Florida Banking June/July 2025

Leading with Purpose: Costello Steps Into FBA Chairmanship

A s the newly appointed Chair of the Florida Bankers Association, Keith Costello brings a unique blend of entrepreneurial spirit and community-driven leadership to the role. As Chairman, President & CEO of Fort Lauderdale based Locality Bank, Costello has been a vocal advocate for innovation in community banking, championing digital transformation while staying rooted in local values. In this candid Q&A, he shares his vision for the FBA, insights on the future of banking and what drives his passion for serving Florida’s financial institutions. Q: We’re all so excited about your year as FBA Chair. Can you describe your FBA involvement, how your volunteer efforts began and how your path developed over the years leading to this role? A: I got involved with the FBA when I started the first de novo bank I was part of, which was in 2008 – an incredibly difficult time to raise money and launch a bank. Alex Sanchez reached out and invited me on a Washington, D.C. trip, even though we hadn’t opened the bank yet. We were still in the capital-raising phase and working on applications. That trip made a huge impact on me. I’ll never forget meeting people like John McCain and other legendary legislators. It was my first exposure to that kind of advocacy, and it floored me. I came back energized and inspired, and from that point on, I wanted to get more involved. During that time, we were dealing with Dodd-Frank and a lot of regulatory challenges. The atmosphere was tough – people were down on banks, and we often got on those buses to Capitol Hill feeling discouraged. But Alex would always try to lift us up, and we kept going back, trip after trip. Over time, things started to shift. That experience taught me how powerful perseverance and advocacy can be. Fast forward to now, our most recent trip to D.C. was probably the best we’ve ever had. Many of the people we've built relationships with over the years are now in positions of influence, and we’re starting to see real change. That whole evolution – from 2008 to 2025 – has opened my eyes to the power of advocacy and the incredible value of the FBA. Q: That’s an incredible journey. Looking ahead, what are your priorities as FBA Chair in the coming year? And what banking industry issues are you most passionate about? A: A few things are top of mind. This is actually the second de novo bank I’ve been involved with, and I

think the issue of de novo bank formation is critical. We’re seeing a lot of consolidation in the industry, and the creation of new banks has really slowed down, especially since Dodd-Frank. The supply just hasn’t kept pace. That’s why I’m so excited about Mary Usategui opening her bank in Miami – great news, but it also highlights how rare these openings have become. I want to do whatever I can to help foster an environment where more banks can be created. That’s something I have experience with, and I believe it’s important for the future of the industry. Beyond that, my passion has always been community banking. While the FBA represents banks of all sizes, my background has always been in community banks. So my focus will be on how we can make the environment more supportive and favorable for them. That includes asking the question: how do we create a regulatory landscape that doesn’t disproportionately burden small banks? It's a very tough industry, especially for a small bank trying to compete with the largest institutions that have virtually unlimited resources. We need to look at ways to ensure community banks don’t become obsolete as these massive banks grow. There should always be a place for that entrepreneurial, locally driven bank serving its unique market. I'm also really interested in the ongoing regulatory changes, including developments in open banking. Fintech and crypto are two areas I’ve been closely watching, especially stablecoins. I’ve had some great conversations with Kathy Kraninger on that front – her background is perfect for this topic. The stablecoin bills are moving forward, and we have to ask: how will this impact smaller banks? Big banks have the teams and resources to engage in these emerging areas, but will community banks be left behind again? Technology is another key interest of mine. When fintechs first emerged, it was largely because traditional banks weren’t leading the way in innovation. Fintechs saw that gap and disrupted the industry with more intuitive platforms. While larger banks have since built out strong tech infrastructures, there's no reason community and regional banks can’t offer the same high-quality digital experiences. The difference is, smaller banks can’t do it alone – they need to rely on partnerships. That means working with vendors, collaborating with fintechs, and being strategic about adopting tools that let them compete on a level playing field with larger institutions. These are just a few of the areas I’m passionate about. Ultimately, it’s about making sure the banking landscape remains diverse, innovative and inclusive of the smaller institutions that have such a vital role in their communities. Keith Costello, Continued on page 10

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