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The Fdic Has Given Gainey Business Bank Preliminary Approval To Open In Scottsdale

Gainey Business Bank, a startup bank, has received conditional approval to begin operations in Scottsdale, pending the completion of a capital increase and other standard regulatory conditions.

Gainey Business Bank received “in organization” status from the Arizona Department of Financial Institutions in 2018 and has been working with the Federal Deposit Insurance Corporation, the nation’s banking regulator, to earn its charter and open completely since then.

Gainey is one of the few so-called “de novo” banks in Arizona, intending to be the state’s first new bank to open since 2008.

The bank will be focused on client service, according to Jim Unruh, chairman of the Gainey Business Bank board. This, in turn, will build a better community and economy.

“We have a situation where local folks want to see our communities develop more quickly and be a help to people fulfilling their aspirations,” he said of the Gainey group. “It’s something we’re quite enthusiastic about; we believe the possibility is enormous.”

Unruh was the chairman and CEO of Unisys Corporation for most of the 1990s and now manages Alerion Capital Group, a Scottsdale-based private equity business.

In the real estate and commercial and industrial (C&I) sectors, the bank will largely assist small and medium-sized businesses.

Gainey Business Bank must fund $15 million to launch as part of the conditional approval, a goal that Unruh claimed is getting closer by the hour.

When he spoke to Business Journal on Wednesday, he wouldn’t say how much money had already been raised since he said the information would be out of date by the time the piece was published; he said he had personally raised $300,000 for the cause in the previous 24 hours.

Gainey Bank expects to finalize financing, complete all other FDIC criteria, and begin for operation by January 2022, subject to modification and some external considerations such as the ongoing effects of the epidemic.

‘Environment with a lot of targets’
According to Unruh, there is a clear local demand for a new bank that serves small businesses in the Valley, but bringing that concept to life will take a fantastic team.

After serving as Arizona market president at Bankers Trust and over three decades at JPMorgan Chase and its predecessor organizations, Joseph Stewart joined Gainey as its CEO in April 2020. According to Stewart, Arizona has a large number of banks, but the small company sector is severely underserved.

“In the valley, we have a target-rich environment for startups that meet the characteristics of a business we want to pursue.” And with the decrease in the number of community banks, I really see an opportunity here that we can achieve if we execute well,” Stewart added.

The Covid-19 pandemic has pushed several businesses, including banking, to use more technology, but Stewart believes the value of having a relationship with a banker hasn’t altered, especially for small company owners.

Is it possible to end the drought?
In the state of Arizona, there are just 12 banks with headquarters, many less than in neighboring states with smaller populations.

A bank hasn’t opened in Arizona in more than a decade. According to the FDIC, Gateway Commercial Bank, Metro Phoenix Bank, Goldwater Bank, and Republic Bank of Arizona all began operations in 2007. A few more banks opened in 2007 and 2008, however they have all since closed or merged with other businesses.

The Business Journal reported that Scottsdale Community Bank, the state’s only other de novo with conditional FDIC approval, had met its $16 million fundraising goal. Scottsdale Community Bank’s chairman, George Weisz, said the bank still needed to complete several regulations before launching, which it aims to achieve by the end of the year.

The FDIC approved Scottsdale Community Bank in October. SCB Chairman Weisz said the news of Gainey’s provisional clearance was wonderful news because the demand for local banking is so urgent.

Integro Bank, a new de novo, filed its charter application with the FDIC on June 15, with the intention of launching by the end of the year.

Ocotillo Bank, the state’s fourth and final de novo, withdrew its charter application at the end of 2020 to rethink its strategy, although its leadership earlier told the Business Journal that it plans to resubmit later this year.

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