Savi Financial Corp. said Tuesday it received regulatory approval from the Federal Deposit Insurance Corp. to form a new state-chartered commercial bank headquartered in Bellingham, Washington.
The $576 million-asset Savi, which already owns SaviBank in Burlington, Washington, said its de novo would be named Orca Bank. Pending Federal Reserve Board approval, it would open in the first quarter of 2024.
Savi would form Orca via the de novo bank charter and then acquire the bank and operate it as a wholly owned subsidiary. In addition, Orca Bank would acquire SaviBank's Bellingham branch. The company said that as larger banks shift attention to digital offerings and major metropolitan markets, rural communities are increasingly in need of new banking services.
"Over the past 12 months, we have come to realize that the need for a true community-based bank that serves only Whatcom County is now more important than ever," Drew Wilkens, incoming president of Orca Bank, said in a press release. "With our talented and diverse board of directors, along with our very capable and purpose-driven staff, we are very much looking forward to fulfilling that need. This is a very exciting time for our organization."
Savi Chairman and CEO Michal Cann will assume the same roles at Orca.
Should the new bank open as planned it would mark a relative rarity.
Nationwide, startup banks grew increasingly uncommon over the past several years. Regulatory hurdles emerged in the aftermath of the financial crisis. What's more, raising capital amid the
Nationally, fewer than 50 de novo banks opened in the U.S. in the past decade, according to the Fed. That was far below the average of 100 a year before the financial crisis. S&P Global Market Intelligence data shows that between the fourth quarter of last year and the first quarter of 2023, only three new bank charter applications were filed, while four applications were withdrawn in that span.
"A lot of places, people can't even remember the last de novo," Charles Wendel, president of Financial Institutions Consulting, said in a recent interview.
He said that with digital capabilities continually advancing, physical startups have to show outsize need in order to attract capital required to fund a new bank. That said, following years of consolidation across the country, some rural areas are in need of new banks, Wendel added.
He pointed to Scottsdale Community Bank as an example. When it started up last year, it
At the same time, M&A activity has slowed over the past two years. This is in part due to economic uncertainty, but it also signals that, at least in some regions, a dearth of small banks available for sale may be forming, said Jacob Thompson, managing director at Samco Capital Markets.
Through July 26, only 50 bank deals were announced this year, according to S&P Global. That was down from 96 deals in the same period last year. And 2022 was a slow year, with just 168 deals announced, down from 205 in 2021.
