- Key insight: In a rare move, nonbank lender Enova International plans to acquire Grasshopper Bank, which would allow Enova to leverage Grasshopper's national bank charter.
- Supporting data: Post-closing, the combined entity would have $8.8 billion of assets, Enova said.
- Forward look: If the deal is approved, Enova, which has roots in payday lending, would gain access to a broader geographic area.
The all-digital Grasshopper Bank has agreed to be acquired by Enova International, a nonbank lender that plans to utilize Grasshopper's national charter and low-cost deposits to gain scale.
Enova, a publicly traded company with roots in payday lending, said Thursday that it will buy Grasshopper and its parent company, Grasshopper Bancorp, in a cash-and-stock deal worth about $369 million. The transaction, which requires approval from the Federal Reserve and the Office of the Comptroller of the Currency, is expected to close during the second half of 2026.
"Acquiring a bank has been an aspiration of ours for a long time and we believe we've found a perfect partner," Enova CEO David Fisher told analysts Thursday during a call to discuss the deal. "We believe now is the perfect time to move forward with this important, strategic step."
The move by a nonbank lender to acquire a bank-chartered company is somewhat unusual. If the deal is approved, it "will create the only higher-rate lender/bank combination in the public market," John Rowan, an analyst at Janney Montgomery Scott, wrote Thursday in a research note.
He pointed out that in other instances where nonbank lenders have bought banks — LendingClub acquired Radius Bancorp in 2021, for example — the buyers have been lower-interest-rate lenders that focus more on customers with prime credit scores.
Enova, based in Chicago, owns a number of nonbank subsidiaries, including CashNetUSA and OnDeck, which offer higher-rate loans to consumers and small businesses. On Thursday, consumer advocacy groups worried that if Enova obtains a bank charter, it could further enable what they see as the company's exploitation of customers.
"Enova makes incredibly predatory loans," Lauren Saunders, associate director of the National Consumer Law Center, told American Banker. "I really hope that they don't use this bank acquisition as a way of trying to get around state laws that protect people from predatory lending."
New York City-based Grasshopper
The deal announcement comes eight months after Grasshopper finalized its acquisition of Auto Club Trust in Dearborn, Michigan, a deal that provided a fresh source of deposits. Four months ago, the bank completed a $46.6 million funding round, in part to support the Auto Club Trust acquisition and in part to expand its banking-as-a-service effort.
As of Sept. 30, Grasshopper had $1.27 billion of deposits and $1.04 billion of loans and leases, according to the Federal Deposit Insurance Corp. It employs about 150 people.
Enova, by comparison, has about $5 billion of loans and no deposits.
Post-closing, Grasshopper Bank will be the bank subsidiary of Enova, which will become a bank holding company. At that time, Mike Butler, chairman and CEO of the $1.4 billion-asset Grasshopper, will become bank president and report to Steve Cunningham, the current chief financial officer at Enova, who will become CEO of the bank. Enova announced this summer that Cunningham would succeed Fisher as CEO of Enova, effective on Jan. 1, 2026.
The $369 million purchase price will be paid 50% in cash and 50% in newly issued Enova shares. In addition to Fed and OCC approval, the pending deal requires a thumbs-up from Grasshopper shareholders. It is expected to generate adjusted earnings per share accretion of more than 15% within the first year after closing and more than 25% in future years, Enova said.
The combined company would have $8.8 billion of assets.
Butler, who joined Grasshopper in mid-2021, said in a press release that Enova is "a market leader in digital lending and a true innovator in the use of technology and analytics."
Enova's CashNetUSA business will operate outside of the bank subsidiary, Cunningham said on the call. Still, "we expect to continue to operate it as we have for 20 years," he added.
CashNetUSA lends money to subprime borrowers, providing high-cost online installment loans and lines of credit in about a dozen states. Another Enova business, NetCredit, provides online loans up to $10,000 and lines of credit up to $4,500 in more than 30 states.
Enova executives mentioned several times Thursday that they looked forward to the ability to expand their products and services geographically, including some of their products that are geared for "near-prime" borrowers.
"This transaction accelerates our ability to execute on [our] mission by directly expanding access to more customers with more products, more efficiently and more broadly than ever," Fisher said.
Enova has a checkered history with regulators. In 2019, the Consumer Financial Protection Bureau
The CFPB ordered Enova to pay a $3.2 million civil penalty and required other forms of compliance and redress to customers.
Then in 2023, during the Biden administration, the CFPB determined that Enova had
At the time, Enova said these "errors" affected only a very small portion of its customers. It also said it was fully cooperating with regulators.
"While the errors identified in this settlement are similar to those addressed in the 2019 order, they do not arise from deliberate attempts to avoid law, but instead resulted from unintended computer and system errors," the company said in a 2023
But what Enova calls errors, the company's critics call a pattern of law-breaking.
"Any company that has been found not only to violate the law once, but then to violate a consent order to address the first set of violations, is extremely troubling," Saunders said.
The pending acquisition of Grasshopper may not draw as much scrutiny as it would likely have drawn under Biden.
The CFPB has been largely dismantled under the second Trump administration. In September, the agency terminated its orders against Enova. It has closed dozens of enforcement actions, and employees within the agency have said it is gradually
