SoFi Technologies, Inc. 10-Q

sofi-20210930 UNITED STATES SECURITIES AND EXCHANGE COMMISSION Washington, D.C. 20549 FORM 10-Q (Mark One) ☒ QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 For the quarterly period ended September 30, 2021 or ☐ TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 For the transition period from to Commission file number 001-39606 SoFi Technologies, Inc. (Exact name of registrant as specified in its charter) Delaware 98-1547291 (State or other jurisdiction of incorporation) (I.R.S. Employer Identification No.) 234 1st Street San Francisco , California 94105 (Address of principal executive offices) (Zip Code) ( 855 ) 456-7634 (Registrant’s telephone number, including area code) Securities registered pursuant to Section 12(b) of the Act: Title of each class Trading Symbol(s) Name of each exchange on which registered Common stock, $0.0001 par value per share SOFI The Nasdaq Global Select Market Redeemable warrants, each whole warrant exercisable for one share of common stock, $0.0001 par value SOFIW The Nasdaq Global Select Market Indicate by check mark whether the registrant (1) has filed all reports required to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during the preceding 12 months (or for such shorter period that the registrant was required to file such reports), and (2) has been subject to such filing requirements for the past 90 days. Yes ☒ No ☐ Indicate by check mark whether the registrant has submitted electronically every Interactive Data File required to be submitted and posted pursuant to Rule 405 of Regulation S-T (§232.405 of this chapter) during the preceding 12 months (or for such shorter period that the registrant was required to submit such files). Yes ☒ No ☐ Indicate by check mark whether the registrant is a large accelerated filer, an accelerated filer, a non-accelerated filer, a smaller reporting company, or an emerging growth company. See the definitions of “large accelerated filer”, “accelerated filer” and “smaller reporting company” and “emerging growth company” in Rule 12b-2 of the Exchange Act. Large accelerated filer ☐ Accelerated filer ☐ Non-accelerated filer ☒ Smaller reporting company ☐ Emerging growth company ☐ If an emerging growth company, indicate by check mark if the registrant has elected not to use the extended transition period for complying with any new or revised financial accounting standards provided pursuant to Section 13(a) of the Exchange Act. ☐ Indicate by check mark whether the registrant is a shell company (as defined in Rule 12b-2 of the Exchange Act). Yes ☐ No ☒ The number of shares of the registrant’s common stock, par value $0.0001 per share, outstanding as of November 4, 2021 was 806,916,607 shares. SOFI TECHNOLOGIES, INC. TABLE OF CONTENTS Page PART I – FINANCIAL INFORMATION Item 1. Financial Statements Unaudited Condensed Consolidated Balance Sheets 4 Unaudited Condensed Consolidated Statements of Operations and Comprehensive Loss 5 Unaudited Condensed Consolidated Statements of Changes in Temporary Equity and Permanent Equity (Deficit ) 6 Unaudited Condensed Consolidated Statements of Cash Flows 8 Notes to Unaudited Condensed Consolidated Financial Statements 11 Item 2. Management’s Discussion and Analysis of Financial Condition and Results of Operations 77 Item 3. Quantitative and Qualitative Disclosures About Market Risk 122 Item 4. Controls and Procedures 123 PART II – OTHER INFORMATION Item 1. Legal Proceedings 125 Item 1A. Risk Factors 126 Item 2. Unregistered Sales of Equity Securities and Use of Proceeds 173 Item 3. Defaults Upon Senior Securities 173 Item 4. Mine Safety Disclosures 173 Item 5. Other Information 173 Item 6. Exhibits 174 Signatures 175 1 TABLE OF CONTENTS SoFi Technologies, Inc. As used in this Quarterly Report on Form 10-Q, unless the context requires otherwise, references to “SoFi”, the “Company”, “we”, “us”, and “our”, and similar references refer to SoFi Technologies, Inc. and its wholly-owned subsidiaries following the Business Combination (as defined herein) and to Social Finance, Inc. prior to the Business Combination. As a result of the Business Combination completed on May 28, 2021, share and per share amounts presented in this Quarterly Report on Form 10-Q for periods prior to the Business Combination for Social Finance, Inc. have been retroactively converted by application of the exchange ratio of 1.7428. For more information regarding the Business Combination, see Item I, Note 2 to the Notes to Unaudited Condensed Consolidated Financial Statements and Item 2, “Management’s Discussion and Analysis of Financial Condition and Results of Operations” included in this Quarterly Report on Form 10-Q. CAUTIONARY STATEMENT REGARDING FORWARD-LOOKING STATEMENTS This Quarterly Report on Form 10-Q contains statements that are forward-looking and as such are not historical facts. This includes, without limitation, statements regarding the financial position, business strategy and the plans and objectives of management for our future operations; anticipated trends and prospects in the industries in which our business operates; and new products, services and related strategies. These statements constitute projections, forecasts and forward-looking statements, and are not guarantees of performance. Such statements can be identified by the fact that they do not relate strictly to historical or current facts. When used in this Quarterly Report on Form 10-Q, words such as “aim”, “anticipate”, “believe”, “continue”, “could”, “estimate”, “expect”, “intend”, “may”, “might”, “opportunity”, “plan”, “possible”, “potential”, “predict”, “project”, “should”, “strive”, “will”, “would” and similar expressions may identify forward-looking statements, but the absence of these words does not mean that a statement is not forward-looking. Forward-looking statements in this Quarterly Report on Form 10-Q may include, for example, statements about: • the effect of and uncertainties related to the ongoing COVID-19 pandemic (including any government responses thereto) and any continued recovery from the impact of the COVID-19 pandemic; • our ability to achieve and maintain profitability in the future; • the impact on our business of the regulatory environment and complexities with compliance; • our ability to become a bank holding company and acquire a national bank charter; • our ability to respond to general economic conditions; • our ability to manage our growth effectively and our expectations regarding the development and expansion of our business; • our ability to access sources of capital, including debt financing and other sources of capital to finance operations and growth; • the success of our marketing efforts and our ability to expand our member base; • our ability to grow market share in existing markets or any new markets we may enter; • our ability to develop new products, features and functionality that are competitive and meet market needs; • our ability to diversify our core student loan business into other lending products and broaden our suite of financial services offerings; • our ability to realize the benefits of our strategy, including what we refer to as our financial services productivity loop, and achieve scale in our Financial Services segment; • our ability to make accurate credit and pricing decisions or effectively forecast our loss rates; • our ability to establish and maintain an effective system of internal controls over financial reporting; • our ability to maintain the listing of our securities on Nasdaq; • our ability to realize the anticipated benefits of the Business Combination; and • the outcome of any legal or governmental proceedings that may be instituted against us. These forward-looking statements are based on information available as of the date of this Quarterly Report on Form 10-Q and current expectations, forecasts and assumptions, and involve a number of judgments, risks and uncertainties. Accordingly, forward-looking statements should not be relied upon as representing our views as of any subsequent date, and we do not undertake any obligation to update forward-looking statements to reflect events or circumstances after the date they were made, whether as a result of new information, future events or otherwise, except as may be required under applicable securities laws. As a result of a number of known and unknown risks and uncertainties, our actual results or performance may be materially different from those expressed or implied by these forward-looking statements. You should not place undue reliance on these forward-looking statements. 2 TABLE OF CONTENTS TRADEMARKS This document contains references to trademarks, service marks and trade names owned by us or belonging to other entities. Solely for convenience, trademarks, service marks and trade names referred to in this document may appear without the ® or ™ symbols, but such references are not intended to indicate, in any way, that we or the applicable licensor will not assert, to the fullest extent under applicable law, our or its rights to these trademarks, service marks and trade names. SoFi Technologies does not intend its use or display of other companies’ trademarks, service marks or trade names to imply a relationship with, or endorsement or sponsorship of it by, any other companies. All trademarks, service marks and trade names included in this document are the property of their respective owners. 3 TABLE OF CONTENTS PART I – FINANCIAL INFORMATION Item 1. Financial Statements SoFi Technologies, Inc. Unaudited Condensed Consolidated Balance Sheets (In Thousands, Except for Share Data) September 30, 2021 December 31, 2020 Assets Cash and cash equivalents $ 533,523 $ 872,582 Restricted cash and restricted cash equivalents (1) 320,705 450,846 Investments in available-for-sale securities (amortized cost of $ 196,956 and $ 0 , respectively) 197,203 — Loans, less allowance for credit losses on loans at amortized cost of $ 3,000 and $ 219 , respectively (1)(2) 4,865,558 4,879,303 Servicing rights 163,474 149,597 Securitization investments 392,058 496,935 Equity method investments 19,979 107,534 Property, equipment and software 99,260 81,489 Goodwill 898,527 899,270 Intangible assets 301,191 355,086 Operating lease right-of-use assets 117,748 116,858 Related party notes receivable — 17,923 Other assets, less allowance for credit losses of $ 1,959 and $ 562 , respectively 174,098 136,076 Total assets $ 8,083,324 $ 8,563,499 Liabilities, temporary equity and permanent equity (deficit) Liabilities: Accounts payable, accruals and other liabilities (1) 325,456 412,950 Operating lease liabilities 139,903 139,796 Debt (1) 2,770,226 4,798,925 Residual interests classified as debt (1) 103,898 118,298 Warrant liabilities 174,938 39,959 Total liabilities 3,514,421 5,509,928 Commitments, guarantees, concentrations and contingencies (Note 15) Temporary equity (3) : Redeemable preferred stock, $ 0.00 par value: 100,000,000 and 570,562,965 shares authorized; 3,234,000 and 469,150,522 shares issued and outstanding as of September 30, 2021 and December 31, 2020, respectively 320,374 3,173,686 Permanent equity (deficit): Common stock, $ 0.00 par value: 3,100,000,000 and 789,167,056 shares authorized; 805,667,914 and 115,084,358 shares issued and outstanding as of September 30, 2021 and December 31, 2020, respectively (4) 80 — Additional paid-in capital 5,321,009 579,228 Accumulated other comprehensive loss ( 458 ) ( 166 ) Accumulated deficit ( 1,072,102 ) ( 699,177 ) Total permanent equity (deficit) 4,248,529 ( 120,115 ) Total liabilities, temporary equity and permanent equity (deficit) $ 8,083,324 $ 8,563,499 _______________ (1) Financial statement line items include amounts in consolidated variable interest entities (“VIEs”). See Note 5. (2) As of September 30, 2021 and December 31, 2020, includes loans measured at fair value of $ 4,793,546 and $ 4,859,068 , respectively, and loans measured at amortized cost of $ 72,012 and $ 20,235 , respectively. See Note 1, Note 4, Note 7 and Note 8. (3) Redemption amounts are $ 323,400 and $ 3,210,470 as of September 30, 2021 and December 31, 2020, respectively. (4) Includes 100,000,000 non-voting common shares authorized and no non-voting common shares issued and outstanding as of September 30, 2021, and 8,714,000 shares authorized and 2,406,549 shares outstanding as of December 31, 2020. See Note 11 for additional information. The accompanying notes are an integral part of these unaudited condensed consolidated financial statements. 4 TABLE OF CONTENTS SoFi Technologies, Inc. Unaudited Condensed Consolidated Statements of Operations and Comprehensive Loss (In Thousands, Except for Share and Per Share Data) Three Months Ended September 30, Nine Months Ended September 30, 2021 2020 2021 2020 Interest income Loans $ 89,844 $ 81,130 $ 246,743 $ 244,731 Securitizations 2,999 5,337 11,260 18,898 Related party notes — 778 211 2,709 Other 758 872 2,023 5,126 Total interest income 93,601 88,117 260,237 271,464 Interest expense Securitizations and warehouses 19,360 34,280 75,418 121,481 Corporate borrowings 1,366 4,345 7,752 8,849 Other 500 280 1,400 2,026 Total interest expense 21,226 38,905 84,570 132,356 Net interest income 72,375 49,212 175,667 139,108 Noninterest income Loan origination and sales 142,147 103,869 362,211 271,082 Securitizations ( 4,551 ) 12,752 ( 6,613 ) ( 63,002 ) Servicing 458 ( 6,637 ) ( 11,875 ) ( 18,298 ) Technology Platform fees 49,951 35,405 140,560 51,607 Other 11,626 6,186 39,314 13,544 Total noninterest income 199,631 151,575 523,597 254,933 Total net revenue 272,006 200,787 699,264 394,041 Noninterest expense Technology and product development 74,434 55,428 209,771 143,432 Sales and marketing 114,985 77,458 297,170 204,395 Cost of operations 69,591 51,821 187,785 125,886 General and administrative 40,461 58,766 373,374 161,284 Provision for credit losses 2,401 — 2,887 — Total noninterest expense 301,872 243,473 1,070,987 634,997 Loss before income taxes ( 29,866 ) ( 42,686 ) ( 371,723 ) ( 240,956 ) Income tax (expense) benefit ( 181 ) ( 192 ) ( 1,202 ) 99,519 Net loss $ ( 30,047 ) $ ( 42,878 ) $ ( 372,925 ) $ ( 141,437 ) Other comprehensive income (loss) Unrealized losses on available-for-sale securities, net ( 150 ) — ( 150 ) — Foreign currency translation adjustments, net 204 24 ( 142 ) ( 19 ) Total other comprehensive income (loss) 54 24 ( 292 ) ( 19 ) Comprehensive loss $ ( 29,993 ) $ ( 42,854 ) $ ( 373,217 ) $ ( 141,456 ) Loss per share (Note 16) Loss per share – basic $ ( 0.05 ) $ ( 0.70 ) $ ( 0.94 ) $ ( 2.38 ) Loss per share – diluted $ ( 0.05 ) $ ( 0.70 ) $ ( 0.94 ) $ ( 2.38 ) Weighted average common stock outstanding – basic 800,565,830 75,320,032 429,750,486 72,296,724 Weighted average common stock outstanding – diluted 800,565,830 75,320,032 429,750,486 72,296,724 The accompanying notes are an integral part of these unaudited condensed consolidated financial statements. 5 TABLE OF CONTENTS SoFi Technologies, Inc. Unaudited Condensed Consolidated Statements of Changes in Temporary Equity and Permanent Equity (Deficit) (In Thousands, Except for Share Data) Common Stock Additional Paid-In Capital Accumulated Other Comprehensive Loss Accumulated Deficit Permanent Equity Temporary Equity Shares Amount Shares Amount Balance at June 30, 2021 794,692,813 $ 79 $ 5,249,878 $ ( 512 ) $ ( 1,042,055 ) $ 4,207,390 3,234,000 $ 320,374 Stock-based compensation expense — — 72,681 — — 72,681 — — Vesting of RSUs 8,081,148 1 ( 1 ) — — — — — Stock withheld related to taxes on vested RSUs ( 555,031 ) — ( 8,637 ) — — ( 8,637 ) — — Exercise of common stock options 3,448,984 — 17,277 — — 17,277 — — Redeemable preferred stock dividends — — ( 10,189 ) — — ( 10,189 ) — — Net loss — — — — ( 30,047 ) ( 30,047 ) — — Other comprehensive income, net — — — 54 — 54 — — Balance at September 30, 2021 805,667,914 $ 80 $ 5,321,009 $ ( 458 ) $ ( 1,072,102 ) $ 4,248,529 3,234,000 $ 320,374 Common Stock Additional Paid-In Capital Accumulated Other Comprehensive Loss Accumulated Deficit Permanent Equity (Deficit) Temporary Equity Shares Amount Shares Amount Balance at January 1, 2021 66,034,174 $ — $ 579,228 $ ( 166 ) $ ( 699,177 ) $ ( 120,115 ) 256,459,941 $ 3,173,686 Retroactive conversion of shares due to Business Combination 49,050,184 — — — — — 212,690,581 — Balance at January 1, 2021, as converted 115,084,358 — 579,228 ( 166 ) ( 699,177 ) ( 120,115 ) 469,150,522 3,173,686 Stock-based compensation expense — — 162,289 — — 162,289 — — Vesting of RSUs 12,026,846 1 ( 1 ) — — — — — Stock withheld related to taxes on vested RSUs ( 2,088,755 ) — ( 37,240 ) — — ( 37,240 ) — — Exercise of common stock options 5,652,778 — 20,642 — — 20,642 — — Redeemable preferred stock dividends — — ( 30,236 ) — — ( 30,236 ) — — Issuance of contingently issuable stock 1,281,132 — — — — — — — Cancellation of redeemable preferred stock related to business combination — — — — — — ( 83,856 ) ( 743 ) Conversion of redeemable preferred stock warrants into permanent equity — — 161,775 — — 161,775 — — Conversion of redeemable preferred stock to common stock 450,832,666 45 2,702,524 — — 2,702,569 ( 450,832,666 ) ( 2,702,569 ) Issuance of common stock in connection with Business Combination and PIPE Investment 222,878,889 22 1,789,579 — — 1,789,601 — — Costs directly attributable to the issuance of common stock in connection with Business Combination and PIPE Investment — — ( 27,539 ) — — ( 27,539 ) — — Repurchase of redeemable common stock — — — — — — ( 15,000,000 ) ( 150,000 ) Change in par for historical SoFi common stock — 12 ( 12 ) — — — — — Net loss — — — — ( 372,925 ) ( 372,925 ) — — Other comprehensive loss, net — — — ( 292 ) — ( 292 ) — — Balance at September 30, 2021 805,667,914 $ 80 $ 5,321,009 $ ( 458 ) $ ( 1,072,102 ) $ 4,248,529 3,234,000 $ 320,374 The accompanying notes are an integral part of these unaudited condensed consolidated financial statements. 6 TABLE OF CONTENTS SoFi Technologies, Inc. Unaudited Condensed Consolidated Statements of Changes in Temporary Equity and Permanent Equity (Deficit) (Continued) (In Thousands, Except for Share Data) Common Stock Additional Paid-In Capital Accumulated Other Comprehensive Loss Accumulated Deficit Permanent Deficit Temporary Equity Shares Amount Shares Amount Balance at June 30, 2020 42,612,505 $ — $ 220,708 $ ( 64 ) $ ( 573,157 ) $ ( 352,513 ) 271,557,528 $ 3,253,887 Retroactive conversion of shares due to Business Combination 31,652,569 — — — — — 224,534,257 — Balance at June 30, 2020, as converted 74,265,074 — 220,708 ( 64 ) ( 573,157 ) ( 352,513 ) 496,091,785 3,253,887 Stock-based compensation expense — — 26,551 — — 26,551 — — Equity-based payments to non-employees 130,710 — — — — — — — Vesting of RSUs 3,159,362 — — — — — — — Stock withheld related to taxes on vested RSUs ( 1,211,516 ) — ( 8,857 ) — — ( 8,857 ) — — Exercise of common stock options 964,453 — 1,432 — — 1,432 — — Redeemable preferred stock dividends — — ( 10,189 ) — — ( 10,189 ) — — Note receivable issuance to stockholder, inclusive of interest — — ( 332 ) — — ( 332 ) — — Note receivable payments from stockholder, inclusive of interest — — 6,494 — — 6,494 — — Net loss — — — — ( 42,878 ) ( 42,878 ) — — Other comprehensive income, net — — — 24 — 24 — — Balance at September 30, 2020 77,308,083 $ — $ 235,807 $ ( 40 ) $ ( 616,035 ) $ ( 380,268 ) 496,091,785 $ 3,253,887 Common Stock Additional Paid-In Capital Accumulated Other Comprehensive Loss Accumulated Deficit Permanent Deficit Temporary Equity Shares Amount Shares Amount Balance at January 1, 2020 39,614,844 $ — $ 135,517 $ ( 21 ) $ ( 474,558 ) $ ( 339,062 ) 218,814,230 $ 2,439,731 Retroactive conversion of shares due to Business Combination 29,425,906 — — — — — 185,356,535 — Balance at January 1, 2020, as converted 69,040,750 — 135,517 ( 21 ) ( 474,558 ) ( 339,062 ) 404,170,765 2,439,731 Stock-based compensation expense — — 69,781 — — 69,781 — — Equity-based payments to non-employees 130,710 — 908 — — 908 — — Vesting of RSUs 8,349,112 — — — — — — — Stock withheld related to taxes on vested RSUs ( 3,242,490 ) — ( 21,485 ) — — ( 21,485 ) — — Exercise of common stock options 1,121,332 — 1,847 — — 1,847 — — Vested stock options assumed in acquisition — — 32,197 — — 32,197 — — Common stock purchases ( 10,687 ) — — — ( 40 ) ( 40 ) — — Redeemable preferred stock dividends — — ( 30,346 ) — — ( 30,346 ) — — Note receivable issuance to stockholder, inclusive of interest — — ( 1,671 ) — — ( 1,671 ) — — Note receivable payments from stockholder, inclusive of interest — — 33,494 — — 33,494 — — Issuance of redeemable preferred stock in acquisition — — — — — — 91,921,020 814,156 Issuance of common stock in acquisition 1,919,356 — 15,565 — — 15,565 — — Net loss — — — — ( 141,437 ) ( 141,437 ) — — Other comprehensive loss, net — — — ( 19 ) — ( 19 ) — — Balance at September 30, 2020 77,308,083 $ — $ 235,807 $ ( 40 ) $ ( 616,035 ) $ ( 380,268 ) 496,091,785 $ 3,253,887 The accompanying notes are an integral part of these unaudited condensed consolidated financial statements. 7 TABLE OF CONTENTS SoFi Technologies, Inc. Unaudited Condensed Consolidated Statements of Cash Flows (In Thousands) Nine Months Ended September 30, 2021 2020 Operating activities Net loss $ ( 372,925 ) $ ( 141,437 ) Adjustments to reconcile net loss to net cash used in operating activities: Depreciation and amortization 75,041 44,346 Deferred debt issuance and discount expense 14,228 22,893 Stock-based compensation expense 162,289 69,781 Equity-based payments to non-employees — 908 Deferred income taxes 699 ( 99,551 ) Equity method investment earnings 21 ( 6,508 ) Accretion of seller note interest expense — 4,556 Fair value changes in residual interests classified as debt 19,261 28,815 Fair value changes in securitization investments ( 7,106 ) ( 11,402 ) Fair value changes in warrant liabilities 96,504 6,371 Fair value adjustment to related party notes receivable ( 169 ) 319 Other ( 4,240 ) 803 Changes in operating assets and liabilities: Originations and purchases of loans ( 9,375,583 ) ( 8,081,253 ) Proceeds from sales and repayments of loans 9,297,238 7,643,289 Other changes in loans 2,138 ( 36,010 ) Servicing assets ( 13,877 ) 43,970 Related party notes receivable interest income 1,399 65 Other assets ( 26,883 ) ( 17,495 ) Accounts payable, accruals and other liabilities 18,037 43,025 Net cash used in operating activities $ ( 113,928 ) $ ( 484,515 ) Investing activities Purchases of property, equipment, software and intangible assets $ ( 38,445 ) $ ( 17,617 ) Related party notes receivable issuances — ( 7,643 ) Proceeds from repayment of related party notes receivable 16,693 — Proceeds from sales of available-for-sale investments 15,789 — Purchases of available-for-sale investments ( 205,128 ) — Proceeds from non-securitization investments 109,534 974 Purchases of non-securitization investments ( 20,000 ) ( 145 ) Proceeds from securitization investments 201,093 245,087 Acquisition of business, net of cash acquired — ( 32,392 ) Net cash provided by investing activities $ 79,536 $ 188,264 The accompanying notes are an integral part of these unaudited condensed consolidated financial statements. 8 TABLE OF CONTENTS SoFi Technologies, Inc. Unaudited Condensed Consolidated Statements of Cash Flows (Continued) (In Thousands) Nine Months Ended September 30, 2021 2020 Financing activities Proceeds from debt issuances $ 6,296,901 $ 8,134,412 Repayment of debt ( 8,368,904 ) ( 7,719,848 ) Payment of debt issuance costs ( 5,136 ) ( 14,115 ) Taxes paid related to net share settlement of stock-based awards ( 37,240 ) ( 21,485 ) Purchases of common stock ( 526 ) ( 40 ) Redemptions of redeemable common and preferred stock ( 282,859 ) — Proceeds from Business Combination and PIPE Investment 1,989,851 — Payment of costs directly attributable to the issuance of common stock in connection with Business Combination and PIPE Investment ( 26,951 ) — Proceeds from stock option exercises 20,642 1,847 Note receivable principal repayments from stockholder — 30,720 Payment of redeemable preferred stock dividends ( 20,047 ) ( 20,157 ) Finance lease principal payments ( 397 ) ( 244 ) Net cash (used in) provided by financing activities $ ( 434,666 ) $ 391,090 Effect of exchange rates on cash and cash equivalents ( 142 ) ( 19 ) Net (decrease) increase in cash, cash equivalents, restricted cash and restricted cash equivalents $ ( 469,200 ) $ 94,820 Cash, cash equivalents, restricted cash and restricted cash equivalents at beginning of period 1,323,428 690,206 Cash, cash equivalents, restricted cash and restricted cash equivalents at end of period $ 854,228 $ 785,026 Reconciliation to amounts on consolidated balance sheets (as of period end) Cash and cash equivalents $ 533,523 $ 493,047 Restricted cash and restricted cash equivalents 320,705 291,979 Total cash, cash equivalents, restricted cash and restricted cash equivalents $ 854,228 $ 785,026 The accompanying notes are an integral part of these unaudited condensed consolidated financial statements. 9 TABLE OF CONTENTS SoFi Technologies, Inc. Unaudited Condensed Consolidated Statements of Cash Flows (Continued) (In Thousands) Nine Months Ended September 30, 2021 2020 Supplemental non-cash investing and financing activities Securitization investments acquired via loan transfers $ 89,111 $ 151,768 Non-cash property, equipment, software and intangible asset additions 859 — Deconsolidation of residual interests classified as debt — 101,718 Deconsolidation of securitization debt — 770,918 Costs directly attributable to the issuance of common stock paid in 2020 588 — Reduction to temporary equity associated with purchase price adjustments 743 — Warrant liabilities recognized in conjunction with the Business Combination 200,250 — Series H warrant liabilities conversion to common stock warrants 39,959 — Conversion of temporary equity into permanent equity in conjunction with the Business Combination 2,702,569 — Seller note issued in acquisition — 243,998 Redeemable preferred stock issued in acquisition — 814,156 Common stock options assumed in acquisition — 32,197 Issuance of common stock in acquisition — 15,565 Finance lease right-of-use assets acquired — 15,100 Property, equipment and software acquired in acquisition — 2,026 Debt assumed in acquisition — 5,832 Redeemable preferred stock dividends accrued but unpaid 10,189 10,189 Available-for-sale investment securities purchased but unpaid 7,712 — Deferred debt issuance costs accrued but unpaid 850 1,630 The accompanying notes are an integral part of these unaudited condensed consolidated financial statements. 10 TABLE OF CONTENTS SoFi Technologies, Inc. Notes to Unaudited Condensed Consolidated Financial Statements (In Thousands, Unless Otherwise Stated and Except for Share and Per Share Data) Note 1. Organization, Summary of Significant Accounting Policies and New Accounting Standards Organization Social Finance, Inc. (“Social Finance”) entered into a merger agreement (the “Agreement”) with Social Capital Hedosophia Holdings Corp. V (“SCH”) on January 7, 2021. The transactions contemplated by the terms of the Agreement were completed on May 28, 2021 (the “Closing”), in conjunction with which SCH changed its name to SoFi Technologies, Inc. (hereafter referred to, collectively with its subsidiaries, as “SoFi”, the “Company”, “we”, “us” or “our”, unless the context otherwise requires). The transactions contemplated in the Agreement are collectively referred to as the “Business Combination”. See Note 2 for additional information on the Business Combination. SoFi Technologies, Inc. is a financial services platform. SoFi was founded in 2011 to offer an innovative approach to the private student loan market by providing student loan refinancing options. The Company conducts its business through three reportable segments: Lending, Technology Platform and Financial Services. Since its founding, SoFi has expanded its lending strategy to offer home loans, personal loans and credit cards. The Company has also developed non-lending financial products, such as money management and investment product offerings, and has also leveraged its financial services platform to empower other businesses. Through strategic acquisitions, the Company expanded its investment product offerings into Hong Kong, and also operates as a platform-as-a-service for a variety of financial service providers, providing the infrastructure to facilitate core client-facing and back-end capabilities, such as account setup, account funding, direct deposit, authorizations and processing, payments functionality and check account balance features. For additional information on these business combinations, see Note 2. For additional information on our reportable segments, see Note 17. Summary of Significant Accounting Policies Basis of Presentation The unaudited condensed consolidated financial statements include the accounts of the Company, its wholly-owned and majority-owned subsidiaries and certain consolidated VIEs. All intercompany accounts were eliminated in consolidation. The unaudited condensed consolidated financial statements were prepared in conformity with accounting principles generally accepted in the United States (“GAAP”) and in accordance with the rules and regulations of the Securities and Exchange Commission (“SEC”). We condensed or omitted certain notes and other financial information from the interim financial statements presented herein. The financial data and other information disclosed in these Notes to Unaudited Condensed Consolidated Financial Statements related to the three and nine months ended September 30, 2021 and 2020 are unaudited and should be read in conjunction with the annual consolidated statements included in our prospectus filing on Form 424B3 filed with the SEC on May 7, 2021. In the opinion of management, the unaudited condensed consolidated financial statements reflect all adjustments, which are of a normal recurring nature, necessary for a fair statement of the Company’s financial condition and results of operations and cash flows for the interim periods presented. The results for the three and nine months ended September 30, 2021 are not necessarily indicative of the results to be expected for the full year ending December 31, 2021. As a result of the Business Combination completed on May 28, 2021, prior period share and per share amounts presented in the accompanying unaudited condensed consolidated financial statements and these related notes have been retroactively converted in accordance with Accounting Standards Codification (“ASC”) 805, Business Combinations . See Note 2 for additional information. Use of Judgments, Assumptions and Estimates The preparation of our unaudited condensed consolidated financial statements and related disclosures in conformity with GAAP requires management to make assumptions and estimates that affect the amounts reported in our unaudited condensed consolidated financial statements and accompanying notes. Management bases its estimates on historical experience and on various other factors it believes to be reasonable under the circumstances, the results of which form the basis for making judgments about the carrying values of our assets and liabilities. These judgments, assumptions and estimates include, but are not limited to, the following: (i) fair value measurements; (ii) stock-based compensation expense; (iii) consolidation of variable interest entities; and (iv) business combinations. These judgments, estimates and assumptions are inherently subjective in nature and, therefore, actual results may differ from our estimates and assumptions. 11 TABLE OF CONTENTS SoFi Technologies, Inc. Notes to Unaudited Condensed Consolidated Financial Statements (continued) (In Thousands, Unless Otherwise Stated and Except for Share and Per Share Data) Business Combinations We account for acquisitions of entities or asset groups that qualify as businesses using the acquisition method of accounting in accordance with ASC 805, Business Combinations . Purchase consideration is allocated to the tangible and intangible assets acquired and liabilities assumed based on the estimated fair values as of the acquisition date, which are measured in accordance with the principles outlined in ASC 820, Fair Value Measurement . The determination of fair value requires management to make estimates about discount rates, future expected cash flows, market conditions and other future events that are highly subjective in nature. The excess of the total purchase consideration over the fair value of the identified net assets acquired is recognized as goodwill. The results of the acquired businesses are included in our results of operations beginning from the date of acquisition. Acquisition-related costs are expensed as incurred. During the measurement period, which may be up to one year from the acquisition date, we may record adjustments to the allocation of purchase consideration and to the fair values of assets acquired and liabilities assumed to the extent that additional information becomes available. After this period, any subsequent adjustments are recorded in the consolidated statements of operations and comprehensive income (loss). The Business Combination with SCH during the nine-months ended September 30, 2021 was accounted for as a reverse recapitalization. See Note 2 for additional information. Consolidation of Variable Interest Entities We enter into arrangements in which we originate loans, establish a special purpose entity (“SPE”), and transfer loans to the SPE. We retain the servicing rights of those loans and hold additional interests in the SPE. We evaluate each such arrangement to determine whether we have a variable interest. If we determine that we have a variable interest in an SPE, we then determine whether the SPE is a VIE. If the SPE is a VIE, we assess whether we are the primary beneficiary of the VIE, such that we must consolidate the VIE on our consolidated balance sheets. To determine if we are the primary beneficiary, we identify the most significant activities and determine who has the power over those activities, and who absorbs the variability in the economics of the VIE. As of September 30, 2021 and December 31, 2020, we had 13 and 15 consolidated VIEs, respectively, on our consolidated balance sheets. Refer to Note 5 for more details regarding our consolidated VIEs. As of September 30, 2021 and December 31, 2020, there was one and one consolidated VIE, respectively, which did not have securitization debt. We periodically reassess our involvement with each VIE in which we have a variable interest. We monitor matters related to our ability to control economic performance, such as management of the SPE and its underlying loans, contractual changes in the services provided, the extent of our ownership, and the rights of third parties to terminate us as the VIE servicer. In addition, we monitor the financial performance of each VIE for indications that we may or may not have the right to absorb benefits or the obligation to absorb losses associated with variability in the financial performance of the VIE that could potentially be significant to that VIE, which we define as a variable interest of greater than 10 %. A significant change to the pertinent rights of us or other parties, or a significant change to the ranges of possible financial performance outcomes used in our assessment of the variability of cash flows due to us, could impact the determination of whether or not a VIE should be consolidated in future periods. VIE consolidation and deconsolidation may lead to increased volatility in our financial results and impact period-over-period comparability. Our maximum exposure to loss as a result of our involvement with consolidated VIEs is limited to our investment, which is eliminated in consolidation. There are no liquidity arrangements, guarantees or other commitments by third parties that may affect the fair value or risk of our variable interests in consolidated VIEs. Fair Value Measurements Fair value is defined as the price that would be received for an asset or paid to transfer a liability (an exit price) in the principal or most advantageous market for the asset or liability in an orderly transaction between market participants on the measurement date. We use a three-level fair value hierarchy to classify and disclose all assets and liabilities measured at fair value on a recurring basis in periods subsequent to their initial measurement. The hierarchy requires us to use observable inputs when available and to minimize the use of unobservable inputs when determining fair value. The three levels are defined as follows: • Level 1 — Quoted prices in active markets for identical assets or liabilities, accessible by us at the measurement date. 12 TABLE OF CONTENTS SoFi Technologies, Inc. Notes to Unaudited Condensed Consolidated Financial Statements (continued) (In Thousands, Unless Otherwise Stated and Except for Share and Per Share Data) • Level 2 — Quoted prices for similar assets or liabilities in active markets, or quoted prices for identical or similar assets or liabilities in markets that are not active, or observable inputs other than quoted prices. • Level 3 — Unobservable inputs for assets or liabilities for which there is little or no market data, which requires us to develop our own assumptions. These unobservable assumptions reflect estimates of inputs that market participants would use in pricing the asset or liability. Valuation techniques include the use of option pricing models, discounted cash flow models, or similar techniques, which incorporate management’s own estimates of assumptions that market participants would use in pricing the asset or liability. A financial instrument’s categorization within the fair value hierarchy is based on the lowest level of input that is significant to the fair value measurement. Instruments are categorized in Level 3 of the fair value hierarchy based on the significance of unobservable factors in the overall fair value measurement. As a result, the related gains and losses for assets and liabilities within the Level 3 category presented in Note 8 may include changes in fair value that are attributable to both observable and unobservable inputs. Transfers of Financial Assets The transfer of an entire financial asset and, to a much lesser extent, a participating interest in an entire financial asset in which we surrender control over the asset is accounted for as a sale if all of the following conditions are met: • the financial asset is isolated from the transferor and its consolidated affiliates as well as its creditors, even in bankruptcy or other receivership; • the transferee or beneficial interest holders have the right to pledge or exchange the transferred financial asset; and • the transferor, its consolidated affiliates and its agents do not maintain effective control over the transferred financial asset. Loan sales are aggregated in the financial statements due to the similarity of both the loans transferred and servicing arrangements. The portion of our income relating to ongoing servicing and the fair value of our servicing rights are dependent upon the performance of the sold loans. We measure the gain or loss on the sale of financial assets as the net assets received from the sale less the carrying amount of the loans sold. The net assets received from the sale represent the fair value of any assets obtained or liabilities incurred as part of the transaction, including but not limited to cash, servicing assets, retained securitization investments and recourse obligations. When securitizing loans, we employ a two-step transaction that includes the isolation of the underlying loans in a trust and the sale of beneficial interests in the trust to a bankruptcy-remote entity. Transfers of financial assets that do not qualify for sale accounting are reported as secured borrowings. Accordingly, the related assets remain on our consolidated balance sheets and continue to be reported and accounted for as if the transfer had not occurred. Cash proceeds received from these transfers are reported as liabilities, with related interest expense recognized over the life of the related secured borrowing. As a component of the loan sale agreements, we make certain representations to third parties that purchase our previously-held loans, some of which include Federal National Mortgage Association (“FNMA”) repurchase requirements and all of which are standard in nature and do not constrain our ability to recognize a sale for accounting purposes. Any significant estimated post-sale obligations or contingent obligations to the purchaser of the loans arising from these representations are accrued if probable and estimable. Pursuant to ASC 460, Guarantees , we establish a loan repurchase liability, which is based on historical experience and any current developments which would make it probable that we would buy back loans previously sold to third parties at the historical sales price. The loan repurchase liability is presented within accounts payable, accruals and other liabilities in the consolidated balance sheets, with the corresponding charges recorded within noninterest income — loan origination and sales in the consolidated statements of operations and comprehensive income (loss). Cash and Cash Equivalents Cash and cash equivalents primarily include unrestricted deposits with financial institutions in checking, money market and short-term certificate of deposit accounts and certain short-term commercial paper. We consider all highly liquid investments with original maturity dates of three months or less to be cash equivalents. 13 TABLE OF CONTENTS SoFi Technologies, Inc. Notes to Unaudited Condensed Consolidated Financial Statements (continued) (In Thousands, Unless Otherwise Stated and Except for Share and Per Share Data) Restricted Cash and Restricted Cash Equivalents Restricted cash and restricted cash equivalents consist primarily of cash deposits, certificate of deposit accounts held on reserve, money market funds held by consolidated VIEs, funds reserved for committed stock purchases, and collection balances. These accounts are earmarked as restricted because these balances are either member balances held in our custody, cash segregated for regulatory purposes associated with brokerage activities, escrow requirements for certain debt facilities and derivative agreements, deposits required by various bank holding companies we partner with (“Member Banks”) that support one or more of our products, loan collection balances awaiting disbursement, consolidated VIE cash balances that we cannot use for general operating purposes, or other legally restricted balances. Investments in Debt Securities In the third quarter of 2021, we began investing in debt securities. The accounting and measurement framework for our investments in debt securities is determined based on the security classification. We classify investments in debt securities as available-for-sale (“AFS”) when we do not have an intent and ability to hold the securities until maturity. We do not hold investments in debt securities for trading purposes. As of September 30, 2021, all of our investments in debt securities were classified as AFS. Hereafter, these investments are referred to as “investments in AFS debt securities”. We record investments in AFS debt securities at fair value in our consolidated balance sheets, with unrealized gains and losses recorded, net of tax, as a component of accumulated other comprehensive income (loss) (“AOCI”). See Note 8 for additional information on our fair value estimates for investments in AFS debt securities. The amortized cost basis of our investments in AFS debt securities reflects the security’s acquisition cost, adjusted for amortization of premium or accretion of discount, and net of deferred fees and costs, collection of cash and charge-offs, as applicable. The fair values of our investments in AFS debt securities reflect the amortized cost basis adjusted for accrued interest and unrealized gains and losses. For purposes of determining gross realized gains and losses, the cost of securities sold is based on specific identification. We elected to present accrued interest for AFS debt securities within investments in available-for-sale securities in the consolidated balance sheets. Purchase discounts, premiums, and other basis adjustments for investments in AFS debt securities are generally amortized into interest income over the contractual life of the security using the effective interest method. However, premiums on certain callable debt securities are amortized to the earliest call date. Amortization of premiums and discounts and other basis adjustments for investments in AFS debt securities, as well as interest income earned on the investments, are recognized within interest income—other , and realized gains and losses on investments in AFS debt securities are recognized within noninterest income – other in the consolidated statements of operations and comprehensive income (loss). As of September 30, 2021, our investments in AFS debt securities portfolio includes agency to-be-announced (“TBA”) securities, which are securities that will be delivered under the purchase contract at a later date when the underlying security is issued. We made a policy election to account for contracts to purchase or sell existing securities on a trade-date basis and, as such, we record the purchase at inception of the contract on a gross basis, with the offsetting payable for the settlement amount recorded within accounts payable, accruals and other liabilities in the consolidated balance sheets. In accordance with ASC 326-30, Financial Instruments—Credit Losses—Available-For-Sale Debt Securities , an investment in AFS debt security is considered impaired if its fair value is less than its amortized cost. If we determine that we have the intent to sell the impaired investment in AFS debt security, or if it is more likely than not that we will be required to sell the impaired investment in AFS debt security before recovery of its amortized cost, we recognize the full impairment loss reflecting the difference between the amortized cost (net of any prior recognized allowance) and the fair value of the investment in AFS debt security within noninterest income — other in the consolidated statements of operations and comprehensive income (loss). If neither of the above conditions exists, we evaluate whether the impairment loss is attributable to credit-related or non-credit-related factors. Any impairment that is not credit-related is recognized in other comprehensive income (loss) , net of taxes. See “ Allowance for Credit Losses” below for the factors we consider in identifying credit-related impairment and the treatment of credit losses. See Note 3 for additional information on our investments in AFS debt securities. Loans As of September 30, 2021, our loan portfolio consisted of personal loans, student loans and home loans, which are measured at fair value, and credit card loans, which are measured at amortized cost. As of December 31, 2020, we also had a commercial loan, which is further discussed below. 