California-based FinTech startup- Social Finance or SoFi has announced the acquisition of Golden Pacific Bancorp- a Community bank at a sum of USD 22.3 million.
Anthony Noto, CEO of Social Finance, was reportedly quoted stating that through this purchase the company will be able to enhance its services, providing most of its clients' advanced products and services. Additionally, the transaction will help the company accelerate the development of a national bank subsidiary.
Noto further mentioned that the partnership will help Social Finance expand its financial services offerings and will also allow Galileo’s technology platform to serve local communities.
Notably, Golden Pacific comprises three branches- in Yuba City, Sacramento, and Live Oak and nearly USD 150 million in assets. Upon approval, SoFi is likely to invest nearly USD 750 million for bank capitalization to prepare for the ongoing digital and rolling out across the nation.
According to Virginia Varela, President and CEO of Golden Pacific Bank, North America, the integration of the company with SoFi strengthens the bank’s capability to offer top-notch services to its customers. The financial company will continue to offer more services and convenience to small businesses, individual customers, and communities that serve in Sacramento and nearby countries.
It is worth mentioning that through the national bank charter, SoFi will be able to take deposits and extend loans that are backed by the deposits of the members rather than providing costlier loan products it offers to a non-bank.
Seemingly, in October 2020, SoFi gained conditional approval by the Office of the Controller of the Currency based on its original plan. The Silicon Valley startup will work with Golden Pacific Bankcorp on a new business plan for the OCC and will later apply for Bank Holding Company status from the Federal Reserve.
Citing sources, SoFi joined hands with Social Capital – a special purpose acquisition firm for USD 8.6 billion in January 2021. In the first half of 2021, Social Finance purchased Galileo Financial Technologies for USD 1.2 billion and also roped in Hong Kong-based investment application- 8 securities.