On Tuesday, Chime said it would buy Stride Bank in a cash deal totaling $590 million. Once the deal closes, Stride will operate as Chime Bank, a fully owned unit of Chime.
Stride has worked with Chime for more than seven years, and the fintech has also partnered with Bancorp Bank. Following the acquisition, Chime plans to bring its banking operations under Stride.
The company is aiming to finish the transaction in the first half of 2027, pending regulatory approvals.
Chime has long offered checking and other services, and owning a bank is meant to lower the cost of delivering them. By reducing its dependence on partner banks, Chime expects to cut fees, fund itself more cheaply using its own deposits, and gain tighter control over its products. The company estimates the combination will yield $100 million in net synergies. It also intends to maintain Chime Bank's assets under $10 billion for the foreseeable future.
"We do not intend to morph into a traditional bank that obviously is very heavily fee-driven," Chief Executive Officer Chris Britt said, calling the step "a critical milestone in our evolution from being the challenger to really being the industry leader."
Britt said buying an existing bank accelerates Chime's push into banking versus launching a new one, noting, "We can achieve the vision even sooner because we don't have to go through the series of approval processes and then the slower scaling that typically comes with the de novo charter." He added that a de novo effort would require a significant amount of capital, and that Chime would rather invest in "a highly functioning bank and team that's trusted, that has high ROEs, that is profitable."
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At 4:58 p.m. near the close of after-hours action in New York, Chime's shares were up roughly 5.6% on the announcement. Bancorp's stock dropped 14%.
Chime raised guidance. It now expects third-quarter revenue of $705 million, up from a prior range of $680 million to $690 million. Full-year revenue is now forecast at $2.76 billion to $2.77 billion, compared with a previous outlook of about $2.73 billion to $2.75 billion.
Chime generates revenue from customer debit card spending, and Britt said that will continue, as the firm intends to remain below the key $10 billion asset threshold at which debit card fees are capped.
In what they see as a more accommodating policy environment during the Trump administration, many rivals have been pursuing bank charters. UK-based Revolut Ltd. secured a conditional go-ahead to operate as a US bank just last week, following Nu Holdings Ltd. and other firms. A number of digital-asset companies have also filed to become banks. Similar to Chime's approach, SoFi Technologies Inc. and Happen Inc. (formerly LendingClub) acquired banks to speed the process.
For your wallet, this is about Chime trying to control more of its plumbing so it can lower costs and keep interchange revenue intact by staying under that $10 billion line. If it works, the company gets cheaper funding and more control over its product roadmap, while customers could see a steadier experience as everything moves under one roof.
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