LendingClub, the publicly-traded digital-lending marketplace, got the green light from regulators to complete the acquisition of Radius Bank, after getting preliminary approval from the Office of the Comptroller of the Currency in December. LendingClub’s intent to acquire Radius, a digital bank with $2.4B in assets and $1.7B in deposits, was first announced nearly a year ago.

Why should we care?
LendingClub’s acquisition of Radius, in a deal valued at $185M, will establish LendingClub Bank. Buying a bank will offer the fintech a stable source of funding, access to underwriting tools and a route to an expanded suite of products, including deposits. This move will enhance the company's earnings power while diversifying revenue sources. “Once completed, the acquisition will combine the strengths of these two digital innovators with complementary businesses to create the first public U.S. neobank, with a digital-first branchless approach to banking that will help even more Americans improve their financial well-being, while also accelerating revenue growth and lowering funding costs for the company,” LendingClub wrote in a press release. Industry watcher Peter Renton wrote that one loser in the deal will be WebBank, which originated nearly all of LendingClub’s more than $60B in loans to date. When the deal closes on or around Monday, February 1, WebBank will be removed from the process since LendingClub Bank will originate the loans.