usa dodd/frank

Fintech BM Technologies Buys a Bank As it Focuses on Expansion

BM Technologies, which was formerly called BankMobile Technologies, has announced that it has agreed to buy the community business lender First Sound Bank in a deal that is worth $23 million.

The fintech was established in 2014 and has since managed to onboard more than 2 million customers giving it a very strong userbase and this helped it go public through a SPAC deal with Megalith Financial Acquisition last year which also turned out to be a decent success for the platform. It had been reluctant to enter into the banking business as such but the publicly listing seems to have given it enough confidence and funding to go the full circle and it has finally decided to take the plunge. The 2 platforms have now combined to form a fintech-based bank that will have a proprietary BaaS platform along with deposit-taking abilities around the country and it would hope that it would be able to tap onto the existing userbase and goodwill among them to further expand its reach through the country. The new bank would be named BMTX bank.

Luvleen Sidhu, CEO of BMTX Bank, said: “As one of the largest digital banking platforms in the country with approximately 2 million accounts, this merger allows BMTX to lead a new wave of financial innovation by enhancing its focus on technology, inclusion, easy-to-use products, and customer education with the mission of creating ‘customers for life. This merger is expected to meaningfully expand our already profitable, technology-focused business model and will enhance our diversified earnings, as we bring BMTX-serviced deposits onto our balance sheet and generate superior fee-based income supported by interest income economics from deploying those deposits into loans over time. Looking ahead, BMTX Bank expects to add directly to the consumer and small business operations, marketplace lending, Robo-advisory, and blockchain-based payment systems to sustain our competitive advantage into the future.”

Luvleen is expected to lead the digital initiatives while the current CEO of First Sound Bank is expected to continue to lead the community business lending division at the newly formed bank. With the digitization of financial services all around, it makes sense for certain small-sized banks to seriously consider mergers and acquisitions to grow their userbase and acquire new technology through such actions in a quick manner.