- GOOD NEWS! We continue to be on track to be the first community bank opened in Arizona in 13 years. The FDIC has indicated that its review of our charter application may be completed by the end of this month! Over the past 4 weeks, the Federal Deposit Insurance Corporation (FDIC) which regulates banks, jointly with the Arizona Department of Financial Institutions, have been conducting extensive background investigations on each board member and staff member, including separate, lengthy interviews with each member. Based on the results to date of that process, these agencies have told us that they are very impressed with the quality of our Board members and the leadership of our executive team. Plus, their detailed review of our business model has been very positive. The FDIC essentially determines if they believe that we will be a successful operation in order to be deemed worthy of being insured by the FDIC. It’s a high bar to reach, and we believe that our detailed, outstanding application will be approved with flying colors.
- CORONAVIRUS (COVID-19) BUSINESS CONTINUITY: While we are not yet open for business, SCB has a business continuity plan in place which takes effect during this unique period of disruption. The plan centers on maintaining vital communications with our investors, board members, staff, vendors, and the FDIC/State of Arizona as we conduct organizational activities. While the FDIC, last week, directed most of its employees to work from home, the FDIC has indicated that this shift in workstations will not delay the review of our charter application. Our preparatory activities with vendors, including our core processor, continue without delay. Our Board continues to meet every two weeks; however, those meetings are now held by teleconference instead of in-person. In conjunction with both federal and state health guidelines, we have also limited our in-person meetings with individuals and entities.
- CORONAVIRUS FINANCIAL UPDATES: SCB has access to various newsletters being issued by various financial institutions providing information or opinions/forecasts on the financial effects of the COVID-19. We will be forwarding some of these newsletters to our investors for review. This is done in the interest of getting various pieces of information in our investors’ hands from different sources. SCB is not checking these articles for accuracy, nor does SCB necessarily agree with the views expressed by these institutions, but we thought that they provide a resource for our investors and food for thought.
- CAPITAL RAISE: Our capital raise continues as we head towards the finish line. One highly respected family recently contributed $900,000 in investor funds, complimenting funds from other new investors. We TRULY appreciate their, and every investor’s, confidence in us and our dynamic enterprise. The COVID-19 situation has understandably stymied some of our investor and prospect outreach. Due to health guidelines, we have had to postpone prospective investor receptions. Plus, we have curtailed our one-on-one in-person meetings but are meeting via Zoom conferencing. Some prospective investors, who believe in our project, asked for a bit more time to contribute in order to see how the stock market will settle. On the other hand, others told us how their funds were safe from declining with us while the stock market was so volatile and causing tremendous losses. In addition, we have also received interest from an investment banking firm and family offices who have requested our materials and who believe that the Arizona market is underserved and in need of a true quality community bank. Plus, some investors and some of our colleagues in current banks believe that the timing of our new bank, without any detrimental baggage picked up over this past month, could play a key and profitable role in helping our business community pull out of this current crisis. In addition, as you may know, our President and our Chief Financial Officer have invested over 6-figures in the bank, something we did not request of them. Having executive staff members as investors, in addition to being employees, is a great sign of their dedication to our effort. We are very proud of their trust in us and especially of their expert confidence in the success of our enterprise. We continue to hope that our capital raise will be completed shortly after approval by the FDIC.
- BANKING INTEREST IN THE ARIZONA MARKET CONTINUES: Recently, Alaska USA Federal Credit Union offered to buy all seven Phoenix area branches of Minnesota-based TCF National Bank. It is reported that this will double Alaska USA’s footprint in the Valley. You may not have known that such an entity even operated here which consists of an operations center, a data center, and over 300 employees in the Valley. Its Arizona assets total $1.7 billion with total national assets at more than $8.3 billion. Credit unions buying banks is a new trend. One expert said that credit unions doubled the number of acquired banks last year from the year before. He believes that this trend will continue. We view this proposed acquisition as a positive for SCB and shows the quest that out-of-state financial institutions have for acquiring Arizona entities.
- PARADISE VALLEY NAMED 14th RICHEST PLACE IN THE U.S.: The town of Paradise Valley, a key component of the SCB market, was named the 14th richest place to live in the U.S. by an annual Bloomberg financial report. Last year, P.V. was #20 on the list. P.V. has been repeatedly considered the wealthiest town in Arizona by the Phoenix Business Journal. Family offices in P.V. are targets to be our clients, and several of our investors live in P.V.
- PITTSBURG BANK, PNC, EXPANDS IN ARIZONA: PNC entered the Phoenix market last year, and it has announced plans to greatly expand. Its new regional president said that when PNC was looking nationally to expand, Phoenix was immediately on its radar. Last week, she added: “It makes sense. Probably the biggest driving force around this for Phoenix is the growth we’re seeing in Phoenix.” PNC is the 7th largest bank in the country, and it is targeting businesses with annual revenues of at least $50 million up to $2 billion. This provides a synergy for SCB which will be targeting smaller businesses which are very underserved.