After years of hard work and an almost year-long application process, the Scottsdale Community Bank received conditional approval this month from the Federal Deposit Insurance Corporation to open.
“As one federal official told us, ‘This is a big deal,’” said George Weisz, chair of the bank’s board of directors. “So it’s a major achievement, an outstanding achievement.”
Conditional approval signals that SCB can move forward with final steps, including raising remaining capital, leasing an office and putting technology in place. So far, the bank has raised half of the $16 million in capital that it needs to open. “We’re very much in the homestretch,” Weisz said.
The last step in the process will be receiving a certificate of insurance from the FDIC and a charter from the state of Arizona, which could be just months away. The SCB board of directors hopes to open the bank’s doors in the first quarter of 2021.
Just as COVID-19 disrupted business all across the country, it also delayed the approval process for SCB’s application to the FDIC. After the pandemic hit in March, the FDIC asked SCB to complete an additional step: a three-year, month-by-month forecast for how the bank would handle a pandemic scenario. Weisz estimates that SCB was one of the first banks in the country to complete that forecast as part of the approval process.
“That was a lot of work,” Weisz said. “The positive is that it was a great exercise for us. We’re glad we did it.”
While the COVID-19 pandemic presented a temporary setback to SCB’s application — it took 11 months from the start of the application in November 2019 until SCB received conditional approval in October 2020 — Weisz is excited that plans for the community bank can finally move forward.
“It’s been a long process to get to this point, so I know our board is very proud of being able to attain this achievement that many seek but never reach,” Weisz said.
SCB will be the 11th community bank in Arizona, and the first new community bank approved in the state in the last 12 years. Compared to states like California, which has 70 community banks, or Texas, which has 335, the Arizona business community is under served, Weisz said. That’s why SCB will focus on banking for small and medium businesses across Scottsdale, from Scottsdale Airpark in the north to Arizona State University’s SkySong Innovation Center in the south and from private family offices in Paradise Valley to businesses on tribal land in the east.
“Our real focus is on the central core of Scottsdale,” Weisz said. “There’s so much there, and that’s our concentration because that’s the areas we know.”
Investors and directors at SCB are very familiar with the business community in Scottsdale, with extensive experience across industries.
“Every one of us have different backgrounds and represent a vast array of business fields, from nonprofit to baseball to restaurants to engineering,” said Frank Jacobson, member of the SCB board of directors. “It’s just all over, which is absolutely critical in serving a community that has all those types of businesses.”
Family businesses and nonprofits, in particular, are areas that SCB leadership will focus on serving. With a number of family-owned businesses in the Jewish community, Weisz said, SCB will be an important partner for Jewish-owned businesses, as well.
“We’re actually pretty excited about serving what we think is an under-served Jewish business community and having the understanding of the community as we do,” Weisz said. “Many of our investors are from the Jewish community because they know how under served it is, so we appreciate that confidence. And we want to be a great part of this community, that’s our whole goal.”
SCB’s business model is based on being part of the community it serves. Investors and members of the board of directors are from the Scottsdale business community, meaning they can make decisions based on personal relationships and firsthand knowledge. Businesses that bank with SCB will also have direct access to the executives and directors, Weisz said. Instead of standing in line to talk to a teller, clients can call him or Jacobson directly and get an answer from the decision makers themselves.
“That’s a huge resource for any business, any nonprofit, any family office to have that personal relationship — not talking to a teller or a banker in an office or someone who has to check with San Francisco first in the regional office before they approve something,” Weisz said.
Cutting-edge technology is the other element of SCB’s plan. Clients will have access to a secure online portal where clients can apply for a loan or request a new line of credit without printing and mailing multiple documents, for example, and can arrange for a personal appointment with bank executives to change or add a signature on a business account in minutes.
“Where we think we’re going to have a unique opportunity and a great opportunity is that our technology is actually going to be better than even the very largest banks we’re going to be competing with,” said Neill LeCorgne, SCB president and CEO. “Why? Because it’s the newest. The cost of technology has dropped so dramatically, it’s improved so dramatically.”
The combination of innovative technology and personal relationships “is what a true community bank is supposed to be,” Weisz said.
SCB will also be looking for opportunities to give back to the community, with plans for a philanthropic arm after the bank’s first three years in operation.
“George and I have talked about this for the last 10 years, that we want to give back to the community, too,” Jacobson said.
For SCB, it all comes back to community.
“The board shares all the same principles of integrity, respect for human dignity, doing well for the community — in fact, our slogan is doing well for our investors by doing good for the community,” Weisz said. “You can do both, and you should be able to do both.” JN