14 TABLE OF CONTENTS SoFi Technologies, Inc. Notes to Unaudited Condensed Consolidated Financial Statements (continued) (In Thousands, Unless Otherwise Stated and Except for Share and Per Share Data) Loans Measured at Fair Value Our personal loans, student loans and home loans are carried at fair value on a recurring basis and, therefore, all direct fees and costs related to the origination process are recognized in earnings as earned or incurred. We elected the fair value option to measure these loans, as we believe that fair value best reflects the expected economic performance of the loans, as well as our intentions given our gain on sale origination model. We record the initial fair value measurement and subsequent measurement changes in fair value in the period in which the changes occur within noninterest income — loan origination and sales in the consolidated statements of operations and comprehensive income (loss). Our consolidated loans are originated with the intention to sell to third-party purchasers and are, therefore, considered held for sale. Securitized loans are assets held by consolidated SPEs as collateral for bonds issued, for which fair value changes are recorded within noninterest income — securitizations in the consolidated statements of operations and comprehensive income (loss). Gains or losses recognized upon deconsolidation of a VIE are also recorded within noninterest income — securitizations . Loans do not trade in an active market with readily observable prices. We determine the fair value of our loans using a discounted cash flow methodology, while also considering market data as it becomes available. We classify loans as Level 3 because the valuations utilize significant unobservable inputs. We consider a loan to be delinquent when the borrower has not made the scheduled payment amount within one day of the scheduled payment date, provided the borrower is not in school or in deferment, forbearance or within an agreed-upon grace period. Loan deferment is a provision in the student loan contract that permits the borrower to defer payments while enrolled at least half time in school. During the deferment period, interest accrues on the loan balance and is capitalized to the loan when the loan enters repayment status, which begins when the student no longer qualifies for deferment. Whereas deferment only relates to student loans, forbearance applies to student loans, personal loans and home loans. A borrower in repayment may generally request forbearance for reasons including a FEMA-declared disaster, unemployment, economic hardship or general economic uncertainty. Forbearance typically cannot exceed a total of 12 months over the life of the loan. If forbearance is granted, interest continues to accrue during the forbearance period and is capitalized to the loan when the borrower resumes making payments. At the conclusion of a forbearance period, the contractual monthly payment is recalculated and is generally higher as a result. For personal loans and student loans, delinquent loans are charged off after 120 days of delinquency or on the date of confirmed loss. For home loans, delinquent loans are charged off after 180 days of delinquency or on the date of confirmed loss. For all loans, we stop accruing interest and reverse all accrued but unpaid interest on the date of charge off. Additional information about our loans measured at fair value is included in Note 4 through Note 6, as well as Note 8. Loans Measured at Amortized Cost As of September 30, 2021 and December 31, 2020, loans measured at amortized cost included credit card loans. We launched our credit card product in the third quarter of 2020, which was expanded to a broader market in the fourth quarter of 2020. Our credit card loan portfolio had a carrying value of $ 72,012 and $ 3,723 as of September 30, 2021 and December 31, 2020, respectively. During the fourth quarter of 2020, we also issued a commercial loan, which had a principal balance of $ 16,500 and accumulated unpaid interest of $ 12 as of December 31, 2020, all of which was repaid in January 2021. For loans measured at amortized cost, we present accrued interest within interest income — loans in the consolidated balance sheets. Allowance for Credit Losses Effective January 1, 2020, we adopted the provisions of Accounting Standards Update (“ASU”) 2016-13, Measurement of Credit Losses on Financial Instruments , which requires upfront recognition of lifetime expected credit losses using a current expected credit loss model. As of September 30, 2021, the standard was applicable to (i) cash equivalents and restricted cash equivalents, (ii) accounts receivable from contracts with customers, inclusive of servicing related receivables, (iii) margin receivables, which were attributable to our activities at 8 Limited, (iv) certain loan repurchase reserves representing guarantees of credit exposure, (v) loans measured at amortized cost, including credit card loans, and (vi) investments in AFS debt securities. Our approaches to measuring the allowance for credit losses on the applicable financial assets are as follows: Cash equivalents and restricted cash equivalents : Our cash equivalents and restricted cash equivalents are short-term in nature and of high credit quality; therefore, we determined that our exposure to credit losses over the life of these instruments was immaterial. 15 TABLE OF CONTENTS SoFi Technologies, Inc. Notes to Unaudited Condensed Consolidated Financial Statements (continued) (In Thousands, Unless Otherwise Stated and Except for Share and Per Share Data) Accounts receivable from contracts with customers : Accounts receivable from contracts with customers as of the balance sheet dates are recorded at their original invoice amounts reduced by any allowance for credit losses. In accordance with the standard, we pool our accounts receivable, all of which are short-term in nature and arise from contracts with customers, based on shared risk characteristics to assess their risk of loss, even when that risk is remote. Certain of our historical accounts receivable balances did not have any write-offs. We use the aging method and historical loss rates as a basis for estimating the percentage of current and delinquent accounts receivable balances that will result in credit losses. We consider whether the conditions at the measurement date and reasonable and supportable forecasts about future conditions warrant an adjustment to our historical loss experience. In applying such adjustments, we primarily evaluate changes in customer creditworthiness, current economic conditions, expectations of near-term economic trends and changes in customer payment terms and collection trends. For the measurement dates presented herein, given our methods of collecting funds, and that we have not observed meaningful changes in our customers’ payment behavior, we determined that our historical loss rates remained most indicative of our lifetime expected losses. We record the provision for credit losses on accounts receivable from contracts with customers within noninterest expense — general and administrative in the consolidated statements of operations and comprehensive income (loss). When we determine that a receivable is not collectible, we write off the uncollectible amount as a reduction to both the allowance and the gross asset balance. Recoveries are recorded when received and credited to provision for credit losses. Accrued interest is excluded from the measurement of the allowance for credit losses. Any change in the assumptions used in analyzing a specific account receivable may result in an additional allowance for credit losses being recognized in the period in which the change occurs. See Note 7 for a rollforward of the allowance for credit losses related to our accounts receivable. Margin receivables : Our margin receivables, which are associated with margin lending services we offer to members through 8 Limited, are fully collateralized by the borrowers’ securities under collateral maintenance provisions, to which we regularly monitor adherence. Therefore, using the practical expedient in ASC 326-20-35-6, Financial Instruments — Credit Losses , we did not record expected credit losses on this pool of margin receivables, as the fair value of the underlying collateral is expected to exceed the amortized cost of the receivables. Loan repurchase reserves : We issue financial guarantees related to certain non-agency loan transfers, which are subject to repurchase based on the occurrence of certain credit-related events within a specified amount of time following loan transfer, which does not exceed 90 days from origination. We estimate the contingent guarantee liability based on our historical repurchase activity for similar types of loans and assess whether adjustments to our historical loss experience are required based on current conditions and forecasts of future conditions, as appropriate, as our exposure under the guarantee is short-term in nature. See Note 15 for additional information on our guarantees. Credit card loans : Our estimates of the allowance for credit losses as of September 30, 2021 and December 31, 2020 were $ 3,000 and $ 219 , respectively. Accordingly, our estimate of the allowance for credit losses as of December 31, 2020 was immaterial to the consolidated financial statements. During the third quarter of 2021, we began to segment pools of credit card loans based on consumer credit score bands as measured using FICO scores obtained at the origination of the account (“origination FICO”) and also by delinquency status, which may be adjusted using other risk-differentiating attributes to model charge-off probabilities and the average life over which expected credit losses may occur for the credit card loans within each pool. As our historical internal risk tiers were assigned primarily based on origination FICO, our pooling of our historical assets did not materially change, nor would there have been a material impact on our historical provision for credit losses if we had utilized our current credit quality indicators when setting our historical provision. The pools estimate the likelihood of borrowers with similar origination FICO scores to pay credit obligations based on aggregate credit performance data. When necessary, we apply separate credit loss assumptions to assets that have deteriorated in credit quality such that they no longer share similar risk characteristics with other assets in the same FICO score band. We either estimate the allowance for credit losses on such non-performing assets individually based on individual risk characteristics or as part of a distinct pool of assets that shares similar risk characteristics. We reassess our credit card pools periodically to confirm that all loans within each pool continue to share similar risk characteristics. We establish an allowance for the pooled credit card loans within each pool utilizing the risk model described above, which may then be adjusted for current conditions and reasonable and supportable forecasts of future conditions, including economic conditions. We apply the probability-of-default and loss-given-default assumptions to the drawn balance of credit card loans within each pool to estimate the lifetime expected credit losses within each pool, which are then aggregated to determine the allowance for credit losses. We do not measure credit losses on the undrawn credit exposure, as such undrawn credit exposure is unconditionally cancellable by us. Management further considers an evaluation of overall portfolio credit quality based on 16 TABLE OF CONTENTS SoFi Technologies, Inc. Notes to Unaudited Condensed Consolidated Financial Statements (continued) (In Thousands, Unless Otherwise Stated and Except for Share and Per Share Data) indicators such as changes in our credit decisioning process, underwriting and collection management policies; the effects of external factors, such as regulatory requirements; general economic conditions; and inherent uncertainties in applying the methodology. We record the provision for credit losses on credit card loans within noninterest expense — provision for credit losses in the consolidated statements of operations and comprehensive income (loss). Credit card loans are reported as delinquent when they become 30 or more days past due. Credit card loans are charged off after 180 days of delinquency or on the date of the confirmed loss, at which time we stop accruing interest and reverse all accrued but unpaid interest through interest income as of such date. When a credit card loan is charged off, we record a reduction to the allowance and the credit card loan balance. When recovery payments are received against charged off credit card loans, we record a direct reduction to the provision for credit losses and resume the accrual of interest. Credit card receivables associated with alleged or potential fraudulent transactions are charged off through noninterest expense — general and administrative in the consolidated statements of operations and comprehensive income (loss). There were no credit card loans on nonaccrual status as of September 30, 2021 and December 31, 2020. Credit card loans charged off due to alleged or potential fraudulent transactions, net of recoveries, during the three and nine months ended September 30, 2021 were $ 626 and $ 967 , respectively. Accrued interest receivables written off during the three and nine months ended September 30, 2021 were immaterial. See Note 7 for a rollforward of the allowance for credit losses related to our credit card loans. We elected to exclude interest on credit card loans from the measurement of our allowance, as our policy allows for accrued interest to be reversed in a timely manner. Further, we elected the practical expedient to exclude the accrued interest component of our credit card loans from the quantitative disclosures presented in accordance with the guidance. Credit Quality Indicators The primary credit quality indicators that are important to understanding the overall credit performance of our credit card borrowers and their ability to repay are reflected by delinquency status and by credit performance expectations, as segmented by credit score bands as of September 30, 2021. The Company monitors these credit quality indicators on an ongoing basis. The following table presents the amortized cost basis of our credit card loan portfolio (excluding accrued interest and before the allowance for credit losses) by either current or delinquency status as of the dates indicated: Delinquent Loans Current 30–59 Days 60–89 Days ≥ 90 Days (1) Total Delinquent Loans Total Loans (2) September 30, 2021 Credit card loans $ 71,619 1,123 719 889 2,731 $ 74,350 December 31, 2020 Credit card loans $ 3,864 74 2 — 76 $ 3,940 _______________ (1) As of September 30, 2021, all of the credit card loans that were 90 days or more past due continued to accrue interest. (2) Presented before allowance for credit losses of $ 3,000 and $ 219 as of September 30, 2021 and December 31, 2020, respectively, and excludes accrued interest of $ 662 and $ 2 , respectively. 17 TABLE OF CONTENTS SoFi Technologies, Inc. Notes to Unaudited Condensed Consolidated Financial Statements (continued) (In Thousands, Unless Otherwise Stated and Except for Share and Per Share Data) The following table presents the amortized cost basis of our credit card loan portfolio (excluding accrued interest and before the allowance for credit losses) as of September 30, 2021 based on origination FICO. Generally, higher origination FICO score bands reflect higher anticipated credit performance than lower origination FICO score bands. Origination FICO September 30, 2021 ≥ 800 $ 6,114 780 – 799 5,373 760 – 779 6,088 740 – 759 8,300 720 – 739 10,782 700 – 719 13,641 680 – 699 13,447 660 – 679 8,516 640 – 659 552 < 640 1,537 Total credit card loans $ 74,350 Investments in AFS debt securities: An allowance for credit losses on our investments in AFS debt securities is required for any portion of impaired securities that is determined to be attributable to credit-related factors. Factors considered in evaluating credit losses include adverse conditions, specifically related to the industry, geographic area or financial condition of the issuer; and payment structure of the security. Credit-related impairment is not recognized within other comprehensive income (loss) , but rather recognized as an allowance for credit losses in the consolidated balance sheets with a corresponding adjustment to noninterest expense — provision for credit losses in the consolidated statements of operations and comprehensive income (loss). Such credit losses are limited to the amount of the total impairment. We did not recognize an allowance for credit losses on impaired investments in AFS debt securities as of September 30, 2021. Servicing Rights Each time we enter into a servicing agreement, either in connection with transfers of our financial assets or in connection with a referral fulfillment arrangement we entered into during 2021 in which we are a sub-servicer for financial assets that we do not legally own, we determine whether we should record a servicing asset, servicing liability, or neither a servicing asset nor liability. We elected the fair value option to measure our servicing rights subsequent to initial recognition. We measure the initial and subsequent fair value of our servicing rights using a discounted cash flow methodology, which includes our contractual servicing fee, ancillary income, prepayment rate assumptions, default rate assumptions, a discount rate commensurate with the risk of the servicing asset or liability being valued, and an assumed market cost of servicing, which is based on active quotes from third-party servicers. For servicing rights retained in connection with loan transfers that do not meet the requirements for sale accounting treatment, there is no recognition of a servicing asset or liability. Servicing rights in connection with transfers of financial assets are initially measured at fair value and recognized as a component of the gain or loss from sales of loans and the initial capitalization is reported within noninterest income — loan origination and sales in the consolidated statements of operations and comprehensive income (loss). Servicing rights assumed from third parties for financial assets for which we are not the loan originator are initially measured at fair value and recognized within noninterest income — servicing in the consolidated statements of operations and comprehensive income (loss). Servicing rights are measured at fair value at each subsequent reporting date and changes in fair value are reported in earnings in the period in which they occur. Subsequent measurement changes for all servicing rights, including servicing fee payments and fair value changes, are included within noninterest income — servicing in the consolidated statements of operations and comprehensive income (loss). We elected the fair value option to measure our servicing rights to better align with the valuation of our transferred loans, which also tend to share a similar risk profile to the personal loan servicing we assume from third parties when we are not the loan originator. The loans are also impacted by similar factors, such as conditional prepayment rates. We consider the risk of the assets and the observability of inputs in determining the classes of servicing rights. We have three classes of servicing assets: personal loans, home loans and student loans. There is prepayment and delinquency risk inherent in our servicing rights, but we currently do not use any instruments to mitigate such risks. 18 TABLE OF CONTENTS SoFi Technologies, Inc. Notes to Unaudited Condensed Consolidated Financial Statements (continued) (In Thousands, Unless Otherwise Stated and Except for Share and Per Share Data) See Note 8 for the key inputs used in the fair value measurements of our classes of servicing rights. Securitization Investments In Company-sponsored securitization transactions that meet the applicable criteria to be accounted for as a sale, we retain certain residual interests and asset-backed bonds. We measure these investments at fair value on a recurring basis. Gains and losses related to our securitization investments are reported within noninterest income — securitizations in the consolidated statements of operations and comprehensive income (loss). We determine the fair value of our securitization investments using a discounted cash flow methodology, while also considering market data as it becomes available. We classify the residual investments as Level 3 due to the reliance on significant unobservable valuation inputs. We classify asset-backed bonds as Level 2 due to the use of quoted prices for similar assets in markets that are not active, as well as certain factors specific to us. Our residual investments accrete interest income over the expected life using the effective yield method pursuant to ASC 325-40, Investments — Other, which reflects a portion of the overall fair value adjustment recorded each period on our residual investments. On a quarterly basis, we reevaluate the cash flow estimates over the life of the residual investments to determine if a change to the accretable yield is required on a prospective basis. Additionally, we record interest income associated with asset-backed bonds over the term of the underlying bond using the effective interest method on unpaid bond amounts. Interest income on residual investments and asset-backed bonds is presented within interest income — securitizations in the consolidated statements of operations and comprehensive income (loss). See Note 8 for the key inputs used in the fair value measurements of our residual investments and asset-backed bonds. Equity Method Investments In August 2021, we finalized the purchase of a 5 % interest in Lower Holding Company (“Lower”) for $ 20,000 , upon obtaining certain regulatory approvals. This equity method investment expands our home loan origination fulfillment capabilities. Upon the closing of the transaction, we were granted a seat on Lower’s board of directors. Based on accounting guidance in ASC 323-10, Investments — Equity Method and Joint Ventures , we concluded that we have significant influence over the investee because of our representation on its board of directors. However, we do not control the investee and, therefore, account for the investment under the equity method of accounting. The investment was not deemed to be significant under either Regulation S-X, Rule 3-09 or Rule 4-08(g). We recorded our portion of Lower equity method earnings within noninterest income — other in the consolidated statements of operations and comprehensive income (loss) and as an adjustment to the carrying value of our equity method investment in the consolidated balance sheets. We recognized equity method losses of $ 21 and $ 21 during the three and nine months ended September 30, 2021, respectively, which included basis difference amortization. The investment in Lower resulted in a basis difference of $ 1,769 that was attributable to the excess of the fair value of certain assets measured at amortized cost relative to book value, as well as definite-lived intangible assets. The basis difference is being amortized into income as an offset to equity method earnings over the weighted average life of the assets measured at amortized cost by Lower and the useful life of the separately-identified intangible assets. The amortization range is 1.3 to 5.0 years, and the weighted average amortization period is 3.3 years as of September 30, 2021. Our policy for amortizing separately-identified Lower assets was consistent with our policy for amortizing our assets of a similar type, and our basis for amortizing assets held by Lower at amortized cost was consistent with our experience with similar assets. We did not receive any distributions during the three and nine months ended September 30, 2021. We will assess our Lower investment for possible impairment when events indicate that the fair value of the investment may be below its carrying value. If a decline in fair value is determined to be other than temporary, we will adjust the carrying value of the investment to its fair value and record the impairment expense within noninterest income — other in the consolidated statements of operations and comprehensive income (loss). In determining whether a decline in fair value is other than temporary, we consider factors such as the duration and extent of the decline, the investee’s financial performance, and our ability and intent to retain the investment for a duration sufficient to allow for any anticipated recovery of the investment’s market value. The cost basis of the investment is not adjusted for subsequent recoveries in fair value. We did not recognize any impairment related to our Lower investment during the three and nine months ended September 30, 2021. In December 2018, we purchased a 16.7 % interest in Apex Clearing Holdings, LLC (“Apex”) for $ 100,000 , which represented our only significant equity method investment at the time. We recorded our portion of Apex equity method earnings within noninterest income — other in the consolidated statements of operations and comprehensive income (loss) and as an 19 TABLE OF CONTENTS SoFi Technologies, Inc. Notes to Unaudited Condensed Consolidated Financial Statements (continued) (In Thousands, Unless Otherwise Stated and Except for Share and Per Share Data) increase to the carrying value of our equity method investment in the consolidated balance sheets. We recognized equity method earnings on our investment in Apex of $ 3,041 and $ 6,637 during the three and nine months ended September 30, 2020, which included basis difference amortization. During the nine months ended September 30, 2020, we invested an additional $ 145 in Apex, which increased our equity method investment ownership to 16.8 % as of that date. The seller of the Apex interest had call rights over our initial equity interest in Apex (“Seller Call Option”) from April 14, 2020 to December 14, 2023, which rights were exercised in January 2021. Therefore, we ceased recognizing Apex equity investment income subsequent to the call date. As of December 31, 2020, we measured the carrying value of the Apex equity method investment equal to the call payment that we received in January 2021 of $ 107,534 . There was no equity method investment balance as of September 30, 2021. We did no t receive any distributions during the three and nine months ended September 30, 2020. We also had an equity method investment balance related to a residential mortgage origination joint venture, which was discontinued in the third quarter of 2020, at which point we received a closing distribution of $ 974 related to the investment and we recognized an immaterial loss on the dissolution date. For the three and nine months ended September 30, 2020, the earnings related to this joint venture were immaterial. Derivative Financial Instruments We enter into derivative contracts to manage future loan sale execution risk. We did not elect hedge accounting, as management’s hedging intentions are to economically hedge the risk of unfavorable changes in the fair value of our student loans, personal loans and home loans. Our derivative instruments as of the balance sheet dates included interest rate futures, interest rate swaps, interest rate lock commitments (“IRLC”) and home loan pipeline hedges. The interest rate futures and home loan pipeline hedges are measured at fair value and categorized as Level 1 fair value assets and liabilities, as all contracts held are traded in active markets for identical assets or liabilities and quoted prices are accessible by us at the measurement date. The interest rate swaps are measured at fair value and categorized as Level 2 fair value assets and liabilities, as all contracts held are traded in active markets for similar assets or liabilities and other observable inputs are available at the measurement date. IRLCs are categorized as Level 3 fair value assets and liabilities, as the fair value is highly dependent on an assumed loan funding probability. In the past, we have also entered into derivative contracts to hedge the market risk associated with some of our non-securitization investments. We did not elect hedge accounting. In addition, in conjunction with a loan sale agreement we entered into during 2018, we are entitled to receive payments from the buyer of the loans underlying the agreement if the internal rate of return (as defined in the loan sale agreement) on such loans exceeds a specified hurdle, subject to a dollar cap. This provision is referred to as the “purchase price earn-out”. As the purchaser maintains control of the transferred assets and retains the risk of loss, and the assets remain legally isolated from us, the transfer qualified for true sale accounting. We determined that the purchase price earn-out is a derivative asset. Therefore, the purchase price earn-out is measured at fair value on a recurring basis and is categorized as a Level 3 fair value asset, as the fair value is highly dependent on underlying loan portfolio performance. Historically, the purchase price earn-out value was immaterial. Changes in derivative instrument fair values are recognized in earnings as they occur. Depending on the measurement date position, derivative financial instruments are presented within other assets or accounts payable, accruals and other liabilities in the consolidated balance sheets. Our derivative instruments are reported within net cash provided by (used in) operating activities in the consolidated statements of cash flows. 20 TABLE OF CONTENTS SoFi Technologies, Inc. Notes to Unaudited Condensed Consolidated Financial Statements (continued) (In Thousands, Unless Otherwise Stated and Except for Share and Per Share Data) The following table presents the gains (losses) recognized on our derivative instruments during the periods indicated: Three Months Ended September 30, Nine Months Ended September 30, 2021 2020 2021 2020 Derivative contracts to manage future loan sale execution risk (1)(2) $ 1,305 $ ( 4,125 ) $ 23,439 $ ( 50,412 ) IRLCs (1)(3) ( 3,191 ) ( 1,365 ) ( 11,051 ) 15,766 Purchase price earn-out (1) 7,165 — 7,165 — Special payment (4) — — ( 21,181 ) — Derivative contracts to manage market risk associated with non-securitization investments (5) — — — 996 Total $ 5,279 $ ( 5,490 ) $ ( 1,628 ) $ ( 33,650 ) _____________________ (1) Recorded within noninterest income — loan origination and sales in the consolidated statements of operations and comprehensive income (loss). (2) The loss recognized during the nine months ended September 30, 2020 was inclusive of a $ 22,487 gain on credit default swaps that were opened and settled during the period. (3) IRLCs are not an economic hedge of loan fair values. (4) In conjunction with the Business Combination, the Amended Series 1 Agreement amended the original special payment provision to provide for a one-time special payment to Series 1 preferred stockholders, which was paid from the proceeds of the Business Combination and settled contemporaneously with the Business Combination. The special payment was recognized within noninterest expense — general and administrative in the consolidated statements of operations and comprehensive income (loss), as this feature was accounted for as an embedded derivative that was not clearly and closely related to the host contract, and will have no subsequent impact on our consolidated financial results. The Series 1 Redeemable Preferred Stock has no stated maturity. (5) For the nine months ended September 30, 2020, the gain was recorded within noninterest income — other in the consolidated statements of operations and comprehensive income (loss). We did not have any such derivative contracts to hedge our non-securitization investments during the 2021 periods. Certain derivative instruments are subject to enforceable master netting arrangements. Accordingly, we present our net asset or liability position by counterparty in the consolidated balance sheets. Additionally, since our cash collateral balances do not approximate the fair value of the derivative position, we do not offset our right to reclaim cash collateral or obligation to return cash collateral against recognized derivative assets or liabilities. As of September 30, 2021, our derivative instruments were in asset positions totaling $ 4,554 , with no offsetting liability positions and no cash collateral related to our master netting arrangements. As of December 31, 2020, our derivative instruments were in liability positions totaling $ 2,955 , with no offsetting asset positions and cash collateral of $ 1,746 related to our master netting arrangements. The cash collateral was included within restricted cash and restricted cash equivalents in the consolidated balance sheets. The following table presents the notional amount of derivative contracts outstanding as of the dates indicated: September 30, 2021 December 31, 2020 Derivative contracts to manage future loan sale execution risk: Interest rate swaps $ 3,035,000 $ 1,475,000 Interest rate futures — 3,400,000 Home loan pipeline hedges 575,000 371,000 IRLCs (1) 547,979 630,277 Total $ 4,157,979 $ 5,876,277 _____________________ (1) Amounts correspond with home loan funding commitments subject to IRLC agreements. While the notional amounts of derivative instruments give an indication of the volume of our derivatives activity, they do not necessarily represent amounts exchanged by parties and are not a direct measure of our financial exposure. See Note 8 for additional information on our derivative assets and liabilities. Residual Interests Classified as Debt For residual interests related to consolidated securitizations, the residual interests held by third parties are presented as residual interests classified as debt in the consolidated balance sheets. We measure residual interests classified as debt at fair 21 TABLE OF CONTENTS SoFi Technologies, Inc. Notes to Unaudited Condensed Consolidated Financial Statements (continued) (In Thousands, Unless Otherwise Stated and Except for Share and Per Share Data) value on a recurring basis. We record subsequent measurement changes in fair value in the period in which the change occurs within noninterest income — securitizations in the consolidated statements of operations and comprehensive income (loss). We determine the fair value of residual interests classified as debt using a discounted cash flow methodology, while also considering market data as it becomes available. We classify the residual interests classified as debt as Level 3 due to the reliance on significant unobservable valuation inputs. We recognize interest expense related to residual interests classified as debt over the expected life using the effective yield method, which reflects a portion of the overall fair value adjustment recorded each period on our residual interests classified as debt. Interest expense related to residual interests classified as debt is presented within interest expense — securitizations and warehouses in the consolidated statements of operations and comprehensive income (loss). On a quarterly basis, we reevaluate the cash flow estimates to determine if a change to the accretable yield is required on a prospective basis. See Note 8 for the key inputs used in the fair value measurements of residual interests classified as debt. Loan Origination and Sales Activities We measure our student loans, home loans and personal loans at fair value and, therefore, all direct fees and costs related to the origination process are recognized in earnings as earned or incurred. Direct fees, which primarily relate to home loan originations, and direct loan origination costs are recorded within noninterest income — loan origination and sales and noninterest expense — cost of operations , respectively, in the consolidated statements of operations and comprehensive income (loss). As part of our loan sale agreements, we may retain the rights to service sold loans. We calculate a gain or loss on the sale based on the sum of the proceeds from the sale and any servicing asset recognized, less the carrying value of the loans sold. Our gain or loss calculation is also inclusive of repurchase liabilities recognized at the time of sale. For our credit card loans, direct loan origination costs are deferred within other assets in the consolidated balance sheets and amortized on a straight-line basis over the privilege period, which we have determined to be 12 months, within interest income — loans in the consolidated statements of operations and comprehensive income (loss). During the three and nine months ended September 30, 2021, we amortized $ 492 and $ 594 , respectively, of deferred costs into interest income and had a remaining balance of deferred costs of $ 1,745 within other assets as of September 30, 2021. 22 TABLE OF CONTENTS SoFi Technologies, Inc. Notes to Unaudited Condensed Consolidated Financial Statements (continued) (In Thousands, Unless Otherwise Stated and Except for Share and Per Share Data) Loan Commitments In 2021, we launched a program whereby applicants can lock in an interest rate on a student loan refinancing product to be funded at a later time. We also offer a similar program for our in-school loans. The financial statement impact of our loan commitments on our in-school loans has been historically immaterial. Applicants can exit the loan origination process up until the loan funding date. SoFi is obligated to fund the loan at the committed terms on the disbursement date if the borrower does not cancel prior to the loan funding date. The student loan commitments meet the scope exception under ASC 815, Derivatives and Hedging (“ASC 815”), for issuers of commitments to originate non-mortgage loans. As the writer of the commitments, we elected the fair value option to measure our unfunded student loan commitments to align with the measurement methodology of our originated student loans. As such, our student loan commitments are carried at fair value on a recurring basis. We record the initial fair value measurement and subsequent measurement changes in fair value in the period in which the changes occur within noninterest income — loan origination and sales in the consolidated statements of operations and comprehensive income (loss). We classify student loan commitments as Level 3 because the valuations are highly dependent upon a loan funding probability, which is an unobservable input. Loan commitments also include IRLCs, whereby we commit to interest rate terms prior to completing the origination process for home loans. IRLCs are derivative instruments that are measured at fair value on a recurring basis. Given that a home loan origination is contingent on a plethora of factors, our IRLCs are inherently uncertain and unobservable. As such, we classify IRLCs as Level 3. See “—Derivative Financial Instruments” in this Note 1 for additional information on our derivative instruments. See Note 8 for the key inputs used in the fair value measurements of our loan commitments. Revenue Recognition In accordance with ASC 606, Revenue from Contracts with Customers , in each of our revenue arrangements, revenue is recognized when control of the promised goods or services is transferred to the customer in an amount that reflects our expected consideration in exchange for those goods or services. Disaggregated Revenue The table below presents revenue from contracts with customers disaggregated by type of service, which best depicts how the revenue and cash flows are affected by economic factors, and by the reportable segment to which each revenue stream relates. Revenues from contracts with customers are presented within noninterest income — Technology Platform fees and 23 TABLE OF CONTENTS SoFi Technologies, Inc. Notes to Unaudited Condensed Consolidated Financial Statements (continued) (In Thousands, Unless Otherwise Stated and Except for Share and Per Share Data) noninterest income — other in the consolidated statements of operations and comprehensive income (loss). There are no revenues from contracts with customers attributable to our Lending segment for any of the periods presented. Three Months Ended September 30, Nine Months Ended September 30, 2021 2020 2021 2020 Financial Services Referrals $ 4,378 $ 1,341 $ 9,772 $ 4,093 Brokerage 4,298 995 15,964 2,041 Payment network 1,975 785 4,650 1,606 Underwriting fees 288 — 2,048 — Enterprise services 63 61 2,817 172 Total $ 11,002 $ 3,182 $ 35,251 $ 7,912 Technology Platform Technology Platform fees $ 49,951 $ 35,405 $ 140,560 $ 51,607 Payment network 235 419 1,056 655 Total $ 50,186 $ 35,824 $ 141,616 $ 52,262 Total Revenue from Contracts with Customers Technology Platform fees $ 49,951 $ 35,405 $ 140,560 $ 51,607 Referrals 4,378 1,341 9,772 4,093 Payment network 2,210 1,204 5,706 2,261 Brokerage 4,298 995 15,964 2,041 Underwriting fees 288 — 2,048 — Enterprise services 63 61 2,817 172 Total $ 61,188 $ 39,006 $ 176,867 $ 60,174 Referrals We earn specified referral fees in connection with referral activities we facilitate through our platform. Beginning in the third quarter of 2021, referral fees also include referral fulfillment fees earned for providing pre-qualified borrower referrals to a third-party partner who separately contracts with a loan originator, which is our single performance obligation in the arrangement. The referral fulfillment fee is determined as the lower of a fixed per-loan amount or the multiplication of a set fee percentage by the aggregate loan origination principal balance. In the event that a loan is determined to be ineligible and such loan becomes a charged-off loan, both as defined in the contract agreement (referred to as an “ineligible charged-off loan”), we must re-pay to the customer the outstanding principal amount plus all accrued but unpaid interest of the ineligible charged-off loan, as well as a pro rata amount of fees previously paid for the ineligible charged-off loan (referred to as the “referral fulfillment fee penalty”). As the number and size of referred loans were not known at contract inception, this arrangement contains variable consideration that is constrained due to the potential reversal of referral fulfillment fees. We elected to estimate the amount of variable consideration using the expected value method, wherein we evaluate the conditional probability of ineligible loan charge-offs and, thereby, estimate referral fulfillment fee penalties. This method is appropriate for our arrangement, as we have meaningful experience through our lending business in evaluating expected ineligible referrals. The revenue recognized using the expected value method reflects our estimated net referral fulfillment fees after adjusting for the estimated referral fulfillment fee penalty. Referral fulfillment fees are presented within noninterest income — other in the consolidated statements of operations and comprehensive income (loss). We recognize a liability within accounts payable, accruals and other liabilities in the consolidated balance sheets for the estimated referral fulfillment fee penalty, which represents the amount of consideration received that we estimate will reverse. The liability was immaterial as of September 30, 2021. We satisfy our performance obligation continuously throughout the contractual arrangement with our customer and our customer receives and consumes the benefits simultaneously as we perform. We completely satisfy our performance obligation each time we provide a loan referral and our customer purchases the underlying loan from the third-party loan originator. We apply the right-to-invoice practical expedient to recognize referral fulfillment fees, as our right to consideration corresponds 24 TABLE OF CONTENTS SoFi Technologies, Inc. Notes to Unaudited Condensed Consolidated Financial Statements (continued) (In Thousands, Unless Otherwise Stated and Except for Share and Per Share Data) directly with the value of the service received, as measured using the expected value method and application of the referral fulfillment fee rate. In this arrangement, we act in the capacity of a principal, as we are primarily responsible for fulfilling our referral obligation to our customer, we have risk of loss if the loans that comprise our referral fulfillment services do not meet the contractual eligibility standards, and we have discretion in setting the price we charge to our customer. Therefore, we present our revenue on a gross basis. Technology Platform Fees Commencing in May 2020 with our acquisition of Galileo, we earn Technology Platform fees for providing an integrated platform as a service for financial and non-financial institutions. Within our technology platform fee arrangements, certain contracts contain a provision for a fixed, upfront implementation fee related to setup activities, which represents an advance payment for future technology platform services. Our implementation fees are recognized ratably over the contract life, as we consider the implementation fee partially earned each month that we meet our performance obligation over the life of the contract. We had deferred revenues of $ 2,496 and $ 2,520 as of September 30, 2021 and December 31, 2020, respectively, which are presented within accounts payable, accruals and other liabilities in the consolidated balance sheets. During the three and nine months ended September 30, 2021, we recognized revenue of $ 176 and $ 514 , respectively, associated with deferred revenues within noninterest income — Technology Platform fees in the consolidated statements of operations and comprehensive income (loss). During the three and nine months ended September 30, 2020, we recognized revenue of $ 134 and $ 210 , respectively, associated with deferred revenues. Sales commissions: Capitalized sales commissions presented within other assets in the consolidated balance sheets, which are incurred in connection with obtaining a technology platform-as-a-service contract, were $ 581 and $ 527 as of September 30, 2021 and December 31, 2020, respectively. Additionally, we incur ongoing monthly commissions, which are expensed as incurred, as the benefit of such sales efforts are realized only in the period in which the commissions are earned. During the three and nine months ended September 30, 2021, commissions recorded within noninterest expense — sales and marketing in the consolidated statements of operations and comprehensive income (loss) were $ 637 and $ 2,407 , respectively, of which $ 60 and $ 203 , respectively, represented amortization of capitalized sales commissions. During the three and nine months ended September 30, 2020, commissions were $ 634 and $ 896 , of which $ 81 and $ 99 represented amortization of capitalized sales commissions. Enterprise Services Commencing in the second quarter of 2021, enterprise services also includes fees for providing advisory services in connection with helping operating companies successfully complete the business combination process, inclusive of obtaining the required shareholder votes. The amount of revenue is recorded on a gross basis within noninterest income — other in the consolidated statements of operations and comprehensive income (loss), as we fully control the fulfillment of our performance obligation acting in the capacity of a principal. Out-of-pocket expenses associated with satisfying the performance obligation are recognized at the time the related revenue is recognized and presented as part of noninterest expense — general and administrative . Underwriting Fees Commencing in the second quarter of 2021, we earned underwriting fees related to our membership in underwriting syndicates for initial public offerings. The underwriting of securities is the only performance obligation in our underwriting agreements, and we recognize underwriting fees on the trade date. We are a principal in our underwriting agreements, because we demonstrate the requisite control over the satisfaction of the performance obligation through the assumption of underwriter liability for our designated share allotment. As such, we recognize underwriting fee revenue on a gross basis within noninterest income — other in the consolidated statements of operations and comprehensive income (loss). Contract Assets As of September 30, 2021 and December 31, 2020, accounts receivable, net associated with revenue from contracts with customers was $ 29,100 and $ 23,278 , respectively, which were reported within other assets in the consolidated balance sheets. 