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Starting a Bank
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We Can Help In Starting a New Bank 

Congratulations on taking the first step to exploring the possibilities of starting a new bank. You might be wondering how to start a new bank.

Starting a bank is no easy endeavor. At Jack Henry Banking, we realize it takes a lot of time, money, and the right strategy to make a new bank successful. In business since 1976, Jack Henry is no stranger to the de novo market. The good news is, we’re here to help make the process less stressful and give your bank the proper foundation to set you up for growth and success.

For any bank to grow, we know it is imperative that their core platform allows them to be the bank they want to be, regardless of their size. We are extremely proud of the superior third-party integration and customization options we’re able to offer – industry-leading technology and tools that deliver the flexible enterprise-wide automation you need to compete and position your bank for success long into the future.

With Jack Henry Banking, you’ll gain a partner rather than just a vendor. We are always looking ahead and at how we can be the best business partner to our clients and their continued growth. And you don’t just have to take our word for it. In the past decade, we have worked with nearly 100 de novo banks, and many of them have shared their stories like this one:

From American Banker:

In early 2016, when Lynn Carson and his partners went looking for a community bank to acquire, their aim was clear: to create an institution that would use cutting-edge technology to punch above its weight.

 "... in order to compete with those guys who are on every corner, you've got to have technology that is solid."

Bank3 picked Jack Henry Banking's SilverLake System after the incumbent vendor failed to take the bank's timetable seriously.​

What is a "De Novo Bank"? 

A de novo bank is a newly chartered bank that is not acquired through purchase. It could also mean a newly opened bank branch. A de novo bank could be a commercial bank, state bank, national bank, savings bank or thrift bank and others.

What is a de novo bank for state banks? For state banks, the rule is a de novo bank is a state bank that has been in operation for five years or less. Commercial banks can become a de novo bank if after five years or less of existence they decided to change to state membership. If this happens, the banks need to file de novo bank application and adhere to required supervision standards.

Thrift Banks, Edge Act Companies and Industrial banks converting to state membership would still be considered de novo banks even if they existed for more than five years already. This is because they need to exhibit first that they have the operating stability of a commercial bank. These organizations who converted their memberships to state memberships are referred to as converted banks.

The supervision policy is required from de novo banks until they reach the fifth year because past experience shows that problems in banks often reveal during their fourth and fifth years of operations.

The problems are brought about by management who lacks the necessary experience, turnover of staffs particularly management and directors, disinterest of the directors and improper lending practices. All these factors could contribute problems to the bank.​

How To Start A New Bank

Starting a bank requires dedication, capital funding and involves a long process that could take a year or more, as well as permission from at least two regulatory authorities. Extensive information about the individual organizer(s), the business plan, senior management team, finances, capital adequacy, risk management infrastructure, and other relevant factors must be provided to the appropriate authorities in order to gain approval.

The best guarantee of success is to have a solid business plan in a market with excellent growth opportunities. Starting a new bank is also an intensely detailed undertaking in which a number of key decisions must be made and important issues addressed.

The steps to organizing a De Novo Bank are as follows:

Submit an application to the FDIC and State Banking Agency

  • A mission statement

  • A business plan with three years of financial projections

  • Policies for loans, investments and other operations of the bank

The regulatory agencies review this information closely

  • Possible modifications at the direction of the regulators

Approval must be received prior to opening

Bank of Bird-In-Hand, a De Novo Success​​​
In The News
Read more about starting a bank

New Banks Launch with Jack Henry Banking for Core Processing - Charleston-area Beacon Community Bank joins trend of de novos selecting Jack Henry Banking

Are De Novo Banks on the Rise? - by Cheryl Winokur Munk, Independent Banker

Prices Rise for De Novo Banks - by Bill Poquette,

De Novo Field Widens with S.C. Group's Application - by John Reosti, American Banker

FDIC Releases Final De Novo Handbook - by ABA Banking Journal




The Bank of Austin Files to Become City's Newest Bank - Will Anderson, Austin Business Journal


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Jack Henry & Associates, Inc. ®