Some of the heavy hitting competition is gone, and Lord Credit Swisse (whom all once looked up to as the freaking Oracle) is a total dumpster fire under the weight of it's own corruption, and yet here is our SoFi on steady trajectory for profitability. Oh yes, I'm definitely gonna keep watching this one... 👀
Income statements are YTD, I am not in front of the numbers right now but I assume this is what you are seeing. The Q4 income statement are the results of the entire year.
Good to see, but I will admit though, most all that deposit growth was in interest bearing accounts which will definitely be expensive interest expense going forward.
It wouldn't be there, this is the bank's report to the FFIEC, nothing to do with the SEC. It is a quarterly report that every bank files to the FFIEC, they all have almost an identical structure (depending on the size of the bank and removal of some irrelevant things)
I have the link in the center of the post. (On the phone and can't copy)
For a positive EPS SoFi would need to be net income positive. The bank's net income this quarter is massive and it could indicate that it might break. I am still reluctant to expect it because I don't know how the rest of the company will behave. Maybe SoFi spent more on marketing, maybe SBCs etc.
One noticeable thing (at least to me was) was that brokered deposits increased 60% from 1B to 1.6B. Excluding that, 2.4B in deposit its still phenomenal, which makes me wonder why they were that aggressive going after CD’s? Plans to hold longer? Lots of questions, excited for monday morning
I've been looking everywhere to try and find where I can see the CDs SoFi offers, but no luck. I remember bender said that SoFi seems to offer those to institutions only or something like that.
Recently WF released their CDs and Brokered CDs program and SoFi was on the list so WF might be offering SoFi's CDs when those pop up.
[https://www.wellsfargoadvisors.com/pdf/syn/programbanks.pdf](https://www.wellsfargoadvisors.com/pdf/syn/programbanks.pdf)
Amazing work as always Snipah. $10B deposits is insane and great news and that interest income is shocking. Noto is killing it. The bank is ran so well. Now if the tech side could ramp up finally this company would be unstoppable
I don't think the tech platform will ramp up in the current macro, too many issues for the niche clients that tighten their belts right now. A deal with a bank could be amazing, but those will be tightening their belts right now also due to the banking issues.
This is why I like SoFi though, the diversity that fits different macro. When lending slows, the tech platform will start ramping up.
Agreed. I don’t see it happening anytime soon especially with fintechs struggling and cutting costs. I just can’t wait till that changes and tech side can be that 1/3 revenue they plan on
While I can't comment on Stoneteer, I can offer that many of us have higher averages than that. Some of us are not in a position to commit more capital or push the rest of their portfolios too off balance from what they're comfortable with.
The interest income part : you sure the 2022 part is the whole year number ? If it is only for q4 2022 , then it is worrying becos it is a big decline ..
In Q4 it is 82M as per this article https://seekingalpha.com/article/4581954-sofi-bs-earnings-providing-context from Hoeger. If what we are reading is true this is a huge jump from 82 to 265M
Edit: the above is incorrect. I mistook the sofi bank earnings of 81.9M as net interest income. It seems to be 183M as per their earnings report here https://seekingalpha.com/article/4573562-sofi-technologies-inc-sofi-q4-2022-earnings-call-transcript?hasComeFromMpArticle=false. Still a big jump.
Argh. You are correct. I mistook the sofi bank earnings of 81.9M as net interest income. I edited my comment above. It seems to be 183M as per their earnings report here https://seekingalpha.com/article/4573562-sofi-technologies-inc-sofi-q4-2022-earnings-call-transcript?hasComeFromMpArticle=false
FED interest rates started Jan 2022 at .25% and ended the year at 4.5%. Q1 it went to 5% and next week going to 5.25%
When the FED start cutting rates, it will negatively affect interest income, but for now, it is great for getting Sofi to being profitable.
What u/SoFi_Best said.
Interest rates affect it in a minor way. Maybe if interest goes to 0 then it will tighten the margin but otherwise it is insignificant, and interest rate won't be going to come down so soon. Also, keep in mind that SoFi's loans are fixed rate, so for 6 months after the fed starts cutting rates their interest income will remain elevated. But at the end of the day, SoFi will lower their APY when the fed lowers the funds rate, keeping the margin the same or higher.
Take Goldman Sachs, you'd think they would be making tons of money on interest. Their net interest income in Q1 2023 was lower than it was in Q1 2022.
I did not think about the interest it pays for costumers deposits, that would even it out.
Fed rates would affect rates on margin accounts, for people who use margin. Don't know if that falls under "interest income" though.
Yeah, I am certain about it, income statements are YTD.
