Lex Ford, President, Climate First Bank
Invest: sat down with Lex Ford, president of Climate First Bank, to discuss how the institution sets itself apart with a mission centered around sustainability with heightened attention on how to better care for the planet through banking. “People are the reason we need to worry about climate and climate is the reason we need to worry about people,” he says.
What is the impact of Climate First Bank in the Jacksonville market?
Climate First Bank is the world’s first FDIC-insured bank founded to combat the climate crisis. Sustainability is ingrained into our DNA, exemplified by the bank becoming a Certified B Corp and being a member of 1% for the Planet – Climate First Bank is the only bank in the world to be part of both networks. Through our membership with 1% for the Planet, we donate towards environmental causes year on year.
At Climate First Bank, we are committed to building and enhancing communities that put environmental and social wellbeing first. One of the key ways we have influenced positive change is through our solar lending program which is reflective of our mission to provide access to sustainable and affordable energy. The bank has originated over $100 million in solar loans to individuals and households over the last two years, bringing solar to over 2,000 homes in Florida. And those numbers continue to increase.
Sustainability is layered throughout our organization, and we encourage our employees to educate themselves, volunteer, and make their lives more sustainable through our Mission Specialist program. Employees receive points and permanent pay rises for achieving different levels of the program, while also advancing their own personal journey towards becoming more sustainable.
Our mentality is that there is inherent risk in not paying attention to the impact of banking on the planet. With issues like flooding and hurricanes in Florida increasing, we believe the bank is inherently safer because of our fundamental commitment to the environment and social causes.
How does the bank balance its goals of expansion with a mission dedicated to sustainability?
Our Winter Park branch is certified LEED platinum, specially designed for peak energy efficiency and reduced emissions. It is our goal that all our branches will become LEED certified, and that we’ll make sustainable retrofitting financially accessible for all. When we started, we envisaged that we would focus on developing our digital offering rather than brick and mortar locations, but our vision shifted to include more locations in key markets, like Jacksonville and Tampa. Climate First Bank is the fastest growing bank in the nation since we started in 2021 and our mission is a big part of that growth, having attracted $44 million in capital to start the bank and another $35 million in the midst of the banking crisis over the past year to accelerate our growth.
Banks are built on loans and lending, meaning that building a bank uses an abundance of carbon output to build and renovate. We mitigate this by purchasing carbon offsets and producing as many solar loans as possible. From a social standpoint, people are the reason we need to worry about climate and climate is the reason we need to worry about people. In the last year, we’ve done a lot of employee stock option plan lending, meaning employees are buying the company from the owner, and that’s made a big impact.
What is Climate First’s philosophy on risk management?
Regulators figured out quickly that failed banks have a different operating model than community banks. Failed banks are heavily focused on investments, treasuries, securities, and bonds at fixed low rates for the long term. These failed banks are heavily dependent on liquidity from technology, so as tech companies were burning their deposits, money started leaving the banks. Silicon Valley banks were about 80% uninsured deposits while a community bank like Climate First has under 25% uninsured deposits. From analyzing failed banks, we saw that liquidity is essential and deemed it important for a bank to remain liquid and fight off attrition. After the Silicon Valley crisis, we reached out to customers with balances over $200,000 to assure them their money is safe at Climate First Bank and could put their balance into a despot insurance program. This community outreach heavily influenced our growth as we were recognized as a bank that cares for their clients.
What’s next for Climate First Bank?
Our expansions into Jacksonville and Tampa remain on our radar. We project to be at around $800 million by the end of 2024 and crossing into $1 billion over the following year. Our goal is to become a public company by 2026, allowing us to accelerate our growth and start looking into acquisitions. All the while, we want to continue to make an impact in our communities and for the planet.
We have a fintech sister company called OneEthos that is focused on developing climate technology. Right now, that company is why we’re producing solar in the way we are with middleware built to help navigate the process and decision making. The EPA’s greenhouse reduction fund awards a total $20 billion sent out to CDFIs with another $6 billion awarded to capital partners and will drive lending to low- and moderate-income communities, which tend to get ignored by the solar industry.
Why should customers and small businesses choose community banks?
It’s important for companies and individuals in the community to look at how they’re investing their income and decide if the bank they’re working with aligns with their personal values. When you look at the number of small businesses that work with big banks and the fines those banks have amassed for practices that take advantage of consumers, it makes the point for banking with community banks. We are able to invest our customers’ dollars in the communities they live and work in.
