Chime is paying $590m for its own sponsor bank

Chime is buying the bank that has held its customers’ money for seven years.

The company announced on Tuesday that it has agreed to acquire Stride Bank of Enid, Oklahoma, for $590m in cash. Stride will become Chime Bank and operate as a wholly owned subsidiary. Closing should follow in the first half of 2027. The Office of the Comptroller of the Currency and the Federal Reserve both have to approve it.

Both boards have approved it unanimously.

What Chime says it gets

The company sets out three benefits.

Faster product development, by integrating its own technology stack with Stride’s banking infrastructure. Greater resilience and member trust, from a direct connection between Chime and the bank holding the accounts. And a stronger cost position, because owning the bank removes the partner-bank fees it currently pays.

Chime expects more than $100m in net synergies. It credits three things: the saved sponsor fees, a lower cost of funds, and room to expand lending. The deal should add to earnings per share immediately on closing, the company says, and it will pay from cash on its balance sheet rather than raising new capital.

The price works out at roughly 1.5 times Stride’s tangible book value.

Chief executive Chris Britt framed the purchase as an acceleration rather than a change of direction. The combination, he said, moves Chime toward becoming “the largest provider of primary bank accounts in America”.

Chime raised its guidance on the same day. It now expects $705m of revenue this quarter, up about 30% year on year. The full-year range is $2.76bn to $2.77bn.

Why buy rather than apply

Chime addresses this directly in the announcement. Acquiring Stride, it says, offers “a faster and more proven path to full-stack ownership versus pursuing a de novo bank charter”.

That distinction is live in American fintech. The past few months have produced examples of almost every route.

Wise applied for a national trust charter. The comptroller refused it in July. The Dutch bank bunq has held a licence at home since 2014, and the comptroller turned it down twice, most recently in August. Klarna applied in Utah in July and is still waiting. WebBank holds its American deposits meanwhile.

Palmer Luckey’s Erebor won a national charter in February. X took the rental route with Cross River. We found in July that its product is a stored value account rather than a deposit.

Then on 3 September, five days before Chime’s announcement, the comptroller granted Revolut preliminary conditional approval for a national bank charter. We covered that application back in March. Revolut is also targeting the first half of 2027.

The $10 billion line

One sentence in the announcement has drawn most of the analyst attention.

Chime says it “will manage its balance sheet and keep its assets below $10 billion for the foreseeable future”. It does not elaborate.

Reuters reported the following morning that analysts read the threshold as a reference to the Durbin Amendment, which caps debit card interchange fees for banks holding $10bn or more in assets. Banks below that level are exempt from the cap.

The Federal Reserve’s most recent survey of interchange, published last December, puts the average at 52 cents per transaction for exempt issuers and 22 cents for covered ones.

Interchange matters to Chime more than to most. Payments revenue was $430m of $669.8m in the second quarter, with the remaining $240m coming from lending and other platform products.

Chime itself does not mention the Durbin Amendment anywhere in the announcement.

What Stride is

Stride dates from 1913 and runs branches in Oklahoma and Salt Lake City. It offers consumer and commercial banking, treasury management, mortgage lending and wealth management alongside its fintech partnerships.

Federal Deposit Insurance Corporation filings put its total assets at $5.42bn at the end of June, with deposits of $4.96bn.

Chairman and chief executive Brud Baker will continue to lead the bank after it becomes Chime Bank. Chime says member accounts are already “a significant contributor to Stride’s deposits”, without giving a figure.

Chime also says it expects to consolidate its banking activities at Stride after closing.

The other sponsor bank

Chime currently works with two banks. Its own deposit disclosure names The Bancorp Bank alongside Stride.

The announcement does not mention Bancorp. Its shares fell more than a fifth on Wednesday to a 52-week low. Some early reports put the drop at 14%, which was the premarket move rather than the day’s.

Bancorp told investors in its most recent annual report that 91% of its deposits come from its fintech solutions business. It announced a restructuring eliminating 80 positions on 4 September, four days before the Chime news. It has not commented publicly on the acquisition.

Europe took a different route

The contrast with European neobanks is straightforward, and it is about how the licences work.

Britain and the European Union both offer a staged path. A firm can win a restricted licence and grow into a full one. Revolut spent from July 2024 to March this year in that mobilisation phase, operating under a deposit cap. The restrictions came off in March.

Monzo took a full banking licence through the Central Bank of Ireland in December, approved by the European Central Bank. N26 has held a German licence since 2016, Klarna a Swedish one since 2017, and bunq a Dutch one since 2014.

The United States has no equivalent staged route. Chime is 14 years old with 10.4 million active members and is not yet a bank. Monzo withdrew its American application and left the country. N26 entered and exited. The comptroller refused Wise and bunq.

What to watch

The regulators. Chime notes in its own risk factors that completing the deal will make it a bank holding company under the Bank Holding Company Act, which brings Federal Reserve supervision it does not currently have.

The Bancorp relationship, which the announcement does not address beyond saying banking activities will consolidate at Stride.

And whether Revolut and Chime both arrive where they are heading. Both are working toward the first half of 2027, by different routes, and both still need the Federal Reserve to agree.