Oscar Perry Abello, for Next City.
Climate First Bank hit $1.8 billion in assets by financing clean energy projects one relationship at a time.
Now it wants to teach other community banks how to do the same.
America’s fastest-growing new bank doesn’t specialize in AI or crypto-currency or some exotic investment strategy with little real world value. It specializes in environmental sustainability.
Based in St. Petersburg, Florida, Climate First Bank was chartered in 2021 with a mission to finance environmental sustainability. Five years later, it’s already pushing $1.8 billion in assets. The bank — which describes itself as the nation’s first climate-focused bank — nearly doubled in size over the course of 2025 alone.
While Climate First is financing solar arrays of all sizes, including community solar and utility-scale battery storage systems, its rapid growth is powered mainly by the oldest force in banking: relationships.
The bank raised its startup capital through its founder’s existing network. It hired people who had prior experience lending in its initial target markets in Central Florida. It invested time and resources getting to know the people behind the solar industry and how their projects work, from the simplest residential solar deals to the most complex utility-scale projects. It built technology to support relationship building instead of trying to replace it.
All that starts to snowball. People talk. When one solar project developer has a good experience with a bank, they tell every other solar developer they know. Business cards and emails start flying around. Director of Project Finance Hana Freymiller can’t even keep up.
“I wish there were five of me that could be doing this work,” Freymiller says. “There’s just a tremendous need and also a tremendous opportunity right now in this country to do these types of projects.”
From its residential solar platform to its energy project financing, Climate First Bank’s growth has put it ahead of schedule to meet its goal of reaching $10 billion in assets over its first 10 years.
Much of its success has been in places with green banks — public or quasi-public institutions that provide loan guarantees or use other tools to make green lending less risky for private lenders. “Blue cities in red states happen to be a very interesting growth base for us,” too, says Chief Sustainability Officer Chris Castro.
Now, it’s looking for partners to help it scale up its work beyond the reach of any one institution.
If at first you succeed
It isn’t the first rodeo for Climate First Bank founder Ken LaRoe, who currently serves as chair of the bank’s holding company. It’s his third.
Born and raised in Central Florida, LaRoe first started working in the Florida banking industry back in 1982. By 1999, he’d seen dozens of other community banks acquired by larger banks. It was part of a nationwide shift.
Over the course of the 1980s and early 1990s, state and federal restrictions on banks doing business across state lines gradually went away. Chartering and selling community banks became a money-making model for established community banking executives and their friends. You could charter a new bank, pick off bigger banks’ disgruntled customers, and after five or 10 years of building up a new bank’s balance sheet you could sell the bank and make a profit.
In the late ‘90s, Florida banking regulators only required a minimum of $5 million in startup capital to charter a new bank. LaRoe spotted an opportunity: After raising the necessary startup capital from a few hundred people in his network, he chartered Florida Choice Bank in 1999. It grew to more than $400 million in assets by 2006, when the bank’s shareholders ultimately decided to sell it to a regional bank based in Alabama. Two years later, that regional bank was acquired by Royal Bank of Canada, also known as RBC, Canada’s largest bank and one of the 50 largest banks in the world.
With his share of the proceeds from the sale of Florida Choice Bank, LaRoe set out to kick off his early retirement with an RV tour around the country with his wife. Along the way, LaRoe started reading about the story of Patagonia founder Yvon Chouinard and the philosophy that business should be about more than creating profits for shareholders.
Calling on many of the same shareholders who had backed his first bank, LaRoe opened a second institution, First Green Bank, in 2009. This time the bank had a mission to support environmental sustainability. By 2018, First Green Bank had grown to $800 million in assets.
Then its shareholders sold it to another, much larger Florida-based bank. The buyer had courted LaRoe on the idea that he could expand First Green Bank’s green lending work to its much larger branch network across Florida. LaRoe planned to stick around as an internal green lending expert at the larger bank. But it quickly became clear after the merger that was not going to be the case, according to LaRoe. So he quit — and embarked on another cross-country RV trip with his wife.
