May 29, 2024 • 37 mins
Ever wondered what it takes to build a bank from the ground up in less than a year? Join us as we sit down with Corey LeBlanc, co-founder of Locality Bank, who managed this incredible feat in Miami for under a million dollars. Corey shares his remarkable journey, from overcoming regulatory obstacles to raising capital, and how his background in the Air Force surprisingly prepared him for the structured world of banking. This conversation is packed with insights that anyone in the fintech and banking sectors will find invaluable, especially those passionate about community banking.
Relationships are the backbone of the banking industry, and this episode underscores their critical importance. We discuss with Corey and other industry leaders how seasoned executives and strong networks can navigate the complexities of obtaining a banking charter. Learn how reputation and relationships can fast-track progress and foster innovation, even amidst post-2009 regulatory challenges. Discover our mission to revive community banking by blending local decision-making power with modern technological advancements.
The decline of community banks in America is a pressing issue, and we explore its impact on local markets like Broward County in South Florida. Corey sheds light on the challenges these banks face and the potential for modernization through innovative tech solutions. From strategic decisions in building a tech stack to managing partnerships and contracts, we delve into the intricacies of launching a banking startup. This episode is a goldmine of practical advice on balancing development costs, maintaining customer trust, and successfully navigating the fintech landscape. Don’t miss out on these invaluable lessons.
Hosts: Sam Maule & Maia Bittner
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Transcript
Episode Transcript
Available transcripts are automatically generated. Complete accuracy is not guaranteed.
Maia Bittner (00:06):
Hey, hey.
Welcome back to yet anotherepisode of Artificially
Intelligent brought to you byMoney 2020.
I am your perpetual fintechintern, Maia Bittner.
Sam Maule (00:20):
I love that terminology.
I'm that other perpetualfintech intern, Sam Maule.
Maia, how are you today?
It looks beautiful whereveryou're at.
Maia Bittner (00:29):
Beautiful sunny day.
Sam.
I got to admit I'm operating onlow sleep today.
Babies will do that, um, that'sthe thing about those newborns.
So apologies if, uh, you knowif I seem a little out of it,
but I'm super excited um to bechatting today, of course.
Sam Maule (00:52):
Well, once we get into this topic, everyone uh,
Maia's energy level will gothrough the roof, because this
is what you call teeing upsomething or a softball lob,
because today we're going totalk about how you build a bank.
So for those of you that don'tknow, for some reason, Maia, how
long have you been at Chime?
How many years now?
Maia Bittner (01:10):
I have been at Chime since 2018.
Sam Maule (01:14):
Okay.
Maia Bittner (01:14):
So six years.
Sam Maule (01:15):
So for those of you who don't know roughly how large
is Chime now.
Give us that ballpark stat.
How big are you now?
Maia Bittner (01:27):
In terms of employees, customers how much
money we're making.
Sam Maule (01:28):
Oh, customers, let's go.
Maia Bittner (01:29):
Customers, let's do whatever everybody's favorite
ego um statistic, but let's gowith that how many customers
chime has is the number onething I could never talk about
to anyone ever in any definition, any sense.
I got like, got no idea Likeseven or eight million.
Sam Maule (01:45):
She's not going to admit it.
It's a lot.
Yeah, they do really flippingwell, everybody, they aren't New
Bank down in Brazil, googlethat, but in the US killing it.
Maia Bittner (01:56):
You know we sponsor the Dallas Mavericks.
We got our logo all over thatstadium.
Sam Maule (02:01):
Mr Cuban, there you go.
Well, we are going to talk to afriend of ours who's working on
getting the logo down in Miami.
I'm sure that's well on thelist of things for Corey to get
done.
One of my favorite people inthe world, Corey LeBlanc.
Corey, how are you doing?
Corey LeBlanc (02:17):
I'm doing, beautiful brother.
How are you?
I'm good, mia, we're comingafter you.
We got about 1,500 clients.
Maia Bittner (02:24):
Hey.
Corey LeBlanc (02:25):
Growing Come on.
Maia Bittner (02:26):
I look over my shoulder.
Sam Maule (02:28):
That's it.
Bring it, bring it, yep.
The logo for Miami Heat will beLocality Bank.
That's what we're going to talkabout on this episode today how
to build a bank from scratch,how to build a bank from
absolutely nothing.
And, Corey, you cracked me upas you were getting ready.
Corey LeBlanc (02:48):
You said I don't know if I'm going to tell you
how to build a bank.
I'm going to tell you how webuilt the bank.
Yeah, yeah, that's the onlyexperience I have.
I've talked to a lot of otherpeople that have started to
Novos over the past couple ofyears.
We've kind of created like a Idon't know a group of people
that you know share all of ourcommon complaints, do you?
Maia Bittner (03:06):
guys have a group chat.
Corey LeBlanc (03:07):
We do.
You know, we randomly will pingeach other especially the ones
that were coming out right aboutthe same time we were.
It was kind of a hey, are yougetting the same question?
Are you having the same problem?
How are you raising capital andall these things.
But yeah, I can't tell youexactly how to build the perfect
bank, but I can tell you how wedid it in 10 months for under a
million bucks we could do that.
Sam Maule (03:28):
Well, see, that's going to be fun, because we're
going to talk about the bankcharter side of the house, the
regulatory side, just an immensenumber of meetings, and that's
the Sam Mall trivia question ofthe day, because I am
desperately trying to catch Maiaon one of these.
Maia or Corey, when was thefirst banking charter granted in
the US?
If you can get within 20 years,I high-five you.
Maia Bittner (03:51):
I'm going to go like 1862.
Corey LeBlanc (04:00):
Corey.
I'm going to say late 1700s,early 1800s.
I'm going to say 17.
I almost swear.
I've looked this up recentlyjust reading.
I want to say like 1780.
Sam Maule (04:14):
All right, oh, my God , Corey, 1791.
Ooh.
Maia Bittner (04:18):
The bank in the.
Sam Maule (04:19):
United States Congress gave a 20-year charter.
That is considered the firstbank charter.
Good job, man.
Within 10 years, that's thatmilitary screaming out of core,
even though it's the Air Force,or it isn't kind of military,
it's an army.
Maybe that we won't go thereanymore.
But let's start with what iswrong with you.
(04:39):
Why would you want to start abank in Miami?
Corey LeBlanc (04:44):
Yeah, I'm a former military guy, and if that
don't tell you anything, sam, Idon't know what will.
I am a sucker for punishmentand heavy regulation.
I like rules, man.
And no for me.
I had left the Air Force,thought I was going to go into
banking temporarily, just as astepping stone job to get closer
(05:05):
to family.
Got in there, realized I reallyhad a passion for, specifically
for me community banking.
And after about 15 years at alarger regional bank that was
growing very, very fast and wentpublic, I said, well, this is
not a challenge anymore, solet's, let's go do something
different.
And uh, weirdly enough, man, Ihave to thank you for this.
(05:29):
Uh, I would have not startedthis bank without you, sam All.
Uh, if you recall, right at thebeginning of the pandemic, you
call me and you tell me I'mgoing to do a podcast every
single morning.
It's going to be 30 minutes,it's going to be great.
And I said, sam, you're insane,you can't do a podcast every.
(05:49):
That's a lot of work, dude.
And you said, no, no, no, it'sfine, you just got to
participate.
And then in the mornings youjust got to log in and talk to
people, like in the chat, and Isaid, cool, I could do that.
Uh, cause we've never been moredisconnected, right?
So I was like this is great.
I kind of have thoseconversations again and,
serpantipitously, my co-founderand our CEO, keith Costello,
(06:09):
heard that podcast and knew hewas going to be coming out of a
non-compete, reached out to meon LinkedIn, as anyone would.
When someone messages you onLinkedIn to say they want to
start a bank with you, youignore them and you think
they're spamming the hell out ofyou.
And so my wife finally did theresearch and said no, you really
need to talk to this guy.
So without Sam, I don't thinkwe get here.
Maia Bittner (06:31):
Well, Corey, you and I have that in common,
because Rachel actually coldreached out to me on LinkedIn
and said do you want to have apodcast?
To have a podcast.
Sam Maule (06:43):
And that's how that happened, and so that's why.
Maia Bittner (06:46):
Sam and I are here today, so hold LinkedIn reach
outs.
Hey, working hard, building bigthings.
Sam Maule (06:53):
You know.
If you don't ask, you know.
You got to ask everybody.
There's lesson number one inhow to build a bank Just go on
LinkedIn, send a message.
You never know what will happen.
It was rather funny when Rachelasked me about doing this
podcast.
She said really need a co-hostand I, like screamed through the
phone.
I said Maia Bittner, MaiaBittner, she would be.
(07:16):
I will never get her, but shewould be awesome.
So, Corey man, I just the taskto go and push to start a new
bank, to get the charter andeverything else.
I have no clue.
I left banking in 2004.
My first job was with NorthernTrust, way back when, as a SAS
70 auditor there's a bit oftrivia for everybody Was there
for about 10 years.
(07:37):
Then I left banking.
I've never worked for bankssince.
I just can't imagine what it'slike now, especially post urban,
post the crash, the regulatoryenvironment, the lack of
charters that are issued anymore.
What that experience is like.
