NASHVILLE, TN – Studio Bank (In Organization) announced today that it received final regulatory approvals from the Tennessee Department of Financial Institutions (TDFI) and the Federal Deposit Insurance Corporation (FDIC) to open a new bank in Tennessee. Upon receiving regulatory approvals, the bank also closed its capital raise at over $46 million.
Regulatory Approvals
Regulatory approvals from TDFI and FDIC were the final steps in an exhaustive regulatory application process in which the bank and its founders were thoroughly vetted by the TDFI and the FDIC. The process included a review of more than 75 compliance, risk, and governance policies, as well as the bank’s business plans, financial forecasts, and information technology strategies. The regulatory agencies also completed an on-site examination for nearly one month with interviews of the bank’s management team and board of directors. The application and examination processes validated that the bank is ready to launch as a safe, sound, and compliant organization.
“We have reached the culmination of our efforts to launch a local bank for Nashville’s creators, and I have so much pride in what our team has accomplished,” said Aaron Dorn, chairman, president, and CEO. “It is an extraordinary accomplishment to receive a vote of confidence from regulators after the financial crisis.”
Capital Raise
The bank concurrently closed on a $46 million capital raise and was over-subscribed. Although the bank already met the minimum goal of raising $40 million to meet regulatory requirements in April, the demand to invest in Studio Bank remained strong among local investors which prompted the bank to continue to accept new subscriptions until this week.
When all subscriptions were in hand, Studio Bank had received over $46 million in capital funding from nearly 400 investors. From the beginning of the capital raise in October, the bank was intentional about attracting as many local owners as possible. The bank’s team met with over 600 potential investors in a four-month period of time. In the end, over 85 percent of the bank’s owners are local Nashville-area residents, and they contributed over $30 million of the total invested in the bank.
In 2018, a typical de novo bank capital raise in the U.S. has yielded between $20 million and $30 million in initial funding.
“There are a lot Nashvillians celebrating today,” said Dorn. “The local enthusiasm and buy-in from Nashville business and community leaders during our capital raise was phenomenal. To plan, execute, and successfully raise over $30 million of our capital from right here in Nashville - and in only a few months - is an incredible accomplishment by our team. We are also honored to have a small, select group of world-class institutional investors in our ownership group.”
Studio Bank (In Organization) will be the first true de novo bank headquartered in Nashville since 2008 – one that is not part of a corporate reorganization, merger, or acquisition.
Studio’s headquarters are located in the Gulch at the Bohan Building at 124 12th Avenue South. The bank will serve clients from the Gulch location until an additional stand-alone branch location is finalized later this year.
The bank will be fully operational within the next few weeks.
