Dive Brief:
- Fintech Chime has entered an agreement to acquire Enid, Oklahoma-based Stride Bank for $590 million in cash, the San Francisco-based company said Tuesday.
- Stride, which has a national charter, has been one of Chime’s bank partners for about seven years, the fintech said. With the deal, Stride will become Chime Bank, N.A. and operate as a wholly owned subsidiary of the fintech.
- The transaction is expected to close in the first half of 2027, Chime said.
Dive Insight:
Chime CEO and co-founder Chris Britt said the acquisition will strengthen the company’s model while its “member-aligned, technology-driven strategy will remain the same.”
Founded in 2012, Chime, which had about 10.4 million active members as of the second quarter, sees itself competing largely with incumbent banks for primary account and direct deposit relationships.
“By combining Chime’s leading brand and deep member relationships with Stride’s national charter and team, we will accelerate toward our vision to be the largest provider of primary bank accounts in America,” Britt said in the release.
Stride, which has about $4 billion in assets, was founded in 1913 and has branch locations in Oklahoma and Salt Lake City. Chime accounts “are already a significant contributor to Stride’s deposits,” the fintech said Tuesday.
“Stride has spent more than a century serving customers and strengthening communities,” said Brud Baker, the lender’s chairman and CEO, in the release. “For seven years, we have seen firsthand how Chime puts members first and how seriously it takes its mission. That gives us real confidence in this combination and the future we can build together. Stride’s national bank charter and experienced team will be central to what comes next.”
Baker – who’s been with the bank since 1970, according to his LinkedIn profile – will continue to lead Chime Bank after the deal closes, the fintech said.
The transaction is projected to be accretive to Chime’s earnings “immediately upon closing,” and the fintech expects to realize about $100 million in net synergies, largely due to eliminating sponsor bank fees, expanding its lending product roster and a “significantly lower” cost of funds, Chime said in the release.
The deal’s value is about 1.5 times tangible book value for Stride. Chime said it expects to fund the purchase from cash on its balance sheet.
The Bancorp Bank has been Chime’s other bank partner. For Chime to achieve its long-term vision, Britt said in May “it’s more of a when, not if” the company will seek a bank charter itself.
“It’s, to some degree, an inevitability that we’ll become a bank; the question is just, when?” Britt said during an appearance at a JPMorgan Chase investor conference. “Every year, we take a step back and evaluate: is now the time?” Britt said. Regulators have demonstrated an openness to new charter applications, so it’s something “we’ll be looking at again this year and figuring out what the best path is,” he said.
Once the deal has closed, Chime expects to consolidate its banking activities with Stride, primarily supporting the fintech’s consumer business. Chime said it will “keep its assets below $10 billion for the foreseeable future.”
The fintech’s second-quarter revenue rose 27% year over year, to $670 million, and it generated $28 million in net income. The company projects third-quarter revenue of $705 million, and full-year revenue to be between $2.76 and $2.77 billion, according to Tuesday’s release.
