A group of Dallas organizers has filed a de novo application for a new bank in North Texas, something that hasn’t happened in the region since 2009.
The process has been a three-year journey for proposed CEO Joseph Hansen, who led the bank out of stealth in December to file its applications.
Tyme Bank submitted those applications to federal and state regulators. Hansen and proposed CFO Ken Judd told Dallas Innovates in an interview this week that they hope all approvals will come back in the spring so the bank could open in the third quarter. The approval process usually takes roughly 120 days.
In the interview, Hansen and Judd talked about the process they undertook from idea to application and the promise a new bank brings to North Texas.
A rare de novo
Tyme Bank was the only de novo application in 2019 from North Texas, and one of only two filed in the state of Texas last year (the other was in Houston), according to S&P Global. In fact, only 21 de novo bank applications were submitted nationwide in 2019. A de novo bank is a new, from scratch, institution that’s not created via either a merger of equals (MOE) or by acquisition.
Hansen says the new community bank will be an important piece in the North Texas economy, serving customers in its target area of Dallas, Denton, and Collin counties. The intent is for Tyme to be a place where local account holders, either enterprise businesses or startups, could come to get the kind of service, credit, and funds needed to help build their futures.
Hansen and Judd say the idea for the bank was sparked three years ago. The duo, along with board members and advisers, have been actively working “very methodically and decisively” on forming the bank for about two years.
“It’s a major milestone to get a bank application filed,” he says, and that process starts with a vision. The vision of the bank’s chairman, Mani Jacob, is to be locally owned and locally managed, with local decision making, Hansen says. For Hansen, that meant assembling a local board of directors. “Your board needs to be diverse and represent the members of your community,” he says. “We started with that.”
Joining Hansen and Chairman Mani Jacob on the board of directors are banking and business veterans Tom Yenne, Patti McKee, Danny Brady, Geoffrey Sloma, Paul Chacko, and Randall James. Together they form the organizing group for the bank. Also serving as founders and advisers are: Taylor Herzog, Jonathan Price, Ronnie Shalev, Reagan Rorschach, Robby Pettigrew, Joshua Bruton, Trent Tomlin, Prabha Sri, and Gilbert Travis. Herzog is the group’s chief liquidity officer and credit officer.
Hansen says that two local female banking executives will serve as executive officers, but are unidentified because of their current positions at other institutions. Tyme has also assembled a non-governing advisory board of community evangelists.
A gap in the banking landscape
Hansen and the Tyme team saw a gap in the banking landscape. “I wanted to help people grow and prosper economically,” he says. “I needed a bank to do that. It’s a tool for me to help the community.”
And, as banks consolidate in DFW, Hansen says local decision-making is needed. “We’ve lost that,” he says.
“I thought, if I were going to start a new bank, it wouldn’t be to close loans, it would be to open relationships,” he notes. “I think that’s what sets us apart from everyone else.”
Hansen set out to build a community bank, owned by the community, managed by members of the community, with decisions made here.
“Our business plan is coming from our heart. It’s not the size of the boxes, it’s what you put in them,” Hansen says, referring to the multi-box applications submitted to regulators.
Hansen says a community bank like Tyme could also be an important element for the region during a time of recession.
“We’re needed because we’re the local backup to job creation,” Hansen says. Time is money, and decisions leaving the state take time, he notes. “Businesses deserve access. And the problem is, businesses sometimes wait months for an answer.”
Currently based in Farmers Branch, Hansen and Judd say they are researching the best site for a permanent facility in that tri-county area.
“Farmers Branch is in the heart of the DFW area, which is one of the most vibrant metropolitan areas in the Southwest with rapidly growing population, economy, and job market,” Tyme Bank says in its offering circular. “Farmers Branch and the surrounding DFW market is very diverse with contributions from healthcare, manufacturing, finance, technology, distribution and numerous service industries.
Once approved by regulators, Tyme Bank will join a solid Texas banking landscape.
The state of Texas is home to $878 billion in assets, representing the third-largest state in terms of deposits in the nation. That figure shows a major increase of 86 percent from 2009, when Texas had only $472 billion in deposits.
Locally, in 2019, the Dallas-Fort Worth-Arlington MSA represented $295 billion in deposits, which is roughly one-third of all Texas deposits. That deposit total grew markedly from the region’s total deposits of $158 billion in 2009.
“I’d call that an economic power projection platform,” Hansen says.
The Tyme Bank group put together roughly $1 million in working capital to get the effort off the ground, but with the applications in, Hansen and Judd say the bank now is in the phase of raising funding. Currently, it’s offering shares in the bank, with a goal of roughly $32 million to $36 million. So far though, Hansen says investment interest has been pretty good, with “lots of interest.”
“We want Dallas money. We want people who use the bank to own the bank,” he says. Both men stress that local ownership is a key element of the bank’s success.
“If you want to have a community bank, you have to invest in it,” Judd says.
Serving the ecosystem
Hansen and Judd predict the bank will be a good opportunity for North Texas-based startups.
“I’ve been on the other side. I’ve been CFO for these small startups that were looking for a banking relationship,” Judd says. “My background is startups—I’m not a banker per se. I love startups. That’s what I do. I like building businesses from scratch. I’ve worked with great founders and entrepreneurs for years.”
The group has sent out requests for proposals to Texas firms for accounting and auditing services and is also talking with national providers of banking technology.
Building banking technology from the ground up can be an advantage, says Judd. “We can have a state of the art technology platform with a much lower cost,” he notes.
Currently, Hansen and Judd are the only paid members of the team. But, they say the bank would be hiring staff once the approvals are completed.
Initially, the bank would have 10-12 employees, with the goal to have around 20 by the end of the year. Within three years, they hope to have more than 50 employees.
The executives say their employee search will involve what they called the Three Es: experience, education, and exams. Tyme Bank would value applicants’ experience and education levels, along with advanced certifications.
“We’re very fortunate to be in a market where the talent does exist,” Hansen says. He expects the company to be selective in who it hires.
“You have to assemble the team, and not everyone will make that team,” Hansen, who also has had a long military career, says. “What’s remaining is a very battle-proven group.”
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