Chime Strikes Deal to Buy Stride Bank

Chime, a fintech company that offers bank accounts and cards to consumers, has struck a deal to buy Stride Bank, an Oklahoma-based institution that has supported Chime behind the scenes for years.

Chime on Tuesday said it will buy Stride Bank for $590 million and will rename the institution Chime Bank. Many fintech companies rely on licensed banks to operate, and Chime’s acquisition will reduce fees associated with such an arrangement. Shares in Chime, which listed on the Nasdaq last year, rallied in after market trading on Tuesday. Chime shares have recently recovered above the IPO price of $27 after sliding in the wake of the debut.

Chime said it will fund the acquisition from current cash reserves. Shares in Bancorp, another of Chime’s sponsor banks, fell on Tuesday in after market trading. Chime said it plans to consolidate its banking activities at Stride. The deal is subject to regulatory approvals.