Where do you even start?
Corey LeBlanc (08:00):
You start with a business plan, right, you got to
come up with a really goodbusiness plan and you got to
make sure that you can go outand get the capital to even get
going right.
So that was, first and foremostis let's figure out what it is
that we want to do and why.
What we were wanting to dowould be different enough to get
investors to give us money, buttraditional enough that the
(08:22):
regulators wouldn't make itdifficult and costly.
And so the good thing is is wehad a really great team and we
still have a great team that wasat from the beginning, that
understood how to do this.
You know Keith, our CEO and myco -founder.
He had started a few banksbefore, and so he kind of had
some familiarity with the DeNovoprocess, although it had
(08:45):
changed quite a bit since hesold his last bank, which would
have been, I think, around like2011, 2012.
And we launched in 2022.
But no, oddly, it was wayeasier than I thought it was
going to be.
And so, you know, like two goodFrench and Irish guys, we
decided to submit our charterapplication on St Patrick's Day
(09:07):
for good luck in 2021.
And we had our conditionalapprovals by November of that
year and we launched in Januarythe following, so 10 months.
Maia Bittner (09:17):
Well, yeah, I mean it's good to know about your
co-founder.
That kind of makes sense,because one of the things I was
going to ask about is thatrelationship with the regulators
.
I think tech people kind ofthink of bank charters as like
an API doc or like you eitherhave it or you don't, and it's
programming and it's like hardand fast and it lets you do X, y
(09:39):
and Z definitively and doesn'tlet you do one, two and three
when really that's not how itworks.
So much of bank charters isabout the relationship with the
regulators and so I was going toask if you were starting from
behind with this new bankcharter.
But it sounds like your teamdoes kind of have that
established relationship thatthey can lean on and that would
(10:02):
let you like move faster andhave more trust.
Is that right?
Corey LeBlanc (10:08):
Absolutely yeah, no.
So like you got to think aboutit.
So we're chartered out of thestate of Florida with the Office
of Financial Regulations, theOFR, here in Florida.
We have deep relationships withthem from you know Keith's
previous institutions.
He's been down here for 30years so he's worked with them,
he's created confidence withthese regulators and they
understand that Keith is nottrying to come in here and make
(10:30):
fast money.
He's trying to be a good bankerand a good steward of the
banking concept and do itethically, and so that
alleviates a lot of problems.
The other thing in some of theother de novos that I talked to,
they were having issues gettingthat charter and getting it
through.
One of the first questions Iwould ask them is do you have
anyone in your C-suite, at yoursenior executive level that have
(10:55):
ran banks at a senior executivelevel?
And then, if they said yes tothat, have you had one that
started a bank?
And so that was the nextquestion.
I was so surprised how many didnot have anyone that had worked
in that senior executive levelof a bank before that thought
that they could just go throughthe charter process Like it was
(11:15):
nothing.
That sounds like how techpeople approach things, but I
get it, we had so.
Maia Bittner (11:22):
I started a small fintech company.
We had six people on our team,right, so it was me and my
co-founder, we had two engineers, we had one ops person and we
had a chief compliance officerwho had that pedigree and that
history and that resume andthose relationships.
And that's how we madeeverything happen is by kind of
(11:43):
leaning on that and just whatyou're saying right.
People trusted him.
They knew that he wasn't goingto approve things or get on
board with something that wasgoing to be against consumers or
screw people over, and thatwe're trying to do things the
right way.
And that gave us a little bitmore leeway, a little bit longer
leash to then try some new,innovative things.
Sam Maule (12:02):
Yeah, you think about Chime, about Chime, right With.
Maia Bittner (12:04):
Chris.
Sam Maule (12:04):
Britton, everybody found her at.
Chime right.
I mean Chris came out of GreenDot and Visa, if I remember
right and Visa.
Yeah.
So I mean again isn't itfascinating that in 2024, people
and relationships still matter.
If you're young and listeningto this, please note that very
early on.
If you want a career infinancing and banking and in
(12:25):
tech for that matter, yournetwork, your the people you
know and, by the way, yourcharacter and reputation.
This is the old man talking itmatters absolutely.
Corey LeBlanc (12:37):
And look, I will tell you, if you're not in
banking and you're in anotherindustry, your relationships
with bankers and attorneys andall these other people are going
to matter if you really want togrow to something substantial.
And so, man, you know we talkabout, you know digitization,
all this stuff all the time, andsometimes I get a little
(12:58):
frustrated, you know, with someof the things I read, because
I'm like you're missing a keycomponent of this, and it
absolutely comes down to thepeople around it and what
they're willing to put out toget something done.
But it's also that ecosystem ofpeople that you know, right?
I mean, how many times do Itext you, sam, just to say, hey,
do you know anyone in thisspace?
Because I just want aconnection real quick and vice
(13:19):
versa.
Maia Bittner (13:37):
Those things save time, which saves money, which
makes things work.
Be somebody in the C-suite atExperian.
And that's how we made thathappen, right, because we
weren't making progress throughthe front door.
And she was like these guys areawesome, these guys are great.
And sort of fast-tracked usthrough the whole problem, and
anytime we ran into a roadblock,we'd reach out to her again and
(13:58):
she'd push us forward.
Sam Maule (14:00):
I can't stress enough for those of you.
I mean, this is a FinTechpodcast, so you know our
assumption going in, as you knowa lot about payments and
banking and all that, but youknow, sometimes it's not good to
assume prior to 2009.
So, prior to the market crash,on average, about 150 banking
charters are granted a year.
(14:20):
Roughly right After that, itjust went to zero for several
years.
In the year I think, Corey,that you did this in 2022, there
was only 14 charters granted Imean, this isn't like a factory
people and 14, by the way, isthe highest number since 2009 of
(14:40):
banking charters granted in theUS, so there is not a ton.
Corey LeBlanc (14:46):
So during the time we filed, there was about
five other institutions I wastalking with pretty regularly
about what they were doing.
Of those other fiveinstitutions, only two of them
got out the gate.
As of today I don't know thatthe other ones ever I know they
tried to pivot.
They looked at just goingFinTech route, they tried a
(15:07):
number of different ideas and itdidn't work.
And when it came down toanother thing that we had to do
was we had those goodrelationships, we had that
confidence, but we had to beflexible.
Like our business plan changedbased off of the feedback of the
regulators.
We we had to concede on a fewthings.
You know, at first we said wewere not even going to carry
(15:28):
cash and you know, today we havea traditional you know cash
recycler and things like that inour facility.
So we serve much more as abranch in the physical location
than we intended originally.
And that was because of theconversation we had with the
regulators and we realized itwas going to be easier and maybe
the right thing to do.
Maia Bittner (15:50):
Well, and Corey, can we back up a little bit?
I don't actually know whatyou're building, what you're
doing.
Give me the pitch on what is sospecial that you needed a whole
new banking charter to provideit write it.
Corey LeBlanc (16:11):
Yeah, so we're a bunch of lifelong community
bankers that was seeing theexistence of community banks
kind of being diminished, rightIn the sense that most community
banks are getting gobbled up inaround 200 million assets 500
million assets by largerregional banks, really creating
a gap in local markets wherethat relationship, that local
decisioning power and thosethings are happening.
The thing that we loved aboutbanking was changing and the
(16:34):
shift that we were seeing wasreally creating not just a gap,
but almost an impossible gap tocover by the other institutions,
because the part of thebusiness that was becoming
difficult by the otherinstitutions, because the part
of the business that wasbecoming difficult, they had
zero control to go get backright.
They didn't have the technology, they didn't have the business
(16:56):
structure, they didn't have theplanning in place to go get that
business.
And so when we decided to starta bank, the first thing we did
is when we started sitting downwith investors, they asked us
the same question.
They said why the hell do weneed another bank?
Did you not just drive down LosAlas here in Fort Lauderdale and
pass by 15, 20 other financialinstitutions or banks?
(17:17):
What makes you think you need tobe here?
And so then we started askingthe question of when was the
last time you were able to takeyour business into those
locations, have a conversationand have them understand what
your business needs are, butthen, whenever you left the
building, also have thatfinancial institution be able to
allow you to self-serve withthe digital tools you need, so
(17:37):
that we're not bothering youwhen it's not relevant.
And obviously there was muchmore in the pitch deck than that
, but that's really what kind ofdrove home the point.
And so what we're trying to dohere in South Florida is we've
built a digital native communitybank with a traditional
relationship focus, powered byan infrastructure that supports
(18:00):
modern innovation and growth andchange, so that we can be
sustainable growth and change.
So that we can be sustainable,we can keep growing right
alongside of our customers butbe agile enough to be, I guess,
responsive to the changesthey're going to see in the
future as well.
Sam Maule (18:15):
I just want to let this number strike home for
everybody.
So, according to FDIC, thenumber of US community banks
dropped by 46% over the last twodecades, 46% over the last two
decades 46%, from about 7,500 toaround 4,000 in 2023.
Corey LeBlanc (18:36):
That's so I want to say.
I want to say, when Keithbrought this to me and we
started talking, the first thinghe told me was when he sold his
last bank, there were like 12,I want to say 11 or 12 community
banks headquartered here inBroward County, here in South
Florida, and at the time we werehaving that conversation there
were three, and one was in theprocess of being sold, and so
(18:59):
that struck me because to methis is a big market, there's a
lot of opportunity here.
