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.
Chime said owning rather than partnering will give it greater speed, control and stronger economics, while its core mission, strategy and business model will remain the same. Chime member deposits are currently FDIC-insured through its two partner banks, The Bancorp Bank, N.A. and Stride Bank, N.A. Chime said acquiring an established institution provides a faster and more proven path to full-stack ownership than pursuing a de novo bank charter.
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. Chime said owning the bank will eliminate partner-bank fees, reduce funding costs and improve unit economics.
The company said the acquisition will also allow it to expand its fast-growing lending business more efficiently. 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 AI-native, proprietary technology stack. Chime said it will manage its balance sheet and keep its assets below $10 billion for the foreseeable future, a level that keeps it outside the Durbin Amendment's limits on debit card interchange fees.
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 all outstanding shares of Central Service Corporation preferred stock to be redeemed immediately before completion. Brud Baker, currently Stride Bank's chairman and chief executive, will lead Chime Bank following the closing.
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. Morgan Stanley analysts said the deal was likely to boost Chime's credit growth.