25 TABLE OF CONTENTS SoFi Technologies, Inc. Notes to Unaudited Condensed Consolidated Financial Statements (continued) (In Thousands, Unless Otherwise Stated and Except for Share and Per Share Data) Loss Contingencies Loss contingencies, including claims and legal actions arising in the ordinary course of business, are recorded in accounts payable, accruals and other liabilities in the consolidated balance sheets. Such liabilities and associated expenses are recorded when the likelihood of loss is probable and an amount or range of loss can be reasonably estimated. Such estimates are based on the best information available at the time. As additional information becomes available, we reassess the potential liability and record an estimate in the period in which the adjustment is probable and an amount or range can be reasonably estimated. Due to the inherent uncertainties of loss contingencies, estimates may be different from the actual outcomes. With respect to legal proceedings, we recognize legal fees as they are incurred within noninterest expense — general and administrative in our consolidated statements of operations and comprehensive income (loss). See Note 15 for discussion of contingent matters. Recently Adopted Accounting Standards Accounting for Convertible Instruments and Contracts in an Entity’s Own Equity In August 2020, the FASB issued ASU 2020-06, Debt — Debt with Conversion and Other Options (Subtopic 470-20) and Derivatives and Hedging — Contracts in Entity’s Own Equity (Subtopic 815-40): Accounting for Convertible Instruments and Contracts in an Entity’s Own Equity . This ASU simplifies the accounting for certain convertible instruments, amends the guidance on derivative scope exceptions for contracts in an entity’s own equity, and modifies the guidance on diluted earnings per share calculations as a result of these changes. The standard is effective for fiscal years and interim periods beginning after December 15, 2023. Early adoption is permitted, but no earlier than fiscal years beginning after December 15, 2020, including interim periods within those fiscal years. We early adopted the provisions of ASU 2020-06 effective January 1, 2021. The adoption of this standard did not have an impact on our consolidated financial statements, as we had no notes prior to an issuance in October 2021. The notes issued in October 2021 will be accounted for in accordance with this standard. See Note 18 for additional information. Recent Accounting Standards Issued, But Not Yet Adopted Facilitation of the Effects of Reference Rate Reform on Financial Reporting In March 2020, the FASB issued ASU 2020-04, Reference Rate Reform (Topic 848): Facilitation of the Effects of Reference Rate Reform on Financial Reporting. In January 2021, the FASB issued ASU 2021-01, Reference Rate Reform (Topic 848): Scope, which clarifies the scope of Topic 848 for certain derivative instruments that use an interest rate for margining, discounting or contract price alignment. ASU 2020-04 and ASU 2021-01 were both effective upon issuance and may be applied to contract modifications from January 1, 2020 through December 31, 2022. The Alternative Reference Rates Committee (“ARRC”), a group of private market participants, was convened in the United States by the Federal Reserve Board and the Federal Reserve Bank of New York in cooperation with other United States agencies to promote the successful transition from U.S. Dollar LIBOR (“USD LIBOR”). The ARRC has selected the Secured Overnight Financing Rate (“SOFR”) as their recommended alternative to USD LIBOR. On March 5, 2021, the ICE Benchmark Administration (“IBA”), the administrator of LIBOR, stated that it will cease the publication of (i) the overnight and 1, 3, 6 and 12 month USD LIBOR settings immediately following the LIBOR publication on June 30, 2023 and (ii) all other LIBOR settings, including the 1 week and 2 month USD LIBOR settings, immediately following the LIBOR publication on December 31, 2021. Further, the Federal Reserve Board, the Office of the Comptroller of the Currency and the Federal Deposit Insurance Corporation have issued supervisory guidance encouraging banks to cease entering into new contracts that use USD LIBOR as a reference rate as soon as practicable and, in any event, by December 31, 2021, noting that new USD LIBOR issuances after 2021 would create safety and soundness risks. We established a cross-functional project team to execute our company-wide transition away from USD LIBOR. We are continuing to review certain variable-rate loans, borrowings, Series 1 redeemable preferred stock dividends and certain derivative instruments that utilize LIBOR as the reference rate and are evaluating options for modifying such arrangements in accordance with the provisions of the standard and the potential impact that such modifications may have on our consolidated financial statements and related disclosures. 26 TABLE OF CONTENTS SoFi Technologies, Inc. Notes to Unaudited Condensed Consolidated Financial Statements (continued) (In Thousands, Unless Otherwise Stated and Except for Share and Per Share Data) Note 2. Business Combinations Merger with Social Capital Hedosophia Holdings Corp. V On January 7, 2021, Social Finance entered into the Agreement by and among Social Finance, SCH, a Cayman Islands exempted company limited by shares, and Plutus Merger Sub Inc., a Delaware corporation and a wholly owned subsidiary of SCH (“Merger Sub”). Pursuant to the Agreement, Merger Sub merged with and into Social Finance. Upon the Closing on May 28, 2021, the separate corporate existence of Merger Sub ceased and Social Finance survived the merger and became a wholly-owned subsidiary of SCH. On May 28, 2021, SCH also filed a notice of deregistration with the Cayman Islands Registrar of Companies, together with the necessary accompanying documents, and filed a certificate of incorporation and a certificate of corporate domestication with the Secretary of State of the State of Delaware, under which SCH was domesticated as a Delaware corporation, changing its name from “Social Capital Hedosophia Holdings Corp. V” to “SoFi Technologies, Inc.” These transactions are collectively referred to as the “Business Combination”. The Business Combination was accounted for as a reverse recapitalization whereby SCH was determined to be the accounting acquiree and Social Finance to be the accounting acquirer. This accounting treatment was the equivalent of Social Finance issuing stock for the net assets of SCH, accompanied by a recapitalization whereby no goodwill or other intangible assets were recorded. Operations prior to the Business Combination are those of Social Finance. At the Closing, we received gross cash consideration of $ 764.8 million as a result of the reverse recapitalization, which was then reduced by: • A redemption of redeemable common stock (classified as temporary equity) of $ 150.0 million; • A special payment (as discussed in Note 10), which was accounted for as an embedded derivative, and made to our Series 1 preferred stockholders of $ 21.2 million (which was expensed as incurred); and • Our equity issuance costs. In connection with the Business Combination, Social Finance incurred $ 27.5 million of equity issuance costs, consisting of advisory, legal, share registration and other professional fees, which were recorded within additional paid-in capital as a reduction of proceeds. We paid $ 0.6 million of the equity issuance costs during 2020. In connection with the Business Combination, SCH entered into subscription agreements with certain investors (the “Third Party PIPE Investors”), whereby it issued 122,500,000 shares of common stock at $ 10.00 per share (“PIPE Shares”) for an aggregate purchase price of $ 1.225 billion (“PIPE Investment”), which closed simultaneously with the consummation of the Business Combination. Upon the Closing, the PIPE Shares were automatically converted into shares of SoFi Technologies common stock on a one-for-one basis. Upon the Closing, holders of Social Finance common stock received shares of SoFi Technologies common stock in an amount determined by application of the exchange ratio of 1.7428 (“Exchange Ratio”), which was based on Social Finance’s implied price per share prior to the Business Combination. Additionally, holders of Social Finance preferred stock (with the exception of the Series 1 preferred stockholders) received shares of SoFi Technologies common stock in amounts determined by application of either the Exchange Ratio or a multiplier of the Exchange Ratio, as provided by the Agreement. Acquisition of Golden Pacific Bancorp, Inc. During March 2021, the Company and Golden Pacific Bancorp, Inc. (“Golden Pacific”), a California corporation, entered into an Agreement and Plan of Merger (the “Bank Merger”), by and among the Company, a wholly-owned subsidiary of the Company and Golden Pacific, pursuant to which the Company will acquire all of the outstanding equity interests in Golden Pacific and thereby acquire its wholly-owned subsidiary, Golden Pacific Bank, National Association (“Golden Pacific Bank”), for total cash purchase consideration of $ 22.3 million, of which approximately $ 0.7 million could be held back by the Company in escrow (“Holdback Amount”) if certain legal proceedings with which Golden Pacific is involved as a plaintiff are not resolved at the time the Bank Merger closes. The Holdback Amount will be used for further financing or costs incurred associated with the litigation and any remaining amount upon resolution of the litigation will be released to the Golden Pacific shareholders. Alternatively, if the legal proceedings are resolved prior to the close of the Bank Merger and a favorable 27 TABLE OF CONTENTS SoFi Technologies, Inc. Notes to Unaudited Condensed Consolidated Financial Statements (continued) (In Thousands, Unless Otherwise Stated and Except for Share and Per Share Data) settlement is received, the merger consideration will be increased by the amount of such proceeds, net of all expenses and taxes payable in respect of such proceeds, such that the settlement will be returned to the Golden Pacific shareholders. Golden Pacific is duly registered as a bank holding company with the Board of Governors of the Federal Reserve System. Golden Pacific Bank is a national banking association duly organized and validly existing and in good standing under the laws of the United States and is regulated by the Office of the Comptroller of the Currency (the “OCC”). Deposit accounts of Golden Pacific Bank are insured by the FDIC through the Deposit Insurance Fund to the fullest extent permitted by law. The closing of the Bank Merger is subject to regulatory approval, including approval from the OCC of a revised business plan for Golden Pacific Bank, and approval from the Federal Reserve to become a bank holding company and for a change of control, and other customary closing conditions. The Bank Merger will be accounted for as a business combination. The purchase consideration will be allocated to the tangible and intangible assets acquired and liabilities assumed based on the estimated fair values as of the acquisition date. The acquisition is not expected to be a significant acquisition under ASC 805 or Regulation S-X, Rule 3-05. In March 2021, the Company submitted an application to the Federal Reserve to become a bank holding company. The application review process is ongoing. Acquisition of Galileo Financial Technologies, Inc. On May 14, 2020, we acquired Galileo Financial Technologies, Inc. and its subsidiaries (“Galileo”) by acquiring 100 % of the outstanding Galileo stock as of that date. Galileo primarily provides technology platform services to financial and non-financial institutions. Our acquisition of Galileo enabled us to diversify our business from primarily consumer-based to also serve institutions that rely upon Galileo’s integrated platform as a service to serve their clients. The following table presents the components of the purchase consideration to acquire Galileo: Cash paid $ 75,633 Seller note 243,998 Fair value of preferred stock issued (1) 813,413 Fair value of common stock options assumed (2) 32,197 Total purchase consideration $ 1,165,241 ___________________ (1) The preferred stock issued was subject to adjustment as part of the closing net working capital calculation, which was finalized in April 2021 and reduced the total purchase price consideration, as reflected herein and discussed below. See Note 9 for additional information. The purchase price allocation process for Galileo was finalized in the second quarter of 2021. (2) We contemporaneously converted outstanding options to acquire common stock of Galileo into corresponding options to acquire common stock of SoFi (“Replacement Options”) at an exchange ratio of one Galileo option to 3.83 Replacement Options, which represents the historical amount prior to applying the exchange ratio in connection with the Business Combination with SCH. Upon the finalization of the closing net working capital calculation in April 2021, the total purchase price consideration was reduced by $ 743 , which was settled through the return to SoFi of an equivalent value of 83,856 previously issued Series H-1 preferred stock, which were retired upon receipt. In April 2021, the adjustment similarly reduced the carrying value of recognized goodwill, and did not impact the estimated fair values of the assets acquired and liabilities assumed in conjunction with the transaction. There were no other adjustments to goodwill during the three and nine months ended September 30, 2021. None of the goodwill recognized is deductible for tax purposes. Goodwill is primarily attributable to synergies expected from leveraging SoFi’s resources to further build upon Galileo’s product offerings, scaling Galileo’s operations and expanding its market reach. As such, the goodwill is fully allocated to the Technology Platform segment. Identifiable intangible assets at the date of acquisition included finite-lived intangible assets with a gross carrying amount of $ 388,000 , as follows: Gross Carrying Amount Weighted Average Useful Life (Years) Developed technology $ 253,000 8.6 Customer-related 125,000 3.6 Trade names, trademarks and domain names 10,000 8.6 28 TABLE OF CONTENTS SoFi Technologies, Inc. Notes to Unaudited Condensed Consolidated Financial Statements (continued) (In Thousands, Unless Otherwise Stated and Except for Share and Per Share Data) The following unaudited supplemental pro forma financial information presents the Company’s consolidated results of operations for the nine months ended September 30, 2020 as if the business combination had occurred on January 1, 2020: Nine Months Ended September 30, 2020 Total net revenue $ 411,558 Net loss ( 166,525 ) The unaudited supplemental pro forma financial information is presented for comparative purposes only and is not necessarily indicative of the actual results of operations that would have been achieved, nor is it indicative of future results of operations. The unaudited supplemental pro forma financial information reflects pro forma adjustments that give effect to applying the Company’s accounting policies and certain events the Company believes to be directly attributable to the acquisition. The pro forma adjustments primarily include: • incremental straight-line amortization expense associated with acquired intangible assets; • adjustments to depreciation expense resulting from accounting policy alignment between the acquirer and acquiree; • interest expense on the seller note, inclusive of incremental interest accretion and additional accrued interest; • incremental post-combination stock-based compensation expense associated with the Replacement Options as if they had been granted on January 1, 2020; • the related income tax effects, at the statutory tax rate applicable for the period, of the pro forma adjustments noted above; and • the earnings of the acquiree from January 1, 2020 through the date of acquisition, excluding earnings from SoFi, as those would be eliminated in consolidation. The unaudited supplemental pro forma financial information does not give effect to any anticipated cost savings, operating efficiencies or other synergies that may be associated with the acquisition, or any estimated costs that have been or will be incurred by the Company to integrate the assets and operations of Galileo. Other Acquisitions On April 28, 2020, the Company acquired 100 % of the outstanding stock of 8 Limited, a Hong Kong brokerage services firm, for total consideration of $ 16,126 , consisting of $ 561 in cash and $ 15,565 in fair value of Social Finance common stock issued. Of the 2,240,005 shares of Social Finance’s common stock issuable in connection with the acquisition, 1,919,356 shares were issued at the date of acquisition and the remaining issuable common stock was subject to certain representations and warranties and was expected to be issued within 18 months of the date of acquisition and, therefore, was contingently issuable as of September 30, 2021. The share awards issued in connection with this acquisition have both performance and service-based requirements. The excess of the total purchase consideration over the fair value of the net assets acquired of $ 10,239 was allocated to goodwill, none of which is deductible for tax purposes. As the acquisition was not determined to be a significant acquisition as contemplated in ASC 805, the Company did not disclose the pro forma impact of this acquisition to the results of operations for the nine months ended September 30, 2020. Identifiable intangible assets at the date of acquisition included finite-lived intangible assets for developed technology, customer-related contracts and broker-dealer license and trading rights with an aggregate fair value of $ 5,038 . The intangible assets are being amortized over a period of 3.6 to 5.7 years based on the estimated economic benefit derived from each of the underlying assets. 29 TABLE OF CONTENTS SoFi Technologies, Inc. Notes to Unaudited Condensed Consolidated Financial Statements (continued) (In Thousands, Unless Otherwise Stated and Except for Share and Per Share Data) Note 3. Investments in AFS Debt Securities In the third quarter of 2021, we began investing in debt securities. The following table presents our investments in AFS debt securities as of September 30, 2021, all of which were designated as available-for-sale. We did not have any investments in debt securities as of December 31, 2020. September 30, 2021 Amortized Cost Accrued Interest Gross Unrealized Gains Gross Unrealized Losses (4) Fair Value Investments in AFS debt securities (1) : U.S. Treasury securities $ 100,984 $ 58 $ 1 $ ( 68 ) $ 100,975 Multinational securities (2) 19,975 75 — ( 27 ) 20,023 Corporate bonds 39,532 229 6 ( 48 ) 39,719 Agency TBA 7,537 14 6 ( 18 ) 7,539 Agency mortgage-backed securities 4,822 17 7 — 4,846 Other asset-backed securities 6,423 4 — ( 9 ) 6,418 Commercial paper 17,083 — — — 17,083 Other (3) 600 — — — 600 Total investments in AFS debt securities $ 196,956 $ 397 $ 20 $ ( 170 ) $ 197,203 _____________________ (1) Investments in AFS debt securities are recorded at fair value. (2) As of September 30, 2021, includes sovereign foreign and supranational bonds. (3) As of September 30, 2021, included a state bond security. (4) As of September 30, 2021, we determined that none of our unrealized loss positions were related to credit losses, nor did we determine that we intend to sell the securities or will more likely than not be required to sell the securities prior to recovery of the amortized cost basis. Additionally, no such investments have been in a continuous unrealized loss position for more than 12 months, as we made the investments during the third quarter of 2021. 30 TABLE OF CONTENTS SoFi Technologies, Inc. Notes to Unaudited Condensed Consolidated Financial Statements (continued) (In Thousands, Unless Otherwise Stated and Except for Share and Per Share Data) The following table presents the amortized cost and fair value of our investments in AFS debt securities as of September 30, 2021 by contractual maturity. Due Within One Year Due After One Year Through Five Years Due After Five Years Through Ten Years Due After Ten Years Total September 30, 2021 Investments in AFS debt securities—Amortized cost: U.S. Treasury securities $ — $ 100,984 $ — $ — $ 100,984 Multinational securities — 19,975 — — 19,975 Corporate bonds — 39,532 — — 39,532 Agency TBA — — — 7,537 7,537 Agency mortgage-backed securities — — — 4,822 4,822 Other asset-backed securities — 4,399 2,024 — 6,423 Commercial paper 17,083 — — — 17,083 Other — 600 — — 600 Total investments in AFS debt securities $ 17,083 $ 165,490 $ 2,024 $ 12,359 $ 196,956 Investments in AFS debt securities—Fair value (1) : U.S. Treasury securities $ — $ 100,917 $ — $ — $ 100,917 Multinational securities — 19,948 — — 19,948 Corporate bonds — 39,490 — — 39,490 Agency TBA — — — 7,525 7,525 Agency mortgage-backed securities — — — 4,829 4,829 Other asset-backed securities — 4,391 2,023 — 6,414 Commercial paper 17,083 — — — 17,083 Other — 600 — — 600 Total investments in AFS debt securities $ 17,083 $ 165,346 $ 2,023 $ 12,354 $ 196,806 _____________________ (1) Presentation of fair values of our investments in AFS debt securities by contractual maturity excludes total accrued interest of $ 397 as of September 30, 2021. The following table presents the proceeds and gross realized gains and losses from sales and maturities of our investments in debt securities during the three and nine months ended September 30, 2021. Realized gains and losses are presented within noninterest income — other in the consolidated statements of operations and comprehensive income (loss). There were no transfers between classifications of our investments in AFS debt securities during the periods presented. Three Months Ended September 30, 2021 Nine Months Ended September 30, 2021 Investments in AFS debt securities Gross realized gains included in earnings $ 10 $ 10 Gross realized losses included in earnings ( 10 ) ( 10 ) Net realized gains (losses) $ — $ — Gross proceeds from sales (1) $ 15,789 $ 15,789 _____________________ (1) There were no maturities of investments in AFS debt securities during the periods presented. See Note 11 for unrealized gains and losses on our investments in AFS debt securities and amounts reclassified out of AOCI during these periods. 31 TABLE OF CONTENTS SoFi Technologies, Inc. Notes to Unaudited Condensed Consolidated Financial Statements (continued) (In Thousands, Unless Otherwise Stated and Except for Share and Per Share Data) Note 4. Loans As of September 30, 2021, our loan portfolio consisted of personal loans, student loans and home loans, which are measured at fair value, and credit card loans, which are measured at amortized cost. Below is a disaggregated presentation of our loans, inclusive of fair market value adjustments and accrued interest income, as applicable, as of the dates indicated: September 30, December 31, 2021 2020 Loans at fair value Securitized student loans $ 644,414 $ 908,427 Securitized personal loans 298,329 559,743 Student loans 1,910,027 1,958,032 Home loans 184,879 179,689 Personal loans 1,755,897 1,253,177 Total loans at fair value 4,793,546 4,859,068 Loans at amortized cost (1) Credit card loans (2) 72,012 3,723 Commercial loan (3) — 16,512 Total loans at amortized cost 72,012 20,235 Total loans $ 4,865,558 $ 4,879,303 _____________________ (1) See Note 1 for additional information on our loans at amortized cost as it pertains to the allowance for credit losses pursuant to ASC 326. (2) During the nine months ended September 30, 2021, we had originations of credit card loans of $ 219,603 and gross repayments on credit card loans of $ 148,120 , of which $ 841 were non-cash reductions to the loan balance through reward point redemptions. During the nine months ended September 30, 2020, we had originations of $ 214 and gross repayments of $ 120 . (3) During the third quarter of 2021, we issued a commercial loan with a principal balance of $ 10,000 , all of which was repaid during the quarter. During the fourth quarter of 2020, we issued a commercial loan with a principal balance of $ 16,500 and which had accumulated interest of $ 12 as of December 31, 2020, all of which was repaid in January 2021. Loans Measured at Fair Value The following table summarizes the aggregate fair value of our loans measured at fair value on a recurring basis as of the dates indicated: Student Loans Home Loans Personal Loans Total September 30, 2021 Unpaid principal (1) $ 2,470,907 $ 181,581 $ 1,970,522 $ 4,623,010 Accumulated interest 6,967 90 10,409 17,466 Cumulative fair value adjustments (1) 76,567 3,208 73,295 153,070 Total fair value of loans $ 2,554,441 $ 184,879 $ 2,054,226 $ 4,793,546 December 31, 2020 Unpaid principal (1) $ 2,774,511 $ 171,967 $ 1,780,246 $ 4,726,724 Accumulated interest 9,472 141 11,558 21,171 Cumulative fair value adjustments (1) 82,476 7,581 21,116 111,173 Total fair value of loans $ 2,866,459 $ 179,689 $ 1,812,920 $ 4,859,068 __________________ (1) These items are impacted by charge-offs during the period. 32 TABLE OF CONTENTS SoFi Technologies, Inc. Notes to Unaudited Condensed Consolidated Financial Statements (continued) (In Thousands, Unless Otherwise Stated and Except for Share and Per Share Data) The following table summarizes the aggregate fair value of loans 90 days or more delinquent as of the dates indicated. As delinquent personal loans and student loans are charged off after 120 days of delinquency, amounts presented below represent the fair value of loans that are 90 to 120 days delinquent. There were no home loans that were 90 days or more delinquent as of the dates presented. Student Loans Personal Loans Total September 30, 2021 Unpaid principal $ 2,214 $ 3,366 $ 5,580 Accumulated interest 85 103 188 Cumulative fair value adjustments ( 1,050 ) ( 3,018 ) ( 4,068 ) Fair value of loans 90 days or more delinquent $ 1,249 $ 451 $ 1,700 December 31, 2020 Unpaid principal $ 1,046 $ 4,199 $ 5,245 Accumulated interest 37 210 247 Cumulative fair value adjustments ( 442 ) ( 3,872 ) ( 4,314 ) Fair value of loans 90 days or more delinquent $ 641 $ 537 $ 1,178 33 TABLE OF CONTENTS SoFi Technologies, Inc. Notes to Unaudited Condensed Consolidated Financial Statements (continued) (In Thousands, Unless Otherwise Stated and Except for Share and Per Share Data) The following table presents the changes in our loans measured at fair value on a recurring basis: Student Loans Home Loans Personal Loans Total Three Months Ended September 30, 2021 Fair value as of June 30, 2021 $ 2,739,493 $ 182,313 $ 1,763,542 $ 4,685,348 Origination of loans 967,939 793,086 1,640,572 3,401,597 Principal payments ( 218,940 ) ( 953 ) ( 273,590 ) ( 493,483 ) Sales of loans ( 922,271 ) ( 789,259 ) ( 1,196,798 ) ( 2,908,328 ) Purchases (1) — 334 102,032 102,366 Change in accumulated interest ( 853 ) ( 33 ) 1,191 305 Change in fair value (2) ( 10,927 ) ( 609 ) 17,277 5,741 Fair value as of September 30, 2021 $ 2,554,441 $ 184,879 $ 2,054,226 $ 4,793,546 Three Months Ended September 30, 2020 Fair value as of June 30, 2020 $ 2,248,042 $ 72,181 $ 1,720,657 $ 4,040,880 Origination of loans 1,035,137 631,666 616,309 2,283,112 Principal payments ( 239,445 ) ( 140 ) ( 252,664 ) ( 492,249 ) Sales of loans ( 852,504 ) ( 522,971 ) ( 147,638 ) ( 1,523,113 ) Deconsolidation of securitizations — — ( 145,947 ) ( 145,947 ) Purchases (1) 571,267 783 36,105 608,155 Change in accumulated interest 596 57 ( 321 ) 332 Change in fair value (2) 32,829 4,451 28,984 66,264 Fair value as of September 30, 2020 $ 2,795,922 $ 186,027 $ 1,855,485 $ 4,837,434 Nine Months Ended September 30, 2021 Fair value as of January 1, 2021 $ 2,866,459 $ 179,689 $ 1,812,920 $ 4,859,068 Origination of loans 2,832,121 2,320,918 3,740,645 8,893,684 Principal payments ( 705,048 ) ( 3,712 ) ( 779,597 ) ( 1,488,357 ) Sales of loans ( 2,469,372 ) ( 2,308,467 ) ( 2,946,374 ) ( 7,724,213 ) Purchases (1) 44,850 875 206,571 252,296 Change in accumulated interest ( 2,505 ) ( 51 ) ( 1,149 ) ( 3,705 ) Change in fair value (2) ( 12,064 ) ( 4,373 ) 21,210 4,773 Fair value as of September 30, 2021 $ 2,554,441 $ 184,879 $ 2,054,226 $ 4,793,546 Nine Months Ended September 30, 2020 Fair value as of January 1, 2020 $ 3,185,233 $ 91,695 $ 2,111,030 $ 5,387,958 Origination of loans 3,958,337 1,510,797 1,966,983 7,436,117 Principal payments ( 665,153 ) ( 1,718 ) ( 746,041 ) ( 1,412,912 ) Sales of loans ( 3,799,553 ) ( 1,421,939 ) ( 1,130,975 ) ( 6,352,467 ) Deconsolidation of securitizations ( 495,507 ) — ( 406,687 ) ( 902,194 ) Purchases (1) 604,829 783 39,310 644,922 Change in accumulated interest 1,517 ( 45 ) ( 2,759 ) ( 1,287 ) Change in fair value (2) 6,219 6,454 24,624 37,297 Fair value as of September 30, 2020 $ 2,795,922 $ 186,027 $ 1,855,485 $ 4,837,434 __________________ (1) Purchases reflect unpaid principal balance and relate to previously transferred loans. Purchase activity during the three and nine months ended September 30, 2021 included securitization clean-up calls of $ 100,000 and $ 231,372 , respectively. Purchase activity during the three and nine months ended September 30, 2020 included securitization clean-up calls of $ — and $ 33,012 , respectively. Additionally, during the three and nine months ended September 30, 2021, the Company elected to purchase $ — and $ 15,185 , respectively, of previously sold loans. During the three and nine months ended September 30, 2020, the Company elected to purchase $ 606,264 and $ 606,264 , respectively, of previously sold loans. The Company was not required to buy back these loans. The remaining purchases during the periods presented related to standard representations and warranties pursuant to our various loan sale agreements. 34 TABLE OF CONTENTS SoFi Technologies, Inc. Notes to Unaudited Condensed Consolidated Financial Statements (continued) (In Thousands, Unless Otherwise Stated and Except for Share and Per Share Data) (2) Changes in fair value of loans are recorded in the consolidated statements of operations and comprehensive income (loss) within noninterest income — loan origination and sales for loans held on the balance sheet prior to transfer to a third party through a sale or to a VIE and within noninterest income — securitizations for loans in a consolidated VIE. Changes in fair value are impacted by valuation assumption changes, as well as sales price execution and amount of time the loans are held prior to sale. The estimated amount of gains (losses) included in earnings attributable to changes in instrument-specific credit risk were $( 6,192 ) and $( 8,303 ) during the three and nine months ended September 30, 2021, respectively, and $ 38,336 and $ 45,448 during the three and nine months ended September 30, 2020, respectively. The gains (losses) attributable to instrument-specific credit risk were estimated by incorporating our current default and loss severity assumptions for the loans. These assumptions are based on historical performance, market trends and performance expectations over the term of the underlying instrument. Note 5. Variable Interest Entities Consolidated VIE s The Company consolidates certain securitization trusts in which we have a variable interest and are deemed to be the primary beneficiary. Our consolidation policy is further discussed in Note 1. The VIEs are SPEs with portfolio loans securing debt obligations. The SPEs were created and designed to transfer credit and interest rate risk associated with consumer loans through the issuance of collateralized notes and trust certificates. The Company makes standard representations and warranties to repurchase or replace qualified portfolio loans. Aside from these representations, the holders of the asset-backed debt obligations have no recourse to the Company if the cash flows from the underlying portfolio loans securing such debt obligations are not sufficient to pay all principal and interest on the asset-backed debt obligations. We hold a significant interest in these financing transactions through our ownership of a portion of the residual interest in certain VIEs. In addition, in some cases, we invest in the debt obligations issued by the VIE. Our investments in consolidated VIEs eliminate in consolidation. The residual interest is the first VIE interest to absorb losses should the loans securing the debt obligations not provide adequate cash flows to satisfy more senior claims and is, by design, the interest that we expect to absorb the expected gains and losses of the VIE. The Company’s exposure to credit risk in sponsoring SPEs is limited to our investment in the VIE. VIE creditors have no recourse against our general credit. The following table presents the assets and liabilities of consolidated VIEs that were included in our consolidated balance sheets. The assets in the below table may only be used to settle obligations of consolidated VIEs and were in excess of those obligations as of the dates presented. Additionally, the assets and liabilities in the table below exclude intercompany balances, which eliminate upon consolidation: September 30, December 31, 2021 2020 Assets: Restricted cash and restricted cash equivalents $ 58,409 $ 76,973 Loans 942,743 1,468,170 Total assets $ 1,001,152 $ 1,545,143 Liabilities: Accounts payable, accruals and other liabilities $ 448 $ 759 Debt (1) 772,895 1,248,822 Residual interests classified as debt 103,898 118,298 Total liabilities $ 877,241 $ 1,367,879 ___________________ (1) Debt is presented net of debt issuance costs and debt premiums (discounts). Nonconsolidated VIEs We have created and designed personal loan and student loan trusts to transfer associated credit and interest rate risk associated with the loans through the issuance of collateralized notes and residual certificates. We have a variable interest in the nonconsolidated loan trusts, as we own collateralized notes and residual certificates in the loan trusts that absorb variability. We also have continuing, non-controlling involvement with the trusts as the servicer. As servicer, we have the power to perform the activities which most impact the economic performance of the VIE, but since we hold an insignificant financial interest in the trusts, we are not the primary beneficiary. We define an insignificant financial interest as less than 10% of the expected gains and losses of the VIE. This financial interest represents the equity ownership interest in the loan trusts, wherein there is an 35 TABLE OF CONTENTS SoFi Technologies, Inc. Notes to Unaudited Condensed Consolidated Financial Statements (continued) (In Thousands, Unless Otherwise Stated and Except for Share and Per Share Data) obligation to absorb losses and the right to receive benefits from residual certificate ownership. The maximum exposure to loss as a result of our involvement with the nonconsolidated VIE is limited to our investment. There are no liquidity arrangements, guarantees or other commitments by third parties that may affect the fair value or risk of our variable interests in nonconsolidated VIEs. Personal Loans We established two personal loan trusts during the nine months ended September 30, 2021 and one personal loan trust during the nine months ended September 30, 2020, which were not consolidated as of the corresponding balance sheet dates. As of September 30, 2021 and December 31, 2020, we had investments in seven and nine nonconsolidated personal loan VIEs, respectively. We did not provide financial support to any personal loan trusts beyond our initial equity investment during the periods presented. We did no t deconsolidate any personal loan VIEs during the nine months ended September 30, 2021. We deconsolidated three personal loan VIEs during the nine months ended September 30, 2020, which were originally consolidated in 2017. Student Loans We established four student loan trusts during the nine months ended September 30, 2021 and four student loan trusts during the nine months ended September 30, 2020, which were not consolidated as of the corresponding balance sheet dates. As of September 30, 2021 and December 31, 2020, we had investments in 24 and 20 nonconsolidated student loan VIEs, respectively. We did not provide financial support to any student loan trusts beyond our initial equity investment during the periods presented. We did no t deconsolidate any student loan VIEs during the nine months ended September 30, 2021. We consolidated one student loan VIE during the nine months ended September 30, 2020 that was also deconsolidated during the period. The following table presents the aggregate outstanding value of asset-backed bonds and residual interests owned by the Company in nonconsolidated VIEs, which were included in our consolidated balance sheets: September 30, December 31, 2021 2020 Personal loans $ 41,994 $ 71,115 Student loans 350,064 425,820 Securitization investments $ 392,058 $ 496,935 Note 6. Transfers of Financial Assets We regularly transfer financial assets and account for such transfers as either sales or secured borrowings depending on the facts and circumstances. When a transfer of financial assets qualifies as a sale, in many instances we have continued involvement as the servicer of those financial assets. As we expect the benefits of servicing to be more than just adequate, we recognize a servicing asset. Further, in the case of securitization-related transfers that qualify as sales, we have additional continued involvement as an investor, albeit at insignificant levels relative to the expected gains and losses of the securitization. In instances where a transfer is accounted for as a secured borrowing, we perform servicing (but we do not recognize a servicing asset) and typically maintain a significant investment relative to the expected gains and losses of the securitization. In whole loan sales, we do not have a residual financial interest in the loans, nor do we have any other power over the loans that would constrain us from recognizing a sale. Additionally, we have no repurchase requirements related to transfers of personal loans, student loans and non-FNMA home loans other than standard origination representations and warranties, for which we record a liability based on expected repurchase obligations. For FNMA home loans, we have customary FNMA repurchase requirements, which do not constrain sale treatment but result in a liability for the expected repurchase requirement. 36 TABLE OF CONTENTS SoFi Technologies, Inc. Notes to Unaudited Condensed Consolidated Financial Statements (continued) (In Thousands, Unless Otherwise Stated and Except for Share and Per Share Data) The following table summarizes the loan securitization transfers qualifying for sale accounting treatment for the periods indicated. There were no home loan securitization transfers qualifying for sale accounting treatment during any of the periods presented. Three Months Ended September 30, Nine Months Ended September 30, 2021 2020 2021 2020 Student loans Fair value of consideration received: Cash $ 491,450 $ — $ 1,187,714 $ 2,015,357 Securitization investments 25,999 — 62,783 130,807 Deconsolidation of debt (1) — — — 458,375 Servicing assets recognized 5,847 — 36,948 19,903 Total consideration 523,296 — 1,287,445 2,624,442 Aggregate unpaid principal balance and accrued interest of loans sold 500,874 — 1,227,379 2,540,052 Gain from loan sales (1) $ 22,422 $ — $ 60,066 $ 84,390 Personal loans Fair value of consideration received: Cash $ 300,508 $ 8,684 $ 498,999 $ 316,503 Securitization investments 15,847 — 26,328 20,961 Deconsolidation of debt (1) — 141,581 — 414,261 Servicing assets recognized 1,687 442 2,925 2,086 Total consideration 318,042 150,707 528,252 753,811 Aggregate unpaid principal balance and accrued interest of loans sold 301,302 147,123 502,108 708,346 Gain from loan sales (1) $ 16,740 $ 3,584 $ 26,144 $ 45,465 _____________________ (1) Deconsolidation of debt reflects the impacts of previously consolidated VIEs that became deconsolidated during the period because we no longer held a significant financial interest in the underlying securitization entity, which can fluctuate from period to period. See Note 5 for further discussion of deconsolidations. The gain from sales of student loans excluded losses from deconsolidations of $ 8,601 for the nine months ended September 30, 2020. The gains from sales of personal loans excluded losses from deconsolidations of $ 983 and $ 6,098 for the three and nine months ended September 30, 2020, respectively. Losses on deconsolidations are presented within noninterest income — securitizations in the consolidated statements of operations and comprehensive income (loss). 37 TABLE OF CONTENTS SoFi Technologies, Inc. Notes to Unaudited Condensed Consolidated Financial Statements (continued) (In Thousands, Unless Otherwise Stated and Except for Share and Per Share Data) The following table summarizes the whole loan sales for the periods indicated: Three Months Ended September 30, Nine Months Ended September 30, 2021 2020 2021 2020 Student loans Fair value of consideration received: Cash $ 434,751 $ 891,150 $ 1,282,461 $ 1,830,008 Servicing assets recognized 3,574 8,513 12,172 18,651 Repurchase liabilities recognized ( 75 ) ( 161 ) ( 233 ) ( 333 ) Total consideration 438,250 899,502 1,294,400 1,848,326 Aggregate unpaid principal balance and accrued interest of loans sold 423,576 855,809 1,248,888 1,766,951 Gain from loan sales $ 14,674 $ 43,693 $ 45,512 $ 81,375 Home loans Fair value of consideration received: Cash $ 806,027 $ 545,584 $ 2,358,541 $ 1,467,674 Servicing assets recognized 8,386 5,321 24,292 13,604 Repurchase liabilities recognized ( 745 ) ( 784 ) ( 2,719 ) ( 1,836 ) Total consideration 813,668 550,121 2,380,114 1,479,442 Aggregate unpaid principal balance and accrued interest of loans sold 789,402 522,880 2,308,705 1,421,717 Gain from loan sales $ 24,266 $ 27,241 $ 71,409 $ 57,725 Personal loans Fair value of consideration received: Cash $ 934,888 $ 152,516 $ 2,547,577 $ 868,889 Servicing assets recognized 5,842 980 16,923 6,313 Repurchase liabilities recognized ( 2,221 ) ( 559 ) ( 6,285 ) ( 2,325 ) Total consideration received 938,509 152,937 2,558,215 872,877 Aggregate unpaid principal balance and accrued interest of loans sold 900,633 148,355 2,456,356 836,630 Gain from loan sales $ 37,876 $ 4,582 $ 101,859 $ 36,247 38 TABLE OF CONTENTS SoFi Technologies, Inc. Notes to Unaudited Condensed Consolidated Financial Statements (continued) (In Thousands, Unless Otherwise Stated and Except for Share and Per Share Data) The following table presents information as of the dates indicated about the unpaid principal balances of transferred loans that are not recorded in our consolidated balance sheets, but with which we have a continuing involvement through our servicing agreements: Student Loans Home Loans Personal Loans Total September 30, 2021 Loans in repayment $ 10,572,533 $ 4,196,862 $ 4,894,666 $ 19,664,061 Loans in-school/grace/deferment 28,342 — — 28,342 Loans in forbearance 57,528 19,294 9,825 86,647 Loans in delinquency 92,512 6,968 73,105 172,585 Total loans serviced $ 10,750,915 $ 4,223,124 $ 4,977,596 $ 19,951,635 December 31, 2020 Loans in repayment $ 12,059,702 $ 2,629,015 $ 4,796,404 $ 19,485,121 Loans in-school/grace/deferment 26,158 — — 26,158 Loans in forbearance 275,659 46,357 35,677 357,693 Loans in delinquency 91,424 8,493 110,640 210,557 Total loans serviced $ 12,452,943 $ 2,683,865 $ 4,942,721 $ 20,079,529 The following table presents additional information about the servicing cash flows received and net charge-offs related to transferred loans with which we have a continuing involvement during the periods indicated: Three Months Ended September 30, Nine Months Ended September 30, 2021 2020 2021 2020 Student loans Servicing fees collected $ 12,393 $ 11,420 $ 35,687 $ 37,545 Charge-offs, net of recoveries (1) 8,750 3,701 16,454 12,146 Home Loans Servicing fees collected 2,349 1,244 5,880 3,017 Charge-offs, net of recoveries — — — — Personal Loans Servicing fees collected 8,467 11,718 25,742 35,319 Charge-offs, net of recoveries (1) 19,206 38,938 85,382 156,932 Total Servicing fees collected $ 23,209 $ 24,382 $ 67,309 $ 75,881 Charge-offs, net of recoveries $ 27,956 $ 42,639 $ 101,836 $ 169,078 _____________________ (1) Student loan and personal loan charge-offs, net of recoveries, are impacted by the timing of charge-off sales performed on behalf of the purchasers of our loans, which lower the net amount disclosed. For both loan products, charge-off sales were meaningfully higher in the 2020 periods relative to the 2021 periods. Note 7. Allowance for Credit Losses We measure our allowance for credit losses on accounts receivable, which primarily relates to Galileo, and on loans measured at amortized cost, including credit card loans, under ASC 326. Given our methods of collecting funds on servicing receivables, our historical experience of infrequent write offs, and that we have not observed meaningful changes in our counterparties’ abilities to pay, we determined that the future exposure to credit losses on servicing related receivables was immaterial. 39 TABLE OF CONTENTS SoFi Technologies, Inc. Notes to Unaudited Condensed Consolidated Financial Statements (continued) (In Thousands, Unless Otherwise Stated and Except for Share and Per Share Data) The following table summarizes the activity in the balances of allowance for credit losses on accounts receivable and credit card loans during the periods indicated. Accounts Receivable (1) Credit Card Loans (2) Three Months Ended September 30, 2021 Balance at June 30, 2021 $ 1,230 $ 691 Provision for credit losses (3) 930 2,401 Write-offs charged against the allowance ( 201 ) ( 92 ) Balance at September 30, 2021 $ 1,959 $ 3,000 Nine Months Ended September 30, 2021 Balance at December 31, 2020 $ 562 $ 219 Provision for credit losses (3) 2,710 2,887 Write-offs charged against the allowance (4) ( 1,313 ) ( 106 ) Balance at September 30, 2021 $ 1,959 $ 3,000 Three Months Ended September 30, 2020 Balance at June 30, 2020 $ — $ — Provision for credit losses (3) 490 — Write-offs charged against the allowance ( 175 ) — Balance at September 30, 2020 $ 315 $ — Nine Months Ended September 30, 2020 Balance at December 31, 2019 $ — $ — Provision for credit losses (3) 490 — Write-offs charged against the allowance ( 175 ) — Balance at September 30, 2020 $ 315 $ — _____________________ (1) Accounts receivable balances, net of allowance for credit losses, are presented within other assets in the consolidated balance sheets. We established an allowance for credit losses on accounts receivable subsequent to our acquisition of Galileo in the second quarter of 2020. Certain of our historical accounts receivable balances did not have any write-offs. (2) Credit card loans measured at amortized cost, net of allowance for credit losses, are presented within loans in the consolidated balance sheets. We launched the SoFi Credit Card in the third quarter of 2020, which was expanded to a broader market in the fourth quarter of 2020. (3) Provision for credit losses on accounts receivable and credit card loans are presented within noninterest expense — general and administrative and noninterest expense — provision for credit losses , respectively, in the consolidated statements of operations and comprehensive income (loss). There were no recoveries of credit card losses during the three and nine months ended September 30, 2021 and 2020. (4) The increase in accounts receivable write-offs charged against the allowance during the nine months ended September 30, 2021 was primarily attributable to three accounts that were deemed uncollectible. 