And then when I started lookingat the competition, I realized
that it really wasn't the faceof community banking.
Sam Maule (19:10):
The part I like, Maia is Corey.
Where were you living beforeyou moved to South Florida?
Corey LeBlanc (19:15):
I was living in North Central Louisiana.
Sam Maule (19:18):
Just like Miami and Fort Lauderdale, Maia, they look
so much alike.
The same kind of you knowbusinesses, you know.
Corey LeBlanc (19:25):
Exactly the same.
Sam Maule (19:26):
Cuban food.
Yeah, so I mean you went fromRuston, louisiana, to basically
you're in Fort Lauderdale nowfrom Everett right In Broward
County.
Corey LeBlanc (19:35):
I am North of Miami.
Yes, sir, yeah.
Sam Maule (19:37):
One of the fastest growing places in the country,
Incredible amount of money,incredible amount of businesses
that are there.
So there's probably I'm doingthis off the top of my head, but
I'm guessing the growth and thenumber of businesses as
compared to maybe the entirestate of Louisiana, just in the
couple of counties you're in, ismind boggling.
Corey LeBlanc (19:58):
Well, that was part of the hypothesis as well.
Right, if we were going toprove that a modern version of
the community bank could existand actually make value for
local communities, there's not abetter market necessarily than
South Florida to prove it.
Because if it can't work here,sure as hell isn't going to work
in Ruston, louisiana.
Right, it's not going to workin small town Mississippi, it's
(20:21):
not going to work in ruralMissouri.
But if it can work here, thenwe can talk about.
What does that look like atscale?
What does that look like as ablueprint for everyone else to
understand what works and whatdoesn't work?
Maia Bittner (20:35):
I've done a lot of research on banking deserts,
which is more on the consumerside, but places that aren't
served by bank branches, thatare hardly served by ATMs and
they don't have those resources.
It's really interesting.
Louisiana, I think, is a bighome of banking deserts and
(20:55):
people who don't have thefinancial resources.
But that begs the question tome, right?
Okay, so all these communitybanks are dying?
Very sad.
They're dying because they'renot good enough businesses to
keep going, right?
So how are you thinking aboutthat piece?
Or tell me yeah, or do I haveit wrong?
Are they dying for a differentreason?
Corey LeBlanc (21:16):
So I don't think that it's necessarily a bad
business plan to be a communitybank.
I think they don't have theappropriate plan in place for
their institutions to grow inthe future.
I think what they've done isthey've kicked the appropriate
plan in place for theirinstitutions to grow in the
future.
I think what they've done isthey've kicked the can down the
road for so long that they findthemselves in a position where
they really don't have anability to climb out of the hole
(21:37):
they've created.
And so, therefore, if you can'tgrow, how do you continue to
capitalize the bank?
So either A you're privatelyowned by a small group of people
and you keep your assets at acertain level, you maintain your
deposits and you write the sameamount of loans every single
year and everyone keeps makingmoney, and you're okay.
(22:00):
But that's not typically a modelyou see too often, right, but
that is one that you see incommunity banking.
The other side of that is, youjust have community banks that
can't grow anymore.
And when you hit that plateauas investors, as stakeholders in
that institution, what do youdo?
Like if you have no plan togrow out of it, you've got to
figure out something else, andso that's where you start to
(22:22):
look at the acquisitionopportunities.
And in your large regionalinstitutions there's good assets
there, there's good customers.
It's just the institutiondoesn't have the management team
or the plan in place to takeadvantage of that.
Sam Maule (22:34):
How do you approach this from a tech stack?
So let's get into thetechnology side of this, right?
So, Maia at Chime, right, yougot the ability to say cool,
we're starting from scratch.
Here we go, and the same thingwith you, corey, right, it
wasn't like you inherited a I'llmake fun of Hogan you haven't
inherited a core.
That dates back to when I wasthree years old and you know
(22:56):
watching TV black and white.
You start from scratch.
So how do you go about thatdecision tree of how you're
going to build out?
Corey LeBlanc (23:04):
Yeah, you know, as a IT guy by trade right, I've
been a builder ofinfrastructures and
architectures and the air forceand the banking for a long time
my initial thought was let's gobuild everything we can for
ourselves and let's own the techstack, right.
And then when the investors andmy executive team said 10
(23:25):
months and under a milliondollars, I said well, I was
thinking more three to fiveyears and eight to $10 million.
When the investors in myexecutive team said 10 months
and under a million dollars, Isaid, well, I was thinking more
three to five years and eight to$10 million.
But okay, let's try it your wayas well.
But collectively, as we satdown and we thought about it,
the way we approached it waslet's keep our technical debt
really low.
Let's create a nice path forprofitability as a bank in the
first three years so that whenwe get to that point we have
(23:49):
opportunities to go getadditional capital to keep
growing this thing.
But in doing so, what we didn'twant to do which which is weird
, because I see all these otherde novo banks that are coming
out they're doing it the exactsame way they go sign up with
the traditional core, you know,one of the top three or four
cores that are out there andthey take and they just
replicate the same tech stack,the same application experience,
(24:11):
everything that all other bankshave, and they think that's
their plan for the future.
Maybe they have an idea ofchanging that later, but they
have zero control to do that andthey're just right back into
the same binding contracts andhurdles that they probably left
at their previous institutionsFor us.
We said, okay, well, let's keepthe technical debt low, but
(24:32):
let's work with a provider andpartners that allow us to
iteratively take and gain morecontrol over the tech stack over
time as we see fit right, sowe're not having to build it all
for ourselves.
Maybe we're dependent on ourpartners in years one through
two, three, you know 90, thenyou know maybe 75% and 60%, but
(24:54):
over time we'll have ownershipof the things that matter to us
and then we'll let everyone elsekind of keep building and
shaping the things that we don'treally care to spend as much
time with.
And that's been super helpfulfor us because we're seeing that
now.
The difficult part of that isbecause we kept the tech that
low.
We didn't have full ownershipis in the first two years.
(25:15):
It's a lot of collaboration andworking to try to get the thing
to where you really want it tobe.
But where we are today is soexciting for me because we're
starting to see all of the hardwork we've put in the first
years come to fruition.
We're starting to createpartnerships and opportunities
to do things that I couldn't doat my seven and a half billion
dollar institution beforewithout moving mountains, and I
(25:38):
can do it with a phone call and30,000 bucks right.
It's insane to me that we coulddo some of these things.
So that's kind of the way wedid it.
I know, Maia, you did it alittle bit differently and I
love the way that you guys didit, because there's not one
right answer right to this.
Maia Bittner (25:56):
Right, I know, and that's what I think you know,
my standard advice for startupsis really invest in building out
the things that are yourcompetitive differentiators and
everything else.
Buy it off the shelf and maybelook at you know, implementing
it in a modular way so that youcan rip and replace things and
(26:17):
build it on your own as you growover time.
Particularly, I think that canhelp on the unit economic side
and really reduce expenses.
Buying software for everythinggets pretty expensive once you
get to scale.
But I think that and that allsounds good and I saw it like
Sam's nodding.
Everyone's like yep, cool,invest in your competitive
differentiators, but the devil'sin the details there, right,
(26:37):
and just as you're saying, it'slike well, okay, you work with
partners and then you realize,like the product you can bring
to market is not exactly whatyou want it to look like.
Then what right?
Like?
Do you just compromise?
Do you just ship somethingwhere you're like this is 90% of
what I love, but like at leastit's done, at least it's in
(26:59):
people's hands and we can changeit later?
Do you hold a hard lot Like?
I think that nuance level ofnegotiation is where a lot of
people get stuck and there'sprobably no scientific formula
for it.
There's probably like a littlebit of magic in nailing that
right balance.
Sam Maule (27:14):
And I think part of that is not staying stuck.
That that's something we seeway too much.
Right Is that you can'tovercome inertia because, oh my
God, everything I'm facing andyou're going to have to make a
decision one way or the other,and so which path are you going
to go down?
And I don't care if you're acompany with 10 employees or
(27:34):
you're a company with 200,000employees, that inertia will
kill you.
Corey LeBlanc (27:40):
Absolutely.
You come from a developmentbackground, right yeah my
background is engineering.
Maia Bittner (27:45):
Yeah, so from that engineering background, right.
Yeah, my background isengineering.
Corey LeBlanc (27:47):
Yeah, so from that engineering background, I
know, we both know, and, sam,you've seen this right From the
amount of time you spend in thisspace, on this side.
Sam Maule (27:54):
Dude, I was a Lotus Notes programmer.
I know Come on.
Corey LeBlanc (27:57):
I remember, okay, but on the banking side, the
vast majority of things we'regoing to spend time and money
trying to build and develop arenot going to work right, at
least the first time around.
There's going to be a lot ofthings we have to scrap and
there's going to be a lot ofmoney we burn.
It's just how do you reduce thecost of that burn and keep
moving right To your point, sam?
Is that inertia, or you know,don't stay stock and all these
(28:20):
things, but the reality is isthere's nothing going to be
perfect, and so why?
Why stop Right?
