Dive Brief:

• Locality Bank, a digital-first de novo which aims to serve businesses in Florida’s Miami-Dade, Broward and Palm Beach counties, was granted deposit insurance by the Federal Deposit Insurance Corp. (FDIC) on Friday, a significant milestone as the startup bank prepares for an expected December launch.
• The bank, which is organized by co-founders Keith Costello, Drew Saito and Corey LeBlanc, met its $23 million capital requirement and has over $27 million in subscriptions for stock, according to a press release.
• "We will be the first community bank in 10 years to open in South Florida and with the capital to lend, we welcome the South Florida business community to use us as a resource," Costello, Locality Bank's CEO, said in a statement.

Dive Insight:

Locality, which in September received approval from Florida’s Office of Financial Regulation to open a state-chartered bank, plans to offer commercial banking, commercial real estate lending, Small Business Administration (SBA) lending and deposit and business treasury services.

A key mission for the bank is to become a "modernized version of what a community bank should be," said LeBlanc, the bank’s chief technology officer, during a fireside chat last month at Las Vegas' Money 20/20 conference.

In partnership with Miami-based fintech Nymbus, the bank has developed a cloud-native core banking system with an open application programming interface (API) architecture. 

LeBlanc shared how the yet-to-be-launched de novo has had to overcome employee turnover early on in its journey toward becoming a chartered bank.

"Every single one of our employees took a pay cut to be here," said LeBlanc, who was joined on stage by Liz High, Nymbus Labs' executive vice president of marketing. "We lost some of our people just within the past year before we even got open, because either their organizations offered more money, or maybe they didn't really feel like the challenge that was in front of them was something they wanted to take on.

"As we went through that and lost some of those people, we filled that with people that we think are going to be stronger with us for a longer period of time," LeBlanc added.

When asked by High to dive into the bank’s "not-here-for-profit" philosophy, LeBlanc shared how the stance has shaped the de novo’s mission.

"If we're going to honestly produce the thing that we say we're gonna do, which is to empower our customers to maximize their potential, if we center that around profit first, it starts to change the conversation around how we do that," he said. "We start to cut corners ... we start to look at cost savings and contracts as opposed to utopian environment possibilities."

While the bank calls itself a digital-first community bank, LeBlanc said the aim isn’t to simply focus on its mobile app.

"We start to talk about modernizing community banking, but what does that mean?" he said. "You go sit down at some of these conferences, or these roundtables with industry peers, and it's almost comical. We're having the same damn conversation that we had five years ago and we're bragging about launching a new mobile app. It’s really just the face of the exact same thing that we were giving the customers to start with. We do that every five years and we think that that's keeping up with the industry."

Locality’s goal is to fill the gaps in community banking, LeBlanc said, adding the bank looks at problem solving through a "first-principle lens."

"How can we actually come in and rethink and actually start to fill those holes nicely, so that we can solve problems as opposed to talking about products?" he said. 

Being hyper-focused on providing the best services means Locality Bank won’t be for everyone, and that’s OK, LeBlanc said. 

"We can’t be everything to everyone, but we need to be really good at the thing that we do," he said. "We can obviously scale and move toward other things as we get those opportunities. However, we need to sit down until we get to the [minimum viable product]. I think most regional community banks don't have the conversation about, ‘What is MVP vs. what is the production environment?’

"Our strategy is: Let’s find this market segment where we can actually see the problem and have a solution to the problem," LeBlanc said. "Then we figure out what’s the minimum viable product and iterate on that to continue to make sure that we're improving the lives of the people that we're actually working with."