Square Financial Services Begins Banking Operations

SAN FRANCISCO & SALT LAKE CITY–(BUSINESS WIRE)–Today, Square, Inc. announced its industrial bank, Square Financial Services, has begun operations after completing the charter approval process with the Federal Deposit Insurance Corporation (FDIC) and the Utah Department of Financial Institutions.

Square Financial Services is an independently governed subsidiary of Square, Inc. Headquartered in Salt Lake City, Utah, its primary purpose will be to offer business loan and deposit products, beginning with underwriting and originating business loans for Square Capital’s existing lending product. Moving forward, Square Financial Services will be the primary provider of financing for Square sellers across the U.S.

“Bringing banking capability in-house enables us to operate more nimbly, which will serve Square and our customers as we continue the work to create financial tools that serve the underserved,” said Amrita Ahuja, Square, Inc. Chief Financial Officer and Executive Chairwoman of the board of directors for Square Financial Services. “We thank the FDIC and Utah DFI for their partnership enabling us to reach this milestone, and look forward to continuing to expand access to financial services at this critical time for small businesses.”

Completing the Square Financial Services executive team are leaders who bring collective deep experience across banking, finance, and lending. Joining previously announced CEO Lewis Goodwin and CFO Brandon Soto are:

Sharad Bhasker, Chief Risk Officer
Samantha Ku, Chief Operating Officer
Homam Maalouf, Chief Credit Officer
David Grodsky, Chief Compliance Officer
Jessica Jiang, Capital Markets and Investor Relations Lead

Opening Square Financial Services deepens Square’s unique ability to expand access to loans and banking tools to underserved populations. 58% of loans through Square Capital go to women-owned businesses, compared to 17% of traditional loans; and 35% of loans through Square Capital go to minority-owned businesses, compared to 27% of traditional loans[1].

Square Financial Services will continue to sell loans to third-party investors and limit balance sheet exposure. We do not expect the bank to have a material impact on Square’s consolidated balance sheet, total net revenue, gross profit, or Adjusted EBITDA in 2021.

[1] Square Capital statistic: Based on an April 2019 survey of 5,655 respondents who have accepted a loan through Square Capital. Traditional loan statistic: SBA 7(a) Lending Statistics for Major Programs as of 4/05/2019.

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 activities, treatment of loans and financial impact.

Risks that contribute to the uncertain nature of the forward-looking statements include, among others, 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.

About Square, Inc.

Square, Inc. (NYSE: SQ) builds tools to empower businesses and individuals to participate in the economy. Sellers use Square to reach buyers online and in-person, manage their business, and access financing. And individuals use Cash App to spend, send, store, and invest money. Square has offices in the United States, Canada, Japan, Australia, Ireland, Spain and the UK.