SoFi Technologies, Inc. 10-Q

sofi-20220331 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 March 31, 2022 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 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 May 4, 2022 was 915,824,337 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 7 Notes to Unaudited Condensed Consolidated Financial Statements 9 Item 2. Management’s Discussion and Analysis of Financial Condition and Results of Operations 58 Item 3. Quantitative and Qualitative Disclosures about Market Risk 93 Item 4. Controls and Procedures 95 PART II – OTHER INFORMATION Item 1. Legal Proceedings 96 Item 1A. Risk Factors 96 Item 2. Unregistered Sales of Equity Securities and Use of Proceeds 146 Item 3. Defaults Upon Senior Securities 146 Item 4. Mine Safety Disclosures 146 Item 5. Other Information 146 Item 6. Exhibits 146 Signatures 147 Supplemental Information F-1 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. 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”. As a result of the Business Combination, which was 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. In March 2021, we entered into an agreement to acquire Golden Pacific Bancorp, Inc. (“Golden Pacific”), a bank holding company, and its wholly-owned subsidiary, Golden Pacific Bank, National Association, a national bank (the “Bank Merger”). The Bank Merger closed in February 2022, after which we became a bank holding company and renamed Golden Pacific Bank as SoFi Bank, National Association (“SoFi Bank”). In February 2022, we entered into an agreement to acquire Technisys S.A. (“Technisys”), a cloud-native digital multi-product core banking platform (the “Technisys Merger”). The Technisys Merger closed in March 2022. See Note 2 to the Notes to Unaudited Condensed Consolidated Financial Statements for information on our acquisitions. 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 are subject to risks, uncertainties, and other factors described in “Risk Factors” and elsewhere in this Quarterly Report on Form 10-Q, including among other things: • 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 respond to general economic conditions; • the effect and impact of any further extension of the federal student loan payment moratorium or any governmental actions taken to forgive student loans; • 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, deposits and other sources of capital to finance operations and growth; • the impact of general economic conditions and other macro-economic factors, such as increasing interest rates and inflationary pressures; • 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 business 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; 2 TABLE OF CONTENTS • our ability to successfully operate as a bank holding company, and to own and operate SoFi Bank; • 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 The Nasdaq Global Select Market (“Nasdaq”); • our ability to realize the anticipated benefits of the Bank Merger and the Technisys Merger and the expansion of our operations into foreign jurisdictions; • the outcome of any legal or governmental proceedings that may be instituted against us; and • the effect of and uncertainties related to the ongoing COVID-19 pandemic (including any emergence of additional variants or government responses thereto) and any continued recovery from the impact of the COVID-19 pandemic. Forward-looking statements are based on information available as of the date of this Quarterly Report on Form 10-Q and reflect current expectations, forecasts and assumptions, and involve a number of judgments, risks and uncertainties. New risks and uncertainties emerge from time to time, and it is not possible for us to predict all risks and uncertainties that could have an impact on the forward-looking statements contained in this Quarterly Report on Form 10-Q. The results, events, and circumstances reflected in the forward-looking statements may not be achieved or occur, and actual results, events, or circumstances could differ materially from those described in the forward-looking statements. 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. 