SoFi Technologies’ (NASDAQ:SOFI) stock is finally getting its mojo back. Two of America’s most important banking regulators have finally approved its plans to acquire Golden Pacific Bancorp.

SoFi, led by former Twitter (NYSE:TWTR) executive Anthony Noto, has received a U.S banking charter from the Office of Comptroller, which will allow them to provide more services in America.

Here’s what Noto, SoFi’s CEO, said in a statement released on its website:

“This incredible milestone elevates our ability to help even more people get their money right and realize their ambitions…with a national bank charter, not only will we be able to lend at even more competitive interest rates and provide our members with a high-yielding interest in checking and savings, it will also enhance our financial products and services.”

By bringing SoFi inside the bank regulatory perimeter, it will be subject to comprehensive supervision, and all of its activities will be conducted safely. This ensures that deposits are protected and lending practices for this fintech company are conducted per the Community Reinvestment Act.

The company has a lot of positive momentum on its side, with the low cost to lend combined with an even lower charge for acquiring customers.

This is great news because this will allow them to make more money off each loan they extend.

At this point, SOFI stock is riding high due to a national bank charter. But over the last few months, the stock has given away gains despite beating analyst estimates in Q3.

If the pattern holds, you will soon have the opportunity to buy SOFI stock at a discount. Wait for that moment to buy more of this one.

Implications of National Bank Charter for Sofi Stock

SoFi’s history of trying to become a bank is not new. The company has been trying to get its charter ever since June 2017, but it was not until recently that they were granted national bank status.

The acquisition of the Golden Pacific Bankcorp is an incredible opportunity for the company to branch out and offer more services.

As loan origination is the primary source of revenue, the company will expand its lending capabilities. The bank’s new products help it increase its deposits, making the business more secure and stable.

Since people are investing in these accounts instead of just putting money away for safekeeping or using them as cash flow sources – they’ll check out other investment options too.

Going after a larger market share will let Sofi go after even more customers with the new pricing strategy designed to make themselves extremely competitive.

Mizuho analysts say that having a bank charter license should help lower SoFi’s cost of capital. They expect that SoFi’s profitability could jump by up to $300 million due to the reduction in funding costs.

By being an investment bank, SoFi can eliminate the need for expensive third-party banks by providing its capital. This will reduce operational costs and make their services more accessible to consumers with limited access.

Fundamentals Are Strong

The company’s initial focus was to help college students save money on their loans, but as time went by, they realized they could expand into other areas.

Nowadays, SoFi offers refinancing options for all types of financial needs and objectives – not just those related directly or indirectly to higher education.

SoFi is no longer a startup, but it has evolved into one of America’s most well-established fintech companies. Revenue for 2021 will likely be close to $1 billion, not bad for an organization founded fewer than ten years ago.

Customers can still refinance their student loans through them as before. However, there are several other options available as well, including securing mortgage financing or trading SoFi stock.

A report from SoFi says that they expect their revenues to grow 55% year-over-year in Q4 2021. This is significant because this would be the first time that revenues are growing several quarters in a row.

The recent revenue growth rates of SoFi have been slowing, but the company still has more potential in its business.

The bears are right to be nervous about SoFi’s prospects. It has been a major beneficiary of the recent fintech craze. However, there is the reason for optimism, thanks largely to its established banking roots and expertise, which should enable growth over time.

Student Loan Repayments Are Set to Begin This Spring

The student loan industry feels the pressure as interest rates remain at zero for federal loans. This means that there are no more incentives to move into private lending like Sofi, which can provide competitive rates during regular market conditions with their low-interest-rate policy.

However, student loan repayments are set to restart on May 1.

The repayments are set to begin this spring which will immediately feed revenues in 2022 once they start. This is a big draw for SoFi, as their business model relies heavily on the number of people that refinanced loans with them.

With the recent pause in federal loan interest payments, originations dropped to below $4.9 billion for Sofi’s student loans in 2020 from over $6.5 billion in the year-ago period.

However, investors need not worry. The company is still seeing strong growth in its home lending and personal loans. SoFi is expecting to bring in a whopping $1 billion this year, compared with just over $600 million.

To put this increase in perspective, top-line growth is 61% over the year-ago period. That is mainly because of its growing personal loans business.

Looking ahead, the exponential growth in fintech will help grow its two major segments — Galileo and Financial Services.

By enabling many of today’s up-and-coming fintech to operate effectively, Galileo has created a payments platform and API. That will have a huge impact on the long-term future of SoFi.

The Financial Services segment saw a 179% year-over-year growth in the number of products, to more than 3.2 million from 1.2 million in the year-ago period.

The total product count for this sector is now triple that of Lending offerings.

Invest in Sofi Stock Once the Euphoria Wears Off

The financial services industry is booming, and SoFi has benefited from the growth in all three of its business segments.

The business is providing an alternative to traditional banking, and it’s popular among customers. The company offers products that compete with those of banks, but without being one themselves, they have had to pay higher costs when acquiring funding than if there was just a bank in this position instead.

In recent years, the financial industry has undergone a significant shift. Traditional banks are now vying for attention alongside innovative new companies like SoFi.

Investors are expecting SoFi’s fintech side to experience massive acceleration. The spread of money is always an issue for lenders. Right now, they’re dealing with high borrowing costs.

That will change drastically moving forward. They believe it will reduce their margins and boost profitability as soon as next year, thanks to new technology that allows them to provide low-interest rates on loans while also cutting downtime from customers who want funds from traditional banks.

The bank charter is icing on the cake. However, right now SOFI stock is trading at steep multiples. Wait for shares to dip before adding to or initiating a position.

On the publication date, Faizan Farooque did not have (either directly or indirectly) any positions in the securities mentioned in this article. The opinions expressed in this article are those of the writer, subject to the InvestorPlace.com Publishing Guidelines.

Faizan Farooque is a contributing author for InvestorPlace.com and numerous other financial sites. Faizan has several years of experience in analyzing the stock market and was a former data journalist at S&P Global Market Intelligence. You can check out his analysis on InvestorPlace and TipRanks.