Based in Roswell, Georgia, First Century has business lines focused on payments tax product lending, sponsored card programs and homeowners association services, all of which First Internet Chairman and CEO David Becker says represents an important opportunity.
“First, it aligns with our strategy of operating unique and scalable businesses with nationwide platforms,” Becker said in a news release.
“Second, it allows us to continue to diversify and grow our revenue streams in a capital efficient manner. And, importantly, First Century’s success in the HOA business grants us access to a very attractive deposit base, with opportunity to expand,” he said.
First Century Chairman and CEO William Blanton called the acquisition — expected to become final in the first quarter of next year — a “natural step” in his bank’s evolution.
“We believe First Internet’s larger balance sheet, digital banking expertise and broader array of products will enhance our existing client relationships and enable us to drive long-term growth for the combined organization,” he said.
The agreement will see the Indiana-based First Internet acquire all outstanding shares of First Century common stock for $80 million in cash, funding the transaction with available on-balance sheet cash. As of the end of September, First Internet had $408 million in total assets, $330 million in deposits and loans of $32 million.
When the acquisition is concluded, First Century will merge into First Internet, maintaining operations of its business lines at its current locations: a branch in Commerce, Georgia, to support consumer and small business banking, and another in Hilton Head Island, South Carolina.
A bulk of First Century’s employees will join First Internet, including key members of the First Century senior management team.
Read more: Banking M&A Activity On a Hot Streak Again
The acquisition comes at a time when regional banks are engaged in a flurry of merger and acquisitions activity.
As PYMNTS noted in September, the trend slowed to a trickle last year during the pandemic lockdowns, from 160 mergers in 2019 to 44 in 2020. By the second quarter of 2021, however, the reported number of mergers ticked back up 53 for the year.