Darragh Buckley, founder and CEO of fintech startup Increase, has acquired a significant stake in Twin City Bank, located in Longview, Washington.

The transaction, which exceeds 10%, required public disclosure to the Federal Reserve and approval from the Federal Deposit Insurance Corporation (FDIC).

Buckley confirmed the acquisition but did not specify the exact size of his stake.

Though not the sole owner, Buckley’s stake makes him a major shareholder, and he confirmed the bank will remain focused on serving the local community.

Increase, Buckley’s company, offers a banking-as-a-service (BaaS) platform with clients like Ramp, Check, and Pipe, relying on FDIC-insured bank to deliver its services.

Buckley said the acquisition is a personal investment in community banking and not a move to integrate Twin City Bank into Increase.

This acquisition marks Buckley’s third community bank investment in Washington, with the deal already approved by the FDIC.

🔗 Source: TechCrunch

🧠 Food for thought

1️⃣ Community banks have become valuable infrastructure in the fintech revolution

The acquisition of small banks by fintech leaders is part of a broader trend where community banks serve as critical infrastructure for financial innovation.

Small, often overlooked community banks have become increasingly important to the fintech ecosystem by providing essential regulated banking services like holding deposits and underwriting loans1.

This symbiotic relationship has proven beneficial for both sides. Fintech partnerships helped small banks thrive after the 2008 financial crisis, with some banks like Evolve reporting over 200% month-over-month deposit growth from these arrangements1.

The strategic value is evident in transactions like Flagship Community Bank’s $175 million acquisition of BankMobile, highlighting the premium placed on banking infrastructure with fintech capabilities23.

Buckley’s approach of investing in a community bank while keeping it focused on its traditional strengths represents an alternative model to outright acquisitions like those by Plaid co-founder William Hockey (Column) and former Block executives (Lead Bank).

2️⃣ Regulatory scrutiny is reshaping the bank-fintech landscape