Number of New Community Banks Continued to Grow in 2006

The number of new community banks continues to grow according to recent figures from the Federal Deposit Insurance Corporation (FDIC) and so does the role Wolters Kluwer Financial Services plays in helping those banks reduce compliance and operational risks while bringing new products and services to market faster.

Wolters Kluwer Financial Services cited FDIC data showing that nearly 30 percent more new de novo banks opened their doors in 2006 than did two years ago and that 75 percent more de novos were formed last year than in 2002.

Several factors have contributed to the recent growth of new community banks, according to John Bryant, executive vice president of banking for Wolters Kluwer Financial Services. The company has provided regulatory compliance solutions to 277, or more than 64 percent of the 431 new banks formed in the past three years.

"By working with approximately two-thirds of these newly-created banks, we’ve found they are addressing very specific and targeted needs in their communities," said Bryant. "The banking professionals identifying and satisfying these needs are typically motivated by an entrepreneurial spirit and recognize a new bank as a great business opportunity. And often times, they are former owners or employees of a merged or acquired bank that have chosen to strike out on their own rather than staying on or retiring."

For example, Civic Bank & Trust of Nashville, Tenn. opened its doors in July 2005 in order to better serve the small business and retail banking needs of doctors, accountants and attorneys in the Nashville area. The bank has grown in asset size from $20 million worth of initial capital investments in 2005 to more than $75 million today.

Civic Bank & Trust intends on doubling in asset size in 2007 but realizes that along with such plans come growing pains, not the least of which is compliance. To ease the burden, the bank is looking to Wolters Kluwer Financial Services to help them through the use of the company’s ARTA and Rembrandt lending software.

"As we continue to grow our customer base and the types of products and services we offer, we need tools that can grow with us," said Mark Trogdon, chief lending officer for Civic Bank & Trust. "By using Wolters Kluwer Financial Services’ solutions, we’ll have everything we need to help us document the most complex and challenging small business-related transactions as well as the more routine retail transactions. And we’re confident the industry-leading compliance content will help us continue to meet existing regulatory requirements and new ones as they arise."

"Compliance shouldn’t be something that stands in the way of any bank trying to grow their business and deliver a better customer experience," said Bryant. "By embedding compliance into our customers’ work flow, we can help them to not only reduce compliance and operational risks, but bring new products and services to market faster."