40 TABLE OF CONTENTS SoFi Technologies, Inc. Notes to Unaudited Condensed Consolidated Financial Statements (continued) (In Thousands, Unless Otherwise Stated and Except for Share and Per Share Data) Note 8. Fair Value Measurements The following tables summarize, by level within the fair value hierarchy, the carrying amounts and estimated fair values of our assets and liabilities (i) measured at fair value on a recurring basis, (ii) measured at fair value on a nonrecurring basis, or (iii) disclosed but not carried at fair value in the consolidated balance sheets as of the dates presented. September 30, 2021 Fair Value Carrying Value Level 1 Level 2 Level 3 Total Assets Cash and cash equivalents (1) $ 533,523 $ 533,523 $ — $ — $ 533,523 Restricted cash and restricted cash equivalents (1) 320,705 320,705 — — 320,705 Investments in AFS debt securities (2)(4) 197,203 128,537 68,666 — 197,203 Student loans (2) 2,554,441 — — 2,554,441 2,554,441 Home loans (2) 184,879 — — 184,879 184,879 Personal loans (2) 2,054,226 — — 2,054,226 2,054,226 Credit card loans (1) 72,012 — — 73,846 73,846 Servicing rights (2) 163,474 — — 163,474 163,474 Asset-backed bonds (2)(5) 260,557 — 260,557 — 260,557 Residual investments (2)(5) 131,501 — — 131,501 131,501 Non-securitization investments – ETFs and common stock (2)(6)(7) 2,159 2,159 — — 2,159 Non-securitization investments – other (3) 3,315 — — 3,315 3,315 Derivative assets (2)(12)(14) 3,291 3,291 — — 3,291 Purchase price earn-out (2)(8) 5,411 — — 5,411 5,411 Interest rate lock commitments (2)(9) 4,569 — — 4,569 4,569 Student loan commitments (2)(9) 4,190 — — 4,190 4,190 Interest rate swaps (2)(13)(14) 1,263 — 1,263 — 1,263 Total assets $ 6,496,719 $ 988,215 $ 330,486 $ 5,179,852 $ 6,498,553 Liabilities Debt (1) $ 2,770,226 $ — $ 2,810,067 $ — $ 2,810,067 Residual interests classified as debt (2) 103,898 — — 103,898 103,898 Warrant liabilities – SoFi Technologies warrants (2)(11) 174,938 174,938 — — 174,938 ETF short positions (2)(6) 90 90 — — 90 Total liabilities $ 3,049,152 $ 175,028 $ 2,810,067 $ 103,898 $ 3,088,993 41 TABLE OF CONTENTS SoFi Technologies, Inc. Notes to Unaudited Condensed Consolidated Financial Statements (continued) (In Thousands, Unless Otherwise Stated and Except for Share and Per Share Data) December 31, 2020 Fair Value Carrying Value Level 1 Level 2 Level 3 Total Assets Cash and cash equivalents (1) $ 872,582 $ 872,582 $ — $ — $ 872,582 Restricted cash and restricted cash equivalents (1) 450,846 450,846 — — 450,846 Student loans (2) 2,866,459 — — 2,866,459 2,866,459 Home loans (2) 179,689 — — 179,689 179,689 Personal loans (2) 1,812,920 — — 1,812,920 1,812,920 Credit card loans (1) 3,723 — — 3,723 3,723 Commercial loan (1) 16,512 — — 16,512 16,512 Servicing rights (2) 149,597 — — 149,597 149,597 Asset-backed bonds (2)(5) 357,411 — 357,411 — 357,411 Residual investments (2)(5) 139,524 — — 139,524 139,524 Non-securitization investments – ETFs and common stock (2)(6)(7) 6,850 6,850 — — 6,850 Non-securitization investments – other (3) 1,147 — — 1,147 1,147 Interest rate lock commitments (2)(9) 15,620 — — 15,620 15,620 Total assets $ 6,872,880 $ 1,330,278 $ 357,411 $ 5,185,191 $ 6,872,880 Liabilities Debt (1) $ 4,798,925 $ — $ 4,851,658 $ — $ 4,851,658 Residual interests classified as debt (2) 118,298 — — 118,298 118,298 Warrant liabilities – Series H warrants (2)(10) 39,959 — — 39,959 39,959 Derivative liabilities (2)(12)(14) 2,008 2,008 — — 2,008 Interest rate swaps (2)(13)(14) 947 — 947 — 947 ETF short positions (2)(6) 5,241 5,241 — — 5,241 Total liabilities $ 4,965,378 $ 7,249 $ 4,852,605 $ 158,257 $ 5,018,111 _____________________ (1) Disclosed but not carried at fair value. The carrying value of our debt is net of unamortized discounts and debt issuance costs. The fair values of our warehouse facility debt, revolving credit facility debt, financing arrangements assumed in the Galileo acquisition and credit card loans were based on market factors and credit factors specific to us. The securitization debt was valued using a discounted cash flow model, with key inputs relating to the underlying contractual coupons, terms, discount rate and expectations for defaults and prepayments. The carrying amounts of our cash and cash equivalents and restricted cash and restricted cash equivalents approximate their fair values due to the short-term maturities and highly liquid nature of these accounts. The fair value of our single commercial loan as of December 31, 2020 was also determined to approximate its carrying value, as the loan was issued in the fourth quarter of 2020, was short-term in nature, and was repaid in full in January 2021. (2) Measured at fair value on a recurring basis. (3) Measured at fair value on a nonrecurring basis. (4) Investments in AFS debt securities as of September 30, 2021 were classified as Level 1 or Level 2. The Level 1 investments utilize quoted prices in actively traded markets. The Level 2 investments rely upon observable inputs other than quoted prices, dealer quotes in markets that are not active and implied pricing derived from new issuances of similar securities. See Note 1 and Note 3 for additional information. (5) These assets represent the carrying value of our holdings in VIEs wherein we were not deemed the primary beneficiary. As we do not provide financial support beyond our initial equity investment, our maximum exposure to loss as a result of our involvement with nonconsolidated VIEs is limited to the investment amount. See Note 5 for additional information. (6) ETFs and ETF short positions are classified as Level 1 based on utilizing quoted prices in actively traded markets. The short positions serve as an economic hedge to our non-securitization investments in ETFs. (7) Common stock held on our consolidated balance sheets is composed of fractional shares to facilitate member trading in fractional shares in various companies through a SoFi Invest account, as well as common stock held at 8 Limited, which functions as a clearing broker in Hong Kong. These assets are classified as Level 1 based on the use of quoted prices in actively traded markets. (8) The purchase price earn-out provision is classified as Level 3 because of our reliance on an unobservable inputs, such as conditional prepayment rates, annual default rates and discount rates. (9) IRLCs and student loan commitments are classified as Level 3 because of our reliance on assumed loan funding probabilities. The assumed probabilities are based on our internal historical experience with home loans and student loans similar to those in the funding pipelines on the measurement date. (10) In conjunction with the Closing of the Business Combination, we measured the final fair value of the Series H warrants and subsequently reclassified them into permanent equity. Therefore, we did not measure the Series H warrants at fair value on an ongoing basis, subsequent to May 28, 2021. See Note 10 for additional information on our historical Series H warrant liabilities, including inputs to the valuation. (11) SoFi Technologies warrants include an aggregate 28,125,000 public warrants and private placement warrants assumed in the Business Combination, which are classified as Level 1 due to the reliance upon an observable market quote in an active market. See “—Warrant Liabilities — SoFi Technologies Warrants” in this Note 8 for additional information. (12) Derivative assets and liabilities classified as Level 1 are based on broker quotes in active markets and represent economic hedges of loan fair values. 42 TABLE OF CONTENTS SoFi Technologies, Inc. Notes to Unaudited Condensed Consolidated Financial Statements (continued) (In Thousands, Unless Otherwise Stated and Except for Share and Per Share Data) (13) Interest rate swaps are classified as Level 2, because these financial instruments do not trade in active markets with observable prices, but rely on observable inputs other than quoted prices. Interest rate swaps are valued using the three-month LIBOR swap yield curve, which is an observable input from an active market. (14) For certain derivative instruments for which an enforceable master netting agreement exists, we elected to net derivative assets and derivative liabilities by counterparty. See Note 1 for additional information. Loans The following key unobservable assumptions were used in the fair value measurement of our loans as of the dates indicated: September 30, 2021 December 31, 2020 Range Weighted Average Range Weighted Average Student loans Conditional prepayment rate 16.1 % – 26.8 % 19.2 % 15.8 % – 33.3 % 18.4 % Annual default rate 0.2 % – 3.4 % 0.4 % 0.2 % – 4.9 % 0.4 % Discount rate 1.7 % – 7.1 % 2.9 % 1.1 % – 7.1 % 3.3 % Home loans Conditional prepayment rate 3.5 % – 17.1 % 11.6 % 4.4 % – 17.6 % 14.9 % Annual default rate 0.1 % – 3.4 % 0.1 % 0.1 % – 4.9 % 0.1 % Discount rate 1.8 % – 12.5 % 2.2 % 1.3 % – 10.0 % 1.6 % Personal loans Conditional prepayment rate 15.8 % – 35.5 % 20.5 % 14.5 % – 23.2 % 18.1 % Annual default rate 4.0 % – 30.5 % 4.3 % 3.3 % – 33.8 % 4.2 % Discount rate 3.9 % – 6.9 % 4.1 % 5.0 % – 10.7 % 6.0 % The key assumptions included in the above table are defined as follows: • Conditional prepayment rate — The monthly annualized proportion of the principal of a pool of loans that is assumed to be paid off prematurely in each period. An increase in the conditional prepayment rate, in isolation, would result in a decrease in a fair value measurement. The weighted average assumption was weighted based on relative fair value. • Annual default rate — The annualized rate of borrowers who do not make loan payments on time. An increase in the annual default rate, in isolation, would result in a decrease in a fair value measurement. The weighted average assumption was weighted based on relative fair value. • Discount rate — The weighted average rate at which the expected cash flows are discounted to arrive at the net present value of the loans. An increase in the discount rate, in isolation, would result in a decrease in a fair value measurement. The weighted average assumption was weighted based on relative fair value. See Note 4 for additional loan fair value disclosures. Servicing Rights Servicing rights for student loans and personal loans do not trade in an active market with readily observable prices. Similarly, home loan servicing rights infrequently trade in an active market. At the time of the underlying loan sale or the assumption of servicing rights, the fair value of servicing rights is determined using a discounted cash flow methodology based on observable and unobservable inputs. Management classifies servicing rights as Level 3 due to the use of significant unobservable inputs in the fair value measurement. 43 TABLE OF CONTENTS SoFi Technologies, Inc. Notes to Unaudited Condensed Consolidated Financial Statements (continued) (In Thousands, Unless Otherwise Stated and Except for Share and Per Share Data) The following key unobservable inputs were used in the fair value measurement of our classes of servicing rights as of the dates presented: September 30, 2021 December 31, 2020 Range Weighted Average Range Weighted Average Student loans Market servicing costs 0.1 % – 0.2 % 0.1 % 0.1 % – 0.2 % 0.1 % Conditional prepayment rate 15.1 % – 26.2 % 20.9 % 13.8 % – 24.7 % 18.7 % Annual default rate 0.2 % – 4.3 % 0.4 % 0.2 % – 4.8 % 0.4 % Discount rate 7.3 % – 7.3 % 7.3 % 7.3 % – 7.3 % 7.3 % Home loans Market servicing costs 0.1 % –  0.1 % 0.1 % 0.1 % –  0.1 % 0.1 % Conditional prepayment rate 10.9 % – 17.3 % 12.4 % 13.9 % – 20.3 % 16.5 % Annual default rate 0.1 % – 0.3 % 0.1 % 0.1 % – 0.1 % 0.1 % Discount rate 8.0 % – 8.0 % 8.0 % 10.0 % – 10.0 % 10.0 % Personal loans Market servicing costs 0.2 % – 1.1 % 0.3 % 0.2 % – 0.7 % 0.3 % Conditional prepayment rate 22.1 % – 40.5 % 26.2 % 16.2 % – 26.1 % 19.1 % Annual default rate 3.0 % – 7.1 % 4.7 % 3.1 % – 7.5 % 5.5 % Discount rate 7.3 % –  7.3 % 7.3 % 7.3 % –  7.3 % 7.3 % The key assumptions included in the above table are defined as follows: • Market servicing costs — The fee a willing market participant, which we validate through actual third-party bids for our servicing, would require for the servicing of student loans, home loans and personal loans with similar characteristics as those in our serviced portfolio. An increase in the market servicing cost, in isolation, would result in a decrease in a fair value measurement. The weighted average assumption was weighted based on relative fair value. • Conditional prepayment rate — The monthly annualized proportion of the principal of a pool of loans that is assumed to be paid off prematurely in each period. An increase in the conditional prepayment rate, in isolation, would result in a decrease in a fair value measurement. The weighted average assumption was weighted based on relative fair value. • Annual default rate — The annualized rate of default within the total serviced loan balance. An increase in the annual default rate, in isolation, would result in a decrease in a fair value measurement. The weighted average assumption was weighted based on relative fair value. • Discount rate — The weighted average rate at which the expected cash flows are discounted to arrive at the net present value of the servicing rights. An increase in the discount rate, in isolation, would result in a decrease in a fair value measurement. The weighted average assumption was weighted based on relative fair value. 44 TABLE OF CONTENTS SoFi Technologies, Inc. Notes to Unaudited Condensed Consolidated Financial Statements (continued) (In Thousands, Unless Otherwise Stated and Except for Share and Per Share Data) The following table presents the estimated decrease to the fair value of our servicing rights as of the dates indicated if the key assumptions had each of the below adverse changes: September 30, 2021 December 31, 2020 Market servicing costs 2.5 basis points increase $ ( 10,654 ) $ ( 10,472 ) 5.0 basis points increase ( 21,309 ) ( 20,944 ) Conditional prepayment rate 10% increase $ ( 6,384 ) $ ( 5,430 ) 20% increase ( 12,256 ) ( 10,230 ) Annual default rate 10% increase $ ( 189 ) $ ( 336 ) 20% increase ( 375 ) ( 681 ) Discount rate 100 basis points increase $ ( 3,586 ) $ ( 2,986 ) 200 basis points increase ( 6,973 ) ( 5,820 ) The sensitivity calculations above are hypothetical and should not be considered to be predictive of future performance. The effect on fair value of a variation in assumptions generally cannot be determined because the relationship of the change in assumptions to the fair value may not be linear. Additionally, the effect of an adverse variation in a particular assumption on the fair value of our servicing rights is calculated while holding the other assumptions constant. In reality, changes in one factor may lead to changes in other factors, which could impact the above hypothetical effects. 45 TABLE OF CONTENTS SoFi Technologies, Inc. Notes to Unaudited Condensed Consolidated Financial Statements (continued) (In Thousands, Unless Otherwise Stated and Except for Share and Per Share Data) The following table presents the changes in the Company’s servicing rights, which are measured at fair value on a recurring basis. Student Loans Home Loans Personal Loans Total Three Months Ended September 30, 2021 Fair value as of June 30, 2021 $ 99,601 $ 37,557 $ 22,609 $ 159,767 Recognition of servicing from transfers of financial assets 9,421 8,386 7,529 25,336 Servicing rights assumed from third parties — — 49 49 Derecognition of servicing via loan purchases — — ( 168 ) ( 168 ) Change in valuation inputs or other assumptions ( 1,698 ) 600 1,507 409 Realization of expected cash flows and other changes ( 11,305 ) ( 2,398 ) ( 8,216 ) ( 21,919 ) Fair value as of September 30, 2021 $ 96,019 $ 44,145 $ 23,310 $ 163,474 Three Months Ended September 30, 2020 Fair value as of June 30, 2020 $ 129,514 $ 17,987 $ 36,523 $ 184,024 Recognition of servicing from transfers of financial assets 8,513 5,321 1,422 15,256 Derecognition of servicing via loan purchases ( 12,369 ) — ( 934 ) ( 13,303 ) Change in valuation inputs or other assumptions ( 5,556 ) ( 1,927 ) 2,812 ( 4,671 ) Realization of expected cash flows and other changes ( 12,206 ) ( 1,242 ) ( 10,210 ) ( 23,658 ) Fair value as of September 30, 2020 $ 107,896 $ 20,139 $ 29,613 $ 157,648 Nine Months Ended September 30, 2021 Fair value as of January 1, 2021 $ 100,637 $ 23,914 $ 25,046 $ 149,597 Recognition of servicing from transfers of financial assets 49,120 24,292 19,848 93,260 Servicing rights assumed from third parties — — 49 49 Derecognition of servicing via loan purchases ( 392 ) — ( 356 ) ( 748 ) Change in valuation inputs or other assumptions ( 17,813 ) 2,146 3,743 ( 11,924 ) Realization of expected cash flows and other changes ( 35,533 ) ( 6,207 ) ( 25,020 ) ( 66,760 ) Fair value as of September 30, 2021 $ 96,019 $ 44,145 $ 23,310 $ 163,474 Nine Months Ended September 30, 2020 Fair value as of January 1, 2020 $ 138,582 $ 13,181 $ 49,855 $ 201,618 Recognition of servicing from transfers of financial assets 38,554 13,604 8,399 60,557 Derecognition of servicing via loan purchases ( 12,590 ) — ( 934 ) ( 13,524 ) Change in valuation inputs or other assumptions ( 18,164 ) ( 3,504 ) 5,336 ( 16,332 ) Realization of expected cash flows and other changes ( 38,486 ) ( 3,142 ) ( 33,043 ) ( 74,671 ) Fair value as of September 30, 2020 $ 107,896 $ 20,139 $ 29,613 $ 157,648 Asset-Backed Bonds The fair value of asset-backed bonds is determined using a discounted cash flow methodology. Management classifies asset-backed bonds as Level 2 due to the use of quoted prices for similar assets in markets that are not active, as well as certain factors specific to us. The following key inputs were used in the fair value measurement of our asset-backed bonds as of the dates indicated: September 30, 2021 December 31, 2020 Discount rate (range) 0.6 % – 3.3 % 0.8 % – 4.0 % Conditional prepayment rate (range) 18.0 % – 31.2 % 18.8 % – 21.9 % 46 TABLE OF CONTENTS SoFi Technologies, Inc. Notes to Unaudited Condensed Consolidated Financial Statements (continued) (In Thousands, Unless Otherwise Stated and Except for Share and Per Share Data) As of the dates indicated, the fair value of our asset-backed bonds was not materially impacted by default assumptions on the underlying securitization loans, as the subordinate residual interests, by design, are expected to absorb all estimated losses based on our default assumptions for the respective periods. Residual Investments and Residual Interests Classified as Debt Residual investments and residual interests classified as debt do not trade in active markets with readily observable prices, and there is limited observable market data for reference. The fair values of residual investments and residual interests classified as debt are determined using a discounted cash flow methodology. Management classifies residual investments and residual interests classified as debt as Level 3 due to the use of significant unobservable inputs in the fair value measurements. The following key unobservable inputs were used in the fair value measurements of our residual investments and residual interests classified as debt as of the dates indicated: September 30, 2021 December 31, 2020 Range Weighted Average Range Weighted Average Residual investments Conditional prepayment rate 18.0 % – 31.7 % 23.5 % 18.8 % – 22.3 % 20.2 % Annual default rate 0.3 % – 6.1 % 0.8 % 0.3 % – 6.2 % 0.7 % Discount rate 2.5 % – 10.5 % 4.1 % 3.0 % – 18.5 % 6.2 % Residual interests classified as debt Conditional prepayment rate 19.7 % – 38.7 % 29.6 % 19.5 % – 24.8 % 21.4 % Annual default rate 0.5 % – 6.0 % 3.3 % 0.4 % – 6.4 % 3.1 % Discount rate 5.5 % – 9.5 % 6.1 % 8.5 % – 18.0 % 10.8 % The key assumptions included in the above table are defined as follows: • Conditional prepayment rate — The monthly annualized proportion of the principal of a pool of loans that is assumed to be paid off prematurely in each period for the pool of loans in the securitization. An increase in the conditional prepayment rate, in isolation, would result in a decrease in a fair value measurement. The weighted average assumption was weighted based on relative fair value. • Annual default rate — The annualized rate of borrowers who fail to remain current on their loans for the pool of loans in the securitization. An increase in the annual default rate, in isolation, would result in a decrease in a fair value measurement. The weighted average assumption was weighted based on relative fair value. • Discount rate — The weighted average rate at which the expected cash flows are discounted to arrive at the net present value of the residual investments and residual interests classified as debt. An increase in the discount rate, in isolation, would result in a decrease in a fair value measurement. The weighted average assumption was weighted based on relative fair value. The following table presents the changes in the residual investments and residual interests classified as debt, which are both measured at fair value on a recurring basis. We record changes in fair value within noninterest income — securitizations in the consolidated statements of operations and comprehensive income (loss), a portion of which is subsequently reclassified to 47 TABLE OF CONTENTS SoFi Technologies, Inc. Notes to Unaudited Condensed Consolidated Financial Statements (continued) (In Thousands, Unless Otherwise Stated and Except for Share and Per Share Data) interest expense — securitizations and warehouses for residual interests classified as debt and to interest income — securitizations for residual investments, but does not impact the liability or asset balance, respectively. Residual Investments Residual Interests Classified as Debt Three Months Ended September 30, 2021 Fair value as of June 30, 2021 $ 143,100 $ 112,545 Additions 6,360 — Change in valuation inputs or other assumptions (1) 2,230 5,593 Payments (2) ( 20,189 ) ( 14,240 ) Fair value as of September 30, 2021 $ 131,501 $ 103,898 Three Months Ended September 30, 2020 Fair value as of June 30, 2020 $ 228,630 $ 165,666 Change in valuation inputs or other assumptions (1) 3,291 11,301 Payments (2) ( 28,442 ) ( 17,824 ) Transfers (3) ( 47,261 ) — Derecognition upon achieving true sale accounting treatment — ( 29,692 ) Fair value as of September 30, 2020 $ 156,218 $ 129,451 Nine Months Ended September 30, 2021 Fair value as of January 1, 2021 $ 139,524 $ 118,298 Additions 44,528 2,170 Change in valuation inputs or other assumptions (1) 9,082 19,261 Payments (2) ( 61,633 ) ( 35,831 ) Fair value as of September 30, 2021 $ 131,501 $ 103,898 Nine Months Ended September 30, 2020 Fair value as of January 1, 2020 $ 262,880 $ 271,778 Additions 10,708 — Change in valuation inputs or other assumptions (1) 6,441 28,815 Payments (2) ( 76,550 ) ( 69,424 ) Transfers (3) ( 47,261 ) — Derecognition upon achieving true sale accounting treatment — ( 101,718 ) Fair value as of September 30, 2020 $ 156,218 $ 129,451 ___________________ (1) For residual investments, the estimated amount of losses included in earnings attributable to changes in instrument-specific credit risk were $( 6 ) and $( 214 ) during the three and nine months ended September 30, 2021, respectively, and $( 283 ) and $( 1,314 ) during the three and nine months ended September 30, 2020, respectively. The losses attributable to instrument-specific credit risk were estimated by incorporating our current default and loss severity assumptions for the residual investments. These assumptions are based on historical performance, market trends and performance expectations over the term of the underlying instrument. (2) Payments of residual investments included residual investment sales of $ 1,615 and $ 4,291 during the three and nine months ended September 30, 2021, respectively, and $ 7,163 and $ 7,163 during the three and nine months ended September 30, 2020, respectively. (3) The three and nine months ended September 30, 2020 includes a transfer from residual investments (Level 3) to asset-backed bonds (Level 2) associated with a repackaged securitization transaction in which we formed a new VIE and, in the process, exchanged our residual interest for an asset-backed bond interest. 48 TABLE OF CONTENTS SoFi Technologies, Inc. Notes to Unaudited Condensed Consolidated Financial Statements (continued) (In Thousands, Unless Otherwise Stated and Except for Share and Per Share Data) Loan Commitments We classify student loan commitments as Level 3 because the assets do not trade in an active market with readily observable prices and, as such, our valuations utilize significant unobservable inputs. Additionally, we classify IRLCs as Level 3, as our IRLCs are inherently uncertain and unobservable given that a home loan origination is contingent on a plethora of factors. The following key unobservable inputs were used in the fair value measurements of our IRLCs and student loan commitments as of the dates indicated: September 30, 2021 December 31, 2020 Range Weighted Average Range Weighted Average IRLCs Loan funding probability (1) 64.1 % – 64.1 % 64.1 % 54.5 % – 54.5 % 54.5 % Student loan commitments Loan funding probability (1) 80.0 % – 95.0 % 87.5 % n/a n/a ___________________ (1) The probability of honoring IRLCs and student loan commitments, which reflects the percentage likelihood that an approved loan application will close based on historical experience. A significant difference between the actual funded rate and the assumed funded rate at the measurement date could result in a significantly higher or lower fair value measurement of our IRLCs and student loan commitments. The aggregate amount of student loans we committed to fund was $ 151,919 as of September 30, 2021. See Note 1 under “— Derivative Financial Instruments” for the aggregate notional amount associated with IRLCs. The key assumption included in the above table is defined as follows: • Loan funding probability — Our expectation of the percentage of IRLCs or student loan commitments which will become funded loans. An increase in the loan funding probabilities, in isolation, would result in an increase in a fair value measurement. The weighted average assumptions were weighted based on relative fair values. 49 TABLE OF CONTENTS SoFi Technologies, Inc. Notes to Unaudited Condensed Consolidated Financial Statements (continued) (In Thousands, Unless Otherwise Stated and Except for Share and Per Share Data) The following table presents the changes in our IRLCs and student loan commitments, which are measured at fair value on a recurring basis. Changes in the fair values of IRLCs and student loan commitments are recorded within noninterest income — loan origination and sales in the consolidated statements of operations and comprehensive income (loss). IRLCs Student Loan Commitments Three Months Ended September 30, 2021 Fair value as of June 30, 2021 $ 7,760 $ — Revaluation adjustments 4,569 4,190 Funded loans (1) ( 5,458 ) — Unfunded loans (1) ( 2,302 ) — Fair value as of September 30, 2021 $ 4,569 $ 4,190 Three Months Ended September 30, 2020 Fair value as of June 30, 2020 $ 18,221 $ — Revaluation adjustments 16,856 — Funded loans (1) ( 9,433 ) — Unfunded loans (1) ( 8,788 ) — Fair value as of September 30, 2020 $ 16,856 $ — Nine Months Ended September 30, 2021 Fair value as of January 1, 2021 $ 15,620 $ — Revaluation adjustments 19,447 4,190 Funded loans (1) ( 20,943 ) — Unfunded loans (1) ( 9,555 ) — Fair value as of September 30, 2021 $ 4,569 $ 4,190 Nine Months Ended September 30, 2020 Fair value as of January 1, 2020 $ 1,090 $ — Revaluation adjustments 46,908 — Funded loans (1) ( 16,644 ) — Unfunded loans (1) ( 14,498 ) — Fair value as of September 30, 2020 $ 16,856 $ — ___________________ (1) Funded and unfunded loan fair value adjustments for the three-month periods presented represent the unpaid principal balance of funded and unfunded loans, respectively, during the periods presented multiplied by the IRLC or student loan commitment price in effect at the beginning of the quarter. For the year-to-date periods presented, amounts represent the summation of the per-quarter effects. Non-Securitization Investments Non-securitization investments — ETFs of $ 1,607 as of September 30, 2021 and $ 6,850 as of December 31, 2020 include investments in exchange-traded funds, each of which has a targeted investment strategy, such as securities with regular dividends (applicable to the 2021 period only), investment grade and high-yield fixed income securities (applicable to the 2021 period only), equity securities seeking long-term capital appreciation (sold during the 2021 period), and widely held U.S. stocks by SoFi members (sold during the 2021 period). Non-securitization investments — ETFs are measured at fair value on a recurring basis using the net asset value expedient in accordance with ASC 820 and are presented within other assets in the consolidated balance sheets. Non-securitization investments — Common stock of $ 552 as of September 30, 2021 includes stock inventory to facilitate member trading in fractional shares in various companies through a SoFi Invest account, as well as common stock at 8 Limited, 50 TABLE OF CONTENTS SoFi Technologies, Inc. Notes to Unaudited Condensed Consolidated Financial Statements (continued) (In Thousands, Unless Otherwise Stated and Except for Share and Per Share Data) which functions as a clearing broker in Hong Kong. Fractional share assets are measured at fair value on a recurring basis and presented within other assets in the consolidated balance sheets. Common stock assets were immaterial as of December 31, 2020. As of September 30, 2021 and December 31, 2020, non-securitization investments — other includes investments for which fair values are not readily determinable, which we elect to measure using the measurement alternative method of accounting. Under the measurement alternative method, we measure the investments at cost, less any impairment and adjusted for changes resulting from observable price changes in orderly transactions for identical or similar investments of the same issuers. The carrying values of the investments are presented within other assets in the consolidated balance sheets. Adjustments to the carrying values, such as impairments and unrealized gains, are recognized within noninterest income — other in the consolidated statements of operations and comprehensive income (loss). The fair value measurements are classified within Level 3 of the fair value hierarchy due to the uses of unobservable inputs in the fair value measurements. For one such investment with a fair value of $ 1,147 as of September 30, 2021 and December 31, 2020, we recorded an impairment charge of $ 803 in the second quarter of 2020 and adjusted the carrying value of the investment accordingly, which was based on a discounted cash flow analysis, wherein we weighted different valuation scenarios with different assumed internal rates of return and time to liquidity events. In performing a qualitative impairment assessment, we determined that the carrying amount of the investment exceeded its fair value due to a significant decline in investee operating results relative to expectations, primarily as a result of the COVID-19 pandemic. For an additional investment with a fair value of $ 2,168 as of September 30, 2021, we recognized a gain of $ 3,967 during the second quarter of 2021, which also represents our cumulative adjustment on this security and which we valued based on the investee’s latest round of financing during the second quarter of 2021. We considered this recent equity transaction to be an orderly transaction in an issuance similar to our investment holding. Additionally, we sold a portion of our investment during the second quarter of 2021 for $ 2,000 at the same valuation, contemporaneous with the investee’s latest round of financing, for which the cash was received in the third quarter of 2021. Purchase Price Earn-Out As of September 30, 2021, we had a derivative for a purchase price earn-out in conjunction with a loan sale agreement we entered into during 2018, as further discussed in Note 1. We receive a capped contractual payout based on the respective loan pool internal rate of return over a certain hurdle rate, which is adjusted for the loan purchaser’s expenses, which are generally immaterial. Historically, the purchase price earn-out value was immaterial. The fair value of the purchase price earn-out is determined using a discounted cash flow methodology. Management classifies the purchase price earn-out as Level 3 due to the use of significant unobservable inputs in the fair value measurement. A significant difference between the expected performance of the loans included in the loan sale agreement and the actual results as of the measurement date could result in a higher or lower fair value measurement. Our key valuation inputs were as follows as of the date indicated: September 30, 2021 Purchase Price Earn-Out Range Weighted Average Conditional prepayment rate 18.7 % – 18.7 % 18.7 % Annual default rate 32.1 % – 32.1 % 32.1 % Discount rate 25.0 % – 25.0 % 25.0 % The key assumptions included in the above table are defined as follows: • Conditional prepayment rate — The monthly annualized proportion of the principal of the pool of loans included in the loan sale agreement that is assumed to be paid off prematurely. An increase in the conditional prepayment rate, in isolation, would result in a decrease in a fair value measurement. The weighted average assumption was weighted based on relative fair value. • Annual default rate — The annualized rate of borrowers who fail to remain current on their loans for the pool of loans included in the loan sale agreement. An increase in the annual default rate, in isolation, would result in a decrease in a fair value measurement. The weighted average assumption was weighted based on relative fair value. 51 TABLE OF CONTENTS SoFi Technologies, Inc. Notes to Unaudited Condensed Consolidated Financial Statements (continued) (In Thousands, Unless Otherwise Stated and Except for Share and Per Share Data) • Discount rate — The weighted average rate at which the expected cash flows are discounted to arrive at the net present value of the purchase price earn-out derivative. An increase in the discount rate, in isolation, would result in a decrease in a fair value measurement. The weighted average assumption was weighted based on relative fair value. The following table presents the changes in our purchase price earn-out, which is measured at fair value on a recurring basis. Changes in the fair value are recorded within noninterest income — other in the consolidated statements of operations and comprehensive income (loss). Purchase Price Earn-Out Three Months Ended September 30, 2021 Fair value as of June 30, 2021 $ — Initial recognition (1) 7,165 Payments ( 1,754 ) Fair value as of September 30, 2021 $ 5,411 Nine Months Ended September 30, 2021 Fair value as of January 1, 2021 $ — Initial recognition (1) 7,165 Payments ( 1,754 ) Fair value as of September 30, 2021 $ 5,411 ___________________ (1) The estimated amount of losses included in earnings attributable to changes in instrument-specific credit risk were $( 652 ) during the three and nine months ended September 30, 2021. The losses attributable to instrument-specific credit risk were estimated by incorporating our current default and loss severity assumptions for the purchase price earn-out. These assumptions are based on historical performance and performance expectations over the term of the underlying instrument. Warrant Liabilities – SoFi Technologies Warrants Prior to the Business Combination, SCH issued 8,000,000 private placement warrants to SCH Sponsor V LLC (the “Sponsor”) and 20,125,000 public warrants (collectively, “SoFi Technologies warrants”). Upon the Closing of the Business Combination, the Company assumed the SoFi Technologies warrants. Each whole warrant entitles the holder to purchase one share of Class A common stock, subject to adjustment, for an exercise price of $ 11.50 per share. The SoFi Technologies warrants are exercisable at any time commencing the later of a) 30 days following the Business Combination on May 28, 2021 or b) 12 months from the date of SCH’s initial public offering on October 14, 2020, except as described herein, and terminate five years after the Business Combination or earlier upon redemption or liquidation. Once the SoFi Technologies warrants are exercisable, the Company may redeem the outstanding warrants, in whole, upon a minimum 30 days’ prior written notice of redemption (“Redemption Period”) under one of two potential scenarios. For purposes of the redemption scenarios, the “Reference Value” represents the last reported sale price of SoFi Technologies common stock for any 20 trading days within a 30-trading day period ending on the third trading day prior to the date on which we send the notice of redemption. The two scenarios are as follows: (1) If the Reference Value equals or exceeds $ 18.00 per share, the Company may redeem the outstanding public warrants for cash at a price of $ 0.01 per warrant. The public warrant holders will be entitled to exercise his, her or its public warrants prior to the scheduled redemption date. The private placement warrants are exempt from redemption if the Reference Value is at or above $ 18.00 per share and the private placement warrants continue to be held by the Sponsor or a permitted transferee. (2) If the Reference Value equals or exceeds $ 10.00 per share, the Company may redeem the outstanding public warrants for cash at a price of $ 0.10 per warrant. If the Reference Value is less than $ 18.00 per share, the private placement warrants must also be concurrently called for redemption with the public warrants. The warrant holders will be entitled to exercise his, her or its SoFi Technologies warrants during the Redemption Period on a cashless basis prior to redemption. The cashless exercise will entitle the warrant holders to receive a set number of shares determined by 52 TABLE OF CONTENTS SoFi Technologies, Inc. Notes to Unaudited Condensed Consolidated Financial Statements (continued) (In Thousands, Unless Otherwise Stated and Except for Share and Per Share Data) reference to the redemption date and the “fair market value” of SoFi Technologies common stock, as defined in the warrant agreement. Prior to the Business Combination, SCH evaluated the public warrants and private placement warrants under ASC 815-40, Derivatives and Hedging – Contracts in Entity’s Own Equity and concluded that they did not meet the criteria to be classified in permanent equity. Specifically, the settlement feature for the private placement warrants precluded them from being considered indexed to SCH’s own stock, given that a change in the holder of the private placement warrants may have altered the settlement of the private placement warrants. Since the holder of the instrument was not an input to a standard option pricing model (a consideration with respect to the indexation guidance), the fact that a change in the holder may impact the value of the private placement warrants meant the private placement warrants were not indexed to the SCH’s own stock. Further, a provision in the warrant agreement related to certain tender or exchange offers precluded the public warrants and private placement warrants from being accounted for as components of permanent equity. Since the public warrants and private placement warrants met the definition of a derivative under ASC 815, SCH recorded these warrants as liabilities on the balance sheet at fair value, with subsequent changes in their respective fair values recognized in earnings in accordance with ASC 820. As the accounting acquirer in the Business Combination, and because there were no changes to the terms and conditions of the warrant agreement, SoFi Technologies warrants continue to be classified as derivative liabilities subsequent to the Business Combination, subject to recurring fair value measurement under ASC 820, with changes in fair value recognized in the consolidated statements of operations and comprehensive income (loss) in the period of change. In connection with the Business Combination, on June 14, 2021, the Company filed a Registration Statement on Form S-1 with the SEC, which related to the issuance of an aggregate of up to 28,125,000 shares of common stock issuable upon the exercise of the SoFi Technologies warrants. At the time of the Business Combination, the SoFi Technologies warrants were initially valued at $ 200,250 . As of September 30, 2021, no SoFi Technologies warrants were exercised and the Company valued the warrant liabilities at $ 174,938 based on the closing price of SOFIW. The fair value gains of $ 64,405 and $ 25,312 during the three and nine months ended September 30, 2021, respectively, were recorded within noninterest expense — general and administrative in the consolidated statements of operations and comprehensive income (loss). In November 2021, we announced that we will redeem all outstanding SoFi Technologies warrants. See Note 18 for additional information. Note 9. Debt The following table summarizes the Company’s principal outstanding debt, debt discounts/premiums and debt issuance costs as of the dates indicated: Borrowing Description Collateral Balances (1) Interest Rate (2) Termination/ Maturity (3) Total Capacity (4) Outstanding as of September 30, 2021 (5) December 31, 2020 Student Loan Warehouse Facilities SoFi Funding I $ 71,695 1ML + 125 bps April 2022 $ 200,000 $ 66,936 $ 374,575 SoFi Funding III 27,417 PR –  134 bps (6) September 2024 75,000 24,427 30,170 SoFi Funding V (7) 4,237 1ML + 135 bps May 2023 350,000 4,437 — SoFi Funding VI 79,914 3ML + 125 bps March 2024 600,000 76,219 432,437 SoFi Funding VII 186,113 1ML + 125 bps September 2022 500,000 170,431 276,910 SoFi Funding VIII 124,112 1ML + 90 bps May 2022 300,000 115,214 221,342 SoFi Funding IX (8) 264,047 3ML+ 200 bps and CP + 87.5 bps May 2025 500,000 246,358 70,780 SoFi Funding X (9) 128,328 CP + 125 bps April 2024 400,000 116,395 44,136 SoFi Funding XI (10) 36,806 CP + 115 bps November 2023 500,000 32,636 87,404 Total, before unamortized debt issuance costs $ 922,669 $ 3,425,000 $ 853,053 $ 1,537,754 Unamortized debt issuance costs $ ( 6,570 ) $ ( 7,940 ) Personal Loan Warehouse Facilities SoFi Funding PL I (11) $ 105,363 CP + 137.5 bps September 2023 $ 250,000 $ 88,295 $ — SoFi Funding PL II — 3ML + 225 bps July 2023 400,000 — 137,420 SoFi Funding PL III 10,199 1ML + 175 bps May 2023 250,000 8,855 2,793 SoFi Funding PL IV (12) — CP + 170 bps November 2023 500,000 — 132,416 SoFi Funding PL VI (13) — CP + 170 bps September 2024 50,000 — 107,595 SoFi Funding PL VII 127,281 1ML + 115 bps June 2022 250,000 102,303 15,610 SoFi Funding PL X 22,756 1ML + 142.5 bps February 2023 200,000 19,279 3,004 53 TABLE OF CONTENTS SoFi Technologies, Inc. Notes to Unaudited Condensed Consolidated Financial Statements (continued) (In Thousands, Unless Otherwise Stated and Except for Share and Per Share Data) Borrowing Description Collateral Balances (1) Interest Rate (2) Termination/ Maturity (3) Total Capacity (4) Outstanding as of September 30, 2021 (5) December 31, 2020 SoFi Funding PL XI 114,207 1ML + 170 bps January 2022 200,000 95,513 112,478 SoFi Funding PL XII — 1 ML + ( 225 – 315 bps) June 2021 — — 127,724 SoFi Funding PL XIII — 1ML + 175 bps January 2030 300,000 — 219,362 Total, before unamortized debt issuance costs $ 379,806 $ 2,400,000 $ 314,245 $ 858,402 Unamortized debt issuance costs $ ( 4,254 ) $ ( 6,692 ) Credit Card Warehouse Facilities SoFi Funding CC I LLC $ 13,461 CP + 175 bps (14) October 2022 $ 100,000 $ 10,789 $ — Total, before unamortized debt issuance costs $ 13,461 $ 100,000 $ 10,789 $ — Unamortized debt issuance costs $ ( 259 ) $ — Risk Retention Warehouse Facilities (15) SoFi RR Funding I $ 18,755 1ML + 200 bps January 2024 $ 100,000 $ 15,631 $ 54,304 SoFi RR Repo 95,464 3ML + 185 bps June 2023 192,141 80,224 75,863 SoFi C RR Repo 6,822 3ML + ( 180 – 185 bps) December 2021 5,873 42,757 SoFi RR Funding II 122,681 1ML + 125 bps November 2024 110,692 160,199 SoFi RR Funding III 48,140 1ML + 375 bps November 2024 43,962 60,786 SoFi RR Funding IV 65,071 1ML + 150 bps October 2027 100,000 53,606 37,334 SoFi RR Funding V 61,224 298 bps December 2025 37,344 — Total, before unamortized debt issuance costs $ 418,157 $ 347,332 $ 431,243 Unamortized debt issuance costs $ ( 2,289 ) $ ( 2,052 ) Revolving Credit Facility (16) SoFi Corporate Revolver n/a 1ML + 100 bps (17) September 2023 $ 560,000 $ 486,000 $ 486,000 Total, before unamortized debt issuance costs $ 560,000 $ 486,000 $ 486,000 Unamortized debt issuance costs $ ( 716 ) $ ( 987 ) Seller note (18) n/a 1000 bps February 2021 $ — $ 250,000 Total $ — $ 250,000 Other financing – various notes (18) n/a 331  –  547 bps July 2021 $ — $ 4,375 Total $ — $ 4,375 Student Loan Securitizations SoFi PLP 2016-B LLC $ 54,528 1ML + ( 120 – 380 bps) April 2037 $ 48,256 $ 69,448 SoFi PLP 2016-C LLC 61,960 1ML + ( 110 – 335 bps) May 2037 55,553 81,115 SoFi PLP 2016-D LLC 77,455 1ML + ( 95 – 323 bps) January 2039 69,449 93,942 SoFi PLP 2016-E LLC 92,026 1ML + ( 85 – 443 bps) October 2041 83,499 117,800 SoFi PLP 2017-A LLC 114,950 1ML + ( 70 – 443 bps) March 2040 103,782 146,064 SoFi PLP 2017-B LLC 97,407 274  –  444 bps May 2040 88,942 129,873 SoFi PLP 2017-C LLC 126,438 1ML + ( 60 – 421 bps) July 2040 114,649 161,897 Total, before unamortized debt issuance costs and discount $ 624,764 $ 564,130 $ 800,139 Unamortized debt issuance costs $ ( 4,317 ) $ ( 5,958 ) Unamortized discount ( 1,218 ) ( 1,654 ) 54 TABLE OF CONTENTS SoFi Technologies, Inc. Notes to Unaudited Condensed Consolidated Financial Statements (continued) (In Thousands, Unless Otherwise Stated and Except for Share and Per Share Data) Borrowing Description Collateral Balances (1) Interest Rate (2) Termination/ Maturity (3) Total Capacity (4) Outstanding as of September 30, 2021 (5) December 31, 2020 Personal Loan Securitizations SoFi CLP 2016-1 LLC $ 22,105 326 bps August 2025 $ 6,562 $ 36,546 SoFi CLP 2016-2 LLC 21,370 477 bps October 2025 6,467 37,973 SoFi CLP 2016-3 LLC — 305 –  449 bps September 2021 — 30,780 SoFi CLP 2018-3 LLC 103,783 402  –  467 bps August 2027 95,430 163,784 SoFi CLP 2018-4 LLC 116,535 417  –  476 bps November 2027 107,452 184,831 SoFi CLP 2018-3 Repack LLC — 200 bps March 2021 — 2,457 SoFi CLP 2018-4 Repack LLC — 200 bps June 2021 — 5,853 Total, before unamortized debt issuance costs, premiums and discount $ 263,793 $ 215,911 $ 462,224 Unamortized debt issuance costs $ ( 1,865 ) $ ( 3,057 ) Unamortized premium (discount) 254 ( 2,872 ) Total, before unamortized debt issuance costs, premiums and discounts $ 2,791,460 $ 4,830,137 Less: unamortized debt issuance costs, premiums and discounts ( 21,234 ) ( 31,212 ) Total reported debt $ 2,770,226 $ 4,798,925 _________________ (1) As of September 30, 2021, represents unpaid principal balances, with the exception of the risk retention warehouse facilities, which include securitization-related investments carried at fair value. In addition, certain securitization interests that eliminate in consolidation are pledged to risk retention warehouse facilities. Collateral balances relative to debt balances as presented may vary period to period due to the timing of the next scheduled payment to the warehouse facility. (2) Unused commitment fees ranging from 0 to 75 basis points (“bps”) on our various warehouse facilities are recognized as noninterest expense — general and administrative in our consolidated statements of operations and comprehensive income (loss). “ML” stands for “Month LIBOR”. As of September 30, 2021, 1ML and 3ML was 0.08% and 0.13%, respectively. As of December 31, 2020, 1ML and 3ML was 0.14% and 0.24%, respectively. “PR” stands for “Prime Rate”. As of September 30, 2021 and December 31, 2020, PR was 3.25% and 3.25%, respectively. (3) For securitization debt, the maturity of the notes issued by the various trusts occurs upon either the maturity of the loan collateral or full payment of the loan collateral held in the trusts. Our maturity date represents the legal maturity of the last class of maturing notes. Securitization debt matures as loan collateral payments are made. (4) Represents total capacity as of September 30, 2021. (5) There were no debt discounts and a debt premium of $ 335 issued during the nine months ended September 30, 2021. We paid $ 1,400 during 2021 related to debt issuance costs accrued in 2020. (6) This facility has a prime rate floor of 309 bps. (7) The outstanding balance as of September 30, 2021 does not reflect restricted cash amounts earmarked for repayment of $ 512 at the cutoff date. (8) Warehouse facility incurs different interest rates on its two types of asset classes. One such class incurs interest based on a commercial paper (“CP”) rate, which is determined by the facility lender. As of September 30, 2021 and December 31, 2020, the CP rate for this facility was 0.15 % and 0.25 %, respectively. (9) Warehouse facility incurs interest based on a CP rate, which is determined by the facility lender. As of September 30, 2021 and December 31, 2020, the CP rate for this facility was 0.19 % and 0.28 %, respectively. (10) Warehouse facility incurs interest based on a CP rate, which is determined by the facility lender. As of September 30, 2021 and December 31, 2020, the CP rate for this facility was 0.15 % and 0.25 %, respectively. (11) Warehouse facility incurs interest based on a CP rate, which is determined by the facility lender. As of September 30, 2021, the CP rate for this facility was 0.09 %. As of December 31, 2020, this facility incurred interest based on 1ML. (12) Warehouse facility incurs interest based on a CP rate, which is determined by the facility lender. As of September 30, 2021 and December 31, 2020, the CP rate for this facility was 0.14 % and 0.25 %, respectively. (13) Warehouse facility incurs interest based on a CP rate, which is determined by the facility lender. As of September 30, 2021, the CP rate for this facility was 0.14 %. As of December 31, 2020, this facility incurred interest based on 3ML. (14) Warehouse facility incurs interest at a spread (as indicated in the table) plus the lower of (a) 3ML plus 35 bps or (b) the CP rate for this facility, which is determined by the facility lender. As of September 30, 2021, the CP rate for this facility was 0.16 %. (15) Financing was obtained for both asset-backed bonds and residual investments in various personal loan and student loan securitizations, and the underlying collateral are the underlying asset-backed bonds and residual investments. We only state capacity amounts in this table for risk retention facilities wherein we can pledge additional asset-backed bonds and residual investments as of September 30, 2021. (16) As of September 30, 2021, $ 6.0 million of the revolving credit facility total capacity was not available for general borrowing purposes because it was utilized to secure a letter of credit. Refer to our letter of credit disclosures in Note 15 for more details. (17) Interest rate presented is the interest rate on standard withdrawals on our revolving credit facility, while same-day withdrawals incur interest based on PR. (18) Part of our consideration to acquire Galileo was in the form of a seller note financing arrangement, which we paid off in February 2021. See Note 2 for additional information. We also assumed certain other financing arrangements resulting from our acquisition of Galileo, which we paid off during the third quarter of 2021. 