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) March 31, 2022 December 31, 2021 Assets Cash and cash equivalents $ 1,325,135 $ 494,711 Restricted cash and restricted cash equivalents (1) 377,077 273,726 Investments in available-for-sale securities (amortized cost of $ 205,114 and $ 195,796 , respectively) 199,840 194,907 Loans, less allowance for credit losses on loans at amortized cost of $ 17,866 and $ 7,037 , respectively (1)(2) 7,222,001 6,068,884 Servicing rights 173,505 168,259 Securitization investments 325,370 374,688 Equity method investments — 19,739 Property, equipment and software 131,537 111,873 Goodwill 1,615,694 898,527 Intangible assets 505,526 284,579 Operating lease right-of-use assets 112,400 115,191 Other assets, less allowance for credit losses of $ 1,652 and $ 2,292 , respectively 258,491 171,242 Total assets $ 12,246,576 $ 9,176,326 Liabilities, temporary equity and permanent equity Liabilities: Deposits: Noninterest-bearing deposits $ 95,598 $ — Interest-bearing deposits 1,060,324 — Total deposits 1,155,922 — Accounts payable, accruals and other liabilities (1) 437,319 298,164 Operating lease liabilities 135,955 138,794 Debt (1) 4,916,175 3,947,983 Residual interests classified as debt (1) 70,532 93,682 Total liabilities 6,715,903 4,478,623 Commitments, guarantees, concentrations and contingencies (Note 15) Temporary equity (3) : Redeemable preferred stock, $ 0.00 par value: 100,000,000 shares authorized; 3,234,000 shares issued and outstanding as of March 31, 2022 and December 31, 2021 320,374 320,374 Permanent equity: Common stock, $ 0.00 par value: 3,100,000,000 and 3,100,000,000 shares authorized; 915,673,855 and 828,154,462 shares issued and outstanding as of March 31, 2022 and December 31, 2021, respectively (4) 91 83 Additional paid-in capital 6,509,643 5,561,831 Accumulated other comprehensive loss ( 5,964 ) ( 1,471 ) Accumulated deficit ( 1,293,471 ) ( 1,183,114 ) Total permanent equity 5,210,299 4,377,329 Total liabilities, temporary equity and permanent equity $ 12,246,576 $ 9,176,326 ______________ (1) Financial statement line items include amounts in consolidated variable interest entities (“VIEs”). See Note 5. (2) As of March 31, 2022 and December 31, 2021, includes loans held for sale measured at fair value of $ 7,002,885 and $ 5,952,972 , respectively. (3) Redemption amounts are $ 323,400 as of March 31, 2022 and December 31, 2021. (4) Includes 100,000,000 non-voting common shares authorized and no non-voting common shares issued and outstanding as of March 31, 2022 and December 31, 2021. 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 March 31, 2022 2021 Interest income Loans $ 114,385 $ 77,221 Securitizations 2,758 4,467 Related party notes — 211 Other 1,269 629 Total interest income 118,412 82,528 Interest expense Securitizations and warehouses 19,906 29,808 Deposits 431 — Corporate borrowings 2,649 5,008 Other 493 432 Total interest expense 23,479 35,248 Net interest income 94,933 47,280 Noninterest income Loan origination and sales 157,704 110,345 Securitizations ( 11,281 ) ( 2,036 ) Servicing 12,236 ( 12,109 ) Technology products and solutions 59,857 45,659 Other 16,895 6,845 Total noninterest income 235,411 148,704 Total net revenue 330,344 195,984 Noninterest expense Technology and product development 81,908 65,948 Sales and marketing 138,138 87,234 Cost of operations 70,437 57,570 General and administrative 136,505 161,697 Provision for credit losses 12,961 — Total noninterest expense 439,949 372,449 Loss before income taxes ( 109,605 ) ( 176,465 ) Income tax expense ( 752 ) ( 1,099 ) Net loss $ ( 110,357 ) $ ( 177,564 ) Other comprehensive loss Unrealized losses on available-for-sale securities, net ( 4,455 ) — Foreign currency translation adjustments, net ( 38 ) ( 80 ) Total other comprehensive loss ( 4,493 ) ( 80 ) Comprehensive loss $ ( 114,850 ) $ ( 177,644 ) Loss per share (Note 16) Loss per share – basic $ ( 0.14 ) $ ( 1.61 ) Loss per share – diluted $ ( 0.14 ) $ ( 1.61 ) Weighted average common stock outstanding – basic 852,853,596 116,152,593 Weighted average common stock outstanding – diluted 852,853,596 116,152,593 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 January 1, 2022 828,154,462 $ 83 $ 5,561,831 $ ( 1,471 ) $ ( 1,183,114 ) $ 4,377,329 3,234,000 $ 320,374 Share-based compensation expense — — 81,617 — — 81,617 — — Vesting of RSUs 4,951,204 — — — — — — — Stock withheld related to taxes on vested RSUs ( 343,698 ) — ( 3,593 ) — — ( 3,593 ) — — Exercise of common stock options 1,055,775 — 1,867 — — 1,867 — — Issuance of common stock in acquisition 81,856,112 8 875,034 — — 875,042 — — Vested awards assumed in acquisition — — 2,855 — — 2,855 — — Redeemable preferred stock