And so, yeah, there aredefinitely some things that we
probably rolled out in on dayone that we probably would have
imagined would be differentRight when we first started.
But I can tell you those thingsare very different today than
they were when we launched, andwe're going to continue to shape
(28:41):
that.
And you know, if we havepartners that are working with
us on software, I'm workingreally hard to be creative on
how we structure that.
And you know, if we havepartners that are, you know,
working with us on software, I'mworking really hard to be
creative on how we structurethat contract with them, because
there's not a single thing I'mgoing to sign a contract with
that.
I'm not going to be willing toscrap completely and eat that
contract and do something elseif my business or my customers
(29:02):
need it.
And that's how we've.
We've structured the way we dobusiness.
Maia Bittner (29:08):
I like that.
I think also when dealing with,like money, banking, all this
important stuff, we've talkedabout trust a lot, that trust is
really important and oftenpeople trust things that are
really refined, you know, thatwork really well and that you
could take a naive perspectiveand say like, oh, it doesn't
matter, you know the way that'slooks or this tiny little
(29:28):
interaction, but I think all ofthose things add up and makes
your customers trust you, and sosometimes you do have to invest
in that little bit of polishbefore launching something new.
Corey LeBlanc (29:40):
Absolutely.
You know we have.
We have two vendors right nowthat I would say are part of the
top three major core providers.
When we signed the contractsthey were not part of those
companies.
They were acquired eitherduring implementation or after
implementation.
Those are the two products.
I'm trying to get rid of ASAP,because I have the most problems
(30:00):
supporting my customers with it.
It's not super easy to forkliftthose things and get them out
of there, but that's why we'redoing a lot more due diligence
now on looking at the roadmapand putting some very clear
things in the contracts to dothat Because, to your point, we
are built on trust, but ourcustomers trust us, not the
(30:22):
third parties we work with right.
So at the end of the day, itcomes down to compliance, same
all this other stuff.
We're responsible for theproduct, service and everything
that we do, and so when a thirdparty like that is an affecting
factor, you got to get rid ofthat 100%.
Maia Bittner (30:38):
Yeah, I mean, the buck stops with you.
I used to rant at people.
I worked at an e-commercecompany, you know, and our top
complaint, of course, was whenthings took too long to arrive
in the mail, and sometimespeople on our team would say,
well, like, that's not our fault, like that's the USPS.
And I was like, no, no, that isour fault.
Right, we're the only ones thatchose to work with the USPS.
(31:03):
We could send everythingovernight through FedEx, but we
don't, because our businessmodel doesn't support it and
some other.
Right, but that's on us.
Like we're the ones that arechoosing those vendors, we're
the only ones that have a say inhow that works and we need to
take 100% responsibility for theexperience that our customers
have with it.
So, as you can tell, I'mpassionate about this and I'm
heartened to hear that you sharethe same perspective.
Sam Maule (31:34):
So we need to come up with a sound, a noise, a gong
or something when we come upwith ideas for future shows,
because we've already come upwith two during this
conversation.
So Banking Deserts, Maia, I gotexcited when you said it.
Oh yeah, let's talk about toscale, right.
I'm not pointing fingers, butgo read about JP Morgan and
maybe an investment they did atChase in a tech.
But due diligence can go bothways, right.
It's due diligence with yourpartners.
(31:55):
You got to do due diligence onbanks too, right?
I mean, in this day and age,there's a show, Maia some of the
horror stories and lessonslearned around due diligence
when you're working withcompanies.
Maia Bittner (32:05):
Well, that's like, Corey, do you have any advice?
I mean you kind of hinted at.
You're like, okay, like nowwe've learned there's some
things we need to include in ourcontracts, there's some things
that we need you're going to dodifferently going forward.
Now, it's really hard to getthat stuff right from the start
because you don't know what youdon't know.
Do you have any advice forpeople as they like get started
on a new project right, how canthey structure contracts?
(32:27):
What type of stuff should theybe thinking about when, yeah,
you don't know what you don'tknow?
You don't know how it's allgoing to play out?
Corey LeBlanc (32:34):
Yeah, One keep contracts short, right, that's
pretty simple.
That's an easy one.
Everyone should already knowthat but we always like to try
to take the deal and we take thelonger ones, which invests our
companies into something wedon't know.
The other thing I necessitatewhen we're talking to anyone of
any kind of significant contractanything that's going to
actually go to my customerexperience or drive the way that
we deliver service to ourcustomers.
(32:55):
The first thing we do is we sitdown and we define a clear
objective for Locality Bank.
Here's the one thing we musthave, and this needs to be in
the contract that this will bereceived and in this way.
And then what we ask ourpartners to do is we ask them to
define one clear objective fortheir side that they want in the
(33:15):
contract as well, because wewant them to know we're going to
give much skin in the game ofdelivering something back to
them, as they are going to bedelivering back to us, and
that's been super helpful in usmaking sure that when we get
into the projects, we don'tforget what's important.
We have to be able to definethose things, so that's super
helpful.
(33:36):
The other thing is is one Idon't care how small the
contract or how easy you thinkthis is.
I don't care if you've signed50 billion addendums with the
same vendor.
Do you think that this is goingto be fine?
Have legal review, Make surethat you're protected whenever
the mess hits the fan right, sothat you can back out or get out
of those things.
That's super important becauseit reduced the cost of
(33:59):
forklifting something afterthree years and you never really
wanted it since day one, right?
And that saves the cost for theother things that you need to
be able to do.
So when we start to have budgetconversations, it makes it
entirely different.
Maia Bittner (34:14):
Yeah, yeah, it puts you in a better position to
negotiate.
Corey LeBlanc (34:16):
I don't know if there's golden nuggets, but it's
really simple, right, butthat's what's been working for
us.
Maia Bittner (34:23):
Well, and I think people get carried away Like
it's easy to, or you know, yousee the discounts on the 10 year
contract and it's like oh yeahlet's do that.
We're getting such a good dealand you end up putting yourself
in a bad position.
Sam Maule (34:36):
The thing that I love , Corey, is you know you talk
about biting off more than youcan chew or just going all in
the thing with having acommunity bank.
Um, you can't hide.
They know where you're at allright, they know where that.
I think you have one branch.
They, they know where you're at.
You're gonna you're gonna comeface to face with your customers
.
Corey LeBlanc (34:52):
So we know these people for the most part, too,
like a lot of these, thesepeople who are customers of our,
there are neighbors, you know.
These are people who haveinvested in the bank or invested
in some of the companies thathave invested in our bank or
that we've given loans to, andso these are people we're going
to see, you know, at therestaurant.
We're going to see these peopledowntown, we're going to
(35:15):
interact with them.
So, yeah, we better put ourbest foot forward.
Maia Bittner (35:19):
All I'm hearing is like data points for
underwriting advantages.
I'm like Ooh like.
Well, what restaurant do yousee them at, and where downtown?
Corey LeBlanc (35:28):
And what time of day are they down?
Maia Bittner (35:29):
That's what I'm thinking.
Corey LeBlanc (35:30):
Oh, absolutely, I'm with you, 100% there.
That's the thing that I'mtrying to figure out how do we
continue to replicate?
I love the in-person thing, buthow do?
We take and we create the rightinformation to be very
strategic, very direct andaccurate, with the next thing
that we're going to do so.
Sam Maule (35:48):
folks, for our listeners, here you go.
You want to learn how to builda bank.
Two people to talk to, Coreyand Maia, and we're going to
make sure you get theirinformation.
Corey, where's the best placefor people one to find out about
Locality Bank and then to reachout to you?
Corey LeBlanc (36:03):
Yeah, you can go to localitybankcom.
Uh, we're actually gettinggoing through a web refresh
already just to make sure thatwe're highlighting more
customers and providing moretools for people to use.
Uh, or hit us up on LinkedIn.
Uh, really busy there.
Uh, and, fun note, my daughteris the one who runs our, our
social media platform.
So if you see anything on mysocial media platform, that's my
(36:23):
daughter, charisma, charismaand, by the way, probably of my
wife's recommendations, who'sreally good at marketing as well
.
We also have a great marketingdirector, ryan, who helps us
drive these things home, but hison LinkedIn, and you can always
message me on Twitter, at InkedBanker, or on LinkedIn.
Just Corey LeBlanc, look forLocality Bank.
(36:43):
And I actually look like abanker in that picture, unlike
the way I look most days.
Sam Maule (36:47):
And if we don't give a shout out to his wife, Cassie,
I will never hear the end of it.
So also Cassie LeBlanc atNimbus, who is one of the best
marketers I know.
You're welcome, Cassie.
Maia, how about you?
How to build a bank?
Maia Bittner (37:01):
I'm, I'm no, no, no, no, please do.
Please do not talk to me aboutbuilding a bank.
This is not an interest of mine.
It is not a specialty.
I do not want any DMs invitingme to build a bank with people,
just to put that out there.
No cold LinkedIn messages.
But if you want to chat aboutanything else, I'm on Twitter at
maiab.
Sam Maule (37:23):
And if you want to talk about anything else, please
don't talk to me about buildinga bank, Sam.
Find me on LinkedIn.
Find me on Twitter.
Hey everybody, Thanks forlistening.
This is way too much fun.
It's always good when we knowthat we're learning something.