55 TABLE OF CONTENTS SoFi Technologies, Inc. Notes to Unaudited Condensed Consolidated Financial Statements (continued) (In Thousands, Unless Otherwise Stated and Except for Share and Per Share Data) Material Changes to Debt Arrangements During the nine months ended September 30, 2021, we: • paid off the seller note issued in 2020 for a total payment of $ 269,864 , consisting of outstanding principal of $ 250,000 and accrued interest of $ 19,864 , and paid off the other financing arrangements assumed in connection with the acquisition of Galileo; • opened one risk retention warehouse facility; • opened one credit card warehouse facility with a maximum available capacity of $ 100,000 ; • closed one personal loan warehouse facility that had a maximum available capacity of $ 250,000 ; and • had one home loan warehouse facility mature that had a maximum available capacity of $ 150,000 . The total accrued interest payable on our debt as of September 30, 2021 and December 31, 2020 was $ 2,191 and $ 19,817 , respectively, and was included as a component of accounts payable, accruals and other liabilities in the consolidated balance sheets. Our warehouse and securitization debt is secured by a continuing lien and security interest in the loans financed by the proceeds. Within each of our debt facilities, we must comply with certain operating and financial covenants. These financial covenants include, but are not limited to, maintaining: (i) a certain minimum tangible net worth, (ii) minimum cash and cash equivalents, and (iii) a maximum leverage ratio of total debt to tangible net worth. Our debt covenants can lead to restricted cash classifications in our consolidated balance sheets. Our subsidiaries are restricted in the amount that can be distributed to the parent company only to the extent that such distributions would cause the financial covenants to not be met. We were in compliance with all financial covenants required per each agreement as of each balance sheet date presented. We act as a guarantor for our wholly-owned subsidiaries in several arrangements in the case of default. As of September 30, 2021, we have not identified any risks of nonpayment by our wholly-owned subsidiaries. Note 10. Temporary Equity Pursuant to SoFi Technologies’ Certificate of Incorporation dated May 28, 2021, the Company is authorized to issue 100,000,000 shares of preferred stock having a par value of $ 0.0001 per share (“SoFi Technologies Preferred Stock”) and 100,000,000 shares of redeemable preferred stock having a par value of $ 0.0000025 per share (“SoFi Technologies Redeemable Preferred Stock”). The Company’s board of directors has the authority to issue SoFi Technologies Preferred Stock and SoFi Technologies Redeemable Preferred Stock and to determine the rights, preferences, privileges and restrictions, including voting rights, of those shares. The authorized shares of SoFi Technologies Redeemable Preferred Stock is inclusive of 4,500,000 shares of Series 1 redeemable preferred stock (“Series 1 Redeemable Preferred Stock”), which reflect the conversion on a one-for-one basis of shares of Social Finance Series 1 preferred stock in conjunction with the Business Combination. Shares of SoFi Technologies Series 1 Redeemable Preferred Stock that are redeemed, purchased or otherwise acquired by the Company will be canceled and may not be reissued by the Company. The Series 1 Redeemable Preferred Stock remains classified as temporary equity because the Series 1 Redeemable Preferred Stock is not fully controlled by the issuer, SoFi Technologies. See “—Series 1 Preference and Rights” for additional provisions of the SoFi Technologies Series 1 Redeemable Preferred Stock. In addition to the Series 1 preferred stock, prior to the Business Combination, the Company had outstanding shares of Series A, Series B, Series C, Series D, Series E, Series F, Series G, Series H and Series H-1 preferred stock (collectively, “Preferred Stock”). Immediately prior to the Business Combination, all shares of the Company’s outstanding Preferred Stock, other than the Series 1 preferred stock, converted into a total of 465,832,666 shares of SoFi Technologies common stock on the 56 TABLE OF CONTENTS SoFi Technologies, Inc. Notes to Unaudited Condensed Consolidated Financial Statements (continued) (In Thousands, Unless Otherwise Stated and Except for Share and Per Share Data) following basis ( 15,000,000 of which were classified as redeemable common stock and immediately redeemed subsequent to the Business Combination): • each share of Social Finance Series A, Series B, Series C, Series D, Series E and Series H-1 preferred stock was converted into the right to receive shares of SoFi Technologies common stock equal to the Exchange Ratio (as discussed in Note 2); • each share of Social Finance Series F preferred stock was converted into the right to receive shares of SoFi Technologies common stock equal to 1.1102 multiplied by the Exchange Ratio; • each share of Social Finance Series G preferred stock was converted into the right to receive shares of SoFi Technologies common stock equal to 1.2093 multiplied by the Exchange Ratio; and • each share of Social Finance Series H preferred stock was converted into the right to receive shares of SoFi Technologies common stock equal to 1.0863 multiplied by the Exchange Ratio (except for shares of Series H preferred stock held by our Chief Executive Officer, which were converted into the right to receive shares of SoFi Technologies common stock equal to the Exchange Ratio). As of September 30, 2021, there were no shares of SoFi Technologies Preferred Stock issued and outstanding and there were 3,234,000 shares of SoFi Technologies Series 1 Redeemable Preferred Stock issued and outstanding. Recent Issuances and Redemptions In conjunction with the Business Combination, we redeemed and canceled 15,000,000 shares of redeemable SoFi Technologies common stock for a purchase price of $ 150.0 million. During December 2020, we exercised a call and redeemed 26,941,262 shares of redeemable preferred stock consisting of: 18,400,928 shares of Series B; 1,816,803 shares of Series D; 384,835 shares of Series E and 6,338,696 shares of Series F. The amount payable resulted in a reduction to redeemable preferred stock of $ 80,201 for the redeemable preferred stock balance at the time of the exercise. The shares were retired upon receipt. The cash payment for the redeemed preferred shares was made in January 2021. See Note 14 for additional information. In May 2020, the Company issued 91,921,020 shares of Series H-1 redeemable preferred stock as a component of the purchase consideration for the acquisition of Galileo at a fair value of $ 814,156 . Upon the finalization of the closing working capital calculation in April 2021, the total purchase price consideration was reduced by $ 743 , which was settled through the return to SoFi of an equivalent value of 83,856 previously issued Series H-1 preferred stock, which were retired upon receipt. See Note 2 for additional information on the acquisition. Series 1 Preference and Rights On January 7, 2021, the Company and (i) entities affiliated with Silver Lake, which is affiliated with Michael Bingle, one of the directors of SoFi, (ii) entities affiliated with the Qatar Investment Authority (“QIA”), which is affiliated with Ahmed Al-Hammadi, one of the directors of SoFi, and (iii) Mr. Noto, the Chief Executive Officer and one of the directors of SoFi, entered into the Amended and Restated Series 1 Preferred Stock Investors’ Agreement (the “Amended Series 1 Agreement”), which amended the Series 1 Preferred Stock Investors’ Agreement dated May 29, 2019 (the “Original Series 1 Agreement”). Under the Original Series 1 Agreement, the Series 1 preferred stock had limited price protection in the instance that the Company liquidated, finalized an initial public offering, or sold control of the Company to a third party, which events would have triggered a special payment provision. In conjunction with the Business Combination, the Amended Series 1 Agreement amended the original special payment provision to provide for a one-time special payment of $ 21.2 million to Series 1 preferred stockholders, which was paid from the proceeds of the Business Combination and settled contemporaneously with the Business Combination. The special payment was recognized within noninterest expense — general and administrative in the consolidated statements of operations and comprehensive income (loss), as this feature was accounted for as an embedded derivative that was not clearly and closely related to the host contract, and will have no subsequent impact on our consolidated financial results. The Series 1 Redeemable Preferred Stock has no stated maturity. In addition, in connection with the Business Combination, the Series 1 preferred stockholders entered into the Series 1 Registration Rights Agreement upon request by QIA, which provides Series 1 preferred stockholders with certain registration 57 TABLE OF CONTENTS SoFi Technologies, Inc. Notes to Unaudited Condensed Consolidated Financial Statements (continued) (In Thousands, Unless Otherwise Stated and Except for Share and Per Share Data) rights, provides for certain shelf registration filing obligations by SoFi and limits the future registration rights that SoFi may grant other parties. Dividends Prior to the Business Combination, the preferred stock (other than Series C and excluding Series 1 preferred stock, which is discussed separately below) had non-cumulative and non-mandatory dividend rights. Series C did not have a stated dividend. No dividends were declared or paid subject to such dividend provisions. Subsequent to the Business Combination, the dividend provisions were no longer in effect. Pursuant to the SoFi Technologies Certificate of Incorporation, the SoFi Technologies Series 1 preferred stock are entitled to receive cumulative cash dividends from and including the date of issuance of such shares at a fixed rate equal to $ 12.50 per annum per share, or 12.5 % per annum, of the SoFi Technologies Series 1 Redeemable Preferred Stock share price of $ 100.00 (“Series 1 Dividend Rate”). The Series 1 Dividend Rate resets to a new fixed rate on the fifth anniversary of May 29, 2019, the original Series 1 preferred stock issue date (“Series 1 Original Issue Date”) and on every subsequent one-year anniversary of the Series 1 Original Issue Date (“Dividend Reset Date”), equal to six-month LIBOR as in effect on the second London banking day prior to such Dividend Reset Date plus a spread of 9.94 % per annum. Series 1 preferred stockholders prior to the Business Combination who received shares of SoFi Technologies Series 1 Redeemable Preferred Stock at the effective time of the Merger remained entitled to receive dividends accrued but unpaid as of the date of the Agreement in respect of such shares of Series 1 Redeemable Preferred Stock. During the three months ended September 30, 2021 and 2020, the Series 1 preferred stockholders were entitled to dividends of $ 10,189 and $ 10,189 , respectively. During the nine months ended September 30, 2021 and 2020, the Series 1 preferred stockholders were entitled to dividends of $ 30,236 and $ 30,346 , respectively. Dividends payable were $ 10,189 and $ — as of September 30, 2021 and December 31, 2020, respectively. Dividends are payable semiannually in arrears on the 30th day of June and 31st day of December of each year, when and as authorized by the board of directors. The Company may defer any scheduled dividend payment for up to three semiannual dividend periods, subject to such deferred dividend accumulating and compounding at the applicable Series 1 Dividend Rate. If the Company defers any single scheduled dividend payment on the Series 1 Redeemable Preferred Stock for four or more semiannual dividend periods, the Series 1 Dividend Rate applicable to (i) the compounding following the date of such default on all then-deferred dividend payments (whether or not deferred for four or more semiannual dividend periods) is applied on a go-forward basis and not retroactively, and (ii) new dividends declared following the date of such default and the compounding on such dividends if such new dividends are deferred shall be equal to the otherwise applicable Series 1 Dividend Rate plus 400 basis points. This default-related increase shall continue to apply until the Company pays all deferred dividends and related compounding. Once the Company is current on all such dividends, it may again commence deferral of any pre-scheduled dividend payment for up to three semiannual dividend periods, following the same procedure as outlined in the foregoing. There were no dividend deferrals during the nine months ended September 30, 2021 and year ended December 31, 2020. Conversion Subsequent to the Business Combination, the conversion provisions in respect of each series of preferred stock were no longer in effect, other than the Series 1 Redeemable Preferred Stock, which did not have any rights of conversion. Pursuant to the SoFi Technologies Certificate of Incorporation, the Series 1 Redeemable Preferred Stock continue not to have any rights to convert into shares of any other class or series of securities of the Company. Liquidation Subsequent to the Business Combination, the liquidation provisions in respect of every series of preferred stock, other than Series 1 Redeemable Preferred Stock, were no longer in effect. Pursuant to the SoFi Technologies Certificate of Incorporation, with respect to rights to the distribution of assets upon the Company’s liquidation, dissolution or winding up, the Series 1 Redeemable Preferred Stock is senior to all classes or series of common stock, non-voting common stock, SoFi Technologies Preferred Stock and any other class or series of capital stock of the Company now or hereafter authorized, issued or outstanding that, by its terms, does not expressly provide that it ranks senior to or pari passu with the Series 1 Redeemable Preferred Stock. 58 TABLE OF CONTENTS SoFi Technologies, Inc. Notes to Unaudited Condensed Consolidated Financial Statements (continued) (In Thousands, Unless Otherwise Stated and Except for Share and Per Share Data) Settlement Rights Pursuant to the SoFi Technologies Certificate of Incorporation, the Series 1 Redeemable Preferred Stock is redeemable at SoFi’s option in certain circumstances. SoFi may, at any time but no more than three times, at its option, settle the Series 1 Redeemable Preferred Stock, in whole or in part, but if in part, in an amount no less than (i) one-third of the total amount of Series 1 Redeemable Preferred Stock outstanding as of May 28, 2021 or (ii) the remainder of Series 1 Redeemable Preferred Stock outstanding (the “Minimum Redemption Amount”). In addition, SoFi may, at its option, settle for cash the Series 1 Redeemable Preferred Stock in whole, but not in part, within 120 days of the occurrence of a Change of Control (as that term is defined in the SoFi Technologies Certificate of Incorporation), which would result in a payment of the initial purchase price of the Series 1 preferred stock of $ 323.4 million plus any unpaid dividends on such stock (whether deferred or otherwise) (the “Series 1 Redemption Price”). Such settlement is determined at the discretion of the board of directors. If any such optional redemption by the Company occurs either (i) prior to the fifth anniversary of the Series 1 Original Issue Date or (ii) after the fifth anniversary of the Series 1 Original Issue Date and not on a Dividend Reset Date, the Series 1 Redeemable Preferred Stock is entitled to receive an amount in cash equal to any such dividends that would have otherwise been payable to the holder on its redeemed shares of Series 1 Redeemable Preferred Stock for all dividend periods following the applicable optional redemption date up to and including the Dividend Reset Date immediately following such optional redemption date. If the Series 1 Redeemable Preferred Stock is not earlier redeemed by the Company, each holder of Series 1 Redeemable Preferred Stock has the right to require SoFi to settle for cash some or all of their Series 1 Redeemable Preferred Stock, in each case at the Series 1 Redemption Price, in the following circumstances: (i) within 120 days of the occurrence of a Change of Control, or (ii) during the six-month period following (a) a default in payment of any dividend on the Series 1 Redeemable Preferred Stock, or (b) the cure period for any covenant default under the SoFi Technologies Certificate of Incorporation. The Series 1 preferred stock had similar redemption provisions under the Original Series 1 Agreement. Pursuant to the Amended Series 1 Agreement, in January 2021, the Series 1 preferred stockholders waived their rights in the event of a liquidation, including the right to immediately receive the Series 1 proceeds. Therefore, the Series 1 preferred stock redemption value remained at $ 323.4 million subsequent to the Business Combination. The Series 1 Redeemable Preferred Stock remains in temporary equity following the Business Combination because the Series 1 Redeemable Preferred Stock is not fully controlled by SoFi. Voting Rights Subsequent to the Business Combination, the liquidation provisions in respect of every series of preferred stock, other than Series 1 Redeemable Preferred Stock, were no longer in effect. Pursuant to the SoFi Technologies Certificate of Incorporation, the Series 1 preferred stockholders do not have explicit board of director rights. Warrants In connection with the Series 1 and Series H preferred stock issuances during the year ended December 31, 2019, we also issued 12,170,990 Series H warrants, which were initially accounted for as liabilities in accordance with ASC 480, Distinguishing Liabilities from Equity , and were included within accounts payable, accruals and other liabilities in the consolidated balance sheets. At inception, we allocated $ 22.3 million of the $ 539.0 million of proceeds we received from the Series 1 and Series H preferred stock issuances to the Series H warrants, with such valuation determined using the Black-Scholes Model, in order to establish an initial fair value for the Series H warrants. The remaining proceeds were allocated to the Series 1 and Series H preferred stock balances based on their initial relative fair values. Subsequent to the initial measurement and until the Business Combination, the Series H warrants were measured at fair value on a recurring basis and classified as Level 3 because of our reliance on unobservable assumptions, with fair value changes recognized within noninterest expense — general and administrative in the consolidated statements of operations and comprehensive income (loss). On May 28, 2021, in conjunction with the Closing of the Business Combination, we measured the final fair value of our Series H warrants. Subsequently, we reclassified the Series H warrant liability of $ 161,775 into 59 TABLE OF CONTENTS SoFi Technologies, Inc. Notes to Unaudited Condensed Consolidated Financial Statements (continued) (In Thousands, Unless Otherwise Stated and Except for Share and Per Share Data) permanent equity, as the terms of the Series H instrument no longer necessitated liability accounting. Therefore, we do not measure the warrants at fair value subsequent to May 28, 2021. The key inputs into our Black-Scholes Model valuation as of December 31, 2020 and as of the final measurement date were as follows: Input May 28, 2021 December 31, 2020 Risk-free interest rate 0.3 % 0.2 % Expected term (years) 2.9 3.4 Expected volatility 33.9 % 32.6 % Dividend yield — % — % Exercise price $ 8.86 $ 8.86 Fair value of Series H preferred stock $ 21.89 $ 9.74 The Company’s use of the Black-Scholes Model requires the use of subjective assumptions: • The risk-free interest rate assumption was initially based on the five-year U.S. Treasury rate, which was commensurate with the expected term of the warrants. At inception, we assumed that the term would be five years, given by design the warrants were only expected to extend for greater than five years if the Company was still not publicly traded by that point in time. The expected term assumption used reflects the five-year term less time elapsed since initial measurement. An increase in the expected term, in isolation, would typically correlate to a higher risk-free interest rate and result in an increase in the fair value measurement of the warrant liabilities and vice versa. See below for a development in connection with the Business Combination. • Our expected volatility assumptions reflected the expectation that the Series H warrants would convert into common stock upon consummation of the Business Combination, and the Series H preference would be of no further effect, in which case the Series H preference would not have a material impact on the stock volatility measure. As such, the expected volatility assumptions reflect our common stock volatilities as of May 28, 2021 and December 31, 2020, respectively. An increase in the expected volatility, in isolation, would result in an increase in the fair value measurement of the warrant liabilities and vice versa. • The fair value measurement of the Series H preferred stock as of December 31, 2020 was informed from a common stock transaction during December 2020 at a price of $ 10.57 per common share. We determined that this common stock transaction was a reasonable proxy for the valuation of the Series H preferred stock as of December 31, 2020 due to the proximity to an expected Business Combination; therefore, other than adjusting for the Series H exchange ratio, no further adjustments were made for the Series H concluded price per share. As of May 28, 2021, the fair value measurement of the Series H redeemable preferred stock was determined based on the observable closing price of SCH stock (ticker symbol “IPOE”) on the measurement date multiplied by the weighted average exchange ratio of the Series H preferred stock. • We assumed no dividend yield because we have historically not paid out dividends to our preferred stockholders, other than to the Series 1 preferred stockholders, which is considered a special circumstance. At inception of the warrants, we allocated the remaining net proceeds of $ 514.3 million from the combined Series H and Series 1 preferred stock offering to the Series H and Series 1 preferred stock balances in proportion to their relative fair values. This resulted in an initial allocation of $ 193.9 million and $ 320.4 million to the Series H and Series 1 preferred stock, respectively. 60 TABLE OF CONTENTS SoFi Technologies, Inc. Notes to Unaudited Condensed Consolidated Financial Statements (continued) (In Thousands, Unless Otherwise Stated and Except for Share and Per Share Data) The following table presents the changes in the fair value of the Series H warrant liabilities during the periods prior to the Closing of the Business Combination. As the warrants are no longer measured at fair value subsequent to May 28, 2021, we do not present a rollforward for the three months ended September 30, 2021. Warrant Liabilities Three Months Ended September 30, 2020 Fair value as of June 30, 2020 $ 21,452 Change in valuation inputs or other assumptions (1) 4,353 Fair value as of September 30, 2020 $ 25,805 Nine Months Ended September 30, 2021 Fair value as of January 1, 2021 $ 39,959 Change in valuation inputs or other assumptions (1) 121,816 Reclassification to permanent equity in conjunction with the Business Combination (2) ( 161,775 ) Fair value as of September 30, 2021 $ — Nine Months Ended September 30, 2020 Fair value as of January 1, 2020 $ 19,434 Change in valuation inputs or other assumptions (1) 6,371 Fair value as of September 30, 2020 $ 25,805 ___________________ (1) Changes in valuation inputs or other assumptions are recognized in noninterest expense — general and administrative in the consolidated statements of operations and comprehensive income (loss). (2) Upon the Closing of the Business Combination, Social Finance Series H warrants were converted into SoFi Technologies common stock warrants and reclassified to permanent equity, as the warrants no longer have features requiring liability based accounting. Note 11. Permanent Equity On June 1, 2021, the Company’s common stock and warrants began trading on the Nasdaq Global Select Market under the ticker symbols “SOFI” and “SOFIW”, respectively. Pursuant to SoFi Technologies’ Certificate of Incorporation, the Company is authorized to issue 3,000,000,000 shares of common stock, with a par value of $ 0.0001 per share, and 100,000,000 shares of non-voting common stock, with a par value of $ 0.0001 per share. As of September 30, 2021, the Company had 805,667,914 shares of common stock and no shares of non-voting common stock issued and outstanding. See Note 10 for additional information on Social Finance preferred stock that was converted into SoFi Technologies common stock in conjunction with the Business Combination. During December 2020, we issued 34,973,294 shares of common stock for gross proceeds received of $ 369.8 million, which was offset by direct legal costs of $ 56 (the “Common Stock Issuance”). The number of shares issued in the Common Stock Issuance was subject to upward adjustment if we consummated the Business Combination described in Note 2, with the amount of the adjustment based on the implied per-share consideration in the Business Combination and the number of shares of our capital stock issued in certain dilutive issuances prior to the Closing of the Business Combination. The adjustment resulted in the issuance of an additional 1,281,132 shares at the time of the Closing of the Business Combination. 61 TABLE OF CONTENTS SoFi Technologies, Inc. Notes to Unaudited Condensed Consolidated Financial Statements (continued) (In Thousands, Unless Otherwise Stated and Except for Share and Per Share Data) The Company reserved the following common stock for future issuance as of the dates indicated: September 30, December 31, 2021 2020 Conversion of outstanding redeemable preferred stock — 465,916,522 Unissued redeemable preferred stock reserved for issued warrants — 12,170,990 Unissued redeemable preferred stock — 86,925,094 Outstanding common stock warrants 40,295,990 — Outstanding stock options, RSUs and PSUs 100,608,432 74,549,561 Possible future issuance under stock plans 33,996,986 33,422,273 Contingent common stock 320,649 320,649 Total common stock reserved for future issuance 175,222,057 673,305,089 Dividends Common stockholders and non-voting common stockholders are entitled to dividends when and if declared by the board of directors. There were no dividends declared or paid to common stockholders during the nine months ended September 30, 2021 and 2020. Voting Rights Each holder of common stock has the right to one vote per share of common stock and is entitled to notice of any stockholder meeting. Non-voting common stock does not have any voting rights or other powers. Accumulated Other Comprehensive Income (Loss) Accumulated other comprehensive income (loss) (“AOCI”) primarily consists of accumulated net unrealized gains or losses associated with our investments in AFS debt securities, which commenced during the third quarter of 2021, and foreign currency translation adjustments, which historically have been immaterial. 62 TABLE OF CONTENTS SoFi Technologies, Inc. Notes to Unaudited Condensed Consolidated Financial Statements (continued) (In Thousands, Unless Otherwise Stated and Except for Share and Per Share Data) The following table presents the rollforward of AOCI, inclusive of the changes in the components of other comprehensive income (loss) for the periods indicated. AFS Debt Securities Foreign Currency Translation Adjustments Total Three Months Ended September 30, 2021 AOCI, beginning balance $ — $ ( 512 ) $ ( 512 ) Other comprehensive (loss) income before reclassifications (1) ( 150 ) 204 54 Net current-period other comprehensive (loss) income (2) ( 150 ) 204 54 AOCI, ending balance $ ( 150 ) $ ( 308 ) $ ( 458 ) Three Months Ended September 30, 2020 AOCI, beginning balance $ — $ ( 64 ) $ ( 64 ) Other comprehensive income before reclassifications (1) — 24 24 Net current-period other comprehensive income (2) — 24 24 AOCI, ending balance $ — $ ( 40 ) $ ( 40 ) Nine Months Ended September 30, 2021 AOCI, beginning balance $ — $ ( 166 ) $ ( 166 ) Other comprehensive loss before reclassifications (1) ( 150 ) ( 142 ) ( 292 ) Net current-period other comprehensive loss (2) ( 150 ) ( 142 ) ( 292 ) AOCI, ending balance $ ( 150 ) $ ( 308 ) $ ( 458 ) Nine Months Ended September 30, 2020 AOCI, beginning balance $ — $ ( 21 ) $ ( 21 ) Other comprehensive loss before reclassifications (1) — ( 19 ) ( 19 ) Net current-period other comprehensive loss (2) — ( 19 ) ( 19 ) AOCI, ending balance $ — $ ( 40 ) $ ( 40 ) ____________________ (1) Gross realized gains and losses from sales of our investments in AFS debt securities that were reclassified from AOCI to earnings, which are recorded within noninterest income — other in the consolidated statements of operations and comprehensive income (loss), were equal and offsetting during the three and nine months ended September 30, 2021, and therefore had no net impact on our results of operations. We did not have investments in AFS debt securities during the three and nine months ended September 30, 2020. Additionally, there were no reclassifications related to foreign currency translation adjustments during the three and nine months ended September 30, 2021 and 2020. (2) There were no tax impacts during any of the periods presented due to reserves against deferred tax assets in jurisdictions where OCI activity was generated. For gross amounts of realized gains and losses on our investments in AFS debt securities, see Note 3. Interest income associated with our investments in AFS debt securities recognized within interest income—other during the three and nine months ended September 30, 2021 was immaterial. Note 12. Stock-Based Compensation 2011 Stock Option Plan Prior to the Business Combination, the Company’s Amended and Restated 2011 Stock Option Plan (the “2011 Plan”) allowed the Company to grant shares of common stock to employees, non-employee directors and non-employee third parties. As of September 30, 2021, outstanding awards to non-employee third parties under the 2011 Plan were not material. The Company also had shares authorized under a stock plan assumed in a 2020 business combination, which were assumed by the 2011 Plan. Upon the Closing, the remaining unallocated share reserve under the 2011 Plan was cancelled and no new awards may be granted under such plan. Awards outstanding under the 2011 Plan were assumed by SoFi Technologies upon the Closing and continue to be governed by the terms of the 2011 Plan. 63 TABLE OF CONTENTS SoFi Technologies, Inc. Notes to Unaudited Condensed Consolidated Financial Statements (continued) (In Thousands, Unless Otherwise Stated and Except for Share and Per Share Data) 2021 Stock Option and Incentive Plan In connection with the Closing of the Business Combination, the Company adopted the 2021 Stock Option and Incentive Plan (the “2021 Plan”), which authorized for issuance 63,575,425 shares of common stock in connection with the Business Combination. The number of authorized shares will increase on the first day of each fiscal year beginning with SoFi Technologies’ 2022 fiscal year, as prescribed in the 2021 Plan. The 2021 Plan allows for the issuance of stock options, stock appreciation rights, restricted stock, restricted stock units (including performance stock units), dividend equivalents and other stock or cash based awards for issuance to its employees, non-employee directors and non-employee third parties. As of September 30, 2021, outstanding awards to non-employee third parties under the 2021 Plan were not material. During the nine months ended September 30, 2021 and 2020, we incurred cash outflows of $ 37,240 and $ 21,485 , respectively, related to the payment of withholding taxes for vested RSUs. These cash outflows are presented within net cash (used in) provided by financing activities in the consolidated statements of cash flows. Stock-based compensation expense related to stock options, RSUs and PSUs is presented within the following line items in the consolidated statements of operations and comprehensive income (loss) for the periods indicated: Three Months Ended September 30, Nine Months Ended September 30, 2021 2020 2021 2020 Technology and product development $ 19,633 $ 7,430 $ 47,867 $ 19,373 Sales and marketing 4,681 2,473 10,821 5,584 Cost of operations 3,482 1,609 7,672 4,743 General and administrative 44,885 15,039 95,929 40,081 Total $ 72,681 $ 26,551 $ 162,289 $ 69,781 Common Stock Valuations Prior to us contemplating a public market transaction, we established the fair value of our common stock by using the option pricing model (Black-Scholes Model based) via the backsolve method and through placing weight on previously redeemable preferred stock transactions. The valuations also applied discounts for lack of marketability to reflect the fact that there was no market mechanism to sell our common stock and, as such, the common stock option and RSU holders would need to wait for a liquidity event to facilitate the sale of their equity awards. In addition, there were contractual transfer restrictions placed on common stock in the event that we remained a private company. During the third quarter of 2020, once we made intentional progress toward pursuing a public market transaction, we began applying the probability-weighted expected return method to determine the fair value of our common stock. The probability weightings assigned to certain potential exit scenarios were based on management’s expected near-term and long-term funding requirements and assessment of the most attractive liquidation possibilities at the time of the valuation. During the fourth quarter of 2020, we valued our common stock on a monthly basis. A common stock transaction that closed in December 2020 at a price of $ 10.57 per common share, which was of substantial size and in close proximity to the Business Combination, served as the key input for the fair value of our common stock for grants made during the fourth quarter of 2020. We decreased the assumed discount for lack of marketability throughout the fourth quarter of 2020, corresponding with our decreased time to liquidity assumption throughout the quarter, as we became more certain over time about the possibility of entering into the Business Combination. We continued to use a share price of $ 10.57 to value our common stock for transactions in January until the date on which we executed the Agreement. Subsequent to executing the Agreement on January 7, 2021 and through the Business Combination, we determined the value of our common stock based on the observable daily closing price of SCH’s stock (ticker symbol “IPOE”) multiplied by the exchange ratio in effect for such transaction date. Subsequent to the Business Combination, we determined the value of our common stock based on the observable daily closing price of SoFi’s stock (ticker symbol “SOFI”). 64 TABLE OF CONTENTS SoFi Technologies, Inc. Notes to Unaudited Condensed Consolidated Financial Statements (continued) (In Thousands, Unless Otherwise Stated and Except for Share and Per Share Data) Stock Options The terms of the stock option grants, including the exercise price per share and vesting periods, are determined by our board of directors. At the discretion and determination of our board of directors, the 2021 Plan allows for stock options to be granted that may be exercised before the stock options have vested. The 2011 Plan, which continues to govern awards outstanding under that plan that were assumed by SoFi Technologies upon the Closing, had a similar provision. The following is a summary of stock option activity for the period indicated: Number of Stock Options Weighted Average Exercise Price Weighted Average Remaining Contractual Term (in years) Outstanding as of January 1, 2021 17,183,828 $ 9.92 6.6 Retroactive conversion of stock options due to Business Combination 12,764,147 ( 4.23 ) Outstanding as of January 1, 2021, as converted 29,947,975 5.69 6.6 Granted (1) — n/a Exercised ( 5,652,778 ) 3.65 Forfeited ( 22,008 ) 5.60 Expired ( 129,816 ) 6.28 Outstanding as of September 30, 2021 24,143,373 $ 6.17 5.9 Exercisable as of September 30, 2021 23,489,947 $ 6.26 5.9 ____________________ (1) There were no stock options granted during the nine months ended September 30, 2021. Total compensation cost related to unvested stock options not yet recognized as of September 30, 2021 was $ 7.6 million and will be recognized over a weighted average period of approximately 1.4 years. Restricted Stock Units RSUs are equity awards granted to employees that entitle the holder to shares of our common stock when the awards vest. RSUs are measured based on the fair value of our common stock on the date of grant. The weighted average fair value of our common stock was $ 17.93 during the nine months ended September 30, 2021. The following table summarizes RSU activity for the period indicated: Number of RSUs Weighted Average Grant Date Fair Value Outstanding as of January 1, 2021 25,591,913 $ 13.06 Retroactive conversion of RSUs due to Business Combination 19,009,673 ( 5.57 ) Outstanding as of January 1, 2021, as converted 44,601,586 7.49 Granted 25,729,014 16.61 Vested (1) ( 12,026,846 ) 7.98 Forfeited ( 4,980,157 ) 8.92 Outstanding as of September 30, 2021 (2) 53,323,597 $ 11.65 ________________________ (1) The total fair value, based on grant date fair value, of RSUs that vested during the nine months ended September 30, 2021 was $ 96.0 million. (2) Includes 178,021 RSUs that were granted in 2020 with an original vest date in June 2021 to earn the first tranche of compensation for the 2020 plan period. However, upon determining that the original performance-based vesting condition would not be satisfied, the Company modified the awards to extend the vesting date by 12 months. We concluded that the facts and circumstances aligned with an improbable-to-probable modification (Type III) and the vesting condition of the modified awards is a service-based condition. As a result, we reversed previously recognized share-based compensation expense of $ 1,237 in June 2021. For the modified awards, we will record total share-based compensation expense of $ 3,884 determined based on the number of awards expected to vest and the modification-date fair value over the 12-month service period, of which $ 976 and $ 1,156 was recorded during the three and nine months ended September 30, 2021, respectively. As of September 30, 2021, there was $ 573.9 million of unrecognized compensation cost related to unvested RSUs, which will be recognized over a weighted average period of approximately 3.3 years. 65 TABLE OF CONTENTS SoFi Technologies, Inc. Notes to Unaudited Condensed Consolidated Financial Statements (continued) (In Thousands, Unless Otherwise Stated and Except for Share and Per Share Data) Performance Stock Units PSUs are equity awards granted to employees that, upon vesting, entitle the holder to shares of our common stock. Under the 2021 Plan, we granted PSUs that will vest, if at all, on a graded basis during the four-year period commencing on May 28, 2022, subject to the achievement of specified performance goals, such as the volume-weighted average closing price of our stock over a 90-trading day period (“Target Hurdles”) and, if we become a bank holding company, maintaining certain minimum standards applicable to bank holding companies. All PSUs are subject to continued employment on the date of vesting. In the event of a Sale Event (as defined in the 2021 Plan), the awards may automatically vest subject to the satisfaction of the Target Hurdles by reference to the sale price, without regard to any other vesting conditions. The following table summarizes PSU activity for the period indicated: Number of PSUs Weighted Average Grant Date Fair Value Outstanding as of January 1, 2021 — n/a Granted 23,141,462 $ 9.50 Vested — n/a Forfeited — n/a Outstanding as of September 30, 2021 23,141,462 $ 9.50 Compensation cost associated with PSUs is recognized using the accelerated attribution method for each of the three vesting tranches over the respective derived service period. We determine the grant-date fair values of PSUs utilizing a Monte Carlo simulation model. The following table summarizes the inputs used for estimating the fair values of PSUs granted during the period indicated: Nine Months Ended Input September 30, 2021 Risk-free interest rate 0.8 % – 0.8 % Expected volatility 34.9 % – 35.9 % Fair value of common stock $ 16.99 – $ 23.21 Dividend yield 0 % – 0 % Our use of a Monte Carlo simulation model requires the use of subjective assumptions: • The risk-free interest rate assumptions were based on the U.S. Treasury rate at the time of grant commensurate with the remaining term of the PSUs. • The expected volatility assumptions were based on the implied volatility of our common stock from a set of comparable publicly-traded companies. • The fair values of our common stock were based on the closing stock price on the dates of grant. • We assumed no dividend yield because we have historically not paid out dividends to common stockholders. As of September 30, 2021, there was $ 193.4 million of unrecognized compensation cost related to unvested PSUs, which will be recognized over a weighted average period of approximately 2.0 years. Note 13. Income Taxes For interim periods, we follow the general recognition approach whereby tax expense is recognized through the use of an estimated annual effective tax rate, which is applied to the year-to-date operating results. Additionally, we recognize tax expense or benefit for any discrete items occurring within the interim period that were excluded from the estimated annual effective tax rate. Our effective tax rate may be subject to fluctuations during the year due to impacts from the following items: (i) changes in forecasted pre-tax and taxable income or loss, (ii) changes in statutory law or regulations in jurisdictions where 66 TABLE OF CONTENTS SoFi Technologies, Inc. Notes to Unaudited Condensed Consolidated Financial Statements (continued) (In Thousands, Unless Otherwise Stated and Except for Share and Per Share Data) we operate, (iii) audits or settlements with taxing authorities, (iv) the tax impact of expanded product offerings or business acquisitions, and (v) changes in valuation allowance assumptions. For the three and nine months ended September 30, 2021, we recorded income tax expense of $( 181 ) and $( 1,202 ), respectively. For the three and nine months ended September 30, 2020, we recorded income tax (expense) benefit of $( 192 ) and $ 99,519 , respectively. Income taxes for the nine months ended September 30, 2021 were primarily due to the profitability of SoFi Lending Corp, which incurs income tax expense in some state jurisdictions where separate company filing is required. The significant change in our income tax position for the nine-month 2021 period relative to the corresponding period in 2020 was primarily due to a partial release of our valuation allowance in the second quarter of 2020 in connection with deferred tax liabilities resulting from intangible assets acquired from Galileo in May 2020. There were no material changes to our unrecognized tax benefits during the nine months ended September 30, 2021 and we do not expect to have any significant changes to unrecognized tax benefits over the next 12 months. During the nine months ended September 30, 2021, we maintained a full valuation allowance against our net deferred tax assets in applicable jurisdictions. In certain state jurisdictions where sufficient deferred tax liabilities exist, no valuation allowance is recognized. Management reviews all available positive and negative evidence in assessing the realizability of deferred tax assets. We will continue to recognize a full valuation allowance until there is sufficient positive evidence to support its release. Note 14. Related Parties The Company defines related parties as members of our board of directors, entity affiliates, executive officers and principal owners of the Company’s outstanding stock and members of their immediate families. Related parties also include any other person or entity with significant influence over the Company’s management or operations. Stockholder Note In 2019, the Company entered into a $ 58,000 note receivable agreement with a stockholder (“Note Receivable Stockholder”), which was collateralized by the Note Receivable Stockholder’s common stock and redeemable preferred stock. Related to this collateralization, the Company obtained call rights to purchase the collateral at $ 5.05 per share (“Call Option Rights”). As of December 31, 2020, there was no remaining receivable associated with this related party note; however, our Call Option Rights remained outstanding post settlement, per the terms of our Note Receivable Stockholder agreement. During the three and nine months ended September 30, 2020, we recognized related party interest income of $ 332 and $ 1,671 , respectively. In December 2020, we exercised our Call Option Rights to acquire the Note Receivable Stockholder collateral, which included 104,132 shares of common stock and 26,941,262 shares of redeemable preferred stock. The Call Option Rights shares were retired upon receipt. The option exercise payable of $ 133,385 remained outstanding as of December 31, 2020 and the reserved funds were presented within restricted cash and restricted cash equivalents in the consolidated balance sheets. The full payment was subsequently made in January 2021. Apex Loan In November 2019, we lent $ 9,050 to Apex at an interest rate of 12.5 % per annum, which had a scheduled maturity date of August 31, 2020. In August 2020, we extended the maturity date to August 31, 2021 and modified the interest rate to 5.0 % per annum, which we determined to be below the market rate of interest. In accordance with ASC 835-30, Interest, during the three and nine months ended September 30, 2020, we recognized a loss of $ 319 within noninterest income — other in the consolidated statements of operations and comprehensive income (loss) representing the discounted fair value of the loan receivable relative to its stated value at the market rate of interest, which is accreted into interest income over the remaining term of the loan. During the nine months ended September 30, 2020, we lent an additional $ 7,643 to Apex. We had an interest income receivable of $ 1,443 as of December 31, 2020. In February 2021, Apex paid us $ 18,304 in settlement of all of their outstanding obligations to us, which consisted of outstanding principal balances of $ 16,693 and accrued interest of $ 1,611 . During the three and nine months ended September 30, 2021, we recognized interest income of $ — and $ 211 , respectively, within interest income — related party notes , and we reversed the remainder of the loss for the discount to fair value that had not yet been accreted of $ 169 within noninterest income — other in the consolidated statements of operations and comprehensive income (loss), which was only applicable to the nine-month period. During the three and nine months ended 67 TABLE OF CONTENTS SoFi Technologies, Inc. Notes to Unaudited Condensed Consolidated Financial Statements (continued) (In Thousands, Unless Otherwise Stated and Except for Share and Per Share Data) September 30, 2020, we recognized interest income of $ 446 and $ 1,038 , respectively, which included interest related to the principal balances of $ 417 and $ 1,009 , respectively, and interest related to the discount accretion of $ 29 and $ 29 , respectively. Note 15. Commitments, Guarantees, Concentrations and Contingencies Leases We primarily lease our office premises