For example, instructions on how to prepare FFIEC reports: [https://www.ffiec.gov/pdf/FFIEC\_forms/FFIEC031\_FFIEC041\_201812\_i.pdf](https://www.ffiec.gov/pdf/FFIEC_forms/FFIEC031_FFIEC041_201812_i.pdf)
https://preview.redd.it/ig2ps3fqrwwa1.png?width=646&format=png&auto=webp&s=efd4265fe453b9ab25b43f54e378f872a3029820
Great insight from Snipah, as always. So the cats outta the bag in advance of Monday. We can all eat steak this weekend at our favorite restaurants. SoFi has proven to be a good run business and doesn’t get to far ahead of themselves. Noto is in it for the long haul. Still unsure how much the acquisition was but based on the deposit growth I’m excited.
I am still as bearish on the tech platform performance in the current macro as I was last quarter.
So I am waiting to see what happens with that. Maybe it won't decrease as I feared last quarter (if I remember correctly, SoFi spreads the revenue over a period even if paid in Q1 for the entire year) but I think it will remain flat again.
But the bank numbers are amazing.
This js really good work, thank you for sharing. 41% growth in deposits is amazing.
It’s interesting how this report is released in advance. Is this typical?
These are two different report to two different regulatory bodies and they have nothing to do with one another.
You are talking about when SoFi's earnings report was accidently published for a few minutes and later taken down. SoFi took steps to prevent that since.
Thanks for asking about report release schedules, as I was wondering the same thing. It would seem to be a good report to watch, going into earnings, but there is a ton of information in it.
The bank has their own regulators that they need to report to so I guess they don't match schedules with the SEC. It isn't always the case though, last quarter SoFi reported on the same day the FFIEC report was published, and mentioned that the FFIEC report would be released later that day. A quarter before it was released ahead of time though.
I think I may be able to solve the 1.5bn out and the 706M back in. I think it was a treasuries swap.
When SVB fell, the solution was for the FEDS to buy back their low yielding old treasury notes and allow banks to take back the higher yielding ones. That gets the losses off their books and helps the banks shore up liquidity. See, banks were getting insolvent because they were loaded with treasuries they were forced to buy in 2020 and 2021 in a zero rate environment yielding almost nothing due to low interest rates. Fast forward to 2023, to help "save banks" and allow them to shore up extra liquidity after SVB fell, they said.. "OK banks, sell us back your old treasuries with a yield of almost zero and we'll buy them back at face value... you can then keep the cash raised if you need it OR buy back new treasuries yielding the current 5% and at least this way your money makes you more money at higher interest"
So SOFI sold back 1.5B in treasuries and kept half their cash and spent the other half buying back new treasuries at the 4.9% yield. This is my opinion on why you see those FED transfers. This saved many banks and gave them liquidity to keep going. Banks like SVB and FRC... apparently it wasn't enough as they had mismanaged their funds so poorly.
For SOFI who manages their money very well, it was bullish because SOFI got to swap their treasuries and get liquidity on the cheap but they didn't NEED to...
SoFi has guided for hitting profitability in Q4 this year, people estimated that SoFi is downplaying the results and will hit profitability in Q3, this report could potentially mean it might come in Q3 and maybe even before but it all depends on the impact from the banking issues and what the guidance will be because of that.
The present banking issues will help SOFI not hurt them. Their uninsured sits at about 90% of deposits and they can easily absorb some of the rats that jumped FRC and SVB. The rats were the problem and I sincerely hope SOFI limits their numbers.
Most of those deposits in these banks are business accounts, something SoFi doesn't offer.
Also, getting deposits is nice, but when you can't sell loans because other banks decide to hoard more liquidity in case issues happen, you will be in trouble, or at least your business plan. The longer SoFi holds the loans the higher the risk of default. You don't want to grow deposits too fast.
Some of the heavy hitting competition is gone, and Lord Credit Swisse (whom all once looked up to as the freaking Oracle) is a total dumpster fire under the weight of it's own corruption, and yet here is our SoFi on steady trajectory for profitability. Oh yes, I'm definitely gonna keep watching this one... 👀
Can’t wait for tomorrow!!! 🚀🚀🚀
Great to see
Brilliantly executed by Noto. Now will any of you say the Stock Based Compensations was too much?
Did the net interest drop by 110M? When compared with Q4 2022 report
Income statements are YTD, I am not in front of the numbers right now but I assume this is what you are seeing. The Q4 income statement are the results of the entire year.
To the moon 🌝
Good to see, but I will admit though, most all that deposit growth was in interest bearing accounts which will definitely be expensive interest expense going forward.
SoFi is still keeping similar margins so it has less of an impact. Almost the entire quarter was with 4% APY and 5% funds rate.
SOFI is confirmed a flight to safety bank, holy moly. And I assume these numbers are outdated and don't even factor in the recent FRC crisis.
This is amazing. Thank you for the DD.
