Chime Financial Inc. entered into a definitive agreement on Tuesday to acquire Stride Bank, N.A. for $590 million in cash, a transaction that will give the San Francisco-based fintech direct ownership of a national bank charter for the first time. Stride, headquartered in Enid, Oklahoma, and founded in 1913, has served as one of Chime's bank partners for more than seven years. Upon closing, Stride will be renamed Chime Bank, N.A. and operate as a wholly owned subsidiary of Chime. The transaction value represents approximately 1.5 times Stride's tangible book value, and the boards of directors of both companies unanimously approved the deal. Chime, which is profitable, expects to fund the purchase from cash on its balance sheet with no incremental capital contribution anticipated.
The acquisition marks a structural departure from the sponsor-bank arrangement that has underpinned Chime's consumer deposit and payment products since its founding. Under that model, the Nasdaq-listed company originated customer relationships and built the front-end technology while regulated partners — Stride and, previously, The Bancorp Bank — held deposits and performed the regulated functions. Stride first partnered with Chime in 2018, becoming its second banking partner. Chime said acquiring an established institution provides a faster and more proven path to full-stack ownership than pursuing a de novo bank charter, a route that has proved lengthy and uncertain for other digital-first lenders.
ECONOMICS OF FULL-STACK OWNERSHIP
Chime said it expects the transaction to generate more than $100 million in net synergies, driven by the elimination of sponsor bank fees, the expansion of lending products, and a significantly lower cost of funds. The company also expects the deal to be accretive to earnings per share following completion. Removing the partner-bank layer addresses one of the most persistent margin constraints in the neobank model, in which fee-sharing arrangements with chartered institutions absorb a portion of interchange and deposit economics.
Direct ownership of a charter also changes Chime's capacity to originate credit on its own balance sheet rather than through third-party arrangements, an area long dominated by traditional lenders. Following the closing, Chime expects to consolidate its banking activities at Stride, which will focus primarily on supporting the fintech's consumer business. Stride's infrastructure and national charter will be combined with ChimeCore, the company's proprietary core banking platform. Chime indicated it will seek to keep the bank's assets below $10 billion for the foreseeable future — a threshold that carries materially heavier regulatory and interchange consequences under US rules.
REGULATORY PATH AND MARKET RESPONSE
The transaction is expected to close in the first half of 2027, subject to approvals by the Office of the Comptroller of the Currency and the Board of Governors of the Federal Reserve System, along with the satisfaction of other customary closing conditions. Chime is acquiring Stride's parent, Central Service Corporation, with Stride's preferred shares to be redeemed prior to completion. Brud Baker, currently Stride Bank's chairman and chief executive, will lead Chime Bank following the closing. The extended timeline reflects the scrutiny US regulators apply to change-in-control applications involving fintech acquirers of insured depository institutions.
Equity markets responded positively, with Chime shares rising roughly 10% in after-hours trading on Tuesday and around 11% before the opening bell on Wednesday, alongside a raised revenue outlook from the company. Analysts at J.P. Morgan wrote that acquiring an existing bank provides Chime a faster and more proven path to securing a national charter, while Piper Sandler said the deal would improve unit economics and give the company greater control over product development. The principal variables from here are the regulatory review calendar and the terms attached to any approval, both of which will determine whether the projected synergies materialise on the stated timetable.