SoFi Officially Acquires Golden Pacific Bancorp, Becomes SoFi Bank
Whether you’re a FinTech observer or an everyday American, you’ve probably heard the name “SoFi” a lot lately. For the latter group, that’s likely because this year’s Super Bowl is set to be held at SoFi Stadium in Los Angeles. Yet, outside of that high-profile naming rights deal, the startup has continued to make headlines as it grows and expands. On that note, this week, the company took a major step forward by officially becoming a bank.
SoFi has now completed its acquisition of Sacramento-based Golden Pacific Bancorp, which will now be known as SoFi Bank. The plan to acquire Pacific Bancorp was announced nearly one year ago, with the deal costing SoFi approximately $22.3 million. While SoFi will invest $750 million to grow the bank’s digital presence, it notes that it will also still operate Golden Pacific Bank’s three brick-and-mortar branch locations in Sacramento, Live Oak, and Yuba City, California.
According to SoFi, following the acquisition, it now plans to offer customers 1% APY on their funds. Currently, their SoFi Money hybrid account earns 0.25% APY following multiple interest rate cuts in recent years. Additionally, the platform will forgo its hybrid status to offer separate checking and savings accounts going forward while also teasing a “more user-friendly interface.” These changes are expected to take place in the coming weeks, although no specific timeline was announced.
In a press release detailing the completed purchase, SoFi CEO Anthony Noto said, “This announcement reflects SoFi’s ongoing mission to help people achieve financial independence and realize their ambitions. Through this acquisition, Golden Pacific Bank members can expect an elevated digital and more robust mobile banking experience to serve local businesses and individual customers.”
Virginia Varela, Golden Pacific Bank’s President and CEO, added, “This new partnership will enhance our ability to provide the highest level of service while offering our customers a suite of products designed to help them get their money right. I look forward to working hand in hand with our new team as we continue to deepen our community banking experience in Sacramento and surrounding counties.”
Of course, SoFi isn’t the first major FinTech to become a national bank via acquisition. For example, in 2019, LendingClub purchased Radius Bank, renamed to LendingClub Bank. Meanwhile, Varo Bank became the first digital banking service to obtain a national banking charter in 2019, which it did without acquiring an existing bank. Despite this, the advent of SoFi Bank is still a major moment for FinTech and for the company itself. Considering that SoFi had already branched out into several aspects of finance even without a banking charter, it will be fascinating to see where the company takes its ambitions from here.