• The $185 million deal is structured as 75% cash and 25% stock and is expected to close within 15 months
  • $50.2 million has been set aside to comply with federal bank ownership regulations in a deal with LendingClub's biggest shareholder
  • Radius has $1.4 billion in assets; LendingClub has a $12.3 billion portfolio

LendingClub Corp. announced a $185 million in stock and cash deal to acquire Radius Bancorp and its wholly owned subsidiary, online Radius Bank.

LendingClub said the deal, which is expected to close within 15 months, will enable consumers to borrow for less and earn more interest on savings.

LendingClub (LC) closed off 1.37% Wednesday.

“It’s a no-brainer,” LendingCorp Chief Executive Scott Sanborn told Reuters. “Adding the capabilities of a bank charter to the LendingClub mix really changes the game both in terms of what we can do for our customers and what we can do for shareholders.”

"By combining with Radius, we will create a category-defining experience for our members that will dramatically enhance the resilience and earnings trajectory of our business," he added in a press release.

Radius, founded in 1987 and based in Boston, is known for its digital banking platform for both consumers and small businesses, providing for check deposit, bill pay and card management. The bank, with more than $1.4 billion in assets, features a management dashboard and offers open application programming interfaces for “banking-as-a-service” functionality to leading fintechs, as well as commercial lending options and treasury management services for pension funds, unions, cities and nonprofits.

LendingClub, which describes itself as a fintech innovator, provides personal loans to its more than 3 million members. Its portfolio totaled $12.3 billion in 2019.

Sanborn told a conference call with analysts Radius is one of the few digital U.S. banks with a national footprint and no legacy branches.

“We believe the time is right for checking and savings to be reimagined in a way that’s free from legacy practices and systems, one where the success of the institution aligns with the success of the customer,” Sanborn told analysts. “We plan to be at the forefront of that reimagining.”

The $185 million deal is expected to be 75% cash and 25% stock, with $20 million allotted for advisory and transaction-related costs. Some $50.2 million is being set aside to comply with banking ownership regulations in a deal with LendingClub’s largest shareholder.