Planned BankMobile sale hits snag

The would-be buyer failed to raise enough money to complete the $175 million transaction, regulatory filing says

A Florida bank might not buy BankMobile after all.

Flagship Community Bank did not raise enough money to buy the branchless Customers Bancorp offshoot, Customers CEO Jay Sidhu said in a regulatory filing Wednesday. 

The sale could still go through in a restructured arrangement that would let Flagship finish the planned purchase with significantly less money up front, but the Florida-based bank now faces competition from two other potential buyers.

BankMobile is Wyomissing-based Customers Bancorp’s branchless division targeted toward millennials and underbanked low- to middle-income Americans. The bank has about 220 employees working out of offices in Connecticut, New York and Pennsylvania, including at an innovation lab in Lancaster.

Flagship, which has about $112.6 million in assets, announced its intention to buy BankMobile in March for $175 million. Selling BankMobile would help Customers avoid breaching $10 billion in assets, a threshold at which the federal government would limit the amount of money it can charge merchants for debit card transactions, bank officials said at the time.

According to the regulatory filing, a revamped sales agreement with Flagship would look like this: Customers would restructure the transaction as a tax-free spinoff of BankMobile to Customers shareholders. Then Flagship would buy BankMobile in an all-stock acquisition.

This arrangement could require Flagship to raise only $85 million as opposed to the $260 million it originally planned, American Banker reported Wednesday

A representative from Flagship was not immediately available to comment Thursday afternoon.

BankMobile, however, has received two unsolicited all-cash offers from other potential buyers over the past few weeks. These offers could give Customers’ shareholders a better deal, according to Wednesday’s regulatory filing.

Customers hopes to act on one of these options within the next several weeks.

Jennifer Wentz
Jennifer Wentz covers Lancaster County, York County, financial services, taxation and legal services. Have a tip or question for her? Email her at jwentz@cpbj.com.

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