The organizers of de novo TYME Bank have withdrawn the proposed North Texas bank’s application with the Federal Deposit Insurance Corp. The withdrawal is a casualty of “the uncertainty caused by the COVID-19 pandemic,” the group behind the proposed bank announced today.
“Unfortunately, with the headwinds of the COVID pandemic we have decided to withdraw our application with FDIC,” TYME Bank Vice Chairman and CEO Joe Hansen said in a statement. “We will continue to study options for refiling an application in the near future. Our focus will be to serve small- to medium-businesses and meet the needs of our community.”
The TYME group of organizers filed a de novo application for a new Farmers Branch-based bank in North Texas in December, something that hadn’t happened in the region since 2009. That process was a three-year journey for proposed CEO Joseph Hansen, as well as its executives and board. The team announced in January that applications were filed with the FDIC and the Texas Department of Banking.
A de novo bank is a new institution that’s not created via either a merger of equals (MOE) or by acquisition.
The de novo applications were filed for a locally-owned community bank serving customers—startups, enterprises, and individuals—in its target area of Dallas, Denton, and Collin counties. As banks consolidate, local decision-making is needed, Hansen previously told Dallas Innovates.
Hansen said the team set out to build a community bank, owned by the community, managed by members of the community, with decisions made here. “I thought, if I were going to start a new bank, it wouldn’t be to close loans, it would be to open relationships,” he said in January. “I think that’s what sets us apart from everyone else.”
The process started with the vision of the bank’s chairman, Mani Jacob, to be locally owned and locally managed, with local decision making, Hansen told Dallas Innovates at the time. Hansen set about assembling a local board of directors to represent the community.
Hansen and the TYME leaders hoped the proposed bank would open in the first quarter of 2021, but the recent surge in coronavirus cases in Texas made an already complicated business environment even more difficult, he told Dallas Innovates in March.
“COVID appeared to be improving and unfortunately it has reappeared and turned Texas into a hot zone,” TYME Bank Chief Financial Officer Ken Judd said. “We want to provide the best for our community and investors.”
According to the bank’s organizers, the Dallas de novo is not alone in making such an announcement. According to the statement, “TYME Bank (in organization) joins several other de novo banks around the nation that have been affected by the COVID-19 crisis.”
Per S&P Global Market Intelligence reports, “several other de novo banks around the country either had their applications returned or have withdrawn their applications waiting for conditions to stabilize,” according to TYME.
TYME Bank was the only de novo application in 2019 from North Texas, and one of only two filed in the state of Texas last year (the other was in Houston), according to S&P Global. 21 de novo bank applications were submitted nationwide in 2019, Lance Murray reported earlier this year.
The TYME Bank group put together about $1 million in working capital to get the effort off the ground, according to Hansen and Judd, who said the bank’s goal was to raise roughly $32 million to $36 million. Hansen said at the time that investment interest had been pretty good, with “lots of interest.”
Hansen, who has had a long military career, called the core TYME team a very “battle-proven group.” According to an email from CFO Judd, the uncertainties from the virus have required a pause. But the team will reevaluate how to best serve small and medium businesses in Dallas, he said.