BofI Federal Bank has secured regulatory approval from Office of the Comptroller of the Currency (OCC) to acquire the $3bn assets from Nationwide Bank.
BofI Federal Bank signed an agreement with Nationwide Bank on 3 August this year to acquire certain assets and assume some liabilities.
As per the deposit purchase and assumption agreement (DAA) Bofl will acquire nearly $3bn in deposits from Nationwide Bank including $1bn in checking, savings and money market accounts and $2bn in time deposit accounts.
The transaction is expected to close in November this year.
BofI Federal Bank president and CEO Greg Garrabrants said: “We are pleased to receive regulatory approval for this transaction in 45 days. Once completed and closed, the Nationwide Bank deposits will reduce our funding cost and strengthen our deposit franchise.
“We are excited to provide Nationwide Bank customers with a broad suite of products and enhanced technology and service capabilities.”
Bofl expects to replace higher cost deposits and borrowings with the deposits acquired from Nationwide Bank. The company stated that there can be no assurance about when or if the contemplated transactions will close, or the final terms and conditions of the various agreements.
When the transaction was announced in August, Garrabrants stated that the bank will acquire nearly 100,000 deposit customers from Nationwide Bank.
The experience of closing similar transactions with Principal Bank and H&R Block in the past, is expected to come in hand for acquisition, the bank stated.
After the transaction is completed, BofI intends to offer a full suite of consumer, commercial and small business banking products and services.
A deposit premium commensurate with the fair market value of the deposits purchased will be funded from excess capital at the bank, BofI Federal Bank said when the agreement was signed.
In August, Nationwide chief marketing officer and emerging businesses president Terrance Williams said “BofI is a strong and stable institution with many similarities to Nationwide Bank. Both companies are direct, digital banks with a customer-centric approach to banking.
“Because of these similarities, as well as BofI’s depth of product offerings and history of successful transitions, we feel confident that it’s the right partner to provide banking services to our customers going forward.”