Evolve Bank & Trust

Overview

Evolve Bank & Trust is a West Memphis, Arkansas-chartered community bank that became nationally known as a banking-as-a-service partner bank for fintech apps — and then became the central bank in the 2024 Synapse collapse, a Federal Reserve enforcement action, and a customer-funds freeze affecting more than 100,000 people (Federal Reserve; PYMNTS).

In the partner-bank model, fintech apps are not banks themselves: they sit on top of a licensed sponsor bank that actually holds the deposits, issues the cards, and carries the regulatory obligations. Evolve played that role for hundreds of fintechs — until the middleware firm keeping track of whose money was whose collapsed, and the records no longer matched the money (Arkansas Business).

A 1925 farm bank goes national on fintech

Evolve began in 1925 in Parkin, Arkansas, as First State Bank, a community bank serving local farming communities in Cross County (Arkansas Business). It stayed small for eighty years. In 2005, a group led by Chairman Scot Lenoir bought it, renamed it Evolve Bank & Trust, and moved its banking charter to West Memphis, putting its corporate headquarters across the Mississippi (Arkansas Business).

The reinvention was banking-as-a-service. By 2022, Evolve said it had offered the service for approximately five years and powered more than 400 fintech partners through an API technology stack covering ACH transfers, remote deposit capture, domestic and international wires, and virtual accounts (Arkansas Business). The growth was dramatic: total assets essentially doubled in eighteen months, from $691 million at the end of 2020 to $1.3 billion at June 30, 2022, while deposits grew more than 135% from $425 million in June 2021 to $1.06 billion a year later — growth the bank’s CEO attributed in some way to technology offerings or partnerships (Arkansas Business). Its trust division grew alongside, reaching more than $12 billion in trust assets, the largest total in Arkansas (Arkansas Business).

Synapse, the Fed order, and the rebuild

The model broke in 2024. Synapse Financial Technologies, the middleware aggregator that sat between fintech apps and partner banks including Evolve, filed for bankruptcy in April 2024 (Arkansas Business). Since May 2024, more than 100,000 customers of fintech apps including Yotta, Juno, and Copper had been frozen out of their accounts (PYMNTS). The bankruptcy trustee reported that most funds in demand-deposit accounts had been dispersed, but returning funds in more complex “for benefit of” accounts was harder because of discrepancies in Synapse’s records and a potential shortfall of $65 million to $96 million (PYMNTS).

On June 14, 2024, the Federal Reserve Board issued an enforcement action against Evolve Bancorp and Evolve Bank & Trust for deficiencies in anti-money-laundering, risk-management, and consumer-compliance programs, stating that 2023 examinations had found the bank engaged in unsafe and unsound practices by failing to have an effective risk-management framework for its fintech partnerships (Federal Reserve). The 23-page cease-and-desist order, issued jointly with the Arkansas State Bank Department, required the board to submit plans within 90 days to strengthen oversight, enhance risk management of the Open Banking Division, improve lending, capital, liquidity, and IT controls, and hire an independent third party to review the fintech partner program for consumer-law compliance (Banking Dive). The Fed stressed the action was independent of Synapse’s bankruptcy proceedings (Federal Reserve). Later in 2024 the bank also suffered a data breach in which a known cybercriminal organization stole customer data and posted it on the dark web (Arkansas Business).

Evolve has not backed away from banking-as-a-service. But the rebuild is expensive: the bank lost $8.76 million in the first half of 2025, its assets fell about 20% from $1.81 billion to $1.46 billion, staff dropped from 500 to 381, and it closed 16 loan and mortgage offices (Arkansas Business). Bob Hartheimer, a former FDIC regulator, took over as CEO in the summer of 2025 with an “Evolve 2.0” plan to build what he called the most technology-forward banking-as-a-service business possible — but he was fired a day after being arrested on federal criminal charges, which Arkansas Business reported its sources said were unrelated to his work at the bank (Arkansas Business).

What this profile does not claim

• Whether the bank’s headquarters is West Memphis or Memphis is described differently across sources: the Federal Reserve release places both the bank and its holding company in West Memphis, while Arkansas Business (2025) says the bank is chartered in West Memphis and headquartered in Memphis. This profile uses the charter city as the location and flags the discrepancy rather than resolving it.
• Attribution of the $65–96 million shortfall remains disputed in litigation over whether Synapse’s records were accurate; this profile does not assign blame.
• Ultimate per-customer recovery amounts, and the identity of the CEO after Hartheimer’s dismissal, were not verified in this pass and are not claimed.
• The breach actor is described only as Arkansas Business described it — a “known cybercriminal organization” — since no fully-read source verified a name.
• No relationship between Evolve and Alloy is claimed: the Finovate Alloy article read in this pass does not name Evolve.