US-based digital banking platform BM Technologies (BMTX) has signed a definitive agreement to merge with First Sound Bank in a deal valued at nearly $23m.

As per the agreement, which is expected to complete in the second half of 2022, BMTX has offered to pay up to $7.22 in cash for each share of FSB common stock.

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First Sound Bank is an independent community bank, which offers commercial and private banking services to small and medium-sized businesses, NGOs, entrepreneurs, and professional service firms.

The combined entity will be called BMTX Bank, which will focus on serving clients digitally across the US.

The acquisition will allow BMTX to move deposit accounts onto First Sound Bank’s balance sheet, form new partnerships and attract new customers.

BM Technologies chair, CEO and founder Luvleen Sidhu BM said: “This merger is expected to meaningfully expand our already profitable, technology-focused business model and will enhance our diversified earnings, as we bring BMTX-serviced deposits onto our balance sheet and generate superior fee-based income supported by interest income economics from deploying those deposits into loans over time.

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“Looking ahead, BMTX Bank expects to add direct to consumer and small business operations, marketplace lending, robo-advisory and blockchain-based payment systems to sustain our competitive advantage into the future.”

First Sound Bank president and CEO Marty Steele said: “As a local bank, we remain committed to our community and are excited about the opportunity to leverage BMTX’s innovative digital banking technology, Banking-as-a-Service business model, low-cost deposit funding, and better access to the capital markets in order to scale our SBA, commercial and private banking, mortgage, and other business lines.”

In January 2020, BM Technologies went public through a SPAC deal with blank cheque company Megalith Financial Acquisition.