Chime agrees to acquire Stride Bank parent for $590 million in cash

Chime Financial entered into a definitive agreement on September 8 to acquire Central Service Corporation, the parent of Stride Bank, National Association, for $590 million in cash, subject to customary purchase-price adjustments. The acquisition has not closed. Chime expects closing in the first half of 2027, subject to approvals from the Office of the Comptroller of the Currency and the Board of Governors of the Federal Reserve System, along with other customary conditions.

Structure and consideration

Clocktower Merger Sub, a direct wholly owned Chime subsidiary, would merge into CSC, with CSC surviving. Upon closing, Stride would become Chime Bank, N.A. and operate as a wholly owned Chime subsidiary. The cash consideration is subject to deductions for certain CSC transaction expenses, certain dividends paid before closing and amounts paid to redeem outstanding CSC preferred stock. All outstanding CSC preferred shares are to be redeemed immediately before the merger's effective time.

Company's financial case

Chime said the transaction value represents approximately 1.5 times Stride's tangible book value and expects to fund the purchase using cash on its balance sheet. The company projects more than $100 million in net synergies from sponsor bank fee savings, expanded lending products and a significantly lower cost of funds. Chime also expects the transaction to be immediately accretive to earnings per share. Those synergy and accretion statements are company expectations, not realized results; no synergy realization schedule is specified in the company disclosure.

A longtime partner

Stride has been Chime's bank partner for more than seven years. The nationally chartered bank was founded in 1913 and is headquartered in Enid, Oklahoma, with a branch network that includes Oklahoma and Salt Lake City. Chime described its own scale as more than 10 million Active Members, a company-defined metric.

Approvals and next steps

The boards of Chime and CSC unanimously approved the transaction. The affirmative vote of holders of a majority of CSC's outstanding common stock, required for stockholder approval, has already been obtained, according to the 8-K. Regulatory approvals and the remaining closing conditions still determine whether the transaction can close within the company's expected first-half 2027 window. The proposed Chime Bank name and subsidiary status are future outcomes tied to closing.