Craft Bank, Atlanta’s first de novo bank in more than a decade, was about to open—and then the pandemic arrived. Now open, it promises to give potential customers the ability to craft their banking experience.
By Margaret Littman
Name: Craft Bank
Atlanta hadn’t seen a new community bank open in more than a decade. The dearth of de novos applies statewide, too, with just four new banks opening in the state of Georgia in the past decade. Now, however, the drought is over.
Craft Bank, based in Atlanta, opened on Oct. 15, 2020, after a process Ross Mynatt, president and CEO, describes as the most difficult of his career. While organizing a new bank may not be an easy task at the best of times, doing it during a global pandemic limited the group’s fundraising tactics and made it harder to recruit organizers. Mynatt says it wasn’t possible to apply the brakes mid-ride, however, as they were already working with consultants and attorneys. At the point shutdown orders began, he says, “There was no Plan B.”
But the team believed there was room for a local de novo bank in the area. When doing their initial research, Craft Bank staff analyzed Atlanta ZIP codes. Where there were community banks, those community banks did well. They had healthy market share even when competing against national banks that had found success in neighboring ZIP codes. Mynatt, who had worked at other community banks in the area, was convinced there was opportunity.
Plus, there was demand for local banking. Before the Great Recession, there were 27 community banks inside the perimeter of Atlanta’s Interstate 285. When Mynatt and his team started their process in early 2019, there were just five.
“Atlanta has only gotten bigger, and there are more people,” he says, “yet those numbers went from 27 to five.”
Raising capital virtually
The Craft Bank team started their work in early 2019, and then the world turned upside down when the pandemic hit in early 2020. It required the group of bankers to think creatively about how to surmount newly raised roadblocks.
For example, the small initial staff reduced their payroll and cut other expenses to make more funds available for the launch process. Fundraising was another challenge. When it became clear that a large in-person event at a country club—the old way of soliciting investment—was a nonstarter due to lockdown restrictions, the Craft Bank team shifted gears. Capital-raising events became virtual.
“It was a challenge to stay positive,” Mynatt says, “but that did not mean that we did not believe in ourselves.”
As the stock market and the pandemic recession went through cycles, so did the ability to fundraise.
“We hit a lot of plateaus,” he says, noting that there were pauses at the $7 million, $13 million and $17 million levels until the Craft Bank team reached its $20 million goal thanks to approximately 200 investors. “It felt like we were stuck at [$17 million] forever.”
“Because everyone is local, we can make that decision or craft that proposal very quickly. We do not need to explain to someone else what Piedmont Park is.”
—Ross Mynatt, Craft Bank
Despite the challenges and the delayed opening, Mynatt believes that the community bank and its mission are well suited to current circumstances. Craft Bank’s one physical location doesn’t have an ATM, a drive-thru or a night drop, which had been the plan pre-pandemic as well. Craft Bank employees are empowered to grab a laptop and meet prospective and current customers where they want, be it at a park or a coffee shop.
“We will make all the decision-makers available [to customers] in one sitting,” Mynatt says. “Because everyone is local, we can make that decision or craft that proposal very quickly. We do not need to explain to someone else what Piedmont Park is. All of our folks live here, work and play here.”
“The word ‘craft’ implies great care being taken. Not only are we trying to craft solutions; our clients or customers can craft the kind of experience they want.”
—Ross Mynatt, Craft Bank
The bank’s name reflects this approach. Chief experience officer Beth Martin, who had worked with Mynatt at a different community bank, came up with it while driving her car. She had been thinking about the kind of relationships they’d be building, allowing customers to craft how they wanted to be banked. And that was it. Like craft brewing or arts and crafts, the name is meant to signify that the bank can tailor products and services to customers and their needs.
“The word ‘craft’ implies great care being taken,” Mynatt says. “Not only are we trying to craft solutions; our clients or customers can craft the kind of experience they want.”
Craft Bank is primarily a commercial bank, working, in particular, with fintechs and other small and medium-sized businesses. It also serves individual customers and reaches out to those who are unbanked and underbanked within a seven-mile radius.
Mynatt says the bank’s size—no more than 40 staffers and an eventual goal of $500 million in assets—will allow the community bank to be nimble. Craft Bank’s business plan projects operational profitability by the second quarter of year two and cumulative profitability by the end of year three.
To get there, Craft Bank promises customers the best of both worlds: modern, convenient banking with the hands-on approach of community banking and the freshness of a new organization. The community bank is busy offering demos to potential customers interested in its digital banking platform.
“Customers are coming to us and saying, ‘You are a new bank, prove to me that your platform is as robust as you say it is,’” Mynatt says. “So, we show it to them. I don’t know of other banks that will do that.”
Margaret Littman is a writer in Tennessee.