks shrinks rapidly, a new breed of entrepreneur-friendly bank is emerging to fill the void. The boomlet of start-up activity comes after 20 long years of consolidation in the banking world. At the end of 2004, there were 7,630 banks in the United States, according to the Federal Deposit Insurance Corp. That's roughly half as many as there were at the end of 1984, the year the population of banks peaked. But as the overall number...