Climate First secures $67 million in latest funding round

• Key insight: Climate First Bancorp's institutional fundraising round — led by Wellington Management and Alliance Bernstein — signals growing mainstream investor confidence in climate-focused banking.
  
• Forward look: With plans to acquire Florida community banks for a total of $4 billion of assets over the next five years, Climate First is positioning its latest capital infusion as a launchpad toward increasing its assets fivefold by 2031.  
  
• Expert quote: "If we were to look at what an IPO could accelerate, it's our ability to acquire other banks and access capital more readily." –  Climate First Bank CEO Lex Ford

Climate First Bancorp, which specializes in financing clean-energy production, closed a $67 million funding round, marking its first capital infusion from institutional investors and bringing its total funding to $222 million.

The five-year-old bank's latest fundraising round was led by Wellington Management and supported by Alliance Bernstein. Lex Ford, CEO of the company's banking subsidiary,  told American Banker that the funding round is a step toward achieving the bank's "north-star" goal of increasing its asset base fivefold by 2031. Ford also said that an initial public offering could be on the table.

He said he considers institutional investors signing on while the company is still private a "stamp of approval," calling the latest fundraising round "a really strong endorsement of what we've been building and the runway that we have in front of us."

St. Petersburg, Florida-based Climate First has continued to grow at a time when clean energy has fallen out of favor in Washington, D.C. Last year, Climate First executives said they expected the bank to accelerate its solar-lending operations because they believed Republican-authored policy changes would cause other solar lenders to fail.

On Tuesday, Climate First Bancorp CEO Ken LaRoe said in a press release that the latest fundraising round is "a testament to our hard-working team and mission to combat climate change and save the planet."

"In the face of weakened environmental protections, we continue to invest in climate solutions and community resilience," said LaRoe, who also founded Climate First.

Coming out of the latest funding round, Climate First plans to acquire smaller peer banks in Florida, Ford said. He pointed to those banks' "really strong deposit brand from their local community that's sticky and low cost."

"We want to acquire banks to the tune of about $4 billion in the next five years," Ford said. "If we were to look at what an IPO could accelerate, it's our ability to acquire other banks and access capital more readily."

OneEthos, Climate First Bancorp's fintech arm, has generated over $450 million in solar loans and more than 9,300 individual solar projects since its inception. Ford credited the subsidiary as the primary engine behind Climate First's outsized growth relative to its peers.

"We'd be literally a third of the size without them," Ford said of OneEthos. He added that the fintech arm "not only drives demand and efficiency, but also controls risk," keeping loan charge-offs lower than what an operation of Climate First's scope might typically carry.

Climate First was founded in 2021, and early on it built its identity by rejecting the dealer-fee financing model dominant in the solar lending industry. The bank grew its assets from $542 million at the end of 2023 to $1.62 billion at the end of last year.