Security First Network Bank said it had received a $10 million equity infusion from State Farm Financial Services, a unit of the Bloomington, Ind.-based insurance company.
Security First Network Bank, the highly touted "first bank on the Internet," has sold its Internet banking system to 81 banks and insurance companies. Royal Bank of Canada is buying Security First's banking business but not its technology business; after the sale the latter would adopt the name Security First Technologies.
State Farm, with 66 million policies issued to 27 million U.S. households, plans to start offering on-line services to customers in Illinois, Missouri, and parts of Arizona when it obtains a thrift charter, which is expected within a few weeks, according to spokesman Philip Supple. State Farm also has licensed Security First's Internet banking software.
Another insurance company, Principal Financial Group, has a $1 million investment in Security First. Principal began operating a virtual bank in April and has more than 1,000 deposit accounts.