Organizers of what was to be Connecticut’s first de novo in 12 years withdrew their application to launch the bank, according to a notice last month from the state’s Department of Banking.
"While we had significant investor interest, a stellar staff and location, the economic downturn presented enough concerns that we voluntarily withdrew our application," Louis Garcia, who would have served as CEO of The New Canaan Bank, said in a statement, according to CT Insider.
Garcia and the other organizers applied to form the startup in December 2021, and received a temporary certificate of authority in July.
The New Canaan Bank, named after the city where it was to be based, aimed to provide personal and commercial banking products and services for businesses, nonprofits, local merchants and consumers in New Canaan and its adjoining neighborhoods, according to the Hartford Business Journal.
That represented an "unfilled niche" in Fairfield County, American Banker reported, citing the business plan organizers submitted.
"As large banks acquired smaller ones and personal service was subjected to consolidation strategies, the opportunity has increased for locally-owned, operated, and highly personal service-oriented banks," the organizers said.
Garcia cited “a significant reduction in the number of banking options for the consumer and for businesses in the state of Connecticut over the last 10-plus years,” in an interview with the New Canaan Advertiser.
The bank would have been the first de novo to launch in Connecticut since Start Community Bank formed in 2010. Start, which counts $168 million in assets, has operated as New Haven Bank since 2019.
New Canaan organizers initially planned to raise $40 million in initial capital and open in the fourth quarter of 2022, according to American Banker. Garcia did not tell the publication whether he and his fellow organizers would attempt to form a new bank as the economy stabilizes.
Fewer than 50 startup banks have opening nationally in the past 10 years, Federal Reserve data indicated. That compares with an average of 100 per year before the 2007-08 financial crisis, according to the central bank.