I guess the big number we will need to see is member growth
If they indeed added $3b in deposits the member growth must big huge! Give us 700k new members!!
I wouldn't expect growth that big. I imagine similar customer growth as in previous quarters but bigger average deposits.
All I need to know: will my calls print??
Unless they say AWS is gonna be weak in Q2 on the call, then yes
Nice work… what does HOEGER think?
Can’t believe no one said it yet… $20 by EoY. We going be so fuk rich!
We are gonna be so fuk rich
Where did this come from? It's not on the investor relations page. Thanks!
It wouldn't be there, this is the bank's report to the FFIEC, nothing to do with the SEC. It is a quarterly report that every bank files to the FFIEC, they all have almost an identical structure (depending on the size of the bank and removal of some irrelevant things) I have the link in the center of the post. (On the phone and can't copy)
Thanks! Do you think these results could lead to positive EPS? Killer results
For a positive EPS SoFi would need to be net income positive. The bank's net income this quarter is massive and it could indicate that it might break. I am still reluctant to expect it because I don't know how the rest of the company will behave. Maybe SoFi spent more on marketing, maybe SBCs etc.
I switched from calls earlier this week to puts haha. Ah well!
Puts at < $6? You're a madman!
One noticeable thing (at least to me was) was that brokered deposits increased 60% from 1B to 1.6B. Excluding that, 2.4B in deposit its still phenomenal, which makes me wonder why they were that aggressive going after CD’s? Plans to hold longer? Lots of questions, excited for monday morning
I've been looking everywhere to try and find where I can see the CDs SoFi offers, but no luck. I remember bender said that SoFi seems to offer those to institutions only or something like that. Recently WF released their CDs and Brokered CDs program and SoFi was on the list so WF might be offering SoFi's CDs when those pop up. [https://www.wellsfargoadvisors.com/pdf/syn/programbanks.pdf](https://www.wellsfargoadvisors.com/pdf/syn/programbanks.pdf)
I regret selling my shares yesterday lol. But got -81 puts though so at least there is that
Amazing work as always Snipah. $10B deposits is insane and great news and that interest income is shocking. Noto is killing it. The bank is ran so well. Now if the tech side could ramp up finally this company would be unstoppable
I don't think the tech platform will ramp up in the current macro, too many issues for the niche clients that tighten their belts right now. A deal with a bank could be amazing, but those will be tightening their belts right now also due to the banking issues. This is why I like SoFi though, the diversity that fits different macro. When lending slows, the tech platform will start ramping up.
Agreed. I don’t see it happening anytime soon especially with fintechs struggling and cutting costs. I just can’t wait till that changes and tech side can be that 1/3 revenue they plan on
$9.44 by weeks end.
Pick me up at 13.50
Why haven’t you avg down more yet?
Because A I basically lump sum dump my entire 65k inheritance into SoFi And B add to loser is a fucking terrible investment strategy
While I can't comment on Stoneteer, I can offer that many of us have higher averages than that. Some of us are not in a position to commit more capital or push the rest of their portfolios too off balance from what they're comfortable with.
LETS GOOOOOOOOOOOOOOOOOO!!!
Great find! 🙏
The interest income part : you sure the 2022 part is the whole year number ? If it is only for q4 2022 , then it is worrying becos it is a big decline ..
In Q4 it is 82M as per this article https://seekingalpha.com/article/4581954-sofi-bs-earnings-providing-context from Hoeger. If what we are reading is true this is a huge jump from 82 to 265M Edit: the above is incorrect. I mistook the sofi bank earnings of 81.9M as net interest income. It seems to be 183M as per their earnings report here https://seekingalpha.com/article/4573562-sofi-technologies-inc-sofi-q4-2022-earnings-call-transcript?hasComeFromMpArticle=false. Still a big jump.
[удалено]
Argh. You are correct. I mistook the sofi bank earnings of 81.9M as net interest income. I edited my comment above. It seems to be 183M as per their earnings report here https://seekingalpha.com/article/4573562-sofi-technologies-inc-sofi-q4-2022-earnings-call-transcript?hasComeFromMpArticle=false
FED interest rates started Jan 2022 at .25% and ended the year at 4.5%. Q1 it went to 5% and next week going to 5.25% When the FED start cutting rates, it will negatively affect interest income, but for now, it is great for getting Sofi to being profitable.
What u/SoFi_Best said. Interest rates affect it in a minor way. Maybe if interest goes to 0 then it will tighten the margin but otherwise it is insignificant, and interest rate won't be going to come down so soon. Also, keep in mind that SoFi's loans are fixed rate, so for 6 months after the fed starts cutting rates their interest income will remain elevated. But at the end of the day, SoFi will lower their APY when the fed lowers the funds rate, keeping the margin the same or higher. Take Goldman Sachs, you'd think they would be making tons of money on interest. Their net interest income in Q1 2023 was lower than it was in Q1 2022.
