Apr. 19--NEW HAVEN -- Economists are debating whether the nation's mammoth financial institutions really are solvent. Twenty-four banks have failed so far this year.

Yet, a group of community leaders has assessed the local socio-economic landscape and reached what might seem like an unlikely conclusion in the face of a recession and the collapse of the nation's financial sector: The Elm City needs a new bank.

But not just any bank.

If approved by the state Department of Banking, the First Community Bank of New Haven (FCB) would be only the second community development bank in the state, offering financial literacy services in distressed neighborhoods to help build wealth and providing traditional products to under-served borrowers, homeowners and entrepreneurs.

Nonprofit organizations with missions complementary to those of the bank also are potential customers.

Here's a statistic that grabbed William Placke, chief executive officer of the First Community Bank of New Haven organizing group: This area has $254.5 million in deposits, yet the market potential for deposits is an estimated $504.3 million, according to FCB's consulting firm, FinPro Inc. of New Jersey. "That money is going someplace. It's not going to the banks," Placke said. Consumers could be stashing their savings "under the mattress," he said, or with respect to the immigrant population, it could be going to their country of origin.

"I find that very interesting and very hopeful. We can capture a part of the wallet-share that's not being captured right now," Placke said.

The bank's primary market area will be the city of New Haven, with secondary markets in Hamden and West Haven. Its focus would be to offer low-cost deposit products, with a special emphasis on saving.

"There is a gap between products offered by traditional banks and what's needed," Placke said.

A three-member panel of state officials from the Department of Banking and offices of the Treasurer and Comptroller is considering whether to grant First Community Bank a temporary certificate of authority, which would be valid for 18 months.

During that time, the bank would have to demonstrate a capacity to meet its mission, submit additional documents on policies and procedures and show that it will conform to state and federal regulatory requirements. State Banking Commissioner Howard Pitkin has asked for a written policy on conflicts of interest.

Major contracts for technological and operations services must be put in place, as well as leasing arrangements for the headquarters location planned on Whalley Avenue near Sherman Avenue and at 258 Grand Ave., a site owned by real estate developer Angelo Reyes.

Reyes said the bank would have roughly 2,000 square feet available on the first floor and he is building a brick privacy wall at the rear of the site to prevent commercial activity from disturbing residential neighbors.