As part of the transaction, Discover Bank will purchase substantially all of the deposits—about $1.1 billion—of Allstate Bank.
Under the terms of the agreement, Discover Bank will assume the Allstate Bank deposit accounts and provide banking products and services to Allstate customers. Allstate Financial does not intend to originate banking products or services after the transaction closes.
"Allstate Financial has refocused on insurance, retirement and investment products. That, combined with the changing regulatory environment, led us to the determination that operating Allstate Bank is no longer core to our long-term strategy," Matthew Winter, president and CEO of Allstate Financial said in a release. "This agreement will enable Allstate Financial to deepen its focus on producing differentiated products for our key markets, strengthening relationships with existing customers, and creating profitable growth for Allstate. Our customers will have uninterrupted access to their FDIC-insured deposits and services through Discover, a leading direct bank with a nationally respected brand."
Under the agreement, Allstate's affiliates and agents will offer personal savings and money market accounts, certificates of deposit and individual retirement account CDs to customers through Discover, whose Discover Bank subsidiary also offers credit card loans, student and personal loans, as well as CDs, savings and other deposit accounts.
"Affinity relationships with leading organizations have provided us with an effective platform for offering Discover Bank's products to an expanded customer base," Carlos Minetti, the president of consumer banking and operations for Discover, said in the release.
The parties expect the transaction to close by mid-year, subject to regulatory approval. Financial terms of the transaction are not considered material.
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