- Key insight: On the brink of launching a de novo bank in Atlanta, an investor group opted to recapitalize a Virginia institution after an 11th-hour introduction to its CEO.
- Supporting data: Covington, Virginia-based Highlands Community Bank has $167 million of deposits against $81 million of loans, which made it an attractive partner for a bank targeting loan growth in the Atlanta area.
- Expert quote: The struggle for us in getting out of the gate fast as a de novo was to make sure we could get low-cost deposits to match our loan growth." — Georgia Skyline President Ryan Floyd
Building from the ground up has its appeal, but for one Georgia-based investment group, the prospect of growing and reaching profitability years ahead of schedule proved more enticing.
The investors behind the proposed Georgia Skyline Bank still aim to exploit what they see as a community-banking gap in the massive Atlanta market, but they have dropped their original plan to launch a de novo institution. Instead, the group has agreed to recapitalize a three-branch, Covington, Virginia-based bank and use it as a platform for the anticipated Atlanta splashdown.
The Georgia Skyline team, which had obtained conditional approval for its deposit-insurance application from the Federal Deposit Insurance Corp., believes partnering with the $189 million-asset Highlands Community Bank — which is headquartered nearly 500 miles northeast of their home base in Roswell, Georgia — offers a better option for a running start.
While Highlands Community and Georgia Skyline haven't released the precise details of their deal, they've agreed to merge boards and management teams, with Georgia Skyline's backers agreeing to make a significant investment in the Virginia bank.
Indeed, several Georgia Skyline investors opted to increase their subscriptions when they learned of the partnership, Georgia Skyline President Ryan Floyd told American Banker.
"Rather than building from the ground up, we're aligning with an established, successful bank with two decades of history, a sound balance sheet and a loan-to-deposit ratio that gives us real capacity to grow," Floyd said Friday. "This just puts us forward about two years."
For their first three years, startup banks are held to stricter capital standards than established lenders. They're also required to obtain regulatory permission before making management changes or altering their original operational plan.
The 24-year-old Highlands Community faces no such restrictions. And with $167 million of deposits against $81 million of loans, the Virginia bank possesses ample liquidity to support additional lending. The combined institution expects to open an Atlanta loan production office later this month and convert it to a branch before the end of October. The company will operate as Georgia Skyline in Atlanta and Highlands Community Bank in Virginia.
"We're over-the-moon ecstatic," said Floyd, who added that the Georgia Skyline team had been "charging ahead" to finish its de novo capital raise when an advisor made an "eleventh-hour" introduction to Highlands Community CEO Robert Hemsath.
The Georgia Skyline team had actually explored partnership opportunities with several banks before filing a de novo application, but hadn't found the right fit, Floyd said.
The session with Hemsath went smoothly.
"The first meeting we had, it was a very good cultural alignment," Floyd said. "We felt the same way about credit quality, to servicing our communities, to relationship banking. It just really seemed like a good fit."
When Georgia Skyline executives continued their due diligence, they found a clean balance sheet and — crucially — tens of millions of dollars of deposits waiting to be lent out.
"Highlands Community doesn't have the lending opportunities we do in Atlanta," Floyd said. "But what they do have is a cornered market on the community's deposits. The struggle for us in getting out of the gate fast as a de novo was to make sure we could get low-cost deposits to match our loan growth."
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For Highlands Community, which has seen its loan portfolio shrink in recent years, the priority was finding a partner to build on its existing foundation, Hemsath said.
"Georgia Skyline's team brings the energy, market relationships and growth vision to do exactly that," Hemsath said in a press release.
Highlands Community won't be the first out-of-state community bank to enter Atlanta after being recapitalized with help from Peach State investors. The $569.9 million-asset Hyperion Bank opened a branch in Atlanta's Buckhead district in 2019.
The move came after Hyperion CEO Charlie Crawford, who had led the Private Bank of Buckhead prior to its 2016 sale to Birmingham, Alabama-based National Bank of Commerce, joined Hyperion and led an $18 million recapitalization effort in 2018.
The impact was almost immediate for Hyperion, which had struggled with growth and profitability in the five years prior to the recapitalization and Atlanta expansion. Its loan book has grown, and the company has reported an annual profit every year since 2020. Through the first six months of 2026, Hyperion reported earnings totaling $1.7 million.
Hyperion "has done amazing with two locations so far apart," Floyd said.
Crawford, who is familiar with Georgia Skyline's leadership team, told American Banker that partnering with Highlands Community appears to be a shrewd move.
"I think Ryan and his team will have a strong loan engine," Crawford said Friday. "That's going to let them deploy some of that liquidity from Virginia into Atlanta.
"To me, it's harder to generate deposits than loans these days," Crawford added.
According to Floyd, the logistics of managing an organization split between Virginia and Northern Georgia are less challenging that they may seem.
"Delta flies right to Roanoke [which neighbors Covington] in an hour-and-a-half," Floyd said. "Someties it takes me that long to get home in Atlanta traffic."
