The Business Bank Planning Process

• 1). Hire a chief executive for the new bank who will command respect from the bank's future customer base. Important qualities for a business bank CEO are leadership skills, a successful track record in banking, integrity and business-development abilities. Lenders, account officers and other executives should have relevant backgrounds in banking and be able to work well with discerning customers. State banking authorities will investigate each person on the initial leadership team --- the executives as well as the initial stockholders and directors --- and will pay particular attention to matters of competence, integrity, banking experience and financial ability.
  
  
• 2). Analyze the intended market area. Economic conditions should indicate sufficient demand for the type of services the new bank will offer. Because many customers of a business bank are high net worth individuals, the new bank will probably want to develop services that attract deposits. The analysis should indicate the expectation that a new business banking operation can succeed in this market area. The analysis must also measure the competitive impact on banks that are already operating in the market area and show that the applicant-bank will not have a material adverse effect on their business.
  
  
• 3). Find a location for the initial banking office and disclose whether the space will be owned or leased. Is the location logical in view of the organizers' business development plans? Since this is a business bank, it should probably be located in the community's business center. Plans can call for branch offices to be added in the future.
  
  
• 4). Commit to an amount of starting capital that reflects the state's required minimum plus other considerations such as the economy, competitive conditions and the leadership team's ability to raise more capital as needed.
  
  
• 5). Apply for deposit insurance from the Federal Deposit Insurance Corporation. The appropriate form for this is the Inter-agency Charter and Federal Deposit Insurance Application.