SoFi Technologies, the online bank and personal finance company, acquired Wyndham Capital Mortgage in an all-cash transaction, the neobank announced last week.
The acquisition of the Charlotte, North Carolina-based fintech mortgage lender is aimed at broadening the neobank’s suite of mortgage products and enhancing its economics, the company said in a press release. The firms did not disclose the financial terms of the deal.
The “full stack” approach will lessen SoFi’s reliance on third-party partners and processes, the fintech noted.
“At SoFi, we’re on a mission to help people get their money right and purchasing a home is often one of, if not the, biggest financial decision individuals make in their lives,” SoFi CEO Anthony Noto said in a statement.
Citing macro and socioeconomic factors, including high inflation and mortgage rates, Noto said the U.S. real estate market has paved the way for a new era.
“Today’s acquisition of Wyndham Capital will not only allow us to scale and keep pace with accelerated growth, but also allow us to foster that growth in a way that brings value to our members through sales and operational efficiencies and helps members get their money right when it comes to one of life’s most significant financial milestones,” he added.
The San Francisco-based fintech lender said it will integrate Wyndham’s origination platform into SoFi’s lending business. The fintech has also extended an offer to 170 Wyndham employees who were part of the company before the purchase, a SoFi spokesperson told Banking Dive via email.
Though most of Wyndham’s employees are expected to join SoFi after the acquisition, Donny Kirby, vice president of national direct to consumer sales at Wyndham, reportedly resigned to start his own brokerage company, American Banker reported.
All of SoFi’s existing and newly acquired customers can access financial tools including career advisors, credentialed financial planners and special discounts, along with competitive rates on checking, savings and personal loans, a SoFi spokesperson said.
The move follows several pivotal acquisitions SoFi made earlier in 2022.
In February 2022, the personal finance fintech closed its $22.3 million acquisition of Golden Pacific Bancorp, clinching its mission to secure its own bank charter.
And in March last year, SoFi acquired Technisys, a cloud-native digital and core banking platform and extended its footprint in Latin America.
Despite economic headwinds, SoFi’s net revenue was $443 million in the fourth quarter of 2022 and $1.5 billion for the whole of 2022 — a 58% and 52% increase from the corresponding prior-year periods of $279.9 million and $1 billion, respectively, the firm reported in January.
The neobank’s lending, technology and financial services segments performed well to drive the year-over-year growth, the company said.
Analyst predictions
John Hecht, an analyst at Jefferies, expects the latest acquisition will help SoFi accelerate its mortgage originations volume, “at the same time as the SOFI bank continues to grow deposits at an accelerated pace of 7.3x in 2022,” he said, according to CNBC.
The neobank’s mortgage division accounted for around 4% of total originations in the last quarter of 2022, the outlet noted.
Moreover, David Chiaverini, managing director of equity research at Wedbush, in a recent research note shared with Banking Dive, mentioned the Wyndham acquisition will help to bolster SoFi’s “mortgage capabilities, which have been hampered by rising rates and friction with fulfillment partners.”
“We believe SOFI’s strong cash position of $1.8 billion combined with high capital ratios positions SOFI to be a consolidator in the neobank space as competitor valuations come under pressure, as evidenced by its recent acquisition of Wyndham Capital Mortgage Association,” he noted.
