Gainey Business Bancorp could be Arizona's bank
In recent years, the banking industry has been defined by contraction and consolidation. Since 1990, there has been a net reduction of 10,042 banking institutions - or 66 percent. In 2008, the Federal Deposit Insurance Corporation (FDIC) approved nearly 100 new banks. By 2009, new licenses dipped to 31, before bottoming out at zero in 2012, 2014, and 2016.
In the last 12 months, there has been a net reduction of 246 bank charters. For 2020, the De Novo Bank Replenishment Rate is expected to be 5.7 percent, which means there are expected to be fewer than six new banks for every 100 merged or failed banks.
So looking at those statistics, it seems like you'd have to be 99 cents short of a dollar to want to start a bank especially in the shadow of a global pandemic. Right? "The idea to start Gainey Business Bancorp started from a recognition of need," says Jim Unruh, who is leading the charge to bring the community bank to the Gainey area of Scottsdale. "When you look at the fast-growing area of small- and medium-sized businesses, which is what really builds the economy, and you look at this market, we are really down to four community banks that meet the needs of small- and medium-sized businesses."
And there are plenty of small- and medium-sized businesses that need to be served by the banking industry. In the eight-mile radius surrounding Unruh's Scottsdale office, there are about 11,000 businesses with revenues of $10 million or less.
"A lot of those businesses are very small," Unruh says, "but when you look at the development surrounding the Scottsdale Airpark and along the Loop 101, there is a lot of market to serve here - in healthcare, technology, and other emerging industries. There is a real need, so there is real opportunity for a community bank that fulfills those businesses' needs." While the number of new bank charters sank to zero in three of the last eight years, there has been a slight uptick in activity. Over the last three years, the FDIC has helped 20 new banks open, including eight in 2019. And the agency is working to make it easier for aspiring community banks like Gainey Business Bancorp to become a reality.
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