He came back to Central Florida resolved to charter yet another bank. Starting with the same networks of investors he had built after chartering and selling two other banks, LaRoe raised $44 million in startup capital for Climate First Bank. He hired back some of the staff that had helped him build his previous two banks.
But this time, he told his investors the plan would be to keep the bank independent and focused on its mission. He recruited founding board members devoted to that mission, not just making money — including Chris Castro, who had previously launched an urban farming enterprise and served as director of sustainability and resilience for the City of Orlando.
“The board makeup is the reason why we’re in this current situation,” Castro says. “In order for us to actually create this long-term sustainable institution, we needed to have a board of integrity.”
Building on trust
While Climate First Bank started out with a mission to finance environmental sustainability, it doesn’t exclusively do green lending. Most of its lending has been typical lending for a community bank in 2026: a lot of commercial real estate, a lot of working capital and term loans for businesses of all sizes, and a busy but manageable portfolio of construction and project financing.
These are lending categories that require bank board members and loan committee members with deep knowledge of local markets, local developers, and local business owners — something that larger banks generally don’t have at their board or loan committee level.
That’s why, even though community banks like Climate First represent just 11% of assets among federally insured banks, they represent 31% of commercial real estate mortgages, 32% of small business loans, and 33% of construction loans from banks. Meanwhile, the largest four banks combined (Chase, Bank of America, Wells Fargo, and Citi) represent 42% of assets among federally insured banks, but account for just 11% of commercial real estate mortgages, 18% of small business loans, and 11% of all construction loans among banks.
Among those trusted networks of clients — particularly developers and small business owners — Climate First Bank eventually generated investments in environmental sustainability. It happened largely organically, over the course of conversations with clients. A restaurant owner comes in wanting a loan to buy the building they’ve been renting — how about adding solar panels to the roof and lowering their monthly electric bill? Or installing car chargers in the parking lot that generate a little bit of extra revenue? Maybe the restaurant owner might also want solar installed at their home?
Those early connections also helped the bank better understand the underlying solar industry. Climate First’s healthy residential mortgage portfolio provided an entrée into the residential solar market.
For residential solar, deals typically come through solar company sales reps knocking on individual homeowners’ doors. The sales rep comes in with a tape measure and a laptop, takes some measurements, asks some questions, inputs data into a platform on the laptop, and the platform spits out a whole offer for the homeowner showing how much the installation will allegedly reduce their electric bills, the tax credit or other subsidy amounts that might be available to help pay for the installation, and ultimately how much it will cost the homeowner.
But many of those sales reps present offers with the cost of the installation marked up by 30% or more in dealer fees — funds that come out of homeowners’ pockets and into the hands of investors, according to the Consumer Financial Protection Bureau.
After understanding how the deals get made, Climate First Bank created an affiliated financial technology platform called OneEthos that solar installation sales reps can take into those meetings and generate offers that are more affordable because they don’t have any dealer fees. The bank also made the platform available to solar installation sales reps across the country.
More than 5,000 solar “consultants” are now actively using OneEthos across the country, according to the bank — resulting in Climate First making $275 million in residential solar loans across 44 states last year. Climate First is now the second-largest residential solar financing provider across the country, according to EnergySage.
Climate First also partners with local entities, like Maryland’s Montgomery County Green Bank, to make residential solar installations using OneEthos affordable to low- and moderate-income households.
Credit culture
At any given moment, Freymiller has about a dozen or so “messy middle” projects on her plate as director of energy project finance. As soon as one wraps up, there’s always at least one more ready to get rolling. A 25-megawatt solar array — enough to power up to 10,000 average homes — or maybe a five-megawatt battery project.
These projects fall in between less complex residential or commercial solar installation loans and the massive $100 million-plus projects that can attract financing from much larger institutions. While Freymiller’s deals tend to hover in the $15-$20 million range, they’re often just as complex as much larger deals. Each one may require layers of federal, state, or local subsidies plus multiple financing partners to make the deal work.
