Mercury received a conditional nod for deposit insurance from the Federal Deposit Insurance Corp. on Tuesday, more than 260 days after submitting its application. The proposed Mercury Bank N.A., headquartered in Salt Lake City, must provide initial paid-in capital of $300 million to open, submit background information for each of its proposed senior executive officers not previously submitted with its application, obtain prior written approval for proposed changes to management, ownership or control, and submit a complete shareholder list for its parent company.
The fintech, founded by Immad Akhund in 2017, has framed the move as the culmination of a long-held ambition. "Going from a fintech that partners with banks to a tech company with an actual bank has been the vision from the beginning," Akhund wrote in a LinkedIn post Wednesday. Mercury announced its charter application in December, appointing Jon Auxier—an alum of SoFi, Green Dot and Goldman Sachs—as CEO of the proposed bank. The Office of the Comptroller of the Currency gave Mercury conditional charter approval in April, but the Federal Reserve still needs to approve the firm's bank holding company application.
The approval arrives amid a broader uptick in de novo bank formation. The OCC received 18 de novo applications last year and 22 more by August of this year, compared with 15 total over the previous nine years. Comptroller of the Currency Jonathan Gould has said new bank formation is "a sign of the health of the banking system," and FDIC Chair Travis Hill has also spoken in favor of de novo formation. Mercury Bank is the second bank in two weeks to get the FDIC's nod, following VALT Bank's conditional approval on Aug. 25.
Mercury Bank is projected to open next year, but Akhund cautioned that "there's still work between here and opening Mercury Bank's virtual doors." The remaining Federal Reserve approval is a key outstanding step, and the conditional nature of the FDIC approval means the bank must satisfy the listed capital, background, and governance requirements before it can begin operating.