Ohio's first majority women-owned bank is expected to open in September, making Columbus, Ohio, the metropolitan statistical area with the most de novo bank openings in the country since 2019.

Despite regulatory scrutiny on de novo banks and recent historic lows for new bank openings, Fortuna Bank's organizing team was able to gain conditional approval from state and federal entities and close its $20.7 million capital raise July 30. Fortuna's team is comprised of Columbus de novo veterans, easing investor concerns due to the city's de novo history — one of multiple profitable new banks providing attractive returns for shareholders.

A string of six de novo openings in Columbus from 2004 to 2007, proved the city's business environment was friendly to new banks, said Ilaria Rawlins, Fortuna's inaugural CEO, in an interview. All the banks that opened in that period were acquired by larger institutions, with some generating internal rates of returns between 10% and 14%, Rawlins said.

After a de novo drought from 2008 to 2018, a second wave of de novo banks has begun to form in the city. Ohio State Bank opened in 2019, followed by Riverside Bank of Dublin and First Bank of Central Ohio in 2021 and Adelphi Bank in 2023 as the first Black-owned bank in Ohio.

"Most of the de novos that have popped back up in Columbus are groups of former bank shareholders who said, 'Hey, we've made money before, let's do it again,'" Rawlins said.

The Columbus market's population stood at about 2.2 million in 2024, up 15.2% from 2010, according to the data firm Claritas, which projects another 3.5% growth by 2029.

Building Fortuna

Fortuna was seeking investment during a time when many investors had turned away from investing in de novos and favored acquiring preexisting banks, due to the complicated and sometimes unprofitable process of starting a bank, said Charles Crowley, a managing director for Janney Montgomery Scott who has advised on de novo sales in Columbus. Convincing investors to become a shareholder in a de novo is more difficult in 2024 than it was in 2019, Crowley said.

Jeffrey Meyer one of Fortuna's founders, was part of a team that founded Bexley, Ohio-based First Bexley Bank in 2006. That bank was acquired by First Financial Bank in 2014, and Meyers was involved in the launch of Ohio State Bank as an initial shareholder. Meyer later started a title company with partners including Lisa Berger, an attorney and entrepreneur, and together with Berger, decided to start a women-owned bank, with at least 51% female shareholders, to differentiate the institution from other area de novos and provide support to women entrepreneurs who were often sidelined at traditional banks.

Rawlins, who started with de novo banks as chief retail officer at First Bexley Bank, said Fortuna's mission helped attract investors to the project. Still, while Fortuna executives expected to raise the funds in about two months, the process ended up taking more than 10 months.

Fortuna's team required a lower minimum investment amount, allowing shareholders to contribute a minimum of $10,000 instead of the standard $50,000 to $100,000, Rawlins said. While the change contributed to the elongated fund-raising period, it created easier access for female investors who may not have participated in private equity opportunities before, Rawlins said.

Fortuna now has 340 shareholders, about 75% of whom are women. About 30% of the shareholders participated at the $10,000 minimum investment. Approximately 85% of shareholders are from Columbus, reflecting a shared vested interest among the local business community in feeding the city's economic development, Rawlins said.

Sticking the landing

Now that the bank has gained both state and federal approvals and closed its capital raise, it plans to open its doors at the end of September, Meyer said.

Despite a nail-biting first year, Rawlins and Meyer said it is a fortuitous time to start a bank because interest rates are high: The bank can lock in loans at current rates rather than being stuck with three- to five-year-old loans at low rates, Meyer said.

Fortuna expects to reach $94.2 million in assets after its first year in business and $155.3 million after three years, according to the bank's investor presentation. Bank executives hope to turn a profit of $874,000 after the third year.

Fortuna hopes to obtain low-cost funding through a majority certificate of deposit and a non-interest-bearing deposit base, according to the presentation. The bank expects to focus on commercial loans, with 42% of its loan composition in commercial real estate and 20% in commercial and industrial, according to its third-year portfolio mix forecast.