De Novo Banks

What is a De Novo Bank?

A de novo bank is defined as a state member bank that has been in operation for five years or less. Commercial banks that have been in existence for five years or less and convert to Fed membership are also subject to the de novo bank application and supervision standards.

The Federal Reserve's Partnership for Progress website provides resources for the management of de novo banks and those considering a de novo bank charter.

Peer Data, 1995-2004

New data has been developed to allow us to better model the behavior of these still-young banks, especially those banks that grow quickly beyond $50 million in assets. The custom de novo peer methodology developed here includes banks of up to eight years of age with no size restriction. The following custom de novo peer data is based on year established.

2004 (PDF,81KB)
2003 (PDF,90KB)
2002 (PDF,90KB)
2001 (PDF,90KB)
2000 (PDF,96KB)
1999 (PDF,96KB)
1998 (PDF,94KB)
1997 (PDF,94KB)
1996 (PDF,97KB)
1995 (PDF,93KB)

The focus of this data is on new banks "built from the ground up" rather than banks created from existing branches or institutions. Consequently, two types of banks were excluded from the peer calculations.

• Banks formed by the purchase of a branch or the merger of existing branches.
• Banks formed by the merger of two or more institutions during the first year of their existence.

Custom Peer Data
Statistics on Depository Institutions allows you to sort custom peer data by factors including geography, asset size, and age of institution.

Uniform Bank Performance Report

The Uniform Bank Performance Report(UBPR) provides aggregate percentile rank statistics on de novo banks using the standard UBPR peer group # 025. This peer group includes banks that were established within the past three years and whose asset size is less than or equal to $50 million. The UBPR reference manuals are also available. The custom peer data based on year established now also use the same general format as the standard UBPR, so the reference manuals generally can serve both sets of data.

De Novo Forms

2083/A/B/C Membership (PDF) - De Novo Bank Membership

Y-3N BHC Formation (PDF) - Bank Holding Company Formation (Expedited - Riegle Notice)

Y-3 BHC Formation (PDF) - Bank Holding Company Formation (Non-Expedited)

Federal Reserve System Regulatory Guidelines

SR 91-17
Provides the current supervisory guidelines for the supervision of state member de novo banks.

Resources

De Novo Bank Exit (PDF,77KB)
Discusses weaknesses in the staying power of new banks and their sensitivity to adverse changes in the local market conditions.

Basics for Bank Directors (PDF,6MB)
A practical guide for bank directors to use in overseeing bank operations and judging the condition and performance of their banks.

Why Have De Novo Banks Proliferated? (PDF,77KB)
Chicago Fed Executive Update, June 2001, page 3

"New Banks: Why Enter When Others Exit?" (PDF,158KB)
Discusses why the number of de novo banks is bucking the consolidation trend in the banking sector and identifies some common characteristics of de novo banks.