Newly formed bank on track for June 1 opening

With $27 million to its name already, Climate First Bank has vastly exceeded its initial $17 million investment target as it prepares for a June 1 grand opening at its recently acquired location in west St. Petersburg.

Founded by Florida banking industry veteran Ken LaRoe, Climate First Bank has adopted a values-based business model that emphasizes the “triple bottom line” — people, planet and prosperity. As a community bank, it will offer a full range of traditional banking options and products but also plans to feature dedicated loan options for customers who require funds for solar photovoltaic systems, energy retrofits and infrastructure to help combat the climate crisis, according to a news release.

Although LaRoe initially wanted to build or retrofit the bank’s headquarters in accordance with LEED, Green Globes and Energy Star sustainability standards, he decided to lease space at 5301 Central Ave., in a 2,800-square-foot office owned by Burkart Holdings Inc. The coronavirus pandemic’s effect on the way the business world views office space also played a role in his decision to hold off on a major construction project, LaRoe told the Catalyst.

Ken LaRoe, founder and CEO of Climate First Bank. Courtesy photo.

“These Covid teachings have made us realize you just don’t have to have real offices anywhere,” he said. “Our team is literally all over the state and they’re going to stay all over the state. In St. Pete, we will have, I think, eight [staff members] initially, but keep in mind, a lot of them are going to work out of the house and will just go into the office if they need to meet with somebody or something like that. But they’ll be based in the area.”

LaRoe plans to work at his home in Eustis most of the time but anticipates being in St. Pete at least a couple of times per week as Climate First Bank gets up and running. The institution recently cleared some major hurdles when it received conditional approval for deposit insurance from the FDCI and appointed Tampa Bay banking veterans Edmund O’Carroll and Brian Kruse to its executive leadership team.

The leadership team is mostly built out now, LaRoe said, but he might hire another lending specialist or two prior to opening. Back-of-house operation staffers, likewise, are mostly all in place. “We’ve got some phenomenal talent,” he said. “I just feel very blessed with the level of talent we’ve acquired.”

LaRoe, who also founded Florida Choice Bank and First Green Bank, said investors’ level of enthusiasm for Climate First Bank’s business model came as something of a surprise, given that his initial subscription target was just $15 million, which he then upped slightly to $17 million upon determining that, under the $15 million pro forma, the bank would struggle to turn a profit at the end of three years.

“I was originally going to [aim] for $25 million,” he said, “because I thought, ‘You know, I’ve raised $110 million in my career. Surely I can do $25 million from the third bank I’ve done.’ And then Covid hit and I got really nervous about it and kept dropping it back and doing the math and dropping it back and running pro formas. And we ended up at $15 million, but the performance barely works at 15.”

LaRoe said the bank’s founding shareholders are a mix of people who’ve funded his previous banks as well as a surprising number of institutional investors and family offices across the state and nation that are allocating their resources in accordance with the environmental, social and governance (ESG) movement.

“As the press started picking it up,” he said, “I was getting calls from all over the state saying, ‘I read this article. I saw this headline. You’re talking to my talk. It’s what I believe. I’m going to invest and not only am I going to invest, I want to move all my accounts over.’”

With $46 million already in its loan pipeline, Climate First Bank will hit the ground running on June 1, LaRoe said.

“We have an underwriter on board and she’s underwriting deals as we speak. The plan is, on the day we open, to close all the loans. We’ll have them all queued up, documents prepared and everything. And then a bunch of people are going to be opening deposit accounts. The first week, we’re kind of calling it our friends and family week where we’ll be trying to work the bugs out and all that stuff. But yeah, that’s the plan.”