under multi-year, non-cancelable operating leases. During the nine months ended September 30, 2021, we commenced new operating leases for office premises with terms expiring from 2024 to 2026, exclusive of renewal option periods. Our new office leases contain renewal option periods ranging from three to ten years from the expiration dates. These options were not recognized as part of our ROU assets and operating lease liabilities, as we did not conclude at the commencement date of the leases that we were reasonably certain to exercise these options. However, in our normal course of business, we expect our office leases to be renewed, amended or replaced by other leases. Associated with these leases, we obtained non-cash operating lease ROU assets in exchange for new operating lease liabilities of $ 8,269 and $ 11,850 during the three and nine months ended September 30, 2021, respectively. Lease Concession The lessor for one of our operating leases allowed us to defer payments on the lease beginning in April 2020 as a result of our inability to use the leased premises during the COVID-19 pandemic. We elected to not account for this concession as a lease modification, as the concession did not result in a substantial change to the enforceable rights and obligations of the parties under the lease contract. During the concession period, we did not recognize operating lease cost and we did not remeasure the right-of-use asset or lease liability. We regained access to the leased premises in September 2021 and resumed lease amortization at that time, which represents the straight-line recognition of the remaining total operating lease cost over an extended lease term. In the absence of this concession, we would have recognized additional operating lease cost of $ 377 and $ 1,509 during the three and nine months ended September 30, 2021, respectively, and $ 566 and $ 1,132 during the three and nine months ended September 30, 2020, respectively. Other Commitments In September 2019, we entered into a 20 -year partnership with LA Stadium and Entertainment District at Hollywood Park in Inglewood, California that granted us the exclusive naming rights to SoFi Stadium and official partnerships with the Los Angeles Chargers and Los Angeles Rams, as well as rights with the performance venue and surrounding entertainment district (“Naming and Sponsorship Agreement”). We made payments totaling $ 6,250 and $ 15,767 during the three and nine months ended September 30, 2021, respectively. We made payments totaling $ 3,267 and $ 3,267 during the three and nine months ended September 30, 2020, respectively. See “ Contingencies ” below for discussion of an associated contingent matter. We also have commitments to fund home loans and student loans that are only cancellable at the option of the borrower. The commitments are measured at fair value on a recurring basis. See Note 8 for additional information. Concentrations Financial instruments that potentially subject us to significant concentrations of credit risk consist principally of cash and cash equivalents, restricted cash and restricted cash equivalents, residual investments and loans. We hold cash and cash equivalents and restricted cash and restricted cash equivalents in accounts at regulated domestic financial institutions in amounts that may exceed FDIC insured amounts. We believe these institutions are of high credit quality and have not experienced any related losses to date. We are dependent on third-party funding sources to originate loans. Additionally, we sell loans to various third parties. During the nine months ended September 30, 2021, the two largest third-party buyers accounted for a combined 42 % of our loan sales volume. No individual third-party buyer accounted for 10% or more of consolidated total net revenues for any of the periods presented. The Company is exposed to default risk on borrower loans originated and financed by us. There is no single borrower or group of borrowers that comprise a significant concentration of the Company’s loan portfolio. Likewise, the Company is not overly concentrated within a group of channel partners or other customers, with the exception of our distribution of personal loan residual interests in our sponsored personal loan securitizations, which we market to third parties, and the aforementioned 68 TABLE OF CONTENTS SoFi Technologies, Inc. Notes to Unaudited Condensed Consolidated Financial Statements (continued) (In Thousands, Unless Otherwise Stated and Except for Share and Per Share Data) whole loan buyers. Given we have a limited number of prospective buyers for our personal loan securitization residual interests, this might result in us utilizing a significant amount of our own capital to fund future residual interests in personal loan securitizations, or impact the execution of future securitizations if we are limited in our own ability to invest in the residual interest portion of future securitizations, or find willing buyers for securitization residual interests. See Note 17 for a discussion of concentrations in revenues from contracts with customers. Contingencies Legal Proceedings In limited instances, the Company may be subject to a variety of claims and lawsuits in the ordinary course of business. Regardless of the final outcome, defending lawsuits, claims, government investigations, and proceedings in which we are involved is costly and can impose a significant burden on management and employees, and there can be no assurances that we will receive favorable final outcomes. Contingencies Galileo. Galileo, our wholly owned subsidiary that we acquired in May 2020, was a defendant in a putative class action involving service disruption for customers of Galileo’s largest client stemming from Galileo’s system experiencing technology platform downtime in 2019. The parties entered into a class action settlement agreement to resolve the claims in the action. In May 2021, the United States District Court Northern District of California granted a motion for final approval of the class action settlement. In June 2021, an appeal was filed to the final order approving the settlement in the United States Court of Appeals for the Ninth Circuit by a pro se putative class member. On September 1, 2021, that appeal was dismissed for lack of prosecution. As of the date of this Quarterly Report on Form 10-Q, there are no further contingencies associated with this matter. As of September 30, 2021, our liability associated with this litigation was $ 1,750 , which decreased from the amount estimated as of December 31, 2020 due to lower-than-anticipated claims. The liability was presented within accounts payable, accruals and other liabilities in the consolidated balance sheets. Other assets as of September 30, 2021 included $ 1,750 for the insurance recovery on the class action settlement. We expensed Galileo legal fees associated with this litigation as incurred. Additionally, Galileo’s client sought compensatory payment from Galileo as part of the technology platform outage, which Galileo settled in November 2020 for $ 3,341 . SoFi Stadium. In September 2019, we established a 20 -year partnership with LA Stadium and Entertainment District at Hollywood Park in Inglewood, California (“StadCo”), through a naming and sponsorship agreement, which, among other things, provides SoFi with exclusive naming rights of SoFi Stadium and an official partnership with the Los Angeles Chargers and Los Angeles Rams and with the performance venue, which shares a roof with the stadium, and the surrounding planned entertainment district, which is anticipated to include office space, retail space and hotel and dining options. In September 2020, we discussed certain provisions of the naming and sponsorship agreement with StadCo in light of the COVID-19 pandemic. Based on these discussions, SoFi paid sponsorship fees for the initial contract year (July 1, 2020 to March 31, 2021) of $ 9.8 million, of which $ 6.5 million was paid during 2020 and $ 3.3 million was paid in January 2021. The parties are revisiting the sponsorship fees to determine the ultimate amount payable for the initial contract year and have agreed upon a third party with expertise in the valuation of sports media rights and sports sponsorship or promotional rights (“Valuation Expert”) to perform an evaluation of the delivered value during the initial contract year, which evaluation has not begun as of the date of this Quarterly Report on Form 10-Q. Therefore, the Company is exposed to additional potential sales and marketing expense of up to $ 12.7 million, which reflects the difference between the actual sponsorship fees paid during the initial contract year and the commitment for the initial contract year made under the Naming and Sponsorship Agreement. As of September 30, 2021, we are unable to estimate the amount of reasonably possible additional costs we may incur with respect to this contingency. Moreover, we have not determined that the likelihood of additional cost is probable. Therefore, as of September 30, 2021, we have not recorded additional expense related to this contingency. 69 TABLE OF CONTENTS SoFi Technologies, Inc. Notes to Unaudited Condensed Consolidated Financial Statements (continued) (In Thousands, Unless Otherwise Stated and Except for Share and Per Share Data) Guarantees We have three types of repurchase obligations that we account for as financial guarantees pursuant to ASC 460. First, we issue financial guarantees to FNMA on loans that we sell to FNMA, which manifest as repurchase requirements if it is later discovered that loans sold to FNMA do not meet FNMA guidelines. We have a three-year repurchase obligation from the time of origination to buy back originated loans that do not meet FNMA guidelines, and we are required to pay the full initial purchase price back to FNMA. We recognize a liability for the full amount of expected loan repurchases, which we estimate based on historical experience. The liability we record is equal to what we expect to buy back and, therefore, approximates fair value. Second, we make standard representations and warranties related to other loan transfers, breaches of which would require us to repurchase the transferred loans. Finally, we have limited repurchase obligations for certain loan transfers associated with credit-related events, such as early prepayment or events of default within 90 days after origination. Estimated losses associated with credit-related repurchases are evaluated pursuant to ASC 326. In the event of a repurchase, we are typically required to pay the purchase price of the loans transferred. As of September 30, 2021 and December 31, 2020, the Company accrued liabilities within accounts payable, accruals and other liabilities in the consolidated balance sheets of $ 7,089 and $ 5,196 , respectively, related to our estimated repurchase obligation, with the corresponding charges recorded within noninterest income — loan origination and sales in the consolidated statements of operations and comprehensive income (loss). As of September 30, 2021 and December 31, 2020, the amount associated with loans sold that were subject to the terms and conditions of our repurchase obligations totaled $ 6.5 billion and $ 3.9 billion, respectively. As of September 30, 2021 and December 31, 2020, the Company had a total of $ 9.3 million and $ 9.3 million, respectively, in letters of credit outstanding with financial institutions. These outstanding letters of credit were issued for the purpose of securing certain of the Company’s operating lease obligations. A portion of the letters of credit was collateralized by $ 3.3 million of the Company’s cash as of each of September 30, 2021 and December 31, 2020, which is included within restricted cash and restricted cash equivalents in the consolidated balance sheets. Mortgage Banking Regulatory Mandates The Company is subject to certain state-imposed minimum net worth requirements for the states in which the Company is engaged in the business of a residential mortgage lender. Noncompliance with these requirements on an annual basis could result in potential fines or penalties imposed by the applicable state. Future events or changes in mandates may affect the Company’s ability to meet mortgage banking regulatory requirements. As of September 30, 2021 and December 31, 2020, the Company was in compliance with all minimum net worth requirements and, therefore, has not accrued any liabilities related to fines or penalties. Retirement Plans The Company has a 401(k) plan that covers all employees meeting certain eligibility requirements. The 401(k) plan is designed to provide tax-deferred retirement benefits in accordance with the provisions of Section 401(k) of the Internal Revenue Code. Eligible employees may defer up to 100 % of eligible compensation up to the annual maximum as determined by the Internal Revenue Service. The Company’s contributions to the plan are discretionary. The Company has not made any contributions to the plan to date. Note 16. Loss Per Share We compute loss per share attributable to common stock using the two-class method required for participating interests. Prior to the Business Combination, our participating interests included all series of our preferred stock. Series 1 preferred stock has preferential cumulative dividend rights. Pursuant to ASC 260, Earnings Per Share , for each period presented, we increased net loss by the contractual amount of dividends payable to Series 1 preferred stock before allocating any remaining undistributed earnings to all participating interests. Prior to the Business Combination, all other classes of preferred stock, except for Series C, had stated dividend rights, which had priority over undistributed earnings. The remaining losses were shared pro-rata among the preferred stock (with the exception of Series 1 preferred stock) and common stock outstanding during the measurement period, as if all of the losses for the period had been distributed. While our calculation of loss per share accounted for a loss allocation to all participating shares, we only presented loss per share below for our common stock. Basic loss per share of common stock was computed by dividing 70 TABLE OF CONTENTS SoFi Technologies, Inc. Notes to Unaudited Condensed Consolidated Financial Statements (continued) (In Thousands, Unless Otherwise Stated and Except for Share and Per Share Data) net loss, adjusted for the impact of Series 1 preferred stock dividends and loss allocated to other participating interests, as applicable, by the weighted average number of shares of common stock outstanding during the period. Because the amount available to distribute to all participating interests after adjusting for redeemable preferred stock dividends was negative in all periods presented, we did not allocate any loss to participating interests in determining the numerator of the basic and diluted loss per share computation, as the allocation of loss would have been anti-dilutive. Further, we excluded the effect of all potentially dilutive common stock elements from the denominator in the computation of diluted loss per share, as their inclusion would have been anti-dilutive. The calculation of basic and diluted loss per share was as follows for the periods indicated: Three Months Ended September 30, Nine Months Ended September 30, 2021 2020 2021 2020 Numerator: Net loss $ ( 30,047 ) $ ( 42,878 ) $ ( 372,925 ) $ ( 141,437 ) Less: Redeemable preferred stock dividends ( 10,189 ) ( 10,189 ) ( 30,236 ) ( 30,346 ) Net loss attributable to common stockholders – basic and diluted $ ( 40,236 ) $ ( 53,067 ) $ ( 403,161 ) $ ( 171,783 ) Denominator: Weighted average common stock outstanding – basic 800,565,830 75,320,032 429,750,486 72,296,724 Weighted average common stock outstanding – diluted 800,565,830 75,320,032 429,750,486 72,296,724 Loss per share – basic $ ( 0.05 ) $ ( 0.70 ) $ ( 0.94 ) $ ( 2.38 ) Loss per share – diluted $ ( 0.05 ) $ ( 0.70 ) $ ( 0.94 ) $ ( 2.38 ) We excluded the effect of the below elements from our calculation of diluted loss per share, as their inclusion would have been anti-dilutive, as there were no earnings attributable to common stockholders. These amounts represent the number of instruments outstanding at the end of each respective period: Three Months Ended September 30, Nine Months Ended September 30, 2021 2020 2021 2020 Redeemable preferred stock exchangeable for common stock — 492,857,785 — 492,857,785 Redeemable preferred stock warrants exchangeable for common stock — 12,170,990 — 12,170,990 Contingent common stock (1) 320,649 320,649 320,649 320,649 Common stock options 24,143,373 31,068,906 24,143,373 31,068,906 Common stock warrants 40,295,990 — 40,295,990 — Unvested RSUs 53,323,597 37,370,320 53,323,597 37,370,320 Unvested PSUs 23,141,462 — 23,141,462 — ____________________ (1) For all periods presented, includes contingently issuable common stock in connection with our acquisition of 8 Limited, as further discussed in Note 2. Note 17. Business Segment Information Each of our reportable segments is a strategic business unit that serves specific needs of our members based on the products and services provided. The segments are based on the manner in which management views the financial performance of the business. Contribution profit (loss) is the primary measure of segment profit and loss reviewed by the Chief Operating Decision Maker (“CODM”) and is intended to measure the direct profitability of each segment. Contribution profit (loss) is defined as total net revenue for each reportable segment less: • fair value changes in servicing rights and residual interests classified as debt that are attributable to assumption changes, which impact the contribution profit within the Lending segment. These fair value changes are non-cash in nature and are not realized in the period; therefore, they do not impact the amounts available to fund our operations; and 71 TABLE OF CONTENTS SoFi Technologies, Inc. Notes to Unaudited Condensed Consolidated Financial Statements (continued) (In Thousands, Unless Otherwise Stated and Except for Share and Per Share Data) • expenses directly attributable to the corresponding reportable segment. Directly attributable expenses primarily include compensation and benefits and sales and marketing, and vary based on the amount of activity within each segment. Directly attributable expenses also include loan origination and servicing expenses, professional services, product fulfillment, lead generation and occupancy-related costs. Expenses are attributed to the reportable segments using either direct costs of the segment or labor costs that can be attributed based upon the allocation of employee time for individual products. The reportable segments also reflect the Company’s organizational structure. Each segment has a segment manager who reports directly to the CODM. The CODM has ultimate authority and responsibility over resource allocation decisions and performance assessment. The Company has three reportable segments: Lending, Technology Platform and Financial Services. The Lending segment includes our personal loan, student loan and home loan products and the related servicing activities and, for 2020, a commercial loan. We originate loans in each of the aforementioned channels with the objective of either selling whole loans or securitizing a pool of originated loans for transfer to third-party purchasers. Revenues in the Lending segment are driven by changes in the fair value of our whole loans and securitization interests, gains or losses recognized on transfers that meet the true sale requirements under ASC 860 and our servicing-related activities, which mainly consist of servicing fees and the changes in our servicing assets over time. We also earn the difference between interest income earned on our loans and interest expense on any loans that are financed. Interest expense primarily impacts our Lending segment, and we present interest income net of interest expense, as our CODM considers net interest income in addition to contribution profit in evaluating the performance of the Lending segment and making resource allocation decisions. Finally, beginning in the third quarter of 2021, our Lending segment revenue also includes earnings or losses from an equity method investment, which are discussed further in Note 1. The Technology Platform segment includes our Technology Platform fees, which commenced with our acquisition of Galileo in May 2020, and, in the 2020 periods, our equity method investment in Apex, which represented our portion of net earnings on clearing brokerage activity on the Apex platform. Apex was the Company’s only material equity method investment as of December 31, 2020. During January 2021, the seller of our Apex interest exercised the Seller Call Option, and as such we do not recognize Apex equity investment income subsequent to the call date. Due to the additional investment we made during 2020, we will maintain an immaterial investment in Apex, but will no longer qualify for equity method accounting. See Note 2 for additional information on the acquisition of Galileo, and Note 1 for additional information on our Apex equity method investment. The Financial Services segment includes our SoFi Money product, SoFi Invest product, SoFi Credit Card product (which we launched in the third quarter of 2020), SoFi Relay personal finance management product and other financial services, such as equity capital markets and advisory services, lead generation, and content for other financial services institutions and our members. SoFi Money provides members a digital cash management experience, interest income and the ability to separate money balances into various subcategories. SoFi Invest provides investment features and financial planning services that we offer to our members. Revenues in the Financial Services segment include payment network fees on our member transactions and pay for order flow, digital assets transaction fees and share lending arrangements in SoFi Invest. Additionally, we earn underwriting fees and enterprise services fees associated with equity capital markets and advisory services we began providing in the second quarter of 2021. We also earn referral fees in connection with referral activity we facilitate through our platform. The referral fee is paid to us by third-party partners that offer services to end users who do not use one of our product offerings, but who were referred to the partners through our platform. Beginning in the third quarter of 2021, referral fees also include referral fulfillment fees earned for providing pre-qualified borrower referrals to a third-party partner who separately contracts with a loan originator. Non-segment operations are classified as Other, which includes net revenues associated with corporate functions that are not directly related to a reportable segment. These non-segment net revenues include interest income earned on corporate cash balances, nonrecurring income on certain investments from available cash on hand, such as our investments in AFS debt securities (which investments are not interconnected with our core business lines and, thereby, reportable segments), and interest expense on corporate borrowings, such as our revolving credit facility and the seller note issued in connection with our acquisition of Galileo. During the three and nine months ended September 30, 2021, net revenues within Other also included $ — and $ 211 , respectively, of interest income and $ — and $ 169 , respectively, of reversal of loss on discount to fair value in connection with related party transactions. During the three and nine months ended September 30, 2020, net revenues within Other included $ 778 and $ 2,709 , respectively, of interest income earned in connection with related party transactions. Refer to Note 14 for further discussion of our related party transactions. 72 TABLE OF CONTENTS SoFi Technologies, Inc. Notes to Unaudited Condensed Consolidated Financial Statements (continued) (In Thousands, Unless Otherwise Stated and Except for Share and Per Share Data) The accounting policies of the segments are consistent with those described in Note 1, except for the accounting policies in relation to the allocations of consolidated income and consolidated expenses, as described below. The following tables present financial information, including the measure of contribution profit (loss), for each reportable segment for the periods indicated. The information is derived from our internal financial reporting used for corporate management purposes. Assets are not allocated to reportable segments, as the Company’s CODM does not evaluate reportable segments using discrete asset information. Three Months Ended September 30, 2021 Lending Technology Platform (1)(4) Financial Services Reportable Segments Total Other Total Net revenue Net interest income (loss) $ 72,257 $ 39 $ 1,209 $ 73,505 $ ( 1,130 ) $ 72,375 Noninterest income 138,034 50,186 11,411 199,631 — 199,631 Total net revenue (loss) $ 210,291 $ 50,225 $ 12,620 $ 273,136 $ ( 1,130 ) $ 272,006 Servicing rights – change in valuation inputs or assumptions (2) ( 409 ) — — ( 409 ) Residual interests classified as debt – change in valuation inputs or assumptions (3) 5,593 — — 5,593 Directly attributable expenses ( 97,807 ) ( 34,484 ) ( 52,085 ) ( 184,376 ) Contribution profit (loss) $ 117,668 $ 15,741 $ ( 39,465 ) $ 93,944 Three Months Ended September 30, 2020 Lending Technology Platform (1) Financial Services Reportable Segments Total Other Total Net revenue Net interest income (loss) $ 52,222 $ ( 47 ) $ 98 $ 52,273 $ ( 3,061 ) $ 49,212 Noninterest income (loss) 109,890 38,865 3,139 151,894 ( 319 ) 151,575 Total net revenue (loss) $ 162,112 $ 38,818 $ 3,237 $ 204,167 $ ( 3,380 ) $ 200,787 Servicing rights – change in valuation inputs or assumptions (2) 4,671 — — 4,671 Residual interests classified as debt – change in valuation inputs or assumptions (3) 11,301 — — 11,301 Directly attributable expenses ( 75,073 ) ( 14,832 ) ( 40,704 ) ( 130,609 ) Contribution profit (loss) $ 103,011 $ 23,986 $ ( 37,467 ) $ 89,530 73 TABLE OF CONTENTS SoFi Technologies, Inc. Notes to Unaudited Condensed Consolidated Financial Statements (continued) (In Thousands, Unless Otherwise Stated and Except for Share and Per Share Data) Nine Months Ended September 30, 2021 Lending Technology Platform (1)(4) Financial Services Reportable Segments Total Other Total Net revenue Net interest income (loss) $ 180,856 $ ( 29 ) $ 1,980 $ 182,807 $ ( 7,140 ) $ 175,667 Noninterest income 343,703 141,616 34,142 519,461 4,136 523,597 Total net revenue (loss) $ 524,559 $ 141,587 $ 36,122 $ 702,268 $ ( 3,004 ) $ 699,264 Servicing rights – change in valuation inputs or assumptions (2) 11,924 — — 11,924 Residual interests classified as debt – change in valuation inputs or assumptions (3) 19,261 — — 19,261 Directly attributable expenses ( 261,202 ) ( 97,148 ) ( 135,851 ) ( 494,201 ) Contribution profit (loss) $ 294,542 $ 44,439 $ ( 99,729 ) $ 239,252 Nine Months Ended September 30, 2020 Lending Technology Platform (1) Financial Services Reportable Segments Total Other Total Net revenue Net interest income (loss) $ 142,218 $ ( 65 ) $ 396 $ 142,549 $ ( 3,441 ) $ 139,108 Noninterest income (loss) 189,656 58,899 7,423 255,978 ( 1,045 ) 254,933 Total net revenue (loss) $ 331,874 $ 58,834 $ 7,819 $ 398,527 $ ( 4,486 ) $ 394,041 Servicing rights – change in valuation inputs or assumptions (2) 16,332 — — 16,332 Residual interests classified as debt – change in valuation inputs or assumptions (3) 28,815 — — 28,815 Directly attributable expenses ( 220,496 ) ( 21,751 ) ( 103,162 ) ( 345,409 ) Contribution profit (loss) $ 156,525 $ 37,083 $ ( 95,343 ) $ 98,265 ____________________ (1) Noninterest income within the Technology Platform segment for the three and nine months ended September 30, 2020 included $ 3,041 and $ 6,637 , respectively, of earnings from our equity method investment in Apex. There were no earnings from our equity method investment in Apex during the three and nine months ended September 30, 2021. See Note 1 under “—Equity Method Investments” for additional information. (2) Reflects changes in fair value inputs and assumptions, including market servicing costs, conditional prepayment and default rates and discount rates. This non-cash change, which is recorded within noninterest income in the consolidated statements of operations and comprehensive income (loss) is unrealized during the period and, therefore, has no impact on our cash flows from operations. As such, the changes in fair value attributable to assumption changes are adjusted to provide management and financial users with better visibility into the cash flows available to finance our operations. (3) Reflects changes in fair value inputs and assumptions, including conditional prepayment and default rates and discount rates. When third parties finance our consolidated VIEs through purchasing residual interests, we receive proceeds at the time of the securitization close and, thereafter, pass along contractual cash flows to the residual interest owner. These obligations are measured at fair value on a recurring basis, with fair value changes recorded within noninterest income in the consolidated statements of operations and comprehensive income (loss). The fair value change attributable to assumption changes has no impact on our initial financing proceeds, our future obligations to the residual interest owner (because future residual interest claims are limited to securitization collateral cash flows), or the general operations of our business. As such, this non-cash change in fair value during the period is adjusted to provide management and financial users with better visibility into the cash flows available to finance our operations. (4) During the three and nine months ended September 30, 2021, the five largest clients in the Technology Platform segment contributed 63 % and 65 %, respectively, of the total net revenue within the segment, which represented 12 % and 13 %, respectively, of our consolidated total net revenue. 74 TABLE OF CONTENTS SoFi Technologies, Inc. Notes to Unaudited Condensed Consolidated Financial Statements (continued) (In Thousands, Unless Otherwise Stated and Except for Share and Per Share Data) The following table reconciles reportable segments total contribution profit to loss before income taxes for the periods presented. Expenses not allocated to reportable segments represent items that are not considered by our CODM in evaluating segment performance or allocating resources. Three Months Ended September 30, Nine Months Ended September 30, 2021 2020 2021 2020 Reportable segments total contribution profit $ 93,944 $ 89,530 $ 239,252 $ 98,265 Other total net loss ( 1,130 ) ( 3,380 ) ( 3,004 ) ( 4,486 ) Servicing rights – change in valuation inputs or assumptions 409 ( 4,671 ) ( 11,924 ) ( 16,332 ) Residual interests classified as debt – change in valuation inputs or assumptions ( 5,593 ) ( 11,301 ) ( 19,261 ) ( 28,815 ) Expenses not allocated to segments: Share-based compensation expense ( 72,681 ) ( 26,551 ) ( 162,289 ) ( 69,781 ) Depreciation and amortization expense ( 24,075 ) ( 24,676 ) ( 75,041 ) ( 44,346 ) Fair value change of warrant liabilities 64,405 ( 4,353 ) ( 96,504 ) ( 6,371 ) Employee-related costs (1) ( 39,601 ) ( 29,022 ) ( 108,825 ) ( 85,315 ) Special payment (2) — — ( 21,181 ) — Other corporate and unallocated expenses (3) ( 45,544 ) ( 28,262 ) ( 112,946 ) ( 83,775 ) Loss before income taxes $ ( 29,866 ) $ ( 42,686 ) $ ( 371,723 ) $ ( 240,956 ) __________________ (1) Includes compensation, benefits, recruiting, certain occupancy-related costs and various travel costs of executive management, certain technology groups and general and administrative functions that are not directly attributable to the reportable segments. (2) Represents a special payment to the Series 1 preferred stockholders in connection with the Business Combination. See Note 10 for additional information. (3) Represents corporate overhead costs that are not allocated to reportable segments, which primarily includes corporate marketing costs, tools and subscription costs, professional services costs and corporate insurance expense. In April 2020, the Company acquired 8 Limited for total consideration of $ 16,126 , which represented the Company’s first international expansion. See Note 2 for additional information on the acquisition. As we do not have material operations outside of the U.S., we did not make the geographic disclosures pursuant to ASC 280, Segment Reporting . No single customer accounted for more than 10% of our consolidated revenues for any of the periods presented. Note 18. Subsequent Events Management of the Company performed an evaluation of subsequent events that occurred after the balance sheet date through the date of this Quarterly Report on Form 10-Q. Convertible Debt Offering On October 4, 2021, the Company issued and sold $ 1.2 billion aggregate principal amount of convertible senior notes due 2026 (the “notes”). The notes are unsecured, unsubordinated obligations. The notes do not bear regular interest. The notes will mature on October 15, 2026, unless earlier repurchased, redeemed or converted. The notes are convertible by the noteholders prior to the close of business on the business day immediately preceding April 15, 2026, if certain conditions related to the Company’s share price are met, there are certain corporate events or distributions of the Company’s stock, or the Company calls the notes for redemption, each as set forth in the indenture. On and after April 15, 2026 until the close of business on the second scheduled trading day immediately preceding the maturity date, the notes are freely convertible by the noteholders. We will settle conversions by paying or delivering, at our election, cash, shares of our common stock or a combination of cash and shares of our common stock, based on the applicable conversion rate(s). If we elect to deliver cash or a combination of cash and shares of our common stock, then the consideration due upon conversion will be determined over an observation period consisting of 30 “VWAP Trading Days” (as defined in the convertible debt agreement). The initial conversion rate is 44.6150 shares of our common stock per $1,000 principal amount of notes, which represents an initial conversion price of approximately $ 22.41 per share of our common stock. The conversion rate and conversion price will be subject to customary adjustments upon the occurrence of certain events. In addition, if certain corporate events that constitute a “Make-Whole 75 TABLE OF CONTENTS SoFi Technologies, Inc. Notes to Unaudited Condensed Consolidated Financial Statements (continued) (In Thousands, Unless Otherwise Stated and Except for Share and Per Share Data) Fundamental Change” (as defined in the indenture) occur, then the conversion rate will, in certain circumstances, be increased for a specified period of time. The notes will also be redeemable, in whole or in part, at our option at any time, and from time to time, on or after October 15, 2024 through on or before the 30th scheduled trading day immediately before the maturity date, at a cash redemption price equal to the principal amount of the notes to be redeemed, plus accrued interest, if any, thereon to, but excluding, the redemption date, but only if certain liquidity conditions described in the indenture are satisfied and certain conditions are met with respect to the last reported sale price per share of our common stock prior to conversion. The net proceeds from the offering were $ 1.176 billion, after deducting the initial purchasers’ discount and before the cost of the capped call transactions, as described below, and offering expenses payable by the Company. We used $ 113.8 million of the net proceeds to fund the cost of entering into the capped call transactions described below. We intend to use the remainder of the net proceeds from the offering, (i) to pay related expenses, and (ii) for general corporate purposes. Capped Call Transaction In connection with the pricing of the notes, the Company entered into privately negotiated capped call transactions with certain financial institutions (the “Capped Call Counterparties”). In connection with the exercise by the initial purchasers of their option to purchase additional notes, the Company entered into additional privately negotiated capped call transactions (together, the “Capped Call Transactions”) with each of the Capped Call Counterparties. The Capped Call Transactions initially cover, subject to customary anti-dilution adjustments, the number of shares of our common stock that initially underlie the notes. The Capped Call Transactions are expected generally to reduce the potential dilutive effect on the common stock upon any conversion of notes and/or offset any potential cash payments we are required to make in excess of the principal amount of converted notes, as the case may be, with such reduction and/or offset subject to a cap which initially is $ 32.02 per share, representing a premium of 100 % over the last reported sale price per share of our common stock on September 29, 2021, subject to certain adjustments under the terms of the Capped Call Transactions. The Capped Call Transactions are separate transactions entered into by the Company with each of the Capped Call Counterparties, are not part of the terms of the notes, and do not affect any holder’s rights under the notes. Holders of the notes do not have any rights with respect to the Capped Call Transactions. Warrants Redemption On November 4, 2021, we announced that we will redeem all outstanding SoFi Technologies warrants that remain outstanding at 5:00 p.m. New York City time on December 6, 2021 (the “Redemption Date”) for a redemption price of $ 0.10 per warrant. The Warrants may be exercised by the holders thereof until 5:00 p.m. New York City time on the Redemption Date to purchase fully paid and non-assessable shares of common stock underlying such warrants. Payment upon exercise of the warrants may be made either (i) in cash, at an exercise price of $ 11.50 per share of common stock, or (ii) on a “cashless basis” in which the exercising holder will receive a number of shares of common stock to be determined in accordance with the terms of the warrant agreement and based on the Redemption Date and the volume weighted average price (the “fair market value”) of the common stock during the 10 trading days immediately following the date on which the notice of redemption was sent to holders of warrants. The Company will provide holders the fair market value no later than one business day after such 10-trading day period ends. In no event will the number of shares of common stock issued in connection with an exercise on a cashless basis exceed 0.361 shares of common stock per warrant. If any holder of warrants would, after taking into account all of such holder’s warrants exercised at one time, be entitled to receive a fractional interest in a share of common stock, the number of shares the holder will be entitled to receive will be rounded down to the nearest whole number of shares. Any warrants that remain unexercised on the Redemption Date will be void and no longer exercisable, and the holders of those warrants will be entitled to receive only the redemption price of $ 0.10 per warrant. 76 TABLE OF CONTENTS Item 2. Management’s Discussion and Analysis of Financial Condition and Results of Operations The following discussion and analysis provides information that management believes is relevant to an assessment and understanding of our consolidated results of operations and financial condition. You should read this discussion and analysis in conjunction with the unaudited condensed consolidated financial statements and notes thereto included elsewhere in this Quarterly Report on Form 10-Q, as well as SoFi Technologies’ audited consolidated financial statements and notes thereto included in the final prospectus and definitive proxy statement, dated May 7, 2021 (the “Proxy Statement/Prospectus”) and filed with the SEC. Certain amounts may not foot or tie to other disclosures due to rounding. Certain information in this discussion and analysis or set forth elsewhere in this Quarterly Report on Form 10-Q contains forward-looking statements that involve numerous risks and uncertainties, including, but not limited to, those described under the sections entitled “Cautionary Note Regarding Forward-Looking Statements” and Item II, Part 1A. “Risk Factors” included in this Quarterly Report on Form 10-Q. We assume no obligation to update any of these forward-looking statements. Actual results may differ materially from those contained in any forward-looking statements. Social Finance, Inc. (“Social Finance”) entered into a merger agreement (the “Agreement”) with Social Capital Hedosophia Holdings Corp. V (“SCH”) on January 7, 2021. The transactions contemplated by the terms of the Agreement were completed on May 28, 2021 (the “Closing”), in conjunction with which SCH changed its name to SoFi Technologies, Inc. (hereafter referred to, collectively with its subsidiaries, as “SoFi”, the “Company”, “we”, “us” or “our”, unless the context otherwise requires). The transactions contemplated in the Agreement are collectively referred to as the “Business Combination”. Business Overview We are a member-centric, one-stop shop for digital financial services that allows members to borrow, save, spend, invest and protect their money. Our mission is to help our members achieve financial independence in order to realize their ambitions. To us, financial independence does not mean being wealthy, but rather represents the ability of our members to have the financial means to achieve their personal objectives at each stage of life, such as owning a home, having a family, or having a career of their choice — more simply stated, to have enough money to do what they want. We were founded in 2011 and have developed a suite of financial products that offers the speed, selection, content, and convenience that only an integrated digital platform can provide. In order for us to achieve our mission, we have to help people get their money right, which means providing them with the ability to borrow better, save better, spend better, invest better and protect better. Everything we do today is geared toward helping our members “Get Your Money Right” and we strive to innovate and build ways for our members to achieve this goal. Our three reportable segments and their respective products as of September 30, 2021 were as follows: Lending Technology Platform Financial Services • Student Loans (1) • Technology Platform Services (Galileo) • SoFi Money • Personal Loans • SoFi Invest (2) • Home Loans • SoFi Relay • SoFi Credit Card • SoFi At Work • SoFi Protect • Lantern Credit • Equity capital markets and advisory services __________________ (1) Composed of in-school loans and student loan refinancing. (2) Our SoFi Invest service is composed of three products: active investing accounts, robo-advisory accounts and digital assets accounts. We refer to our customers as “members”. We define a member as someone who has a lending relationship with us through origination and ongoing servicing, opened a financial services account, linked an external account to our platform, or signed up for our credit score monitoring service. Once someone becomes a member, they are always considered a member unless they violate our terms of service. Our members have continuous access to our certified financial planners (“CFPs”), our career advice services, our member events, our content, educational material, news, tools and calculators at no cost to the member. Additionally, our mobile app and website have a member home feed that is personalized and delivers content to a member about what they must do that day in their financial life, what they should consider doing that day in their financial life, and what they can do that day in their financial life. Since our inception through September 30, 2021, we have served approximately 2.9 77 TABLE OF CONTENTS million members who have used approximately 4.3 million products on the SoFi platform. We believe we are in the early stages of the digital transformation of financial services and, as a result, have a substantial opportunity to continue to grow our member base and increase the number of products that our members use on the SoFi platform. Members In Thousands YoY Growth 74% 90% 110% 113% 96% We offer our members a suite of financial products and services, enabling them to borrow, save, spend, invest and protect their finances within one integrated platform. Our aim is to create a best-in-class, integrated financial services platform that will generate a virtuous cycle whereby positive member experiences will lead to more products adopted per member and enhanced profitability for each additional product by lowering overall member acquisition costs and increasing the lifetime value of our members. We refer to this virtuous cycle as our “Financial Services Productivity Loop”. We believe that developing a relationship with our members and gaining their trust is central to our success as a financial services platform. Moreover, we believe that some of the current frictions faced by other financial institutions are caused by a disjointed and non-seamless product experience, a lack of digital acquisition, subpar mobile web products instead of digital native apps and incomplete product offerings to meet a customer’s holistic financial needs. Through our mobile technology and continuous effort to improve our financial services products, we are seeking to build a financial services platform that members can access for all of their financial services needs. We believe we are in the early stages of realizing the benefits of the Financial Services Productivity Loop, as increasing numbers of our members are using multiple products on our platform. In addition to benefiting our members, our products and capabilities are also designed to appeal to enterprises, such as financial services institutions that subscribe to our enterprise services through SoFi At Work, and other enterprises that leverage our capabilities to assist with equity capital markets and advisory services. These enterprises become interconnected with the SoFi platform when using it for these services. We also leverage our platform to provide pre-qualified borrower referrals to a third-party partner who separately contracts with the loan originator. While these enterprises and partner are not considered members, they are important contributors to the growth of the SoFi platform, and, in some cases, also have their own constituents who might benefit from our products in the future. Further, our wholly-owned subsidiary, Galileo, had approximately 89 million total accounts on its platform (excluding SoFi accounts) as of September 30, 2021. Galileo started contributing new accounts to the SoFi ecosystem during the second quarter of 2020. While we primarily operate in the United States, in 2020, we expanded into Hong Kong with our acquisition of 8 Limited, an investment business. Additionally, with the acquisition of Galileo in May 2020, we gained clients in Mexico. National Bank Charter. A key element of our long-term strategy is to secure a national bank charter, which we believe can enhance our overall profitability. While we currently rely on third-party bank holding companies to provide banking services to our members, securing a national bank charter would, among other things, allow us to provide members and prospective members broader and more competitive options across their financial services needs, including deposit accounts, and lower our cost to fund loans (by utilizing our SoFi Money members’ deposits to fund our loans), which would enable us to offer lower interest rates on loans to members as well as offer higher interest rates on SoFi Money accounts, all while continuing not to charge non-interest based fees. 78 TABLE OF CONTENTS In October 2020, we received preliminary, conditional approval from the Office of the Comptroller of the Currency (the “OCC”) for our application for a national bank charter. Final OCC approval is subject to a number of preopening requirements. In March 2021, we entered into an agreement to acquire Golden Pacific Bancorp, Inc., a bank holding company (“Golden Pacific”), and its wholly-owned subsidiary, Golden Pacific Bank, National Association, a national bank (“Golden Pacific Bank”), for a total cash purchase price