Years of sluggish de novo activity combined with decades of bank consolidation have left major gaps in the communities served by our nation's community banks.
2026 is showing signs of a turnaround with seven new banks opening in the first half of the year; most of them are community banks focused on serving local markets. Small towns, in particular, are gaining strong local investor support with a commitment to keep deposits and lending decisions local.
However, not all new entrants fit the community-bank model, as institutions like Erebor Bank are targeting specialized markets such as technology, AI, and cryptocurrency clients.
JRN by Bauer 43:27
De Novo Banks Gain Momentum ...But not all are Community Banks
Last March, (JRN 42:11) we asked if 2025 would be the year for a de novo comeback. It was not. Only four new banks opened their doors for the first time in 2025, even fewer than the paltry six we saw in each ’23 and ’24.
This year may be the turning point. Seven de novo banks opened for business between January and June, and we have a slew of new applications in the pipeline. Six of the seven de novos are much needed and appreciated community banks. One, 3½-Star Generations Community Bank, Indianapolis, IN (59365) was featured last week since it is also a Minority Depository Institution - the first EVER in Indiana.
The most recent opening this year was Portrait Bank, Winter Park, FL (59381) with a June 22nd opening. Winter Park is a quiet laidback town in Orange County, Florida, just north of Orlando. The area has no shortage of banks or bank branches, but the majority are big out-of-state banks. There’s a good reason. Orlando hosts millions of visitors each year, many of whom want access to their bank while traveling. However, that comes at a cost: the loss of community banks for the people who actually live in the area.
The last time a new community bank emerged in this region was in 2017. It’s no wonder the local community was eager to chip in to get Portrait Bank opened. Nearly 250 local investors came together and raised $42 million to make this bank come to fruition. For many years out-of-state behemoths have been taking over the Sunshine State and Orange County has been hit hard.
The banks operating the most branches in Orange County include: 4-Star JPMorgan Chase Bank, NA, Columbus, OH (628) which has 32 Orange County branches; 5-Star Truist Bank, Charlotte, NC (9846) operates 31; and 4-Star Bank of America, N.A., Charlotte, NC (3510) and 4-Star Wells Fargo Bank, NA, Sioux Falls, SD (3511) each have 27 Orange County branch offices.
To drive that point home: only 15% of deposits in Orange County Branches are placed in Florida banks (based on June 30, 2025 data). This area was ripe for a new community bank. And it’s not the only one. Two of the seven 2026 de novos are headquartered in the Sunshine State.
The other, Echelon Bank, Clearwater, FL (59377), opened in May and is another community bank. Clearwater is the County Seat for Pinellas County, which is not as overrun with out-of-state banks as its neighbor to the East. Florida-based bank branches in Pinellas County hold almost 60% of the county’s bank deposits.
Now we’ll head north to Kentucky, where the last new bank opened 17 years ago, and to Owensboro, KY, specifically, in Daviess County, which has not seen a new bank since 1997 (29 years ago). Only eleven unique banks operate in Daviess County. Of those, only three are local, Kentucky banks. These three banks hold 45.8% of the county’s bank deposits in their eight combined branches.
Cornerstone Community Bank, Owensboro, KY (59379) opened for business on June 8, 2026 with the help of more than 200 shareholders that raised the initial $25 million needed to open. The first week was a soft opening and the public was able to begin banking on June 22nd. Like the true community banker he is, Kyle Aud, president and CEO of Cornerstone Community Bank, was reported as saying, “All of us are from here. …All of your dollars are staying in our market and going back out to spending it locally and helping that economic impact.”
That’s the reason we love community banks. Many have similar sentiments on their websites:
- Portrait Bank: “A genuine commitment to strengthen the communities we call home.”
- “Our team is dedicated and passionate about collaborating with members within our community in ways to help you achieve economic success and or help you imagine what is possible.” - Al London, CEO Generations Community Bank.
Another common theme we are seeing in these new banks is a need to fill the void created after decades of industry consolidation.
- According to Richard Spengler, President & CEO of 3½-Star Liberty Bank of New Jersey, Verona, NJ (59369), which opened in January, “60% of local New Jersey banks have either merged or been acquired. Our communities deserve more.”
- Houston Bank & Trust, Houston, TX (59360): Years of acquisitions of local banks by out-of-area banks led to a significant lack of banks having decisions made by Houstonians. That’s why Houston B&T opened its doors on May 22nd - "A Local Bank, for Houstonians, by Houstonians".
The seventh de novo is clearly NOT a community bank. 3½-Star Erebor Bank, NA, Columbus, OH (59378) was created to fill a different void – the one left behind by the failure of Silicon Valley Bank. Its plan is to provide crypto-related products to Tech and AI companies, as well as other “innovative” entities and payment servicers for foreign banks. It is not the bank of the people but the bank of the ultra-wealthy. Established February 6, 2026, Erebor Bank already reported assets of $1.7 billion at March 31st.
Eleven other banks have received provisional approvals from the FDIC for deposit insurance but have not yet opened for one reason or another, five are Utah Industrial Banks and include automakers Ford, GM and Stellantis.
Financial Advisor Edward Jones Bank, and payments apps Klarna Bank USA and PayPal Bank, are among the others awaiting decisions from Utah on their Industrial Bank applications.
We wanted more de novo banks. Perhaps we should have been more specific “more community banks”.
Remember the old adage, “Be careful what you wish for”.