Square Receives Conditional FDIC Approval for Industrial Loan Charter Application for Deposit Insurance
March 18 2020 - 3:53PM
Business Wire
The Federal Deposit Insurance Corporation (FDIC) Board has voted
to conditionally approve Square’s application for deposit insurance
related to its Industrial Loan Company (ILC) bank charter. Square
has also received charter approval from the Utah Department of
Financial Institutions.
The bank, Square Financial Services, is expected to launch in
2021. It will operate independently, as a direct subsidiary of
Square, Inc. Its primary purpose will be to offer small business
loans for Square Capital’s commercial lending business, and to
offer deposit products.
“We appreciate the FDIC’s thoughtful approach to our
application, and their recognition that Square Capital is uniquely
positioned to build a bridge between the financial system and the
underserved,” said Jacqueline Reses, Square Capital Lead and
Executive Chairwoman of the board of directors for Square Financial
Services. “We’re now focused on the work ahead to build out Square
Financial Services and open our bank to small business
customers.”
Square Financial Services CEO Lewis Goodwin and CFO Brandon Soto
will lead the bank’s executive team; both bring decades of banking
leadership experience to Square and have managed multiple ILCs over
their banking careers. As the ILC prepares to open, Square
Financial Services will make additional hires for its bank
headquarters in Salt Lake City, Utah.
Square Financial Services expects to continue to sell loans to
third-party investors and limit balance sheet exposure. As a
result, we do not expect the bank to have a material impact on
Square’s consolidated balance sheet in 2020. We also do not expect
the bank to have a material impact on our consolidated total net
revenues, gross profit, or Adjusted EBITDA in 2020.
SAFE HARBOR STATEMENT
This press release contains forward-looking statements within
the meaning of the Safe Harbor provisions of the Private Securities
Litigation Reform Act of 1995. All statements other than statements
of historical fact could be deemed forward-looking, including, but
not limited to, statements regarding Square Financial Services’
expected launch timeline, purpose, personnel plans, treatment of
loans and financial impact.
Risks that contribute to the uncertain nature of the
forward-looking statements include, among others, the ability to
satisfy certain approval conditions required by the Federal Deposit
Insurance Corporation Board in a timely manner, or at all; the
possibility that final approval may be delayed or not achieved; as
well as other risks and uncertainties relating to the Company
listed or described from time to time in the Company’s filings with
the Securities and Exchange Commission (the SEC), including the
Company’s most recent Annual Report on Form 10-K, which is on file
with the SEC. All forward-looking statements are based on
information and estimates available to the Company at the time of
this press release. Except as required by law, the Company assumes
no obligation to update any of the statements in this press
release.
EXECUTIVE BIOS
Lewis Goodwin is President and Chief Executive Officer of
Square Financial Services. Previously, Lewis served as President
and CEO of Green Dot Bank and has held other senior banking roles
at Toyota Savings Bank, Chrysler Financial Bank, and West One Bank
(merged with US Bank). He is a licensed CPA in Utah.
Brandon Soto is Chief Financial Officer of Square
Financial Services. Previously, Brandon served as Chief
Administrative Officer and Chief Financial Officer at Green Dot
Bank and held other senior finance and accounting roles at Sallie
Mae Bank, Chrysler Financial Bank, Toyota Savings Bank, Allegiance
Direct Bank and JPMorgan Chase. He is a licensed CPA in Utah.
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Media Contact: press@squareup.com
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