It shouldn't matter? Sofi ensures the margin is same regardless of interest rate?
I assume the spread will stay the same
I did not think about the interest it pays for costumers deposits, that would even it out. Fed rates would affect rates on margin accounts, for people who use margin. Don't know if that falls under "interest income" though.
Yeah, I am certain about it, income statements are YTD. For example, instructions on how to prepare FFIEC reports: [https://www.ffiec.gov/pdf/FFIEC\_forms/FFIEC031\_FFIEC041\_201812\_i.pdf](https://www.ffiec.gov/pdf/FFIEC_forms/FFIEC031_FFIEC041_201812_i.pdf) https://preview.redd.it/ig2ps3fqrwwa1.png?width=646&format=png&auto=webp&s=efd4265fe453b9ab25b43f54e378f872a3029820
Thanks for your diligent research. I don’t understand what any of it means, but I genuinely appreciate your effort.
So I’m gonna be so rich?
So fuk rich!
Great insight from Snipah, as always. So the cats outta the bag in advance of Monday. We can all eat steak this weekend at our favorite restaurants. SoFi has proven to be a good run business and doesn’t get to far ahead of themselves. Noto is in it for the long haul. Still unsure how much the acquisition was but based on the deposit growth I’m excited.
I am still as bearish on the tech platform performance in the current macro as I was last quarter. So I am waiting to see what happens with that. Maybe it won't decrease as I feared last quarter (if I remember correctly, SoFi spreads the revenue over a period even if paid in Q1 for the entire year) but I think it will remain flat again. But the bank numbers are amazing.
Cheers Snipah. Thanks for putting this together.
Another spike will probably happen after Monday
Probably on Monday since the report is pre market!
This js really good work, thank you for sharing. 41% growth in deposits is amazing. It’s interesting how this report is released in advance. Is this typical?
Didn't they do that once already "by mistake"
These are two different report to two different regulatory bodies and they have nothing to do with one another. You are talking about when SoFi's earnings report was accidently published for a few minutes and later taken down. SoFi took steps to prevent that since.
Thanks!
Thanks for asking about report release schedules, as I was wondering the same thing. It would seem to be a good report to watch, going into earnings, but there is a ton of information in it.
The bank has their own regulators that they need to report to so I guess they don't match schedules with the SEC. It isn't always the case though, last quarter SoFi reported on the same day the FFIEC report was published, and mentioned that the FFIEC report would be released later that day. A quarter before it was released ahead of time though.
I think I may be able to solve the 1.5bn out and the 706M back in. I think it was a treasuries swap. When SVB fell, the solution was for the FEDS to buy back their low yielding old treasury notes and allow banks to take back the higher yielding ones. That gets the losses off their books and helps the banks shore up liquidity. See, banks were getting insolvent because they were loaded with treasuries they were forced to buy in 2020 and 2021 in a zero rate environment yielding almost nothing due to low interest rates. Fast forward to 2023, to help "save banks" and allow them to shore up extra liquidity after SVB fell, they said.. "OK banks, sell us back your old treasuries with a yield of almost zero and we'll buy them back at face value... you can then keep the cash raised if you need it OR buy back new treasuries yielding the current 5% and at least this way your money makes you more money at higher interest" So SOFI sold back 1.5B in treasuries and kept half their cash and spent the other half buying back new treasuries at the 4.9% yield. This is my opinion on why you see those FED transfers. This saved many banks and gave them liquidity to keep going. Banks like SVB and FRC... apparently it wasn't enough as they had mismanaged their funds so poorly. For SOFI who manages their money very well, it was bullish because SOFI got to swap their treasuries and get liquidity on the cheap but they didn't NEED to...
Thanks for the updates, man.
This is interesting, hopefully this means we will be becoming profitable this year
We are gonna be so fuk rich
This guy knows!
SoFi has guided for hitting profitability in Q4 this year, people estimated that SoFi is downplaying the results and will hit profitability in Q3, this report could potentially mean it might come in Q3 and maybe even before but it all depends on the impact from the banking issues and what the guidance will be because of that.
The present banking issues will help SOFI not hurt them. Their uninsured sits at about 90% of deposits and they can easily absorb some of the rats that jumped FRC and SVB. The rats were the problem and I sincerely hope SOFI limits their numbers.
Most of those deposits in these banks are business accounts, something SoFi doesn't offer. Also, getting deposits is nice, but when you can't sell loans because other banks decide to hoard more liquidity in case issues happen, you will be in trouble, or at least your business plan. The longer SoFi holds the loans the higher the risk of default. You don't want to grow deposits too fast.