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Why Is The Bancorp Stock Down 21% Today?
Key Points
The Bancorp (TBBK) fell nearly 21% on Wednesday after fintech client Chime agreed to buy its other banking partner, Stride Bank, for $590 million.
Chime plans to consolidate its banking operations at Stride once the deal closes in the first half of 2027.
The move echoes a pattern already set by LendingClub and SoFi.
The Bancorp, Inc. (NASDAQ: TBBK) is down 20.9% in Wednesday trading as of 3:12 p.m. ET. The S&P 500 and Nasdaq Composite are down about 0.4% and 0.6%, respectively.
The bank stock is sinking after Chime agreed to acquire a competitor in a deal that threatens one of The Bancorp's most important fintech relationships.
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Chime buys its other bank partner for $590 million
Chime, a neobank, announced on Tuesday that it will acquire Stride Bank for $590 million in cash. The deal is expected to close during the first half of 2027, after which point Stride will become Chime Bank. The deal gives Chime direct control over much of the banking infrastructure behind its products and will help it speed up the "development of regulatory-compliant" offerings.
Chime expects the deal to generate more than "$100 million in net synergies" by eliminating fees and reducing costs.
The Bankcorp may lose Chime's business
As a fintech without a banking license, Chime needs a banking partner in order to operate. Up to this point, it's relied on both Stride and The Bancorp. While Chime hasn't said it will end its relationship with The Bancorp outright, bringing Stride in-house likely means Chime plans -- at the very least -- to reduce its dealings with the company.
Image source: Getty Images.
More fintechs could follow Chime's lead
The Bancorp has succeeded in becoming a go-to for fintechs, providing the regulatory plumbing they need. The concern here is not just that the company loses Chime's business, but that other fintechs follow suit and bring banking operations in-house.
Johnny Rice has no position in any of the stocks mentioned. The Motley Fool has no position in any of the stocks mentioned. The Motley Fool has a disclosure policy.