So, hey, join us next week.
Hey, hey.
Welcome back to yet anotherepisode of Artificially
Intelligent brought to you byMoney 2020.
I am your perpetual fintechintern, Maia Bittner.
Sam Maule (00:20):
I love that terminology.
I'm that other perpetualfintech intern, Sam Maule.
Maia, how are you today?
It looks beautiful whereveryou're at.
Maia Bittner (00:29):
Beautiful sunny day.
Sam.
I got to admit I'm operating onlow sleep today.
Babies will do that, um, that'sthe thing about those newborns.
So apologies if, uh, you knowif I seem a little out of it,
but I'm super excited um to bechatting today, of course.
Sam Maule (00:52):
Well, once we get into this topic, everyone uh,
Maia's energy level will gothrough the roof, because this
is what you call teeing upsomething or a softball lob,
because today we're going totalk about how you build a bank.
So for those of you that don'tknow, for some reason, Maia, how
long have you been at Chime?
How many years now?
Maia Bittner (01:10):
I have been at Chime since 2018.
Sam Maule (01:14):
Okay.
Maia Bittner (01:14):
So six years.
Sam Maule (01:15):
So for those of you who don't know roughly how large
is Chime now.
Give us that ballpark stat.
How big are you now?
Maia Bittner (01:27):
In terms of employees, customers how much
money we're making.
Sam Maule (01:28):
Oh, customers, let's go.
Maia Bittner (01:29):
Customers, let's do whatever everybody's favorite
ego um statistic, but let's gowith that how many customers
chime has is the number onething I could never talk about
to anyone ever in any definition, any sense.
I got like, got no idea Likeseven or eight million.
Sam Maule (01:45):
She's not going to admit it.
It's a lot.
Yeah, they do really flippingwell, everybody, they aren't New
Bank down in Brazil, googlethat, but in the US killing it.
Maia Bittner (01:56):
You know we sponsor the Dallas Mavericks.
We got our logo all over thatstadium.
Sam Maule (02:01):
Mr Cuban, there you go.
Well, we are going to talk to afriend of ours who's working on
getting the logo down in Miami.
I'm sure that's well on thelist of things for Corey to get
done.
One of my favorite people inthe world, Corey LeBlanc.
Corey, how are you doing?
Corey LeBlanc (02:17):
I'm doing, beautiful brother.
How are you?
I'm good, mia, we're comingafter you.
We got about 1,500 clients.
Maia Bittner (02:24):
Hey.
Corey LeBlanc (02:25):
Growing Come on.
Maia Bittner (02:26):
I look over my shoulder.
Sam Maule (02:28):
That's it.
Bring it, bring it, yep.
The logo for Miami Heat will beLocality Bank.
That's what we're going to talkabout on this episode today how
to build a bank from scratch,how to build a bank from
absolutely nothing.
And, Corey, you cracked me upas you were getting ready.
Corey LeBlanc (02:48):
You said I don't know if I'm going to tell you
how to build a bank.
I'm going to tell you how webuilt the bank.
Yeah, yeah, that's the onlyexperience I have.
I've talked to a lot of otherpeople that have started to
Novos over the past couple ofyears.
We've kind of created like a Idon't know a group of people
that you know share all of ourcommon complaints, do you?
Maia Bittner (03:06):
guys have a group chat.
Corey LeBlanc (03:07):
We do.
You know, we randomly will pingeach other especially the ones
that were coming out right aboutthe same time we were.
It was kind of a hey, are yougetting the same question?
Are you having the same problem?
How are you raising capital andall these things.
But yeah, I can't tell youexactly how to build the perfect
bank, but I can tell you how wedid it in 10 months for under a
million bucks we could do that.
Sam Maule (03:28):
Well, see, that's going to be fun, because we're
going to talk about the bankcharter side of the house, the
regulatory side, just an immensenumber of meetings, and that's
the Sam Mall trivia question ofthe day, because I am
desperately trying to catch Maiaon one of these.
Maia or Corey, when was thefirst banking charter granted in
the US?
If you can get within 20 years,I high-five you.
Maia Bittner (03:51):
I'm going to go like 1862.
Corey LeBlanc (04:00):
Corey.
I'm going to say late 1700s,early 1800s.
I'm going to say 17.
I almost swear.
I've looked this up recentlyjust reading.
I want to say like 1780.
Sam Maule (04:14):
All right, oh, my God , Corey, 1791.
Ooh.
Maia Bittner (04:18):
The bank in the.
Sam Maule (04:19):
United States Congress gave a 20-year charter.
That is considered the firstbank charter.
Good job, man.
Within 10 years, that's thatmilitary screaming out of core,
even though it's the Air Force,or it isn't kind of military,
it's an army.
Maybe that we won't go thereanymore.
But let's start with what iswrong with you.
(04:39):
Why would you want to start abank in Miami?
Corey LeBlanc (04:44):
Yeah, I'm a former military guy, and if that
don't tell you anything, sam, Idon't know what will.
I am a sucker for punishmentand heavy regulation.
I like rules, man.
And no for me.
I had left the Air Force,thought I was going to go into
banking temporarily, just as astepping stone job to get closer
(05:05):
to family.
Got in there, realized I reallyhad a passion for, specifically
for me community banking.
And after about 15 years at alarger regional bank that was
growing very, very fast and wentpublic, I said, well, this is
not a challenge anymore, solet's, let's go do something
different.
And uh, weirdly enough, man, Ihave to thank you for this.
(05:29):
Uh, I would have not startedthis bank without you, sam All.
Uh, if you recall, right at thebeginning of the pandemic, you
call me and you tell me I'mgoing to do a podcast every
single morning.
It's going to be 30 minutes,it's going to be great.
And I said, sam, you're insane,you can't do a podcast every.
(05:49):
That's a lot of work, dude.
And you said, no, no, no, it'sfine, you just got to
participate.
And then in the mornings youjust got to log in and talk to
people, like in the chat, and Isaid, cool, I could do that.
Uh, cause we've never been moredisconnected, right?
So I was like this is great.
I kind of have thoseconversations again and,
serpantipitously, my co-founderand our CEO, keith Costello,
(06:09):
heard that podcast and knew hewas going to be coming out of a
non-compete, reached out to meon LinkedIn, as anyone would.
When someone messages you onLinkedIn to say they want to
start a bank with you, youignore them and you think
they're spamming the hell out ofyou.
And so my wife finally did theresearch and said no, you really
need to talk to this guy.
So without Sam, I don't thinkwe get here.
Maia Bittner (06:31):
Well, Corey, you and I have that in common,
because Rachel actually coldreached out to me on LinkedIn
and said do you want to have apodcast?
To have a podcast.
Sam Maule (06:43):
And that's how that happened, and so that's why.
Maia Bittner (06:46):
Sam and I are here today, so hold LinkedIn reach
outs.
Hey, working hard, building bigthings.
Sam Maule (06:53):
You know.
If you don't ask, you know.
You got to ask everybody.
There's lesson number one inhow to build a bank Just go on
LinkedIn, send a message.
You never know what will happen.
It was rather funny when Rachelasked me about doing this
podcast.
She said really need a co-hostand I, like screamed through the
phone.
I said Maia Bittner, MaiaBittner, she would be.
(07:16):
I will never get her, but shewould be awesome.
So, Corey man, I just the taskto go and push to start a new
bank, to get the charter andeverything else.
I have no clue.
I left banking in 2004.
My first job was with NorthernTrust, way back when, as a SAS
70 auditor there's a bit oftrivia for everybody Was there
for about 10 years.
(07:37):
Then I left banking.
I've never worked for bankssince.
I just can't imagine what it'slike now, especially post urban,
post the crash, the regulatoryenvironment, the lack of
charters that are issued anymore.
What that experience is like.
Where do you even start?
Corey LeBlanc (08:00):
You start with a business plan, right, you got to
come up with a really goodbusiness plan and you got to
make sure that you can go outand get the capital to even get
going right.
So that was, first and foremostis let's figure out what it is
that we want to do and why.
What we were wanting to dowould be different enough to get
investors to give us money, buttraditional enough that the
(08:22):
regulators wouldn't make itdifficult and costly.
And so the good thing is is wehad a really great team and we
still have a great team that wasat from the beginning, that
understood how to do this.
You know Keith, our CEO and myco -founder.
He had started a few banksbefore, and so he kind of had
some familiarity with the DeNovoprocess, although it had
(08:45):
changed quite a bit since hesold his last bank, which would
have been, I think, around like2011, 2012.
And we launched in 2022.
But no, oddly, it was wayeasier than I thought it was
going to be.
And so, you know, like two goodFrench and Irish guys, we
decided to submit our charterapplication on St Patrick's Day
(09:07):
for good luck in 2021.
And we had our conditionalapprovals by November of that
year and we launched in Januarythe following, so 10 months.
Maia Bittner (09:17):
Well, yeah, I mean it's good to know about your
co-founder.
That kind of makes sense,because one of the things I was
going to ask about is thatrelationship with the regulators
.
I think tech people kind ofthink of bank charters as like
an API doc or like you eitherhave it or you don't, and it's
programming and it's like hardand fast and it lets you do X, y
(09:39):
and Z definitively and doesn'tlet you do one, two and three
when really that's not how itworks.
