Live Oak Bancshares in Wilmington, N.C., will record a large one-time gain when Fiserv buys cloud-based core system Finxact.
Fiserv said in a press release Monday that it will buy the remaining ownership stake in Finxact for about $650 million.
“We’re accelerating the delivery of innovative digital banking experiences for our clients and elevating their ability to compete in a rapidly changing market,” Frank Bisignano, Fiserv’s president and CEO, said in the release.
“This transaction complements our Fiserv account processing solutions and expands our opportunities to serve clients by bringing together Finxact’s highly flexible and scalable API-first capabilities with the comprehensive digital financial solutions portfolio and expertise of Fiserv,” Bisignano added.
The transaction will be a windfall for Live Oak, which expects to realize a pretax gain of about $115 million from the deal.
Live Oak has a roughly 15% stake in Finxact and Chip Mahan, the bank’s chairman and CEO, is on the fintech’s board.
The $8.2 billion-asset Live Oak asked Finxact to build an open, real-time core system in 2017, providing some of the initial $12 million in capital to help create the fintech-friendly platform.
The Finxact core works with software from 14 partners, including Apiture, Marqeta, LexisNexis and Savana. Live Oak converted from Fiserve to Finxact last fall.