of $22.3 million. The acquisition is subject to regulatory approval, including approval from the OCC of a revised business plan for the acquiree national bank, and approval from the Federal Reserve to become a bank holding company and for a change of control, and other customary closing conditions. In March 2021, we also submitted an application to the Federal Reserve to become a bank holding company. The application review process is ongoing. In order to be compliant with all applicable regulations, to operate to the satisfaction of the banking regulators, and to successfully execute our business plan for the bank, SoFi has been building out the required infrastructure to run the bank and to operate as a bank holding company. This effort spans our people and organization, technology, marketing/product management, risk management, compliance, and control functions. We have invested and expect to continue to invest substantial time, money and human resources towards bank readiness, and towards the regulatory approval process. During the three and nine months ended September 30, 2021, we incurred direct costs associated with securing a national bank charter of $4.4 million and $13.6 million, respectively, which consisted primarily of professional fees and compensation and benefits costs. While largely dependent on the timing of the regulatory approvals, we estimate that we could incur additional costs of approximately $4 million through the remainder of the regulatory approval process. IPO Investment Center. Through our FINRA-registered broker-dealer subsidiary, SoFi Securities LLC (“SoFi Securities”), we are licensed to underwrite securities offerings. In March 2021, we launched an IPO investment center that allows members with a SoFi active invest account to invest in initial public offerings before they trade on an exchange. During the three and nine months ended September 30, 2021, we recognized underwriting fee revenue of $0.3 million and $2.0 million, respectively, within noninterest income — other in the consolidated statements of operations and comprehensive income (loss) associated with our IPO Investment Center underwriting activities. We aim to continue to generate revenues in future periods from our IPO investment center activities in the form of underwriting fees. Our Reportable Segments We conduct our business through three reportable segments: Lending, Technology Platform and Financial Services. Below is a discussion of our segments and their corresponding products. Lending Segment Through our Lending segment, we offer student loans, personal loans, home loans and related services. Student Loans. We primarily operate in the student loan refinance space, with a focus on super-prime graduate school loans. We later expanded into “in-school” lending, which allows members to borrow funds while they attend school. We offer flexible loan sizes and repayment options, competitive rates, and the ability to lock in an interest rate for funding at a later time on our student loan products. Personal Loans. We primarily originate personal loans for debt consolidation purposes and home improvement projects. We offer fixed and variable rate loans with no origination fees and flexible repayment terms, such as unemployment protection. There are other personal loan purposes or channels that we have not aggressively pursued, which we believe could represent opportunities for us in the future. Home Loans. We have historically offered agency and non-agency loans for members purchasing a home or refinancing an existing mortgage. For our home loan products, we offer competitive rates, flexible down-payment options for as little as 5% and educational tools and calculators. A key element of our underwriting process is the ability to facilitate risk-based interest rates that are appropriate for each loan. Using SoFi’s proprietary risk models, we project quarterly loan performance, including expected losses and prepayments. The outcome of this process helps us determine a more data-driven, risk-adjusted interest rate that we can offer our members. SoFi has built a comprehensive underwriting process across each lending product that is focused on willingness to pay (measured by credit attributes), ability to pay (measured through income verification), and capacity to pay (measured by debt service in relation to other loans). Our student loan and personal loan underwriting models consider credit reports, industry credit and bankruptcy prediction models, custom credit assessment models, and debt capacity analysis, as indicated by borrower free cash flow (defined as borrower monthly net income less revolving and installment payments less housing payments). Our minimum FICO requirements are 650 for student loan refinancing, 650 for in-school loans (primary or co-signer) and 680 for personal loans. We decreased our in-school loan minimum FICO requirement in conjunction with our launch of a revised 79 TABLE OF CONTENTS underwriting strategy in the second quarter of 2021, which utilizes an advanced risk model that focuses on borrowers' ability to pay and provides refined risk separation. Home loans originated by SoFi that are agency conforming loans are subject to credit, debt service, and collateral eligibility established by Fannie Mae. Existing members generally experience a higher approval rate than new members, subject to the existing member being in good standing on their existing products. Home loans originated by SoFi that are non-agency loans are subject to our credit criteria, which typically includes a minimum tri-bureau credit score, established credit history requirements, income verification, as well as maximum qualified mortgage limits on debt-to-income service and caps on loan-to-value based on an accredited appraisal. We also leverage our data to provide existing members a streamlined application process through automation. Our lending business is primarily a gain-on-sale model, whereby we originate loans and recognize a gain from these loans when we sell them into either our whole loan or securitization channels. We sell our whole loans primarily to large financial institutions, such as bank holding companies, typically at a premium to par, and in excess of our costs to originate the loans. Our loan premiums fluctuate from time to time based on benchmark rates and credit spreads, and we are not guaranteed a gain on all or any of our loan sales. When securitizing loans, we first isolate the underlying loans in a trust and then sell the beneficial interests in the trust to a bankruptcy-remote entity. In securitization transactions that do not qualify for sale accounting, the related assets remain on our consolidated balance sheet and cash proceeds received are reported as liabilities, with related interest expense recognized over the life of the related borrowing. In securitization transactions that qualify for sale accounting, we typically have insignificant continuing involvement as an investor. In the case of both whole loan sales and securitizations, we also typically continue to retain servicing rights following transfer. We, therefore, view servicing as an integral component of the Lending segment. Prior to selling our loans, we hold them on our consolidated balance sheet at fair value and rely upon warehouse financing arrangements. Net interest income, which we define as the difference between the earned interest income and interest expense to finance loans, is a key component of the profitability of our Lending segment. With the exception of certain of our home loans, we retain servicing rights to our originated loans, and believe our servicing function is an important asset because of the connection to the member it affords us throughout the life of the loan. We directly service all of the personal loans that we originate. We act as master servicer for, and rely on sub-servicers to directly service, all of our student loans and Federal National Mortgage Association (“FNMA”) conforming home loans. We believe this ongoing relationship with our members enhances the effectiveness of our Financial Services Productivity Loop by increasing member touchpoints and driving increases in the number of products per member. Furthermore, our platform supports the full transaction lifecycle, including credit application, underwriting, approval, funding and servicing. Through data derived at loan origination and throughout the servicing process, SoFi has life-of-loan performance data on each loan in its ecosystem, which provides a meaningful data asset. Technology Platform Segment Our Technology Platform segment consists of Galileo, and historically included our minority ownership of Apex Clearing Holdings, LLC (“Apex”), a technology-enabled provider of investment custody and clearing brokerage services, in which we invested in December 2018. During January 2021, the seller of the Apex interest exercised its call rights on our Apex investment. Therefore, we did not recognize any Apex equity method investment income during the three and nine months ended September 30, 2021, nor will we have such equity method investment income in future periods. Additionally, we measured the carrying value of the Apex equity method investment as of December 31, 2020 equal to the call payment that we received in January 2021. Although following the exercise of the seller’s call rights we no longer have an equity method investment in Apex or recognize equity method investment income, Apex continues to provide investment custody and clearing services for SoFi Invest, including for our brokerage activities, under a multi-year revenue sharing arrangement. In May 2020, we acquired Galileo, a provider of technology platform services to financial and non-financial institutions. Through Galileo, we provide services through a suite of program, event and authorization application programming interfaces for financial and non-financial institutions. Additionally, Galileo provides vertical integration benefits with SoFi Money. In addition to growth in its U.S. client base, Galileo is increasingly focused on international opportunities, including in Latin America and Asia. We earn revenue on Galileo’s platform in the following two ways: • Technology Platform Fees: We earn Technology Platform revenues for providing continuous delivery of an integrated technology platform as an outsourced service for financial and non-financial institutions. The platform fees we earn are based on access to the platform and are specific to the type of transaction. For example, we offer “event pricing”, which includes a specific charge for an account setup, an active account on file, use of Program, Event and 80 TABLE OF CONTENTS Authorization Application Programming Interfaces (“APIs”), card activation, authorizations and processing, and card loads. In addition, we offer “partner pricing”, which is the back-end support we provide to Galileo’s clients, such as live agent customer service, chargeback and fraud analysis and credit bureau reporting, all within one integrated solution for our clients. • Program Management Fees: Also referred to as “card program fees”, these transaction fees are generated from the creation and management of card programs issued by banks and requested by enterprise partners. In these arrangements, Galileo performs card management services and the revenue stems from the payment network and card program fees generated by the card program. This revenue is reduced by association and bank issuer costs, and a revenue share passed along to the enterprise partner that markets the card program. We categorize this class of revenue as payment network fees. Galileo typically enters into multi-year service contracts with its clients. The contracts provide for a variety of integrated platform services, which vary by client and are generally either non-cancellable or cancellable with a substantive payment. Pricing structures under these contracts are typically volume-based, or a combination of activity- and volume-based, and payment terms are predominantly monthly in arrears. Most of Galileo’s contracts contain minimum monthly payments with agreed upon monthly service levels and may contain penalties if service levels are not met. Financial Services Segment Our Financial Services segment consists of cash management, investment and other financial services activities. SoFi Money Through SoFi Money, a digital, mobile cash management experience for our members, we invest in member acquisition and marketing activities to attract new members, including by offering rewards to incentivize prospective members to house their cash management activities on the SoFi platform. We generate interest income from deposits sitting in our various member banks, which is reduced by the interest fees paid to members. We also earn payment network fees on member expenditures via SoFi-branded debit cards issued by one of our member bank holding companies (each a “Member Bank”). Payment network fees are reduced by direct fees payable to card associations and the Member Bank. The Bancorp Bank (“Bancorp”) is the issuer of all SoFi Money debit cards and sponsors access to debit networks for payment transactions, funding transactions and associated settlement of funds under a sponsorship agreement with SoFi Securities. Additionally, Bancorp provides sponsorship and support for ACH, check, and wire transactions along with associated funds settlement. The SoFi Money product also utilizes a sweep administrator, UMB Bank, National Association (“UMB”), to sweep funds to and from the SoFi Money program banks, as necessary, under a program broker agreement between SoFi Securities and UMB and program account and program bank agreements with a variety of sweep program banks. The SoFi Securities agreement with Bancorp provides for receipt by Bancorp of program revenue and transaction fees, and is subject to a minimum monthly card activity fee. The agreement with Bancorp is terminable by SoFi Securities with 120 days prior notice. The program broker agreement between SoFi Securities and UMB provides for one-year terms that automatically renew and is terminable by either party with at least 90 days’ written notice prior to the end of the current term. The program account agreements and program bank agreements between SoFi Securities, UMB and the sweep banks provide for the rate of interest payable on the balances in a member’s SoFi Money account and include certain maximum transfer requirements on transfers. These arrangements are generally terminable upon termination of SoFi Securities’ sweep arrangement with UMB. SoFi Invest We also provide introductory brokerage services to our members, and have invested significantly in creating SoFi Invest, a streamlined mobile investing experience through which we offer multiple ways to invest and give members access to active investing, robo-advisory and digital assets services. While we do not charge trading fees, other than for digital assets trading, our platform benefits from increasing assets under management as we generate interest income on cash balances that we hold, and we also earn brokerage revenue through share lending and pay for order flow arrangements. We also believe there are opportunities to generate incremental future revenue through margin lending and options. Through our acquisition of 8 Limited in 2020, we expanded SoFi Invest into the Hong Kong market. With respect to our digital assets trading activities, which we initiated in 2019, we do not hold or store members' digital assets, but instead rely on a third party custodian, and we hold an immaterial amount of digital assets in order to facilitate paying new member bonuses when members initiate their first digital assets trade. We do this for member convenience to facilitate a seamless payment of digital assets. 81 TABLE OF CONTENTS Furthermore, our innovative “stock bits” feature allows members to purchase fractional shares in various companies. Through our “stock bits” offering, members with SoFi Invest active brokerage accounts may buy or sell fractional shares in a variety of equity securities. Members can place orders in dollars or shares. During the course of a trading day, all member orders are consolidated into a single order for each equity security, which may be a sell or buy order. These fractional orders are rounded up to the next whole share and executed as a market order prior to market close on a standard trading day. Following market close, we allocate the trades to each individual member. We maintain a stock inventory for each issuer for whose securities we provide fractional trading in order to facilitate “stock bits” trades. Other In August 2020, we began offering the SoFi Credit Card, which we expanded to a broader market in the fourth quarter of 2020. Additionally, we developed SoFi Relay within the SoFi mobile application, a personal finance management product which allows members to track all of their financial accounts in one place and utilize credit score monitoring services. Further, we leverage our technology and information infrastructure to offer services to other enterprises, such as loan referrals, referral fulfillment and SoFi At Work, which is a platform we offer to enterprises that are looking for a seamless way to provide financial benefits to their employees, such as student loan payments made on their employees’ behalf, for which we earn a fee. We have also developed a financial services marketplace platform branded as Lantern Credit to help applicants that do not qualify for SoFi products find alternative products, as well as providing a product comparison experience. Finally, commencing in the second quarter of 2021, we started earning revenues for serving in underwriting syndicates and advisory services in connection with helping companies successfully complete the business combination process, inclusive of obtaining required shareholder votes. We earn revenues in connection with our Financial Services segment through various partnerships and our SoFi Money and SoFi Invest products in the following ways: • Referral fees : Through strategic partnerships, we earn a specified referral fee in connection with referral activity we facilitate through our platform. Referral fees are paid to us by third-party partners that offer services to end users who do not use one of our product offerings, but who were referred to the partners through our platform. As such, the third-party enterprise partners are our customers in these referral arrangements. Beginning in the third quarter of 2021, referral fees also include referral fulfillment fees earned for providing pre-qualified borrower referrals to a third-party partner who separately contracts with a loan originator. The referral fulfillment fee is determined as the lower of a fixed per-loan amount or the multiplication of a set fee percentage by the aggregate loan origination principal balance. As such, the third-party partner is our customer in this referral fulfillment arrangement. • Payment network fees : We earn payment network fees, which primarily constitute interchange fees from our SoFi Money and SoFi Credit Card products, which are reduced by fees payable to card associations and the issuing bank holding company. These fees are remitted by merchants and are calculated by multiplying a set fee percentage (as stipulated by the debit card payment network) by the transaction volume processed through such network. We arrange for performance by a card association and the bank issuer to enable certain aspects of the SoFi branded transaction card process. We enter into contracts with both parties that establish the shared economics of SoFi branded transaction cards. • Enterprise service fees : These fees are earned in connection with services we provide to enterprise partners, such as when we facilitate transactions for the benefit of their employees, such as 529 plan contributions or student loan payments through our At Work product, which represents our single performance obligation in the arrangements. Commencing in the second quarter of 2021, enterprise services also included fees for providing advisory services to an enterprise partner to facilitate reaching a quorum on their shareholder vote, which represented our single performance obligation in the arrangement. Our fee was a success-based fee for achieving contractually-specified targets, which represented variable consideration at contract inception. However, as advisory fees were billed to, and collected directly from, our partner only once our performance obligation was satisfied, the variable consideration within the reporting period was not constrained. Our revenue was reported on a gross basis, as we acted in the capacity of a principal, demonstrated the requisite control over the service, and were primarily responsible for fulfilling the performance obligation to our enterprise partner. These fees are discussed herein as a component of equity capital markets and advisory services. • Brokerage fees : We earn brokerage fees from our share lending and pay for order flow arrangements related to our SoFi Invest product (for which Apex serves as principal), exchange conversion services and digital assets activity. In our share lending arrangements and pay for order flow arrangements with Apex, we do not oversee the execution of the transactions by our members, but benefit through a negotiated multi-year revenue sharing arrangement, since our members' brokerage activity drives the share lending and pay for order flow volume. Apex connects with market 82 TABLE OF CONTENTS makers (order flow) and institutions (share lending) to facilitate the service and is responsible for execution. Apex carries inventory risk with the share lending program and ultimately is responsible for successful order routing to market makers that trigger the pay for order flow revenue. Apex sets the gross price and negotiates with market makers and institutions as part of our order flow and share lending arrangements. We have no discretion or visibility into this pricing and, instead, negotiate a net fee for our order flow and share lending arrangements, which is settled with Apex rather than with market makers or other institutions. In our digital assets arrangements, our fee is calculated as a negotiated percentage of the transaction volume. In our exchange conversion arrangements, we earn fees for exchanging one currency for another. Historically, these fees have not been a significant portion of our total net revenue. Our arrangements with Apex are governed by an agreement which contains certain minimum monthly requirements and which is terminable by either party upon notice. Although we no longer have an equity method investment in Apex as of the balance sheet date, Apex continues to provide the services under this agreement. • Underwriting Fees : Commencing in the second quarter of 2021, we earned underwriting fees related to our membership in underwriting syndicates for initial public offerings. The underwriting of securities is the only performance obligation in our underwriting agreements, and we recognize underwriting fees on the trade date. Moreover, we are a principal in our underwriting agreements, because we demonstrate the requisite control over the satisfaction of the performance obligation through the assumption of underwriter liability for our designated share allotment. As such, we recognize underwriting fee revenue on a gross basis. • Net interest income : Our SoFi Invest and SoFi Money products also generate net interest income based on the cash balances held in these accounts. Historically, this income has not been a significant portion of our total net revenue. COVID-19 Pandemic Although the long-term effects of the novel coronavirus (“COVID-19”) pandemic globally and in the United States remain unknown, we are seeing signs of recovery from the impacts of the pandemic due to the increased availability of vaccinations and government stimulus programs, particularly in the United States, including businesses and schools reopening, improved employment metrics, and increased consumer spending and confidence levels. However, we continue to monitor developments related to the pandemic, particularly the spread of additional strains of the COVID virus and potential related impacts, as well as vaccine adoption rates. Through our business continuity program, which was expanded in response to the COVID-19 pandemic, we continue to monitor the recommendations and protocols published by the U.S. Centers for Disease Control and Prevention (“CDC”) and the World Health Organization, as well as state and local governments, and to communicate with employees on a regular basis to provide updated information and corporate policies. Since the onset of the COVID-19 pandemic, we took a number of measures to proactively support our members, applicants for new loans and employees. Members : We have and will continue to approach hardship programs from a member-first perspective. In addition to our Unemployment Protection Plan, which remains available to all eligible members, we launched comprehensive forbearance programs that provided meaningful Federal Emergency Management Agency disaster hardship relief. Starting in March 2020, we made available a web-enabled self-service forbearance request process that enabled members who faced unemployment, reduction in income or general economic uncertainty to defer their loan payment for an initial period with options to extend. We also deferred certain collection recovery activities, while taking every opportunity to work with our members to find a path to repayment. We discontinued enrollment in our COVID-19 forbearance programs, which were designed to be temporary in nature, for personal loans and student loans on March 31, 2021 and April 30, 2021, respectively. Although enrollment in COVID-19 forbearance programs for home loans remains open, new requests remain low and are primarily related to extensions of existing forbearance. As of September 30, 2021, the remaining loans in active short-term hardship relief or payment deferral due to the COVID-19 pandemic included 72 home loans with an aggregate balance of $19.1 million. There were no personal loans or student loans in this category due to the COVID-19 pandemic. Subject to eligibility, members may participate in other customary hardship programs. Applicants : In response to deteriorating economic conditions and market uncertainty amid the COVID-19 pandemic, in 2020 we proactively executed our recession readiness credit risk strategies. This included introducing elevated credit eligibility requirements for personal loans, thorough validation of income and income continuity, and limiting loan amounts. Throughout the first half of 2021, we adapted our elevated credit eligibility requirements for personal loans through phases of reopening following our metric-driven, return-to-normalcy action plan. Additionally, in the third quarter of 2021, we implemented a proprietary Recession Early Warning System (“REWS”), which applies a set of internal and external indicators and enables us to closely monitor economic conditions and to be more proactive and agile in taking decisive credit actions. REWS is currently enabled for personal loans only, as it is our product with the highest credit risk. Employees : In order to safeguard the health and safety of our team members and their families, we virtualized our entire organization beginning in March 2020, enabling all of our team members to work virtually. We initiated a pilot reopening of 83 TABLE OF CONTENTS our United States offices in July 2021 on a voluntary basis. In October 2021, we delayed our staggered Return-To-Workplace program originally planned for Fall 2021. Our reopening of United States SoFi office locations began with senior management on November 1, 2021 and will follow with our other employees who plan to return to the office on February 1, 2022. Employees are working with their managers and departmental leaders to determine the best place for them to work from upon our full reopening of our office locations, which may include full-time remote and hybrid in-office options. Our offices will continue to be open on a voluntary basis in the interim period. These plans remain subject to change as the impacts of the COVID-19 pandemic continue to evolve. We will continue to align our protocols with evolving CDC, state and local guidelines to continue to safeguard the health and safety of our team members and their families. See Part II, Item 1A “ Risk Factors — COVID-19 Pandemic Risks ” for additional discussion of the risks and uncertainties associated with the repercussions of the COVID-19 pandemic. Executive Overview The following tables display key financial measures for our three reportable segments and our consolidated company that are used, along with our key business metrics, by management to evaluate our business, measure our performance, identify trends and make strategic decisions. Contribution profit (loss) is the primary measure of segment-level profit and loss reviewed by management and is defined as total net revenue for each reportable segment less expenses directly attributable to the corresponding reportable segment and, in the case of our Lending segment, less fair value adjustments attributable to assumption changes associated with our servicing rights and residual interests classified as debt. See “— Results of 84 TABLE OF CONTENTS Operations ” , “ — Summary Results by Segment ” and “ — Non-GAAP Financial Measures ” herein for discussion and analysis of these key financial measures. Three Months Ended September 30, Nine Months Ended September 30, ($ in thousands) 2021 2020 2021 2020 Lending Total interest income $ 91,579 $ 86,468 $ 256,161 $ 263,630 Total interest expense (19,322) (34,246) (75,305) (121,412) Total noninterest income 138,034 109,890 343,703 189,656 Total net revenue 210,291 162,112 524,559 331,874 Adjusted net revenue (1)(2) 215,475 178,084 555,744 377,021 Contribution profit (1) 117,668 103,011 294,542 156,525 Technology Platform (1) Total interest income (expense) 39 (47) (29) (65) Total noninterest income 50,186 38,865 141,616 58,899 Total net revenue 50,225 38,818 141,587 58,834 Contribution profit 15,741 23,986 44,439 37,083 Financial Services (1) Total interest income 1,651 365 3,084 2,418 Total interest expense (442) (267) (1,104) (2,022) Total noninterest income 11,411 3,139 34,142 7,423 Total net revenue 12,620 3,237 36,122 7,819 Contribution loss (39,465) (37,467) (99,729) (95,343) Other (3) Total interest income 371 1,284 992 5,416 Total interest expense (1,501) (4,345) (8,132) (8,857) Total noninterest income (loss) — (319) 4,136 (1,045) Total net loss (1,130) (3,380) (3,004) (4,486) Consolidated Total interest income $ 93,601 $ 88,117 $ 260,237 $ 271,464 Total interest expense (21,226) (38,905) (84,570) (132,356) Total noninterest income 199,631 151,575 523,597 254,933 Total net revenue 272,006 200,787 699,264 394,041 Adjusted net revenue (1)(2) 277,190 216,759 730,449 439,188 Net loss (30,047) (42,878) (372,925) (141,437) Adjusted EBITDA (2) 10,256 33,509 25,628 (56,393) ___________________ (1) Adjusted net revenue within our Lending segment is used by management to evaluate our Lending segment and our consolidated results. For our Lending segment, total net revenue is adjusted to exclude the fair value changes in servicing rights and residual interests classified as debt due to valuation inputs and assumption changes (including conditional prepayment and default and discount rates). We use this adjusted measure in our determination of contribution profit in the Lending segment, as well as to evaluate our consolidated results, as it removes non-cash charges that are not realized during the period and, therefore, do not impact the cash available to fund our operations, and our overall liquidity position. For our Technology Platform and Financial Services segments, there are no adjustments from total net revenue to arrive at the consolidated adjusted net revenue shown in this table. (2) Adjusted net revenue and adjusted EBITDA are non-GAAP financial measures. For information regarding our uses and definitions of these measures and for reconciliations to the most directly comparable U.S. Generally Accepted Accounting Principles (“GAAP”) measures, see “ — Non-GAAP Financial Measures ”. (3) “Other” includes total net revenue associated with corporate functions, non-recurring gains from non-securitization investment activities and interest income and realized gains and losses associated with investments in available-for-sale (“AFS”) debt securities, all of which are not directly related to a reportable segment. For further discussion, see Note 17 to the Notes to Unaudited Condensed Consolidated Financial Statements. 85 TABLE OF CONTENTS Key Recent Developments We continue to execute on our growth and other strategic initiatives and in recent years, we have celebrated launches across our product suite and strategic partnerships, establishing ourselves as a platform that enables individuals to borrow, save, spend, invest, and protect their assets. Some of our key recent achievements are discussed below. Acquisitions In March 2021, we entered into an agreement to acquire Golden Pacific Bancorp, Inc., a bank holding company, and its wholly-owned subsidiary, Golden Pacific Bank, National Association, a national bank, for a total cash purchase price of $22.3 million. The acquisition is subject to regulatory approval, including approval from the OCC of a revised business plan for Golden Pacific Bank, and approval from the Federal Reserve to become a bank holding company and for a change of control, and other customary closing conditions, which we anticipate can be completed by the end of 2021. In March 2021, we submitted an application to the Federal Reserve to become a bank holding company. The application review process is ongoing. In January 2021, Social Finance entered into the Agreement by and among SoFi, SCH, and Plutus Merger Sub Inc. The transactions contemplated by the terms of the Agreement were completed on May 28, 2021, upon which SoFi survived the merger and became a wholly owned subsidiary of SCH, which concurrently changed its name to “SoFi Technologies, Inc.” Shares of SoFi Technologies’ common stock and SoFi Technologies’ warrants began trading on The Nasdaq Global Select Market (“Nasdaq”) under the symbols “SOFI” and “SOFIW”, respectively, on June 1, 2021, in lieu of the ordinary shares, warrants and units of SCH. See Note 2 to the Notes to Unaudited Condensed Consolidated Financial Statements for additional information on the transaction. In May 2020, we completed our acquisition of Galileo for a purchase price of $1.2 billion. Galileo provides technology platform services to financial and non-financial institutions. Our acquisition of Galileo represented a material addition to our Technology Platform segment, but was not a significant acquisition under Regulation S-X, Rule 3-05, Financial Statements of Businesses Acquired or to be Acquired. In April 2020, we acquired 8 Limited, a Hong Kong based investment business, for a purchase price of $16.1 million. Our acquisition of 8 Limited marked our first expansion outside the U.S. and enables our non-U.S. members to experience many of the product features we have developed in the United States for SoFi Invest, including zero commission non-digital assets trading. Product Development and Partnerships In the third quarter of 2021, we entered into a partnership deal with a leading artificial intelligence network for lenders wherein we provide pre-qualified borrower referrals to the partner who separately contracts with a loan originator. This arrangement allows us to serve a broader addressable market for personal loans without incurring additional credit risk. In May 2021, we launched a feature in our SoFi Money product that enables members to receive their qualifying direct deposit paychecks (or other eligible direct deposits) up to two days earlier than their regularly scheduled payday, providing them quicker access to money. Through our FINRA-registered broker-dealer subsidiary, SoFi Securities, we are licensed to underwrite securities offerings. In March 2021, we launched an IPO investment center that allows members with a SoFi active Invest account to invest in initial public offerings before they trade on an exchange. Beginning in the second quarter of 2021, we began earning revenues from our underwriting services. See “—Business Overview” for additional information. In 2020, we celebrated the official opening of SoFi Stadium and the establishment of a 20-year partnership with LA Stadium and Entertainment District at Hollywood Park in Inglewood, California, a multi-purpose sports and entertainment district that serves as the stadium for the National Football League teams the Los Angeles Chargers and Los Angeles Rams. SoFi's 20-year partnership with the LA Stadium and Entertainment District at Hollywood Park, across the naming rights and sponsorship agreements, collectively requires SoFi to pay sponsorship fees quarterly in each contract year beginning in 2020 and ending in 2040 for an aggregate total of $625.0 million, which includes operating lease obligations, finance lease obligations and sponsorship and advertising opportunities at the stadium complex. See Note 15 to the Notes to Unaudited Condensed Consolidated Financial Statements for discussion of an associated contingent matter. In the second half of 2020, we launched our SoFi Credit Card, which carries no annual membership fee and provides up to two percent unlimited cash back when the cash back rewards are applied to a SoFi Money or SoFi Invest account, or are used to pay down SoFi student loans or personal loans, as well as a one-percent annual percentage rate reduction after 12 consecutive on-time credit card payments, with the reduced rate sustained with continued on-time payments. 86 TABLE OF CONTENTS Non-GAAP Financial Measures Our management and board of directors use adjusted net revenue and adjusted EBITDA, which are non-GAAP financial measures, to evaluate our operating performance, formulate business plans, help better assess our overall liquidity position, and make strategic decisions, including those relating to operating expenses and the allocation of internal resources. Accordingly, we believe that adjusted net revenue and adjusted EBITDA provide useful information to investors and others in understanding and evaluating our operating results in the same manner as our management and board of directors. Adjusted Net Revenue Adjusted net revenue is defined as total net revenue, adjusted to exclude the fair value changes in servicing rights and residual interests classified as debt due to valuation inputs and assumptions changes, which relate only to our Lending segment. We adjust total net revenue to exclude these items, as they are non-cash charges that are not realized during the period, and therefore positive or negative changes do not impact the cash available to fund our operations. This measure helps provide our management with an understanding of the net revenue available to finance our operations and helps management better decide on the proper expenses to authorize for each of our operating segments, to ultimately help achieve target contribution profit margins. Therefore, the measure of adjusted net revenue serves as both the starting point for how we think about the liquidity generated from our operations and also the starting point for our annual financial planning, the latter of which focuses on the cash we expect to generate from our operating segments to help fund the current year’s strategic objectives. Adjusted net revenue has limitations as an analytical tool and should not be considered in isolation from, or as a substitute for, the analysis of other GAAP financial measures, such as total net revenue. The primary limitation of adjusted net revenue is its lack of comparability to other companies that do not utilize this measure or that use a similar measure that is defined in a different manner. We reconcile adjusted net revenue to total net revenue, the most directly comparable GAAP measure, as presented for the periods indicated below: Three Months Ended September 30, Nine Months Ended September 30, ($ in thousands) 2021 2020 2021 2020 Total net revenue $ 272,006 $ 200,787 $ 699,264 $ 394,041 Servicing rights – change in valuation inputs or assumptions (1) (409) 4,671 11,924 16,332 Residual interests classified as debt – change in valuation inputs or assumptions (2) 5,593 11,301 19,261 28,815 Adjusted net revenue $ 277,190 $ 216,759 $ 730,449 $ 439,188 ___________________ (1) Reflects changes in fair value inputs and assumptions on servicing rights, including conditional prepayment and default rates and discount rates. These assumptions are highly sensitive to market interest rate changes and are not indicative of our performance or results of operations. Moreover, these non-cash charges are unrealized during the period and, therefore, have no impact on our cash flows from operations. As such, these positive and negative changes are adjusted out of total net revenue to provide management and financial users with better visibility into the net revenue available to finance our operations and our overall performance. (2) Reflects changes in fair value inputs and assumptions on residual interests classified as debt, including conditional prepayment and default rates and discount rates. When third parties finance our consolidated securitization variable interest entities (“VIEs”) by purchasing residual interests, we receive proceeds at the time of the closing of the securitization and, thereafter, pass along contractual cash flows to the residual interest owner. These residual debt obligations are measured at fair value on a recurring basis, but they have no impact on our initial financing proceeds, our future obligations to the residual interest owner (because future residual interest claims are limited to contractual securitization collateral cash flows), or the general operations of our business. As such, these positive and negative non-cash changes in fair value attributable to assumption changes are adjusted out of total net revenue to provide management and financial users with better visibility into the net revenue available to finance our operations. We reconcile adjusted net revenue to total net revenue, the most directly comparable GAAP measure, as presented for the quarterly periods indicated below: Quarter Ended ($ in thousands) September 30, 2021 June 30, 2021 March 31, 2021 December 31, 2020 September 30, 2020 Total net revenue $ 272,006 $ 231,274 $ 195,984 $ 171,491 $ 200,787 Servicing rights – change in valuation inputs or assumptions (1) (409) 224 12,109 1,127 4,671 Residual interests classified as debt – change in valuation inputs or assumptions (2) 5,593 5,717 7,951 9,401 11,301 Adjusted net revenue $ 277,190 $ 237,215 $ 216,044 $ 182,019 $ 216,759 ___________________ (1) See footnote (1) to the table above. (2) See footnote (2) to the table above. 