First Internet Bancorp, Fishers, Ind., is acquiring First Century Bancorp, Roswell, Ga., in an $80 million cash deal. The pending transaction was announced Tuesday and is expected to be completed by early next year.
Founded in 1999, First Internet Bank provides consumer and small business deposits, Small Business Administration financing, residential mortgage loans, consumer loans, specialty financing and other services. First Century Bancorp was founded in 2002. Considered a technology-driven bank holding company, its subsidiary, First Century Bank, N.A., provides customers with payment services, tax product lending, prepaid cards and HOA services.
Under the agreement, First Internet will acquire all of the outstanding common stock shares of the $408 million First Century with available on-balance sheet cash. As of Sept. 30, First Century had $330 million in total deposits and $32 million in total loans. First Century Bank will maintain its lines of business in current locations, including a consumer and small business banking office in Commerce, Ga.; and another branch in Hilton Head Island, S.C.
“The acquisition of First Century is an important opportunity for our organization,” said First Internet Chair and CEO David Becker. “First, it aligns with our strategy of operating unique and scalable businesses with nationwide platforms. 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 homeowners association business grants us access to a very attractive deposit base, with opportunity to expand.”
Becker said First Century is looking to use its national infrastructure to grow and drive more returns for shareholders.
“First Century is a highly profitable company with a strong track record of growth in providing technology-enabled services to a national client roster of premier business partners,” he added. “We are always looking for exceptional financial technology partners that help us further our leadership position in digital banking; the acquisition of First Century is a great fit.”
First Century Chair and CEO William Blanton called the acquisition “a natural step in our evolution and a very positive development for our customers and business partners.”
“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 added.
The transaction is expected to be 21 percent accretive to 2023 earnings per share and 7 percent dilutive to tangible book value per share, with a tangible book value earnback period of approximately three years. Keefe, Bruyette & Woods advised First Internet in the transaction. SmithAmundsen LLC provided legal counsel. First Century was advised by Janney Montgomery Scott LLC, and Troutman Pepper served as legal counsel.