Battery storage is one reason her “messy middle” deals are so valuable — and so hard to close. Throughout the course of a day, the cost of energy changes minute by minute. Utilities have to make sure they are always buying enough power to meet demand. At peak times on peak days of the year — like hot summer afternoons with air conditioners blasting — energy prices spike as utilities start making bids to suppliers in their markets.
With at least some battery storage, utilities can buy extra power at times when power usage (and therefore prices) are lowest, like late at night. Then they can release that power into their grids in the afternoon — helping keep rates down for every home or business connected to that grid.
While battery storage may make sense on paper for any utility, actually building and financing these projects can get hairy. Each deal comes with different state regulatory environments and different legal structures for ownership among utilities as well as suppliers. The cashflow for each battery or solar farm project can look very different, even if the underlying technology is the same.
And because these are largely new kinds of projects, there aren’t many comparable transactions to help demonstrate the likelihood that the battery storage project will deliver. Every deal takes a close examination. Speed also matters, as suppliers and contractors can raise their prices in between giving an estimate and the work taking place.
But Freymiller isn’t alone in evaluating and structuring all her deals. Like all construction lenders at every community bank, her deals need approval from the bank’s loan committee, who work with her every step of the way. The bank’s loan committee members — who include Castro — are continually building their own expertise around all the various ways a deal can go wrong as well as all the policies, incentives, subsidies and other formal or informal mechanisms that can help a deal go right.
“We have a really strong credit culture, a really strong competency at all levels of the bank who understand what energy project finance is and does, which enables me to really work out problems and bring all of the tools of finance to a developer doing a project in a community,” Freymiller says.
Every deal looks a little bit different, but that’s OK. Multiple people across the bank have to sign off for a deal to go through. That’s how community banks ensure safe and sound lending when pure numbers or past performance aren’t enough to assess a deal.
And, like many community banks, Climate First’s loan committee meets weekly to evaluate and approve deals so that projects don’t stall out after waiting around too long for approval. On any given Tuesday afternoon, the bank’s loan committee is reviewing anywhere from five to 12 projects, sometimes more.
“And then it’s really awesome to watch, to monitor the project, to see it get on the grid. And then, often I would say, after a deal you get another one from the same really strong developer.”
Open sourcing
Despite the bank’s rapid growth, there’s only so far that one institution can reach, especially when it depends on a loan committee meeting weekly to evaluate projects. That’s why Climate First also sees it as an imperative to get other community banks in other places involved.
The bank is now recruiting other lenders to utilize its OneEthos platform to generate residential solar loans they can originate through their own trusted networks of solar installation sales reps.
Meanwhile, Freymiller is on the lookout for partners to work with her on the pipeline of deals coming her way. Those deals are often coming from states with green banks and also favorable regulatory environments, such as Virginia, Michigan, and Connecticut.
As each solar developer Freymiller works with for the first time comes back for repeat deals, they eventually approach the borrowing limit every bank has for each of its clients. There can also be moments where Freymiller might be at capacity until some of her current active projects are completed and repay their construction loans (to mitigate risk, each bank only allows a certain percentage of its portfolio to be in active construction loans at any given moment). Freymiller needs relationships with other community banks or regional banks who are willing to take on the additional demand she’s seeing.
“We need partnerships to do this work,” Freymiller says. “I cannot originate everything I want to do even with a single strong developer. I’m capped at a certain concentration level. Those partners also need to have an understanding of the deals to even do a participation or to do a co-lending.”
Freymiller and her colleagues on the bank’s loan committee say they are more than willing to help teach other local or regional lenders the ins and outs of these messy middle deals.
The first thing to understand? Each deal is unique, and that’s not going to change at the speed that communities — not to mention the planet — need the deals done. What they need is more institutions who are comfortable with that.
“People need to like more snowflakes,” Freymiller says. “But every snowflake has the same fundamental chemical structure supporting the differences that come out in its beautiful uniqueness.”
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