New banks nearly vanished after 2008

Before 2008, dozens of new banks opened yearly. From 2010 to 2024, only 86 opened total, down from 93 annually in the 1990s and 2000s.

“From 1995 through 2007, the lowest annual number of new banks was 93, according to Federal Deposit Insurance Corp. data. From 2010 through 2024, only 86 opened in total.”

Interest in new banks is returning

The Office of the Comptroller of the Currency received 40 de novo applications in 18 months, compared to fewer than four annually from 2011 to 2014. Twenty-three involve digital asset activity.

The $20 million starting line

Cornerstone Community Bank in Kentucky had to raise $20 million in initial capital before opening in June 2026. The bank ultimately raised $27 million from over 230 shareholders.

“Cornerstone opened June 8, becoming Kentucky's first newly chartered bank since 2009. Organizers were required to raise $20 million in initial capital and ultimately raised approximately $27 million from more than 230 shareholders.”

Costs pile up before first loan

Cornerstone spent money on employees, office locations, banking systems, and compliance experts long before earning any revenue. These startup expenses arrived well before the bank made its first loan.

“Those costs arrived well before the earning assets did.”

Smaller towns can't raise $20 million

A banker from Madisonville, Kentucky said raising $20 million would be nearly impossible in a smaller community. Cornerstone succeeded in larger Owensboro by spreading the capital among 230 shareholders.

“If we were to try to start First United Bank today, we're not in as large of a community as Owensboro. Madisonville is a much smaller community, and that capital raise of $20 million would be pretty tough.”

Regulatory thresholds need rethinking

Banks cross regulatory thresholds simply by growing their balance sheets, even when their business model and risk profile haven't changed. The Main Street Capital Access Act would adjust thresholds based on actual risk.

Supervision rules need clarity

Bankers asked for measurable criteria for how they'll be judged and clearer supervisory standards. The Main Street Capital Access Act would establish an independent exam review process for challenging regulatory decisions.

“Banks need measurable ways to determine how to run our business and to know the supervisory goalposts against which they will be judged.”

Bank consolidation has accelerated

The U.S. has 4,555 fewer banks than in 2005. Montana lost 31 state-chartered banks since 2008. Mergers happen at a steady rate, but new bank formation has collapsed.

“The United States has 4,555 fewer banks than in 2005.”

Rural borrowers lose out

Large regional banks avoid low-income housing investments in rural areas. Community banks fill this gap, but fewer new banks means fewer options for affordable housing developers.

“We can't always find competitive buyers for them until our community banks come to the table.”

Regulators are reconsidering de novo rules

The FDIC is reviewing requirements that may restrict community bank formation. The Main Street Capital Access Act would create a permanent phase-in period for new banks to meet capital requirements.

Starting a bank should stay difficult

Cornerstone's CEO said the goal shouldn't be easy bank formation, but difficult. Depositors need confidence that new banks have capable management, strong governance, sound systems, and meaningful capital.

“The goal should not be to make starting a bank easy; it should be difficult. Depositors trust us with their money.”