Amid the pessimistic, post-crisis backdrop of bank collapses and consolidations, the birth of a promising new bank is front-page news.
This significance is underscored by the fact that not one bank has formed in Pennsylvania in the past five years, nor has one been launched in the entire nation in the past three.
So when a team of dignitaries cut the ceremonial ribbon on the new offices of Bank of Bird-in-Hand, it was a slice heard round the industry, and the nation. The fledgling bank, situated strategically across the street from the quintessential Amish smorgasbord of Bird-in-Hand Family Restaurant, debuted on a bitterly cold day in December in the heart of clean and green Pennsylvania Dutch Country.
That the first bank to wade into post-crisis waters dawned in the center of the rolling hills and swaying cornfields of rural Lancaster County instead of the bustling steel and concrete jungle of midtown Manhattan is one of the many surprises sprouting from this young bank, which has already garnered positive media attention in the Wall Street Journal and Financial Times.
When Bird-in-Hand became the first new, or de novo, lender to be created in the U.S. since late 2010, it successfully flew in the face of a trend that has witnessed the number of banks in the country fall off from 8,533 at the close of 2007, before the brunt of the financial crisis, to 6,891, according to data from the Federal Deposit Insurance Corporation (FDIC) reported in Financial Times (Dec. 1, 2013). The number of banking institutions in the U.S. has plummeted to its lowest level since at least the Great Depression, from its one-time peak at more than 18,000 strong.
But the news is not all bleak. According to the Wall Street Journal, while the number of institutions has dropped nationwide, overall bank deposits and assets have grown.
Enter Bank of Bird-in-Hand, which will fill a distinctively local niche by making loans to farmers and small business owners, in an area dominated by dairy farms, roadside markets, tourism and live theater, while also providing consumer banking services. The idea was hatched over breakfast when a group of local businessmen decided that this area was the perfect spot for a bank. Company CEO Brent Peters said the sale of a local bank led backers to conclude that the area was glaringly under-served.
Read the full article in January’s issue of Transactions. Aren’t a subscriber? Visit the Transactions page on this website or call PACB at 717-231-7447 to start receiving the magazine.