Shares of SoFi rallied as more than 16% in after-hours trading on Tuesday following news that the fintech cleared its final regulatory hurdle in becoming a bank.

San Francisco-based SoFi received approval from the Office of the Comptroller of the Currency, or OCC, and Federal Reserve to become a bank holding company. The mobile-first finance company offers banking products including loans, cash accounts and debit cards. But it’s not technically a bank. Like many fintech companies, it relies on partnerships with FDIC-insured banks to hold customer deposits and issue loans.

In order to become a bank, SoFi plans to acquire California community lender Golden Pacific Bancorp and operate its bank subsidiary as SoFi Bank. The deal was announced last year and is expected to close in February.

While officially entering the banking business brings on more regulatory oversight, it also improves the company’s economics. By cutting out the middleman, SoFi gets a bigger slice of each transaction. CEO Anthony Noto said a national bank charter will allow lending at more competitive interest rates, and give SoFi customers higher-yielding accounts.

“This important step allows us to add to our broad suite of financial products and services to better be there for our members during the major financial moments in their lives and all of the moments in between,” Noto, a former partner at Goldman Sachs and formerly chief operating officer at Twitter, said in a statement.

SoFi has been on the hunt for a bank charter for more than three years. Before going the bank acquisition route, it filed application for the charter with the Office of the Comptroller of the Currency. The OCC granted preliminary approval in October.

The company went public last year by merging with a blank-check company run by venture capital investor Chamath Palihapitiya. Shares have been under pressure this year as investors rotate away from high-growth tech companies. As of the close Tuesday, shares were down 23% to start the year.