So much of bank charters isabout the relationship with the
regulators and so I was going toask if you were starting from
behind with this new bankcharter.
But it sounds like your teamdoes kind of have that
established relationship thatthey can lean on and that would
(10:02):
let you like move faster andhave more trust.
Is that right?
Corey LeBlanc (10:08):
Absolutely yeah, no.
So like you got to think aboutit.
So we're chartered out of thestate of Florida with the Office
of Financial Regulations, theOFR, here in Florida.
We have deep relationships withthem from you know Keith's
previous institutions.
He's been down here for 30years so he's worked with them,
he's created confidence withthese regulators and they
understand that Keith is nottrying to come in here and make
(10:30):
fast money.
He's trying to be a good bankerand a good steward of the
banking concept and do itethically, and so that
alleviates a lot of problems.
The other thing in some of theother de novos that I talked to,
they were having issues gettingthat charter and getting it
through.
One of the first questions Iwould ask them is do you have
anyone in your C-suite, at yoursenior executive level that have
(10:55):
ran banks at a senior executivelevel?
And then, if they said yes tothat, have you had one that
started a bank?
And so that was the nextquestion.
I was so surprised how many didnot have anyone that had worked
in that senior executive levelof a bank before that thought
that they could just go throughthe charter process Like it was
(11:15):
nothing.
That sounds like how techpeople approach things, but I
get it, we had so.
Maia Bittner (11:22):
I started a small fintech company.
We had six people on our team,right, so it was me and my
co-founder, we had two engineers, we had one ops person and we
had a chief compliance officerwho had that pedigree and that
history and that resume andthose relationships.
And that's how we madeeverything happen is by kind of
(11:43):
leaning on that and just whatyou're saying right.
People trusted him.
They knew that he wasn't goingto approve things or get on
board with something that wasgoing to be against consumers or
screw people over, and thatwe're trying to do things the
right way.
And that gave us a little bitmore leeway, a little bit longer
leash to then try some new,innovative things.
Sam Maule (12:02):
Yeah, you think about Chime, about Chime, right With.
Maia Bittner (12:04):
Chris.
Sam Maule (12:04):
Britton, everybody found her at.
Chime right.
I mean Chris came out of GreenDot and Visa, if I remember
right and Visa.
Yeah.
So I mean again isn't itfascinating that in 2024, people
and relationships still matter.
If you're young and listeningto this, please note that very
early on.
If you want a career infinancing and banking and in
(12:25):
tech for that matter, yournetwork, your the people you
know and, by the way, yourcharacter and reputation.
This is the old man talking itmatters absolutely.
Corey LeBlanc (12:37):
And look, I will tell you, if you're not in
banking and you're in anotherindustry, your relationships
with bankers and attorneys andall these other people are going
to matter if you really want togrow to something substantial.
And so, man, you know we talkabout, you know digitization,
all this stuff all the time, andsometimes I get a little
(12:58):
frustrated, you know, with someof the things I read, because
I'm like you're missing a keycomponent of this, and it
absolutely comes down to thepeople around it and what
they're willing to put out toget something done.
But it's also that ecosystem ofpeople that you know, right?
I mean, how many times do Itext you, sam, just to say, hey,
do you know anyone in thisspace?
Because I just want aconnection real quick and vice
(13:19):
versa.
Maia Bittner (13:37):
Those things save time, which saves money, which
makes things work.
Be somebody in the C-suite atExperian.
And that's how we made thathappen, right, because we
weren't making progress throughthe front door.
And she was like these guys areawesome, these guys are great.
And sort of fast-tracked usthrough the whole problem, and
anytime we ran into a roadblock,we'd reach out to her again and
(13:58):
she'd push us forward.
Sam Maule (14:00):
I can't stress enough for those of you.
I mean, this is a FinTechpodcast, so you know our
assumption going in, as you knowa lot about payments and
banking and all that, but youknow, sometimes it's not good to
assume prior to 2009.
So, prior to the market crash,on average, about 150 banking
charters are granted a year.
(14:20):
Roughly right After that, itjust went to zero for several
years.
In the year I think, Corey,that you did this in 2022, there
was only 14 charters granted Imean, this isn't like a factory
people and 14, by the way, isthe highest number since 2009 of
(14:40):
banking charters granted in theUS, so there is not a ton.
Corey LeBlanc (14:46):
So during the time we filed, there was about
five other institutions I wastalking with pretty regularly
about what they were doing.
Of those other fiveinstitutions, only two of them
got out the gate.
As of today I don't know thatthe other ones ever I know they
tried to pivot.
They looked at just goingFinTech route, they tried a
(15:07):
number of different ideas and itdidn't work.
And when it came down toanother thing that we had to do
was we had those goodrelationships, we had that
confidence, but we had to beflexible.
Like our business plan changedbased off of the feedback of the
regulators.
We we had to concede on a fewthings.
You know, at first we said wewere not even going to carry
(15:28):
cash and you know, today we havea traditional you know cash
recycler and things like that inour facility.
So we serve much more as abranch in the physical location
than we intended originally.
And that was because of theconversation we had with the
regulators and we realized itwas going to be easier and maybe
the right thing to do.
Maia Bittner (15:50):
Well, and Corey, can we back up a little bit?
I don't actually know whatyou're building, what you're
doing.
Give me the pitch on what is sospecial that you needed a whole
new banking charter to provideit write it.
Corey LeBlanc (16:11):
Yeah, so we're a bunch of lifelong community
bankers that was seeing theexistence of community banks
kind of being diminished, rightIn the sense that most community
banks are getting gobbled up inaround 200 million assets 500
million assets by largerregional banks, really creating
a gap in local markets wherethat relationship, that local
decisioning power and thosethings are happening.
The thing that we loved aboutbanking was changing and the
(16:34):
shift that we were seeing wasreally creating not just a gap,
but almost an impossible gap tocover by the other institutions,
because the part of thebusiness that was becoming
difficult by the otherinstitutions, because the part
of the business that wasbecoming difficult, they had
zero control to go get backright.
They didn't have the technology, they didn't have the business
(16:56):
structure, they didn't have theplanning in place to go get that
business.
And so when we decided to starta bank, the first thing we did
is when we started sitting downwith investors, they asked us
the same question.
They said why the hell do weneed another bank?
Did you not just drive down LosAlas here in Fort Lauderdale and
pass by 15, 20 other financialinstitutions or banks?
(17:17):
What makes you think you need tobe here?
And so then we started askingthe question of when was the
last time you were able to takeyour business into those
locations, have a conversationand have them understand what
your business needs are, butthen, whenever you left the
building, also have thatfinancial institution be able to
allow you to self-serve withthe digital tools you need, so
(17:37):
that we're not bothering youwhen it's not relevant.
And obviously there was muchmore in the pitch deck than that
, but that's really what kind ofdrove home the point.
And so what we're trying to dohere in South Florida is we've
built a digital native communitybank with a traditional
relationship focus, powered byan infrastructure that supports
(18:00):
modern innovation and growth andchange, so that we can be
sustainable growth and change.
So that we can be sustainable,we can keep growing right
alongside of our customers butbe agile enough to be, I guess,
responsive to the changesthey're going to see in the
future as well.
Sam Maule (18:15):
I just want to let this number strike home for
everybody.
So, according to FDIC, thenumber of US community banks
dropped by 46% over the last twodecades, 46% over the last two
decades 46%, from about 7,500 toaround 4,000 in 2023.
Corey LeBlanc (18:36):
That's so I want to say.
I want to say, when Keithbrought this to me and we
started talking, the first thinghe told me was when he sold his
last bank, there were like 12,I want to say 11 or 12 community
banks headquartered here inBroward County, here in South
Florida, and at the time we werehaving that conversation there
were three, and one was in theprocess of being sold, and so
(18:59):
that struck me because to methis is a big market, there's a
lot of opportunity here.
And then when I started lookingat the competition, I realized
that it really wasn't the faceof community banking.
Sam Maule (19:10):
The part I like, Maia is Corey.
Where were you living beforeyou moved to South Florida?
Corey LeBlanc (19:15):
I was living in North Central Louisiana.
Sam Maule (19:18):
Just like Miami and Fort Lauderdale, Maia, they look
so much alike.
The same kind of you knowbusinesses, you know.
Corey LeBlanc (19:25):
Exactly the same.
Sam Maule (19:26):
Cuban food.
Yeah, so I mean you went fromRuston, louisiana, to basically
you're in Fort Lauderdale nowfrom Everett right In Broward
County.
Corey LeBlanc (19:35):
I am North of Miami.
Yes, sir, yeah.
Sam Maule (19:37):
One of the fastest growing places in the country,
Incredible amount of money,incredible amount of businesses
that are there.
So there's probably I'm doingthis off the top of my head, but
I'm guessing the growth and thenumber of businesses as
compared to maybe the entirestate of Louisiana, just in the
couple of counties you're in, ismind boggling.
Corey LeBlanc (19:58):
Well, that was part of the hypothesis as well.
Right, if we were going toprove that a modern version of
the community bank could existand actually make value for
local communities, there's not abetter market necessarily than
South Florida to prove it.
Because if it can't work here,sure as hell isn't going to work
in Ruston, louisiana.
