Raising Capital for a De Novo Bank & Shareholder Expectations

DE NOVO BANK ACCELERATOR WEBINAR SERIES

Raising Capital for a De Novo Bank & Shareholder Expectations

November 14, 2018

Fifth of Our Seven-Part Series

Presenters: Brent Baker, CIB Partners, LLC Jeff Adams, Banks Street Partners, LLC Jonathan Hightower, Bryan Cave Leighton Paisner, LLP David Wood, Porter Keadle Moore, LLC

Our Presenters Today...

Brent Baker CIB Partners

Jeff Adams Banks Street

Partners

Jonathan Hightower Bryan Cave

Leighton Paisner

David Wood Porter Keadle Moore

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Purpose of Today's Session Capital adequacy is a statutory factor Capital requirements for a de novo bank Capital raising process

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Guiding Principles

Capital Planning for New Banks ? What's the right number?

Business plan dependent

Statutory factors

Manage to minimum capital ratios for de novo banks over the first three years of operations (8% leverage)

Also consider various concentrations, lending limits, and other factors to avoid capital constraints

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Planning an Offer

For de novo banks, there are many constants in the offering structure due to regulatory requirements.

Generally all common stock

Generally sold at the same price to all investors, including founders

Other than organizer seed funds, all subscription proceeds are held in escrow (i.e., kept away from most pre-opening risks)

While exceptions to these themes can be found, generally best to keep the offering basic in order to have a smooth process

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