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Digital Financial Firm SoFi Buys a Bank, Seeks National Bank Charter

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What You Need to Know

  • SoFi announced a definitive agreement to acquire Golden Pacific Bancorp and the pursuit of a national bank charter.
  • This is the latest move in the firm's strategy to become a comprehensive personal finance platform.
  • SoFi recently announced plans to go public via a SPAC.

The digital financial advisory firm SoFi, which recently disclosed plans to go public via a special-purpose acquisition company, announced it has taken the first step in its strategy to obtain a national bank charter.

SoFi said it has signed a definitive agreement to acquire Golden Pacific Bancorp Inc. and its wholly owned subsidiary Golden Pacific Bank, a California-based community bank that is regulated by the Office of the Comptroller of the Currency (OCC) to advance its effort to obtain a national bank charter.

SoFi will pay $2.55 in cash for each share of GPB, or approximately $22.3 million in total to acquire the bank, which has approximately $150 million in assets.

“We believe that by pursuing a national bank charter, we will be able to help even more people get their money right with enhanced value and more products and services,” said Anthony Noto, CEO of SoFi.

“We are thrilled to have found a partner in Golden Pacific Bank to both accelerate our pursuit to establish a national bank subsidiary, as well as begin to expand our offerings in SoFi’s financial products and Galileo’s technology platform to serve local communities.”

An Aggressive Strategy

David Goldstone, the manager of research and analytics for Backend Benchmarking and The Robo Report, said SoFi’s latest acquisition “is a continuation of the company’s aggressive growth strategy” that “builds on its previous acquisition of banking fintechs Galileo and Zenbanx.”

Goldstone noted that SoFi “is rapidly deploying capital to expand its product offerings” as it works toward “becoming a comprehensive personal finance platform with consumer services on par with nationwide banks. Users can already trade, receive financial planning, bank, borrow, and trade cryptocurrency with SoFi. Whether they can support all of these different business lines with sufficient customer growth remains to be seen.”

SoFi also announced Tuesday the “broad launch” of its first credit card, which comes with perks. Cardholders who make on-time payments for 12 consecutive months earn a 1% reduction in their APR, which can range between 12.99% and 24.99%.

In addition, every two reward points spent on eligible purchases can be deposited into their SoFi Money account as fractional shares, into a SoFi Invest account or as payment toward SoFi Personal Loan or Student Loan Refinance at $0.01 per point or as payment into Sofi Credit Card Accounts at $0.005 per point.

Many of SoFi’s new offerings have occurred since Noto became CEO in February 2018, transforming the digital advisor, which started in 2011 as a refinancing app for student loans. Since 2019, SoFi has offered investment platforms and a hybrid no-fee checking account that pays interest on deposits like savings accounts.

Its SoFi Invest platform includes no-fee brokerage for stock and ETF trades, zero-fee ETFs and trading in fractional shares as well as cryptocurrencies.

Noto is a former chief operating officer and chief financial officer of Twitter, former partner at Goldman Sachs and executive vice president and CFO of the National Football League.

(Image: Shutterstock)