NextCard Inc. said Monday that it has signed an agreement to buy Textron National Bank, a subsidiary of Textron Financial Corp.
NextCard, which offers Visa cards geared toward use for Internet purchases, says it will change Textron Bank's name to NextBank NA and use it to issue its own credit cards, which now come from a community bank in Silicon Valley, Heritage Bank of Commerce. NextCard Visas have been available since December 1997.
"The formation of NextBank is a natural progression in our strategy to deliver on-line consumer credit, giving NextCard the ability to originate credit card accounts for our own account," said Jeremy Lent, the chief executive officer of NextCard.
John Hashman, chief financial officer of NextCard, said the acquisition "will allow us to further diversify our funding sources. The ability to access the FDIC-insured deposit market will further enhance our liquidity position and funding costs, allowing us even more flexibility in meeting our aggressive growth plans."
Total assets of Textron National Bank are less than $3 million in cash and short-term securities, NextCard said. The deal is subject to approval by the Office of the Comptroller of the Currency.
-- Jennifer Kingson Bloom