Coronavirus undermines de novo bank effort in Florida
The group behind Coastal Community Bank in Hollywood, Fla., has withdrawn its application after struggling to raise enough initial capital.
Organizers pulled the application on May 28, about two months after the Federal Deposit Insurance Corp. had granted conditional approval for deposit insurance. The FDIC required the group to raise $19.5 million.
The coronavirus pandemic stymied efforts to raise capital, said Joe Dorsey, who would have been the bank’s CEO.
“Once the virus was announced in mid-march, it threw cold water on our fundraising efforts,” he said.
“As the stock market tanked and fears in the local economy increased, many of our potential investors began to hoard their cash and their verbal commitments to our de novo project, sadly dried-up,” he added.
Shelter-in-place orders made it harder for the organizers to replace the investors who left and the proposed bank’s board “ultimately had to make the hard choice to suspend our operations and eventually withdraw our approvals,” Dorsey said.
Organizers filed their applications last year in hopes of opening the first new bank in South Florida in a decade. The approved application was submitted last July.