Customers Bank to sell BankMobile to Flagship Community Bank
Customers Bank has entered into an agreement with Florida-based Flagship Community Bank to sell its digital banking division BankMobile for $175m.
The transaction is expected to result in $100m of pre-tax gains for Customers Bank.
Using smart phone technology, BankMobile offers a range of deposit products to retail customers. It derives a significant part of its revenues from interchange fees from customer debit card use paid for by the merchant.
Customers Bancorp chairman and CEO Jay Sidhu said: "Due to Durbin Amendment restrictions on debit card interchange fees, Customers believes it will be unable to profitably operate BankMobile once Customers' consolidated assets exceed $10bn.”
Previously, Customers Bank announced that it was looking to sell BankMobile and reviewed initial indications shown by several companies to buy the bank.
The transaction is subject to the receipt of all necessary regulatory approvals, certain Flagship shareholder approvals, financing and other customary closing conditions.
It is expected to be completed in the third quarter of 2017.
Flagship chairman, president and CEO Frank Burke said: “We look forward to welcoming BankMobile's team of over 220 staff members to Flagship, so we can continue to provide BankMobile's customers with the products and services they have come to expect."
Investment banking firm Monroe Financial Partners advised Flagship Community Bank in the transaction, while Customers Bancorp was advised by investment banking firms of KBW, a Stifel Company, and Commerce Street Capital.
Located in Wyomissing, Pennsylvania, Customers Bancorp is a bank holding company involved in banking and related businesses through its bank subsidiary, Customers Bank.
With assets of about $9.4bn, Customers Bank is a community-based, full-service bank.
Image: The transaction is expected to result in $100m of pre-tax gain for Customers Bank.. Photo courtesy of jk1991/FreeDigitalPhotos.net.