Chime to buy Stride Bank for USD $590 million cash

Chime has agreed to acquire Stride Bank for USD $590 million in cash, bringing its long-time banking partner in house.

After completion, Stride would become Chime Bank and operate as a wholly owned subsidiary of the US financial technology company. The purchase will be funded from cash on Chime's balance sheet and will not require an additional capital contribution.

The acquisition brings together two businesses that have worked closely for more than seven years. Stride, a nationally chartered bank founded in 1913 and based in Enid, Oklahoma, already provides banking support for Chime accounts and has become a significant source of deposits through that relationship.

For Chime, the deal offers a faster route to bank ownership than applying for a new charter from scratch. It also gives the company direct control over the banking infrastructure behind its consumer accounts while preserving its payments-led, asset-light model.

Chime expects the deal to be immediately accretive to earnings per share on closing and to generate more than USD $100 million in net synergies. Those gains are expected to come from lower partner-bank fees, cheaper funding and expanded lending products.

The agreed price represents about 1.5 times Stride's tangible book value. After the transaction closes, Chime plans to consolidate its banking activity at Stride, with the bank focused primarily on supporting its consumer business.

Management intends to keep assets below USD $10 billion for the foreseeable future. The combined group would be able to serve consumers across all 50 states.

Alongside the acquisition announcement, Chime raised its guidance for the third quarter and full year. It now expects third-quarter revenue of USD $705 million, up about 30% year on year, with adjusted EBITDA of USD $117 million to USD $120 million.

For the full year, Chime expects revenue of USD $2.76 billion to USD $2.77 billion, representing annual growth of about 26% to 27%. It forecasts adjusted EBITDA of USD $481 million to USD $489 million, implying a margin of 17% to 18%.

Long partnership

Stride has a long history in community banking and also works with fintech partners, businesses and consumers. Chime said the existing relationship between the two groups should help ease the transition for customers once the acquisition is completed.

Chris Britt, Chief Executive Officer and Co-founder of Chime, outlined the rationale for the deal in a statement.

"We founded Chime because mainstream America deserved better banking," said Chris Britt, Chief Executive Officer and Co-founder of Chime. "Our member-aligned, technology-driven strategy will remain the same. This acquisition will make our proven model even stronger. 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."

Stride's leadership also pointed to the depth of the relationship between the two organisations. The bank has operated for more than a century and has branch locations in Oklahoma and Salt Lake City.

"Stride has spent more than a century serving customers and strengthening communities," said Brud Baker, Chairman and Chief Executive Officer of Stride Bank. "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. I look forward to continuing to lead Chime Bank, creating new opportunities for our customers, communities and employees."

Regulatory path

Both boards have unanimously approved the deal. It still requires approval from the Office of the Comptroller of the Currency and the Board of Governors of the Federal Reserve System, along with other customary closing conditions.

If approved, the transaction is expected to complete in the first half of 2027. Once closed, Chime would become a bank holding company and bring its banking operations into a single subsidiary structure.

Owning the bank rather than relying on a partner would also benefit Chime's lending business. The company described it as a more efficient route to expanding a business that has been growing quickly under a disciplined underwriting model.

The acquisition marks a significant shift for a company that built its business through partnerships with chartered banks while offering digital-first accounts to more than 10 million active members. If the transaction proceeds, that model will move closer to direct ownership of the regulated banking entity behind its accounts.

Stride's national bank charter and experienced team are expected to be central to Chime's next phase of development.