Right, it's not going to workin small town Mississippi, it's
(20:21):
not going to work in ruralMissouri.
But if it can work here, thenwe can talk about.
What does that look like atscale?
What does that look like as ablueprint for everyone else to
understand what works and whatdoesn't work?
Maia Bittner (20:35):
I've done a lot of research on banking deserts,
which is more on the consumerside, but places that aren't
served by bank branches, thatare hardly served by ATMs and
they don't have those resources.
It's really interesting.
Louisiana, I think, is a bighome of banking deserts and
(20:55):
people who don't have thefinancial resources.
But that begs the question tome, right?
Okay, so all these communitybanks are dying?
Very sad.
They're dying because they'renot good enough businesses to
keep going, right?
So how are you thinking aboutthat piece?
Or tell me yeah, or do I haveit wrong?
Are they dying for a differentreason?
Corey LeBlanc (21:16):
So I don't think that it's necessarily a bad
business plan to be a communitybank.
I think they don't have theappropriate plan in place for
their institutions to grow inthe future.
I think what they've done isthey've kicked the appropriate
plan in place for theirinstitutions to grow in the
future.
I think what they've done isthey've kicked the can down the
road for so long that they findthemselves in a position where
they really don't have anability to climb out of the hole
(21:37):
they've created.
And so, therefore, if you can'tgrow, how do you continue to
capitalize the bank?
So either A you're privatelyowned by a small group of people
and you keep your assets at acertain level, you maintain your
deposits and you write the sameamount of loans every single
year and everyone keeps makingmoney, and you're okay.
(22:00):
But that's not typically a modelyou see too often, right, but
that is one that you see incommunity banking.
The other side of that is, youjust have community banks that
can't grow anymore.
And when you hit that plateauas investors, as stakeholders in
that institution, what do youdo?
Like if you have no plan togrow out of it, you've got to
figure out something else, andso that's where you start to
(22:22):
look at the acquisitionopportunities.
And in your large regionalinstitutions there's good assets
there, there's good customers.
It's just the institutiondoesn't have the management team
or the plan in place to takeadvantage of that.
Sam Maule (22:34):
How do you approach this from a tech stack?
So let's get into thetechnology side of this, right?
So, Maia at Chime, right, yougot the ability to say cool,
we're starting from scratch.
Here we go, and the same thingwith you, corey, right, it
wasn't like you inherited a I'llmake fun of Hogan you haven't
inherited a core.
That dates back to when I wasthree years old and you know
(22:56):
watching TV black and white.
You start from scratch.
So how do you go about thatdecision tree of how you're
going to build out?
Corey LeBlanc (23:04):
Yeah, you know, as a IT guy by trade right, I've
been a builder ofinfrastructures and
architectures and the air forceand the banking for a long time
my initial thought was let's gobuild everything we can for
ourselves and let's own the techstack, right.
And then when the investors andmy executive team said 10
(23:25):
months and under a milliondollars, I said well, I was
thinking more three to fiveyears and eight to $10 million.
When the investors in myexecutive team said 10 months
and under a million dollars, Isaid, well, I was thinking more
three to five years and eight to$10 million.
But okay, let's try it your wayas well.
But collectively, as we satdown and we thought about it,
the way we approached it waslet's keep our technical debt
really low.
Let's create a nice path forprofitability as a bank in the
first three years so that whenwe get to that point we have
(23:49):
opportunities to go getadditional capital to keep
growing this thing.
But in doing so, what we didn'twant to do which which is weird
, because I see all these otherde novo banks that are coming
out they're doing it the exactsame way they go sign up with
the traditional core, you know,one of the top three or four
cores that are out there andthey take and they just
replicate the same tech stack,the same application experience,
(24:11):
everything that all other bankshave, and they think that's
their plan for the future.
Maybe they have an idea ofchanging that later, but they
have zero control to do that andthey're just right back into
the same binding contracts andhurdles that they probably left
at their previous institutionsFor us.
We said, okay, well, let's keepthe technical debt low, but
(24:32):
let's work with a provider andpartners that allow us to
iteratively take and gain morecontrol over the tech stack over
time as we see fit right, sowe're not having to build it all
for ourselves.
Maybe we're dependent on ourpartners in years one through
two, three, you know 90, thenyou know maybe 75% and 60%, but
(24:54):
over time we'll have ownershipof the things that matter to us
and then we'll let everyone elsekind of keep building and
shaping the things that we don'treally care to spend as much
time with.
And that's been super helpfulfor us because we're seeing that
now.
The difficult part of that isbecause we kept the tech that
low.
We didn't have full ownershipis in the first two years.
(25:15):
It's a lot of collaboration andworking to try to get the thing
to where you really want it tobe.
But where we are today is soexciting for me because we're
starting to see all of the hardwork we've put in the first
years come to fruition.
We're starting to createpartnerships and opportunities
to do things that I couldn't doat my seven and a half billion
dollar institution beforewithout moving mountains, and I
(25:38):
can do it with a phone call and30,000 bucks right.
It's insane to me that we coulddo some of these things.
So that's kind of the way wedid it.
I know, Maia, you did it alittle bit differently and I
love the way that you guys didit, because there's not one
right answer right to this.
Maia Bittner (25:56):
Right, I know, and that's what I think you know,
my standard advice for startupsis really invest in building out
the things that are yourcompetitive differentiators and
everything else.
Buy it off the shelf and maybelook at you know, implementing
it in a modular way so that youcan rip and replace things and
(26:17):
build it on your own as you growover time.
Particularly, I think that canhelp on the unit economic side
and really reduce expenses.
Buying software for everythinggets pretty expensive once you
get to scale.
But I think that and that allsounds good and I saw it like
Sam's nodding.
Everyone's like yep, cool,invest in your competitive
differentiators, but the devil'sin the details there, right,
(26:37):
and just as you're saying, it'slike well, okay, you work with
partners and then you realize,like the product you can bring
to market is not exactly whatyou want it to look like.
Then what right?
Like?
Do you just compromise?
Do you just ship somethingwhere you're like this is 90% of
what I love, but like at leastit's done, at least it's in
(26:59):
people's hands and we can changeit later?
Do you hold a hard lot Like?
I think that nuance level ofnegotiation is where a lot of
people get stuck and there'sprobably no scientific formula
for it.
There's probably like a littlebit of magic in nailing that
right balance.
Sam Maule (27:14):
And I think part of that is not staying stuck.
That that's something we seeway too much.
Right Is that you can'tovercome inertia because, oh my
God, everything I'm facing andyou're going to have to make a
decision one way or the other,and so which path are you going
to go down?
And I don't care if you're acompany with 10 employees or
(27:34):
you're a company with 200,000employees, that inertia will
kill you.
Corey LeBlanc (27:40):
Absolutely.
You come from a developmentbackground, right yeah my
background is engineering.
Maia Bittner (27:45):
Yeah, so from that engineering background, right.
Yeah, my background isengineering.
Corey LeBlanc (27:47):
Yeah, so from that engineering background, I
know, we both know, and, sam,you've seen this right From the
amount of time you spend in thisspace, on this side.
Sam Maule (27:54):
Dude, I was a Lotus Notes programmer.
I know Come on.
Corey LeBlanc (27:57):
I remember, okay, but on the banking side, the
vast majority of things we'regoing to spend time and money
trying to build and develop arenot going to work right, at
least the first time around.
There's going to be a lot ofthings we have to scrap and
there's going to be a lot ofmoney we burn.
It's just how do you reduce thecost of that burn and keep
moving right To your point, sam?
Is that inertia, or you know,don't stay stock and all these
(28:20):
things, but the reality is isthere's nothing going to be
perfect, and so why?
Why stop Right?
And so, yeah, there aredefinitely some things that we
probably rolled out in on dayone that we probably would have
imagined would be differentRight when we first started.
But I can tell you those thingsare very different today than
they were when we launched, andwe're going to continue to shape
(28:41):
that.
And you know, if we havepartners that are working with
us on software, I'm workingreally hard to be creative on
how we structure that.
And you know, if we havepartners that are, you know,
working with us on software, I'mworking really hard to be
creative on how we structurethat contract with them, because
there's not a single thing I'mgoing to sign a contract with
that.
I'm not going to be willing toscrap completely and eat that
contract and do something elseif my business or my customers
(29:02):
need it.
And that's how we've.
We've structured the way we dobusiness.
Maia Bittner (29:08):
I like that.
I think also when dealing with,like money, banking, all this
important stuff, we've talkedabout trust a lot, that trust is
really important and oftenpeople trust things that are
really refined, you know, thatwork really well and that you
could take a naive perspectiveand say like, oh, it doesn't
matter, you know the way that'slooks or this tiny little
(29:28):
interaction, but I think all ofthose things add up and makes
your customers trust you, and sosometimes you do have to invest
in that little bit of polishbefore launching something new.
Corey LeBlanc (29:40):
Absolutely.
You know we have.
We have two vendors right nowthat I would say are part of the
top three major core providers.
When we signed the contractsthey were not part of those
companies.
They were acquired eitherduring implementation or after
implementation.
Those are the two products.
I'm trying to get rid of ASAP,because I have the most problems
(30:00):
supporting my customers with it.
