Challenger HMBradley Bank grew very fast. He is now looking for new banking partners as he promotes mortgages and car loans.

Challenger HMBradley Bank has seen a huge increase in deposits since its launch in June last year, surpassing the 2021 deposit target in May. It is now trying to add more banking partners as fintech continues to increase its balance sheet and expand deeper into lending.

HMBradley is pausing on new accounts, changing to an invitation-only model as it buys additional partner banks. Adding another banking partner can take months, so HMBradley only expects a referral until later this year

For a fintech that focuses on the consumer in a busy market, there are worse problems.

“It came faster than we would have liked,” said Zach Bruhnke, founder and CEO of HMBradley.

But in the spirit of “playing the right hand,” HMBradley is looking for new partner banks to keep up with growth and add new products, Bruhnke said.

Hatch, a subsidiary of Firstrust Bank, is HMBradley’s current banking partner.

Hatch had about $ 40 million in deposits when HMBradley first partnered with it, Bruhnke said. Now, Hatch has more than 10 times that, he added.

As partner banks receive more deposits, they are required to raise more funds to meet


A Hatch spokesman did not return a request for comment.

Disputed banks often target non-banking and non-banking users, who usually have a lower average balance. But HMBradley has $ 396 million in deposits, 98% of which comes from direct depositors with an average balance of $ 40,000.

This is partly due to HMBradley’s interest rate structure. Instant deposit unlocks staggered savings, where users save up to 3.5% on savings, depending on the percentage of revenue they deduct.

HMBradley, which raised $ 18.25 million in Series A at the end of 2020, is currently in talks with eight partner banks, Bruhnke said. He declined to say which banks were being investigated for non-disclosure agreements. HMBradley will eventually add two to three additional partners.

HMBradley has a unique relationship with Hatch and is looking for the same in new partners

Most fintechs prefer to make deposits or lend work with partner banks instead of applying for their own bank charter.

HMBradley’s relationship with Hatch is unique. First, HMBradley borrows on the deposits it takes, unlike most disputing banks.

While HMBradley earns fees from its partner bank for deposits, this equates to the cost of deposits. On credit, through his credit card, HMBradley makes a profit. And it imposes additional credit products, such as mortgages and car loans, to increase revenue.

“Our step towards banking partners is really simple.” “Look at us as a subsidized cost of deposits with depositors you could never get on your own and let us lend so we can cover this subsidy,” said Bruhnke.

And HMBradley’s customer base is worth the credit, with an average FICO 740 rating, Bruhnke said.

Bruhnke is confident that HMBradley will be able to find more partner banks willing to sign similar agreements with the one it already has with Hatch.

“The difference is that we have attracted a customer that every bank really wants,” Bruhnke said. “They understand that these are very sticky deposits.”

HMBradley hopes to be users’ one-stop-shop for financial products, from check-in to savings to credit cards and mortgages.

“We will try to move away from this notion of separate accounts,” Bruhnke said.

Like existing scalable savings accounts, the more users interact with HMBradley, the more they are rewarded.

“With every product you use, it should improve slightly,” Bruhnke said.

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