SmartBiz Buys Centrust Becomes Federally Chartered Bank

On March 17, 2025, SmartBiz completed its $31.5 million acquisition of Centrust Bank, N.A., receiving approvals from the Office of the Comptroller of the Currency (OCC) and the Federal Reserve Bank of Chicago.

SmartBiz has become the first financial technology company to transition into a fully regulated bank under the current Trump presidency (2025), marking a notable shift in financial regulations.

This is the first fintech-to-bank conversion since Donald Trump resumed office in January 2025. However, fintechs like Varo (2021) and Square (2021) secured approvals during Trump’s first term (2017–2021).

Key Details of the Acquisition

• Structure: The deal involved acquiring Centrust’s parent company, United Community Bancshares, Inc., with the combined entity rebranded as SmartBiz Bank, N.A. under the holding company SmartBiz Bancshares, Inc.

• Strategic Goal: The merger aims to blend Centrust’s commercial banking expertise with SmartBiz’s tech-driven small business lending platform. The new entity will offer SBA loans, deposit services, and tailored financial solutions for U.S. small businesses.

• Leadership: Gerard Buccino, former CEO of Centrust, was appointed President of SmartBiz Bank. Centrust’s team will integrate into SmartBiz to enhance service offerings.

Strategic Implications

• Combined Expertise: Centrust Bank (founded in 2006) will operate as a division of SmartBiz Bank, merging its commercial lending experience with SmartBiz’s tech-driven SBA loan platform. Former Centrust CEO Gerard Buccino now serves as President of SmartBiz Bank.

• Small Business Focus: The new entity aims to provide full-service banking tailored to small businesses, leveraging SmartBiz’s history of facilitating over 230,000 loans totaling $9 billion since 2013.

Leadership Vision

This move positions SmartBiz Bank to expand its reach nationally while retaining Centrust’s Chicago-based operational roots.

^{Sources: Yahoo Finance & Businesswire}

Risk of "Bankification"

• Underwriting and Innovation: While CEO Evan Singer claims SmartBiz Bank will retain its tech-driven approach, regulatory requirements (e.g., capital reserves, compliance) may necessitate more conservative lending. Historically, their loans required:

  • Minimum 660 credit score (675 for real estate)

  • 2+ years in business

  • Profitability and positive cash flow

• Market Positioning: No immediate shifts are announced, but banking regulations could push them toward safer borrowers. Their SBA loan focus ($30K-$5M range) and existing criteria suggest continued small business targeting, albeit with possible stricter risk controls.

Technology Integration Challenges

The merger plan shows:

• Centrust operates as a division with retained branding

• Dual Systems Approach: Legacy Centrust platforms may coexist with SmartBiz's digital infrastructure initially

• Operational Risks: Merging Chicago-based Centrust's commercial lending workflows with SmartBiz's automated underwriting could create friction in:

  • Loan approval timelines

  • Customer onboarding

  • API integrations

Customer Impact Considerations

While specifics aren't disclosed:

• Loan Servicing: Existing SmartBiz customers (230,000+ loans) may transition to FDIC-insured accounts

• New Products Likely: Bank status enables:

  • Business checking/savings accounts

  • Merchant services

  • Enhanced credit products

• Potential Downsides:

  • Stricter covenant monitoring

  • Possible fee structure changes to meet bank profitability targets

Crucial Developments to Watch

1. Will their trademark 7-day SBA loan approvals1 survive banking compliance workflows?

2. How will capital reserve requirements affect:

   • Maximum loan sizes

   • Riskier industry lending

   • Startup financing

3. What deposit-gathering strategy will offset fintech's traditional funding cost advantages?

This evolution bears watching - while SmartBiz gains stability, alternative lenders might exploit any innovation slowdown in their core SBA niche.

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