Fintech BM Technologies has agreed to buy community business lender First Sound Bank in a $23 million deal.
BM Technologies, formerly BankMobile Technologies, was launched in 2014 by Customers Bank CEO Jay Sidhu and his daughter Luvleen Sidhu.
Having built up a customer base which now stands at over two million accounts, last year the unit went public via a Spac deal with blank cheque outfit Megalith Financial Acquisition.
Now it is merging with Seattle-based First Sound Bank, paying up to $7.22 a share in cash to create BMTX Bank, a "fintech-based bank" that combines a proprietary BaaS platform and nationwide deposit gathering capabilities with a bank charter.
Luvleen Sidhu will be CEO of BMTX Bank and directly responsible for digital banking initiatives, while First Sound CEO Marty Steele will lead the combined company’s community banking division and also serve as COO.
Says Luvleen Sidhu: “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 direct to consumer and small business operations, marketplace lending, robo-advisory and blockchain based payment systems to sustain our competitive advantage into the future."