It's not super easy to forkliftthose things and get them out
of there, but that's why we'redoing a lot more due diligence
now on looking at the roadmapand putting some very clear
things in the contracts to dothat Because, to your point, we
are built on trust, but ourcustomers trust us, not the
(30:22):
third parties we work with right.
So at the end of the day, itcomes down to compliance, same
all this other stuff.
We're responsible for theproduct, service and everything
that we do, and so when a thirdparty like that is an affecting
factor, you got to get rid ofthat 100%.
Maia Bittner (30:38):
Yeah, I mean, the buck stops with you.
I used to rant at people.
I worked at an e-commercecompany, you know, and our top
complaint, of course, was whenthings took too long to arrive
in the mail, and sometimespeople on our team would say,
well, like, that's not our fault, like that's the USPS.
And I was like, no, no, that isour fault.
Right, we're the only ones thatchose to work with the USPS.
(31:03):
We could send everythingovernight through FedEx, but we
don't, because our businessmodel doesn't support it and
some other.
Right, but that's on us.
Like we're the ones that arechoosing those vendors, we're
the only ones that have a say inhow that works and we need to
take 100% responsibility for theexperience that our customers
have with it.
So, as you can tell, I'mpassionate about this and I'm
heartened to hear that you sharethe same perspective.
Sam Maule (31:34):
So we need to come up with a sound, a noise, a gong
or something when we come upwith ideas for future shows,
because we've already come upwith two during this
conversation.
So Banking Deserts, Maia, I gotexcited when you said it.
Oh yeah, let's talk about toscale, right.
I'm not pointing fingers, butgo read about JP Morgan and
maybe an investment they did atChase in a tech.
But due diligence can go bothways, right.
It's due diligence with yourpartners.
(31:55):
You got to do due diligence onbanks too, right?
I mean, in this day and age,there's a show, Maia some of the
horror stories and lessonslearned around due diligence
when you're working withcompanies.
Maia Bittner (32:05):
Well, that's like, Corey, do you have any advice?
I mean you kind of hinted at.
You're like, okay, like nowwe've learned there's some
things we need to include in ourcontracts, there's some things
that we need you're going to dodifferently going forward.
Now, it's really hard to getthat stuff right from the start
because you don't know what youdon't know.
Do you have any advice forpeople as they like get started
on a new project right, how canthey structure contracts?
(32:27):
What type of stuff should theybe thinking about when, yeah,
you don't know what you don'tknow?
You don't know how it's allgoing to play out?
Corey LeBlanc (32:34):
Yeah, One keep contracts short, right, that's
pretty simple.
That's an easy one.
Everyone should already knowthat but we always like to try
to take the deal and we take thelonger ones, which invests our
companies into something wedon't know.
The other thing I necessitatewhen we're talking to anyone of
any kind of significant contractanything that's going to
actually go to my customerexperience or drive the way that
we deliver service to ourcustomers.
(32:55):
The first thing we do is we sitdown and we define a clear
objective for Locality Bank.
Here's the one thing we musthave, and this needs to be in
the contract that this will bereceived and in this way.
And then what we ask ourpartners to do is we ask them to
define one clear objective fortheir side that they want in the
(33:15):
contract as well, because wewant them to know we're going to
give much skin in the game ofdelivering something back to
them, as they are going to bedelivering back to us, and
that's been super helpful in usmaking sure that when we get
into the projects, we don'tforget what's important.
We have to be able to definethose things, so that's super
helpful.
(33:36):
The other thing is is one Idon't care how small the
contract or how easy you thinkthis is.
I don't care if you've signed50 billion addendums with the
same vendor.
Do you think that this is goingto be fine?
Have legal review, Make surethat you're protected whenever
the mess hits the fan right, sothat you can back out or get out
of those things.
That's super important becauseit reduced the cost of
(33:59):
forklifting something afterthree years and you never really
wanted it since day one, right?
And that saves the cost for theother things that you need to
be able to do.
So when we start to have budgetconversations, it makes it
entirely different.
Maia Bittner (34:14):
Yeah, yeah, it puts you in a better position to
negotiate.
Corey LeBlanc (34:16):
I don't know if there's golden nuggets, but it's
really simple, right, butthat's what's been working for
us.
Maia Bittner (34:23):
Well, and I think people get carried away Like
it's easy to, or you know, yousee the discounts on the 10 year
contract and it's like oh yeahlet's do that.
We're getting such a good dealand you end up putting yourself
in a bad position.
Sam Maule (34:36):
The thing that I love , Corey, is you know you talk
about biting off more than youcan chew or just going all in
the thing with having acommunity bank.
Um, you can't hide.
They know where you're at allright, they know where that.
I think you have one branch.
They, they know where you're at.
You're gonna you're gonna comeface to face with your customers
.
Corey LeBlanc (34:52):
So we know these people for the most part, too,
like a lot of these, thesepeople who are customers of our,
there are neighbors, you know.
These are people who haveinvested in the bank or invested
in some of the companies thathave invested in our bank or
that we've given loans to, andso these are people we're going
to see, you know, at therestaurant.
We're going to see these peopledowntown, we're going to
(35:15):
interact with them.
So, yeah, we better put ourbest foot forward.
Maia Bittner (35:19):
All I'm hearing is like data points for
underwriting advantages.
I'm like Ooh like.
Well, what restaurant do yousee them at, and where downtown?
Corey LeBlanc (35:28):
And what time of day are they down?
Maia Bittner (35:29):
That's what I'm thinking.
Corey LeBlanc (35:30):
Oh, absolutely, I'm with you, 100% there.
That's the thing that I'mtrying to figure out how do we
continue to replicate?
I love the in-person thing, buthow do?
We take and we create the rightinformation to be very
strategic, very direct andaccurate, with the next thing
that we're going to do so.
Sam Maule (35:48):
folks, for our listeners, here you go.
You want to learn how to builda bank.
Two people to talk to, Coreyand Maia, and we're going to
make sure you get theirinformation.
Corey, where's the best placefor people one to find out about
Locality Bank and then to reachout to you?
Corey LeBlanc (36:03):
Yeah, you can go to localitybankcom.
Uh, we're actually gettinggoing through a web refresh
already just to make sure thatwe're highlighting more
customers and providing moretools for people to use.
Uh, or hit us up on LinkedIn.
Uh, really busy there.
Uh, and, fun note, my daughteris the one who runs our, our
social media platform.
So if you see anything on mysocial media platform, that's my
(36:23):
daughter, charisma, charismaand, by the way, probably of my
wife's recommendations, who'sreally good at marketing as well
.
We also have a great marketingdirector, ryan, who helps us
drive these things home, but hison LinkedIn, and you can always
message me on Twitter, at InkedBanker, or on LinkedIn.
Just Corey LeBlanc, look forLocality Bank.
(36:43):
And I actually look like abanker in that picture, unlike
the way I look most days.
Sam Maule (36:47):
And if we don't give a shout out to his wife, Cassie,
I will never hear the end of it.
So also Cassie LeBlanc atNimbus, who is one of the best
marketers I know.
You're welcome, Cassie.
Maia, how about you?
How to build a bank?
Maia Bittner (37:01):
I'm, I'm no, no, no, no, please do.
Please do not talk to me aboutbuilding a bank.
This is not an interest of mine.
It is not a specialty.
I do not want any DMs invitingme to build a bank with people,
just to put that out there.
No cold LinkedIn messages.
But if you want to chat aboutanything else, I'm on Twitter at
maiab.
Sam Maule (37:23):
And if you want to talk about anything else, please
don't talk to me about buildinga bank, Sam.
Find me on LinkedIn.
Find me on Twitter.
Hey everybody, Thanks forlistening.
This is way too much fun.
It's always good when we knowthat we're learning something.
So, hey, join us next week.
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Welcome to Bookmarked by Reese’s Book Club — the podcast where great stories, bold women, and irresistible conversations collide! Hosted by award-winning journalist Danielle Robay, each week new episodes balance thoughtful literary insight with the fervor of buzzy book trends, pop culture and more. Bookmarked brings together celebrities, tastemakers, influencers and authors from Reese's Book Club and beyond to share stories that transcend the page. Pull up a chair. You’re not just listening — you’re part of the conversation.
Dateline NBC
Current and classic episodes, featuring compelling true-crime mysteries, powerful documentaries and in-depth investigations. Follow now to get the latest episodes of Dateline NBC completely free, or subscribe to Dateline Premium for ad-free listening and exclusive bonus content: DatelinePremium.com
On Purpose with Jay Shetty
I’m Jay Shetty host of On Purpose the worlds #1 Mental Health podcast and I’m so grateful you found us. I started this podcast 5 years ago to invite you into conversations and workshops that are designed to help make you happier, healthier and more healed. I believe that when you (yes you) feel seen, heard and understood you’re able to deal with relationship struggles, work challenges and life’s ups and downs with more ease and grace. I interview experts, celebrities, thought leaders and athletes so that we can grow our mindset, build better habits and uncover a side of them we’ve never seen before. New episodes every Monday and Friday. Your support means the world to me and I don’t take it for granted — click the follow button and leave a review to help us spread the love with On Purpose. I can’t wait for you to listen to your first or 500th episode!