87 TABLE OF CONTENTS The reconciling items to determine our non-GAAP measure of adjusted net revenue are applicable only to the Lending segment. The table below presents adjusted net revenue for the Lending segment for the periods indicated: Three Months Ended September 30, Nine Months Ended September 30, ($ in thousands) 2021 2020 2021 2020 Total net revenue – Lending $ 210,291 $ 162,112 $ 524,559 $ 331,874 Servicing rights – change in valuation inputs or assumptions (1) (409) 4,671 11,924 16,332 Residual interests classified as debt – change in valuation inputs or assumptions (2) 5,593 11,301 19,261 28,815 Adjusted net revenue – Lending $ 215,475 $ 178,084 $ 555,744 $ 377,021 ___________________ (1) See footnote (1) to the table above. (2) See footnote (2) to the table above. Adjusted EBITDA Adjusted EBITDA is defined as net income (loss), adjusted to exclude: (i) corporate borrowing-based interest expense (our adjusted EBITDA measure is not adjusted for warehouse or securitization-based interest expense, nor deposit interest expense and finance lease liability interest expense, as discussed further below), (ii) income taxes, (iii) depreciation and amortization, (iv) stock-based expense (inclusive of equity-based payments to non-employees), (v) impairment expense (inclusive of goodwill impairment and property, equipment and software abandonments), (vi) transaction-related expenses, (vii) warrant fair value adjustments, and (viii) fair value changes in servicing rights and residual interests classified as debt due to valuation assumptions. We believe adjusted EBITDA provides a useful measure for period-over-period comparisons of our business, as it removes the effect of certain non-cash items and certain charges that are not indicative of our core operating performance or results of operations. It is also a measure that management relies upon to evaluate cash flows generated from operations, and therefore the extent of additional capital, if any, required to invest in strategic initiatives. Adjusted EBITDA has limitations as an analytical tool and should not be considered in isolation from, or as a substitute for, the analysis of other GAAP financial measures, such as net income (loss). Some of the limitations of adjusted EBITDA include that it does not reflect the impact of working capital requirements or capital expenditures and it is not a universally consistent calculation among companies in our industry, which limits its usefulness as a comparative measure. We reconcile adjusted EBITDA to net loss, the most directly comparable GAAP measure, for the periods indicated below: Three Months Ended September 30, Nine Months Ended September 30, ($ in thousands) 2021 2020 2021 2020 Net loss $ (30,047) $ (42,878) $ (372,925) $ (141,437) Non-GAAP adjustments: Interest expense – corporate borrowings (1) 1,366 4,346 7,752 8,849 Income tax expense (benefit) (2) 181 192 1,202 (99,519) Depreciation and amortization (3) 24,075 24,676 75,041 44,346 Stock-based expense 72,681 26,551 162,289 70,689 Transaction-related expense (4) 1,221 297 24,580 9,161 Fair value changes in warrant liabilities (5) (64,405) 4,353 96,504 6,371 Servicing rights – change in valuation inputs or assumptions (6) (409) 4,671 11,924 16,332 Residual interests classified as debt – change in valuation inputs or assumptions (7) 5,593 11,301 19,261 28,815 Total adjustments 40,303 76,387 398,553 85,044 Adjusted EBITDA $ 10,256 $ 33,509 $ 25,628 $ (56,393) ___________________ (1) Our adjusted EBITDA measure adjusts for corporate borrowing-based interest expense, which primarily includes interest on our revolving credit facility and the seller note issued in connection with our acquisition of Galileo (for periods prior to the quarter ended March 31, 2021), as these expenses are a function of our capital structure. Our adjusted EBITDA measure does not adjust for interest expense on warehouse facilities and securitization debt, which are recorded within interest expense — securitizations and warehouses in the accompanying consolidated statements of operations and comprehensive income (loss), as these interest expenses are direct operating expenses driven by loan origination and sales activity. Additionally, our adjusted EBITDA measure does not adjust for interest expense on SoFi Money deposits or interest expense on our finance lease liability in connection with SoFi Stadium, which are recorded within interest expense — other , as these interest expenses are direct operating expenses driven by SoFi Money deposits and finance leases, respectively. The decreases in interest expense for the three- and nine-month 2021 periods compared to 2020 were primarily related to interest expense on the Galileo seller note, which was issued in May 2020 and repaid in February 2021. Revolving credit facility interest expense remained 88 TABLE OF CONTENTS relatively consistent for the three-month periods, primarily due to identical outstanding debt and relatively consistent interest rates, and decreased slightly in the nine-month 2021 period compared to 2020, as the higher average balance in the 2021 period as a result of the Galileo acquisition was more than offset by a decrease in LIBOR. (2) The significant change in our income tax position for the nine-month 2021 period relative to the corresponding period in 2020 was primarily due to a partial release of our valuation allowance in the second quarter of 2020 in connection with deferred tax liabilities resulting from intangible assets acquired from Galileo in May 2020. See Note 13 to the Notes to Unaudited Condensed Consolidated Financial Statements for additional information. (3) Depreciation and amortization expense for the three months ended September 30, 2021 decreased moderately compared to the same period in 2020 due primarily to the acceleration of core banking infrastructure amortization beginning in the second quarter of 2020 in connection with the acquisition of Galileo that did not fully impact the third quarter of 2021, partially offset by increases in amortization of purchased and internally-developed software and depreciation related to SoFi Stadium fixed assets and computer and related hardware. Depreciation and amortization expense for the nine months ended September 30, 2021 increased compared to the same period in 2020 primarily due to increases in amortization of intangible assets recognized during the second quarter of 2020 associated with the Galileo and 8 Limited acquisitions, amortization of purchased and internally-developed software, and depreciation related to SoFi Stadium fixed assets and computer and related hardware, partially offset by a decrease related to the acceleration of core banking infrastructure amortization. (4) During the three months ended September 30, 2021, transaction-related expenses were primarily incurred for an exploratory acquisition process. Transaction-related expenses for the nine months ended September 30, 2021 also included the special payment to the Series 1 preferred stockholders in conjunction with the Business Combination, as well as financial advisory and professional services costs associated with our pending purchase of Golden Pacific Bancorp, Inc. During the three and nine months ended September 30, 2020, transaction-related expenses included certain costs, such as financial advisory and professional services costs, associated with our acquisitions of Galileo and 8 Limited. (5) Our adjusted EBITDA measure excludes the non-cash fair value changes in warrants accounted for as liabilities, which are measured at fair value through earnings. The amounts in the three- and nine-month 2020 periods and a portion of the nine-month 2021 period related to changes in the fair value of Series H warrants issued by Social Finance in 2019 in connection with certain redeemable preferred stock issuances. We did not measure the Series H warrants at fair value subsequent to May 28, 2021 in conjunction with the Business Combination, as they were reclassified into permanent equity. In addition, in conjunction with the Business Combination, SoFi Technologies assumed certain common stock warrants (“SoFi Technologies warrants”) that are accounted for as liabilities and measured at fair value on a recurring basis. The amount in the three-month 2021 period and a portion of the nine-month 2021 period relate to the SoFi Technologies warrants. The fair value of the SoFi Technologies warrants is based on the closing price of ticker SOFIW and, therefore, fluctuates based on market activity. See Note 8 and Note 10 to the Notes to Unaudited Condensed Consolidated Financial Statements for additional information on these classes of warrants. (6) Reflects changes in fair value inputs and assumptions, including market servicing costs, conditional prepayment and default rates and discount rates. This non-cash change is unrealized during the period and, therefore, has no impact on our cash flows from operations. As such, these positive and negative changes in fair value attributable to assumption changes are adjusted out of net loss to provide management and financial users with better visibility into the earnings available to finance our operations. (7) Reflects changes in fair value inputs and assumptions, including conditional prepayment and default rates and discount rates. When third parties finance our consolidated VIEs through purchasing residual interests, we receive proceeds at the time of the securitization close and, thereafter, pass along contractual cash flows to the residual interest owner. These obligations are measured at fair value on a recurring basis, which has no impact on our initial financing proceeds, our future obligations to the residual interest owner (because future residual interest claims are limited to contractual securitization collateral cash flows), or the general operations of our business. As such, these positive and negative non-cash changes in fair value attributable to assumption changes are adjusted out of net loss to provide management and financial users with better visibility into the earnings available to finance our operations. We reconcile adjusted EBITDA to net loss, the most directly comparable GAAP measure, for the quarterly periods indicated below: Quarter Ended ($ in thousands) September 30, 2021 June 30, 2021 March 31, 2021 December 31, 2020 September 30, 2020 Net loss $ (30,047) $ (165,314) $ (177,564) $ (82,616) $ (42,878) Non-GAAP adjustments: Interest expense – corporate borrowings 1,366 1,378 5,008 19,125 4,346 Income tax expense (benefit) 181 (78) 1,099 (4,949) 192 Depreciation and amortization 24,075 24,989 25,977 25,486 24,676 Stock-based expense 72,681 52,154 37,454 30,089 26,551 Transaction-related expenses 1,221 21,181 2,178 — 297 Fair value changes in warrant liabilities (64,405) 70,989 89,920 14,154 4,353 Servicing rights – change in valuation inputs or assumptions (409) 224 12,109 1,127 4,671 Residual interests classified as debt – change in valuation inputs or assumptions 5,593 5,717 7,951 9,401 11,301 Total adjustments 40,303 176,554 181,696 94,433 76,387 Adjusted EBITDA $ 10,256 $ 11,240 $ 4,132 $ 11,817 $ 33,509 89 TABLE OF CONTENTS Key Business Metrics The table below presents the key business metrics that management uses to evaluate our business, measure our performance, identify trends and make strategic decisions. September 30, 2021 September 30, 2020 2021 vs 2020 % Change Members 2,937,379 1,500,576 96 % Total Products 4,267,665 2,052,933 108 % Lending Total Products 1,030,882 892,934 15 % Financial Services Total Products 3,236,783 1,159,999 179 % Technology Platform Total Accounts 88,811,022 49,276,594 80 % See “— Summary Results by Segment” for additional metrics we review at the segment level. Members We refer to our customers as “members”, as defined in “— Business Overview” . We view members as an indication not only of the size and a measurement of growth of our business, but also as a measure of the significant value of the data we have collected over time. The data we collect from our members helps us to, among other things: (i) assess loan life performance data on each loan in our ecosystem, which can inform risk-based interest rates that we can offer our members, (ii) understand our members’ spending behavior to identify and suggest other products we offer that may align with the members’ financial needs; and (iii) enhance our opportunities to sell additional products to our members, as our members represent a vital source of marketing opportunities. When we provide additional products to members, it helps improve our unit economics per member, as we save on marketing costs we would otherwise incur to attract new members. It also increases the lifetime value of an individual member. This in turn enhances our Financial Services Productivity Loop. Member growth is generally an indicator of future revenue, but is not directly correlated with revenues, since not all members who sign up for one of our products fully utilize or continue to use our products, and not all of our products (such as our complementary product, SoFi Relay) provide direct sources of revenue. Total Products Total products refers to the aggregate number of lending and financial services products that our members have selected on our platform since our inception through the reporting date, whether or not the members are still registered for such products. In our Lending segment, total products refers to the number of home loans, personal loans and student loans that have been originated through our platform through the reporting date, whether or not such loans have been paid off. If a member has multiple loan products of the same loan product type, such as two personal loans, that is counted as a single product. However, if a member has multiple loan products across loan product types, such as one personal loan and one home loan, that is counted as two products. In our Financial Services segment, total products refers to the number of SoFi Money accounts, SoFi Invest accounts, SoFi Credit Card accounts (including accounts with a zero dollar balance at the reporting date), SoFi At Work accounts and SoFi Relay accounts (with either credit score monitoring enabled or external linked accounts) that have been opened through our platform through the reporting date. Our SoFi Invest service is composed of three products: active investing accounts, robo-advisory accounts and digital asset accounts. Our members can select any one or combination of the three types of SoFi Invest products. If a member has multiple SoFi Invest products of the same account type, such as two active investing accounts, that is counted as a single product. However, if a member has multiple SoFi Invest products across account types, such as one active investing account and one robo-advisory account, those separate account types are considered separate products. Total products is a primary indicator of the size and reach of our Lending and Financial Services segments. Management relies on total products metrics to understand the effectiveness of our member acquisition efforts and to gauge the propensity for members to use more than one product. As of September 30, 2021, we had 4,267,665 total products. 90 TABLE OF CONTENTS Products In Thousands Total lending products were composed of the following as of the dates indicated: Lending Products September 30, 2021 September 30, 2020 Variance % Change Home loans 21,318 12,174 9,144 75 % Personal loans 578,772 488,546 90,226 18 % Student loans 430,792 392,214 38,578 10 % Total lending products 1,030,882 892,934 137,948 15 % Total financial services products were composed of the following as of the dates indicated: Financial Services Products September 30, 2021 September 30, 2020 Variance % Change Money 1,161,322 417,613 743,709 178 % Invest 1,233,527 415,718 817,809 197 % Credit Card 65,595 261 65,334 n/m Relay 749,972 318,384 431,588 136 % At Work 26,367 8,023 18,344 229 % Total financial services products 3,236,783 1,159,999 2,076,784 179 % Technology Platform Total Accounts In our Technology Platform segment, total accounts refers to the number of open accounts at Galileo as of the reporting date, excluding SoFi accounts. We exclude SoFi accounts because revenue generated by Galileo from the SoFi relationship is eliminated in consolidation. Total accounts is a primary indicator of the accounts dependent upon Galileo’s technology platform to use virtual card products, virtual wallets, make peer-to-peer and bank-to-bank transfers, receive early paychecks, separate savings from spending balances, make debit transactions and rely upon real-time authorizations, all of which result in technology platform fees for the Technology Platform segment. Key Factors Affecting Operating Results Our future operating results and cash flows are dependent upon a number of opportunities, challenges and other factors, including our loan origination volume, financial services products and member activity on our platform, growth in Galileo accounts, competition and industry trends, general economic conditions and whether or not we are able to secure a national bank charter. Origination Volume Our Lending segment is our largest segment, comprising 77% and 81% of our total net revenue during the three months ended September 30, 2021 and 2020, respectively, and 75% and 84% during the nine months ended September 30, 2021 and 91 TABLE OF CONTENTS 2020, respectively. We are dependent upon the addition of new members and new activity from existing members within our Lending segment to generate origination volume, which we believe is a contributor to Lending segment net revenue. We believe we have a high-quality loan portfolio, as indicated by our weighted average origination FICO score of 761 during the nine months ended September 30, 2021. See “— Industry Trends and General Economic Conditions ” for the impact of specific economic factors, including the COVID-19 pandemic, on origination volume. Member Growth and Activity We have invested heavily in our platform and are dependent on continued member growth, as well as our ability to generate additional revenues from our existing members using additional products and services. Member growth and activity is critical to our ability to increase our scale and earn a return on our technology and product investments. Growth in members and member activity will depend heavily on our ability to continue to offer attractive products and services at sustainable costs and our continued member acquisition and marketing efforts. Product Growth Our aim is to develop and offer a best-in-class integrated financial services platform with products that meet the broad objectives of our members and the lifecycle of their financial needs. We have invested, and continue to invest, heavily in the development, improvement and marketing of our suite of lending and financial services products and are dependent on continued growth in the number of products selected by our members, as well as our ability to build trust and reliability between our members and our platform to reinforce the effects of the Financial Services Productivity Loop. In order to deliver on our strategy, we aim to foster positive member experiences designed to lead to more products per member, leading to enhanced profitability for each additional product by lowering overall member acquisition costs. Galileo Account Growth During 2020, we acquired Galileo, which primarily provides technology platform services to financial and non-financial institutions, to enable us to diversify our business from a primarily consumer-based business to also serve enterprises that rely upon Galileo’s integrated platform as a service to serve their clients. We are dependent on growth in the number of accounts at Galileo, which is an indication of the amount of users that are dependent upon the technology platform for a variety of products and services, including virtual card products, virtual wallets, peer-to-peer and bank-to-bank transfers, early paychecks and relying on real-time authorizations, all of which generate revenues for Galileo. Competition We face competition from several financial services institutions given our status as a diversified financial services provider. In each of our reportable segments, we may compete with more established financial institutions, some of which have more financial resources than we do. We compete at multiple levels, including competition among other personal loan, student loan, credit card and residential mortgage lenders, competition for deposits in our SoFi Money product from traditional banks and other non-bank lenders, competition for investment accounts in our SoFi Invest product from other brokerage firms, including those based on online or mobile platforms, competition for subscribers to our financial services content, and competition with other technology platforms for the enterprise services we provide. Some of our competitors may at times seek to increase their market share by undercutting pricing terms prevalent in that market, which could adversely affect our market share for any of our products and services or require us to incur higher member acquisition costs. Furthermore, our competitors could offer relatively attractive benefits to our current members, which could limit members using more than one product. Industry Trends and General Economic Conditions Our results of operations have historically been relatively resilient to economic downturns but in the future may be impacted by the relative strength of the overall economy and its effect on unemployment, asset markets and consumer spending. As general economic conditions improve or deteriorate, the amount of consumer disposable income tends to fluctuate, which in turn impacts consumer spending levels and the willingness of consumers to take out loans to finance purchases or invest in financial assets. Specific economic factors, such as interest rate levels, changes in monetary and related policies, unemployment rates, market volatility and consumer confidence also influence consumer spending, saving, investing and borrowing patterns. Increased focus by policymakers and the new presidential administration on outstanding student loans has led to discussions of potential legislative and regulatory actions, among other possible steps, to reduce outstanding balances of loans, or cancel loans at a significant scale, including the potential forgiveness of federal student debt. Such actions resulting in forgiveness or cancellation at a meaningful scale would likely have an adverse impact on our results of operations and overall business. Additionally, our business has been, and may continue to be, impacted by some of the national measures taken to counteract the economic impact of the COVID-19 pandemic. For example, the CARES Act and subsequent extensions of 92 TABLE OF CONTENTS certain hardship provisions led to decreased demand for our student loan refinancing products prior to emerging signs of economic recovery from the pandemic. The Federal Reserve’s actions to reduce interest rates to near-zero benchmark levels have led to increased demand for home loan refinancing and we believe have increased the attractiveness of our SoFi Invest product, as members look for alternative ways to earn higher returns on their cash. Conversely, these lower benchmark rates have reduced deposit interest rates we can offer on our SoFi Money product, which we believe has adversely impacted demand for the product. National Bank Charter A key element of our long-term strategy is to secure a national bank charter. In March 2021, we entered into an Agreement and Plan of Merger to acquire Golden Pacific, a registered bank holding company, and its wholly owned subsidiary Golden Pacific Bank, a national banking association. See “Business Overview — National Bank Charter”. If we are successful in securing a national bank charter through the proposed acquisition, we expect to incur additional costs in our operation of the bank primarily associated with headcount, technology infrastructure, governance, compliance and risk management, marketing, and other general and administrative expenses. The key expected financial benefits to us of obtaining a national bank charter include: (i) lowering our cost to fund loans, as we can utilize SoFi Money deposits to fund loans, which have a lower borrowing cost of funds than our current financing model, (ii) holding loans on our consolidated balance sheet for longer periods, thereby enabling us to earn interest on these loans for a longer period and increasing our net interest income margin, and (iii) supporting origination volume growth by providing an alternative financing option, while also maintaining our warehouse capacity. There can be no guarantee that we will be able to secure a national bank charter, either through the proposed acquisition or through the formation of a de novo national bank or, if we do, that we will realize the anticipated benefits. See Part II, Item 1A “ Risk Factors ” . Key Components of Results of Operations Interest Income Interest income is predominantly driven by loan origination volume, prevailing interest rates that we receive on the loans we make and the amount of time we hold loans on our consolidated balance sheet. Securitizations interest income is driven by our securitization-related investments in bonds and residual interest positions, which are required under securitization risk retention rules. See Note 1 to the Notes to Unaudited Condensed Consolidated Financial Statements for additional information on our securitization-related investments. Beginning in the third quarter of 2021, other interest income also includes the interest earned on investments in AFS debt securities as well as amortization of premiums and discounts and other basis adjustments associated with the investments. Moreover, we earn other interest income on excess corporate cash balances and SoFi Money member balances. Related party interest income was derived from notes extended to Apex and one of our stockholders, and was not core to our operations. We received full repayment of all related party notes as of September 30, 2021. Interest Expense Interest expense primarily includes interest we incur under our warehouse facilities, inclusive of the amortization of debt issuance costs, and under our securitization debt, inclusive of debt issuance costs, premiums and discounts. We incur securitization-related interest expense when securitization transfers do not qualify as true sales pursuant to ASC 810, Consolidation . Securitization-related interest expense fluctuates depending on the level of our securitization activity, market rates and whether and how much such activity results in true sale treatment. We also incur interest expense related to our revolving credit facility and on the seller note issued in connection with our acquisition of Galileo in May 2020, which was fully repaid in February 2021, as well as on the other financings assumed in the acquisition, which were repaid in July 2021. For our residual interests classified as debt, we recognize interest expense over the expected life using the effective yield method, which represents a portion of the overall fair value change in the residual interests classified as debt. On a quarterly basis, we reevaluate the cash flow estimates to determine if a change to the accretable yield is required on a prospective basis, which is a reclassification between two income statement line items, and therefore has no net impact on earnings. We also pay interest income to our members who have SoFi Money account balances, which is interest expense to us. Interest expense is dependent on market interest rates, such as LIBOR, interest rate spreads versus benchmark rates, the amount of warehouse capacity we can access, warehouse advance rates and the amount of loans we ultimately pledge to our warehouse facilities. Finally, we incur interest on our finance lease liabilities associated with SoFi Stadium, which relate to certain physical signage within the stadium. Our interest expense has historically fluctuated due to changes in the interest rate environment and we expect it will continue to fluctuate in future periods. 93 TABLE OF CONTENTS Noninterest Income Noninterest income primarily consists of: (i) fair value changes in loans while we hold them on our consolidated balance sheet; (ii) gains on sales of loans transferred into the securitization or whole loan sale channels; (iii) the income we receive from our loan servicing activities, as well as the assumption of servicing rights from third parties; (iv) fair value changes related to our securitization activities; (v) revenue recognized pursuant to ASC 606, Revenue from Contracts with Customers , which primarily relates to our Technology Platform fees; (vi) gains and losses on derivative instruments, as well as student loan commitments; and (vii) realized gains and losses on investments in AFS debt securities. When we originate a loan, we generally expect that we will sell the loan for more than its par value, which will result in positive loan origination and sales results. Moreover, noninterest income — loan origination and sales also includes recognized servicing assets at the time of a loan sale. The subsequent measurement of our servicing assets at fair value, as well as the initial and ongoing measurement of servicing rights assumed from third parties, impact noninterest income — servicing in our consolidated statements of operations and comprehensive income (loss). When we sell a loan into a securitization trust that qualifies for true sale accounting, the gain or loss on sale is recorded within noninterest income — loan origination and sales . Noninterest income — securitizations is impacted by fair value changes in securitization loan collateral, which is impacted by the change in fair value of the loan collateral from the previous period end, residual interests classified as debt and our securitization investments associated with our continuing interest in the securitization subsequent to the sale. Our revenue recognized in accordance with ASC 606 is attributable to our Financial Services and Technology Platform segments and has grown due to our acquisition of Galileo during 2020, primarily in the form of Technology Platform fees, as well as growth generated in our Financial Services segment. Noninterest Expense Noninterest expense primarily relates to the following categories of expenses: (i) technology and product development, (ii) sales and marketing, (iii) cost of operations, and (iv) general and administrative. Certain costs are included within each of these line items, such as compensation and benefits-related expense (inclusive of stock-based compensation expense), professional services, depreciation and amortization and occupancy-related costs. We allocate certain costs to each of these four categories based on department-level headcounts. We generally expect the expenses within each such category to increase in absolute dollars as our business continues to grow. Noninterest expense also includes the fair value changes in warrant liabilities (within general and administrative), as well as the provision for credit losses, which relates primarily to our credit card product within the Financial Services segment. Directly Attributable Expenses As presented within “— Summary Results by Segment ”, in our determination of the contribution profit (loss) for our Lending, Financial Services and Technology Platform segments, we allocate certain expenses that are directly attributable to the corresponding segment. Directly attributable expenses primarily include compensation and benefits and sales and marketing, inclusive of member incentives, and vary based on the amount of activity within each segment. Directly attributable expenses also primarily include loan origination and servicing expenses, professional services, product fulfillment, lead generation and occupancy-related costs. Expenses are attributed to the reportable segments using either direct costs of the segment or labor costs that can be attributed based upon the allocation of employee time for individual products. 94 TABLE OF CONTENTS Results of Operations The following table sets forth condensed consolidated statements of income data for the periods indicated: Three Months Ended September 30, 2021 vs 2020 % Change Nine Months Ended September 30, 2021 vs 2020 % Change ($ in thousands) 2021 2020 2021 2020 Interest income Loans $ 89,844 $ 81,130 11 % $ 246,743 $ 244,731 1 % Securitizations 2,999 5,337 (44) % 11,260 18,898 (40) % Related party notes — 778 (100) % 211 2,709 (92) % Other 758 872 (13) % 2,023 5,126 (61) % Total interest income 93,601 88,117 6 % 260,237 271,464 (4) % Interest expense Securitizations and warehouses 19,360 34,280 (44) % 75,418 121,481 (38) % Corporate borrowings 1,366 4,345 (69) % 7,752 8,849 (12) % Other 500 280 79 % 1,400 2,026 (31) % Total interest expense 21,226 38,905 (45) % 84,570 132,356 (36) % Net interest income 72,375 49,212 47 % 175,667 139,108 26 % Noninterest income Loan origination and sales 142,147 103,869 37 % 362,211 271,082 34 % Securitizations (4,551) 12,752 (136) % (6,613) (63,002) (90) % Servicing 458 (6,637) (107) % (11,875) (18,298) (35) % Technology Platform fees 49,951 35,405 41 % 140,560 51,607 172 % Other 11,626 6,186 88 % 39,314 13,544 190 % Total noninterest income 199,631 151,575 32 % 523,597 254,933 105 % Total net revenue 272,006 200,787 35 % 699,264 394,041 77 % Noninterest expense Technology and product development 74,434 55,428 34 % 209,771 143,432 46 % Sales and marketing 114,985 77,458 48 % 297,170 204,395 45 % Cost of operations 69,591 51,821 34 % 187,785 125,886 49 % General and administrative 40,461 58,766 (31) % 373,374 161,284 132 % Provision for credit losses 2,401 — n/m 2,887 — n/m Total noninterest expense 301,872 243,473 24 % 1,070,987 634,997 69 % Loss before income taxes (29,866) (42,686) (30) % (371,723) (240,956) 54 % Income tax (expense) benefit (181) (192) (6) % (1,202) 99,519 (101) % Net loss $ (30,047) $ (42,878) (30) % $ (372,925) $ (141,437) 164 % Other comprehensive income (loss) Unrealized losses on available-for-sale securities, net $ (150) $ — n/m $ (150) $ — n/m Foreign currency translation adjustments, net 204 24 750 % (142) (19) 647 % Total other comprehensive income (loss) 54 24 125 % (292) (19) n/m Comprehensive loss $ (29,993) $ (42,854) (30) % $ (373,217) $ (141,456) 164 % 95 TABLE OF CONTENTS Interest Income The following table presents the components of our total interest income for the periods indicated: Three Months Ended September 30, 2021 vs 2020 % Change Nine Months Ended September 30, 2021 vs 2020 % Change ($ in thousands) 2021 2020 2021 2020 Loans $ 89,844 $ 81,130 11 % $ 246,743 $ 244,731 1 % Securitizations 2,999 5,337 (44) % 11,260 18,898 (40) % Related party notes — 778 (100) % 211 2,709 (92) % Other 758 872 (13) % 2,023 5,126 (61) % Total interest income $ 93,601 $ 88,117 6 % $ 260,237 $ 271,464 (4) % Total interest income increased by $5.5 million, or 6%, for the three months ended September 30, 2021 compared to the three months ended September 30, 2020, and decreased by $11.2 million, or 4%, for the nine months ended September 30, 2021 compared to the nine months ended September 30, 2020 due to the following: Three Months — Loans. Loans interest income increased by $8.7 million, or 11%, for the three months ended September 30, 2021 compared to the same period in 2020 primarily driven by an increase in non-securitization personal loan and student loan interest income of $23.2 million, which was primarily a function of an increase in aggregate average balances of $1.1 billion (37%) primarily attributable to longer loan holding periods. These increases were offset by a decline of $16.3 million in interest income from consolidated personal loan and student loan securitizations, which were impacted by a $773.4 million (44%) decline in aggregate average balances attributable to payment activity and the deconsolidation of a VIE in July 2020. The remaining increase in interest income primarily included $1.1 million attributable to credit card loans, which launched in the third quarter of 2020, and $0.5 million attributable to home loans. Nine Months — Loans. Loans interest income increased by $2.0 million, or 1%, for the nine months ended September 30, 2021 compared to the same period in 2020 primarily driven by increases in non-securitization personal loan and student loan interest income of $52.5 million and $14.5 million, respectively, which were primarily a function of increases in average balances for personal loans and student loans of $646.2 million (85%) and $606.5 million (41%), respectively, attributable to longer loan holding periods. This increase was offset by a decline of $67.7 million in interest income from consolidated personal loan and student loan securitizations, which were impacted by a $1.1 billion (49%) decline in average balances attributable to payment activity and the deconsolidation of two VIEs in March 2020 and one VIE in July 2020. The remaining increase in interest income primarily included $1.7 million attributable to credit card loans, which launched in the third quarter of 2020, and $0.8 million attributable to home loans. Three Months — Securitizations. Securitizations interest income decreased by $2.3 million, or 44%, for the three months ended September 30, 2021 compared to the same period in 2020, which was primarily attributable to decreases in residual investment interest income of $1.0 million and asset-backed bonds of $1.3 million related to decreases in average securitization investment balances period over period. Nine Months — Securitizations. Securitizations interest income decreased by $7.6 million, or 40%, for the nine months ended September 30, 2021 compared to the same period in 2020, which was attributable to decreases in residual investment interest income of $2.9 million and asset-backed bonds of $3.3 million related to decreases in average securitization investment balances period over period, and a decrease in securitization float interest income of $1.4 million related to decreases in average securitization loan balances and a decline in interest rates period over period. Three Months — Related Party Notes. We did not have any related party notes interest income in the three-month 2021 period. Related party notes interest income in the three-month 2020 period of $0.8 million was attributable to a stockholder loan, which was fully settled in the fourth quarter of 2020 and to our loans to Apex, which were fully settled in February 2021. See Note 14 to the Notes to Unaudited Condensed Consolidated Financial Statements for additional information on our related party notes. Nine Months — Related Party Notes. Related party notes interest income decreased by $2.5 million, or 92%, for the nine months ended September 30, 2021 compared to the same period in 2020 due to the absence of interest income on a stockholder loan and a decrease in interest income related to our loans to Apex, as the loans were fully settled in February 2021. Three Months — Other. Other interest income decreased by $0.1 million, or 13%, for the three months ended September 30, 2021 compared to the same period in 2020, of which $0.2 million was primarily due to interest rate decreases period over period. The interest rate decreases impacted the interest income we earned on both our interest-bearing cash and 96 TABLE OF CONTENTS cash equivalents balances and Member Bank deposits despite higher average balances in the 2021 period. This variance was partially offset by interest income of $0.1 million earned on our investments in AFS debt securities, which we established during the third quarter of 2021. Nine Months — Other. Other interest income decreased by $3.1 million, or 61%, for the nine months ended September 30, 2021 compared to the same period in 2020 primarily due to interest rate decreases period over period that impacted the interest income we earned on both our interest-bearing cash and cash equivalents balances and Member Bank deposits, despite higher average balances in the 2021 period. This variance was partially offset by interest income of $0.1 million earned on our investments in AFS debt securities in the 2021 period. Interest Expense The following table presents the components of our total interest expense for the periods indicated: Three Months Ended September 30, 2021 vs 2020 % Change Nine Months Ended September 30, 2021 vs 2020 % Change ($ in thousands) 2021 2020 2021 2020 Securitizations and warehouses $ 19,360 $ 34,280 (44) % $ 75,418 $ 121,481 (38) % Corporate borrowings 1,366 4,345 (69) % 7,752 8,849 (12) % Other 500 280 79 % 1,400 2,026 (31) % Total interest expense $ 21,226 $ 38,905 (45) % $ 84,570 $ 132,356 (36) % Total interest expense decreased by $17.7 million, or 45%, for the three months ended September 30, 2021 compared to the three months ended September 30, 2020, and decreased by $47.8 million, or 36%, for the nine months ended September 30, 2021 compared to the nine months ended September 30, 2020, due to the following: Securitizations and Warehouses. The following tables present the components of securitizations and warehouses interest expense and other pertinent information. Three Months Ended September 30, 2021 vs 2020 % Change Nine Months Ended September 30, 2021 vs 2020 % Change ($ in thousands) 2021 2020 2021 2020 Securitization debt interest expense $ 8,186 $ 14,346 (43) % $ 28,548 $ 53,429 (47) % Warehouse debt interest expense 6,360 11,475 (45) % 26,261 39,078 (33) % Residual interests classified as debt interest expense 2,036 2,711 (25) % 6,381 9,994 (36) % Debt issuance cost interest expense (1) 2,778 5,748 (52) % 14,228 18,980 (25) % Securitizations and warehouses interest expense $ 19,360 $ 34,280 (44) % $ 75,418 $ 121,481 (38) % ___________________ (1) Debt issuance cost interest expense excludes the acceleration of debt issuance costs of $571 and $4,158 during the three and nine months ended September 30, 2020, respectively, associated with the deconsolidation of VIEs, which is reported within noninterest income — securitizations in the consolidated statements of operations and comprehensive income (loss). Three Months Ended September 30, 2021 vs 2020 % Change Nine Months Ended September 30, 2021 vs 2020 % Change ($ in thousands) 2021 2020 2021 2020 Average debt balances (1) Securitization debt $ 822,364 $ 1,529,236 (46) % $ 970,573 $ 1,953,343 (50) % Warehouse facilities 1,846,473 2,459,028 (25) % 2,195,743 2,085,891 5 % Weighted average interest rates (1)(2) Securitization debt (3) 4.0 % 3.8 % n/m 3.9 % 3.6 % n/m Warehouse facilities (3) 1.4 % 1.9 % n/m 1.6 % 2.5 % n/m ___________________ (1) Table excludes residual interests classified as debt, as interest expense is dependent on the timing and extent of securitization loan cash flows and, therefore, a derived weighted average interest rate using the methodology in the table herein is not meaningful for the purposes of understanding the change in residual interests classified as debt related interest expense. (2) Calculated as annualized interest expense divided by average debt balance for the respective debt category. (3) Interest rates on securitization debt and warehouse facilities exclude the effect of debt issuance cost interest expense. 97 TABLE OF CONTENTS Securitizations and warehouses interest expense decreased by $14.9 million, or 44%, for the three months ended September 30, 2021 compared to the three months ended September 30, 2020, and decreased by $46.1 million, or 38%, for the nine months ended September 30, 2021 compared to the nine months ended September 30, 2020, driven by the following: • Securitization debt interest expense (exclusive of debt issuance and discount amortization) decreased by $6.2 million (43%) for the three months ended September 30, 2021 compared to the same period in 2020, and decreased by $24.9 million (47%) for the nine months ended September 30, 2021 compared to the same period in 2020 primarily driven by declines in average balance of 46% and 50%, respectively, which were attributable to payment activity and the deconsolidation of securitizations discussed within the “interest income” section. The impact of the period-over-period decrease in one-month LIBOR, which primarily affects our student loan securitization debt, was more than offset by payoffs of debt with lower interest rates, raising the overall weighted average interest rate. • Warehouse debt interest expense (exclusive of debt issuance amortization) decreased by $5.1 million for the three months ended September 30, 2021 compared to the same period in 2020, and decreased by $12.8 million for the nine months ended September 30, 2021 compared to the same period in 2020, which were primarily related to decreases in one- and three-month LIBOR period over period and lower warehouse facility interest rate spreads, as well as lower average warehouse debt balances outstanding for the three-month 2021 period. The nine-month period decrease was partially offset by higher average warehouse debt balances outstanding in the 2021 period. • Residual interests classified as debt interest expense decreased by $0.7 million for the three months ended September 30, 2021 compared to the same period in 2020, and decreased by $3.6 million for the nine months ended September 30, 2021 compared to the same period in 2020, which was correlated with a lower balance of residual interests classified as debt during the 2021 periods, a significant driver of which was the deconsolidation of two securitizations in March 2020 and one securitization in July 2020. • Debt issuance cost interest expense decreased by $3.0 million for the three months ended September 30, 2021 compared to 2020, and decreased by $4.8 million for the nine months ended September 30, 2021 compared to the same period in 2020. The variances were primarily driven by a lower run rate on our issuance cost amortization related to our loan warehouse facilities, as we extended certain loan warehouse facilities, which had the effect of lowering the quarterly debt issuance cost amortization. The variance for the nine-month period was also impacted by a decrease in the acceleration of debt issuance costs in the 2021 period compared to the same period in 2020. Corporate Borrowings. Corporate borrowings interest expense decreased by $3.0 million, or 69%, for the three months ended September 30, 2021 compared to the same period in 2020, and decreased by $1.1 million, or 12%, for the nine months ended September 30, 2021 compared to the same period in 2020, primarily due to the following: • Interest expense incurred on the Galileo seller note decreased by $3.0 million for the three months ended September 30, 2021 compared to the same period in 2020, and decreased by $0.9 million for the nine months ended September 30, 2021 compared to the same period in 2020. For the nine-month 2021 period, we incurred interest at the note’s stated rate prior to its repayment in February 2021. As such, we did not incur interest expense during the three-month 2021 period. For the three- and nine-month 2020 periods, we incurred imputed interest during the interest-free period. • Interest expense on the revolving credit facility was consistent for the three months ended September 30, 2021 compared to the same period in 2020, as the average balance was consistent period over period and one-month LIBOR decreased modestly. For the nine months ended September 30, 2021 relative to the same period in 2020, interest expense decreased $0.2 million, which reflected a decline in one-month LIBOR period over period, partially offset by a higher average balance in the 2021 period, as we drew $325.0 million on the facility during the second quarter of 2020. Other. Other interest expense increased by $0.2 million, or 79%, for the three months ended September 30, 2021 compared to the same period in 2020, and decreased by $0.6 million, or 31%, for the nine months ended September 30, 2021 compared to the same period in 2020. The primary contributor to other interest expense was related to our SoFi Money product, for which interest expense increased by $0.1 million and decreased by $1.0 million during the three and nine-month 2021 periods, respectively, relative to the corresponding 2020 periods. The increase in the three-month period was primarily associated with an increase in member cash balances, which was partially offset by lower weighted average interest rates 98 TABLE OF CONTENTS offered to members. The decrease in the nine-month period was primarily attributable to lower weighted average interest rates offered to members, which was partially offset by an increase in member cash balances. Noninterest Income and Net Revenue The following table presents the components of our total noninterest income, as well as total net revenue for the periods indicated: Three Months Ended September 30, 2021 vs 2020 % Change Nine Months Ended September 30, 2021 vs 2020 % Change ($ in thousands) 2021 2020 2021 2020 Loan origination and sales $ 142,147 $ 103,869 37 % $ 362,211 $ 271,082 34 % Securitizations (4,551) 12,752 (136) % (6,613) (63,002) (90) % Servicing 458 (6,637) (107) % (11,875) (18,298) (35) % Technology Platform fees 49,951 35,405 41 % 140,560 51,607 172 % Other 11,626 6,186 88 % 39,314 13,544 190 % Total noninterest income $ 199,631 $ 151,575 32 % $ 523,597 $ 254,933 105 % Total net revenue $ 272,006 $ 200,787 35 % $ 699,264 $ 394,041 77 % Total noninterest income increased by $48.1 million, or 32%, for the three months ended September 30, 2021 compared to the three months ended September 30, 2020, and increased by $268.7 million, or 105%, for the nine months ended September 30, 2021 compared to the nine months ended September 30, 2020, due to the following: Three Months — Loan Origination and Sales. Loan origination and sales increased by $38.3 million, or 37%, for the three months ended September 30, 2021 compared to the same period in 2020, which was primarily related to an increase of $69.0 million in personal loan origination and sales income. The increase was primarily attributable to higher origination volume and higher valuations on the originated loans period over period, as well as higher sales activity during the 2021 period. Additionally, to a much lesser extent, $7.2 million of the increase was related to a personal loan purchase price earn-out derivative position. The personal loan increase was partially offset by a decrease in student loan origination and sales income of $25.4 million, which was primarily due to higher pricing execution on sales in the 2020 period in relation to the carrying value at the time of sale, as well as higher fair value adjustments in the 2020 period following depressed fair values in the second quarter of 2020 amid the impacts of the CARES Act and COVID-19 pandemic, and reduced origination volume. We also had a $5.5 million period-over-period decrease in home loan originations and sales related income, net of hedges and related interest rate lock commitments (“IRLCs”). The decrease was primarily driven by an $8.1 million decrease in home loan valuations during the 2021 period relative to the 2020 period, partially offset by an increase of $4.4 million related to home loan pipeline hedge activity. Additionally, there was a decrease in IRLCs of $1.8 million, which was correlated with a decline in the home loan pipeline pricing during the 2021 period compared to an increase during the 2020 period. We also had an increase of $0.2 million in home loan origination fees period over period in conjunction with an increase in origination volume, partially offset by strategic home loan origination fee pricing initiatives. Nine Months — Loan Origination and Sales. Loan origination and sales increased by $91.1 million, or 34%, for the nine months ended September 30, 2021 compared to the same period in 2020, which was primarily related to an increase of $120.6 million in personal loan origination and sales income. The personal loan increase was primarily attributable to higher origination volume period over period, as well as higher sales activity during the 2021 period. Additionally, $7.2 million of the increase was related to a personal loan purchase price earn-out derivative position. The personal loan increase was partially offset by a decrease in student loan origination and sales income of $1.2 million, which was primarily due to lower origination volume in the 2021 period and increased fair value adjustments in the 2020 period following depressed fair values in 2020 amid the impacts of the CARES Act and COVID-19 pandemic. These student loan decreases were largely offset by our student loan economic hedging activities. Finally, loan origination and sales income was impacted by a credit default swap gain of $22.5 million in the 2020 period that did not recur. We also experienced a $2.4 million period-over-period decrease in home loan origination and sales related income, net of hedges and related IRLCs (exclusive of home loan origination fees), which was reflective of a decrease of $26.8 million associated with IRLCs that was correlated with a decline in the home loan pipeline and pricing in the 2021 period compared to significant increases in the home loan pipeline and pricing during the 2020 period. This decrease was offset by a $21.2 million increase in home loan pipeline hedges, which corresponded with a decline in home loan prices during the period. The remaining 99 TABLE OF CONTENTS increase was attributable to higher origination volume, partially offset by the impact of the aforementioned home loan price decline, which impacted sales execution and our home loan valuations. Additionally, home loan origination fees increased $3.9 million period over period in conjunction with a 54% increase in origination volume. Three Months — Securitizations. Securitizations income decreased by $17.3 million, or 136%, for the three months ended September 30, 2021 compared to the same period in 2020 primarily due to $14.9 million lower fair value i