Customers Bank’s BankMobile to merge with investment firm

Already one of the largest digital banking platforms in the U.S., BankMobile Technologies, a division of Customers Bank, will merge with Megalith Financial Acquisition Corp. (MFAC) in an agreement announced Thursday.

The combined company will become BM Technologies Inc., a publicly traded, stand-alone entity to be led by BankMobile’s management.

The transaction reflects an enterprise value of $140 million, according to a news release.

“We are thrilled to partner with MFAC to become a public company,” said BankMobile CEO Luvleen Sidhu in the release.

“In an era when digital banking continues to expand, we look forward to building our business over the coming years and taking advantage of all strategic opportunities.”

Wyomissing-based Customers Bank is expected to remain the largest investor in BM Technologies, but plans to “gradually reduce” its ownership stake after the transaction is complete, according to the release.

Launched in 2015, BankMobile offers affordable digital banking solutions such as checking, savings, credit and loans, currently boasting over two million accounts.

The platform capitalizes on shifting consumer preferences across the banking industry, which is seeing rising use in digital and mobile tools such as smartphone apps as opposed to visits to brick and mortar branches.

BankMobile also offers programs for college students and has partnerships with numerous colleges and universities, Google, T-Mobile and other companies.

According to its website, MFAC is “a publicly traded investment vehicle formed for the purpose of acquiring or merging with one or more businesses in the financial technology or financial services industries.”

MFAC raised $169 million through an initial public offering in 2018.

The New York City firm sought a “target company” positioned for post-acquisition growth and set up to ride favorable industry trends.

“We believe that BankMobile’s approach to collaborate with distribution partners and partner banks positions it well to continue to grow as an increasing number of nonbanks are looking to offer financial services to their existing customers,” said A.J. Dunklau, CEO of MFAC.

“Accordingly, we believe that the opportunity to bring BankMobile to the public markets as a standalone company is highly attractive.”

MFAC was founded by Sam Sidhu, who in January was appointed to vice chairman and chief operating officer of Customers Bank.

Jay Sidhu, chairman and CEO of Customers Bank, also sits on MFAC’s board, according to the website.