dividends — — ( 9,968 ) — — ( 9,968 ) — — Net loss — — — — ( 110,357 ) ( 110,357 ) — — Other comprehensive loss, net of taxes — — — ( 4,493 ) — ( 4,493 ) — — Balance at March 31, 2022 915,673,855 $ 91 $ 6,509,643 $ ( 5,964 ) $ ( 1,293,471 ) $ 5,210,299 3,234,000 $ 320,374 Common Stock Additional Paid-In Capital Accumulated Other Comprehensive Loss Accumulated Deficit Permanent Deficit Temporary Equity Shares Amount Shares Amount Balance at January 1, 2021 115,084,358 $ — $ 579,228 $ ( 166 ) $ ( 699,177 ) $ ( 120,115 ) 469,150,522 $ 3,173,686 Share-based compensation expense — — 37,454 — — 37,454 — — Vesting of RSUs 3,654,434 — — — — — — — Stock withheld related to taxes on vested RSUs ( 1,399,716 ) — ( 25,989 ) — — ( 25,989 ) — — Exercise of common stock options 1,679,838 — 2,624 — — 2,624 — — Redeemable preferred stock dividends — — ( 9,968 ) — — ( 9,968 ) — — Net loss — — — — ( 177,564 ) ( 177,564 ) — — Other comprehensive loss, net of taxes — — — ( 80 ) — ( 80 ) — — Balance at March 31, 2021 119,018,914 $ — $ 583,349 $ ( 246 ) $ ( 876,741 ) $ ( 293,638 ) 469,150,522 $ 3,173,686 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 Cash Flows (In Thousands) Three Months Ended March 31, 2022 2021 Operating activities Net loss $ ( 110,357 ) $ ( 177,564 ) Adjustments to reconcile net loss to net cash provided by (used in) operating activities: Depreciation and amortization 30,698 25,977 Deferred debt issuance and discount expense 4,209 5,998 Share-based compensation expense 77,021 37,454 Deferred income taxes ( 40 ) 623 Fair value changes in residual interests classified as debt 2,963 7,951 Fair value changes in securitization investments 6,545 ( 2,957 ) Fair value changes in warrant liabilities — 89,920 Other 16,180 ( 139 ) Changes in operating assets and liabilities: Originations and purchases of loans ( 3,599,870 ) ( 2,575,932 ) Proceeds from sales and repayments of loans 2,491,409 2,911,540 Other changes in loans 58,548 30,486 Servicing assets ( 5,246 ) ( 11,643 ) Related party notes receivable interest income — 1,399 Other assets ( 13,623 ) 3,299 Accounts payable, accruals and other liabilities 30,339 ( 6,361 ) Net cash provided by (used in) operating activities $ ( 1,011,224 ) $ 340,051 Investing activities Purchases of property, equipment, software and intangible assets $ ( 25,114 ) $ ( 7,445 ) Proceeds from repayment of related party notes receivable — 16,693 Purchases of available-for-sale investments ( 36,825 ) — Proceeds from sales of available-for-sale investments 17,651 — Proceeds from maturities and paydowns of available-for-sale investments 11,964 — Changes in loans, net ( 33,884 ) — Proceeds from non-securitization investments — 107,534 Proceeds from securitization investments 42,773 64,165 Acquisition of businesses, net of cash acquired 73,314 — Net cash provided by investing activities $ 49,879 $ 180,947 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 (Continued) (In Thousands) Three Months Ended March 31, 2022 2021 Financing activities Proceeds from debt issuances $ 3,569,960 $ 1,925,042 Repayment of debt ( 2,632,625 ) ( 2,912,263 ) Payment of debt issuance costs ( 2,165 ) ( 1,645 ) Net increase in deposits 961,834 — Taxes paid related to net share settlement of share-based awards ( 3,593 ) ( 25,989 ) Purchases of common stock — ( 526 ) Redemptions of redeemable common and preferred stock — ( 132,859 ) Proceeds from stock option exercises 1,867 2,624 Finance lease principal payments ( 120 ) ( 163 ) Net cash provided by (used in) financing activities $ 1,895,158 $ ( 1,145,779 ) Effect of exchange rates on cash and cash equivalents ( 38 ) ( 80 ) Net increase (decrease) in cash, cash equivalents, restricted cash and restricted cash equivalents $ 933,775 $ ( 624,861 ) Cash, cash equivalents, restricted cash and restricted cash equivalents at beginning of period 768,437 1,323,428 Cash, cash equivalents, restricted cash and restricted cash equivalents at end of period $ 1,702,212 $ 698,567 Reconciliation to amounts on unaudited condensed consolidated balance sheets (as of period end) Cash and cash equivalents $ 1,325,135 $ 351,283 Restricted cash and restricted cash equivalents 377,077 347,284 Total cash, cash equivalents, restricted cash and restricted cash equivalents $ 1,702,212 $ 698,567 Supplemental non-cash investing and financing activities Issuance of common stock in acquisition $ 875,042 $ — Vested awards assumed in acquisition 2,855 — Loans received in acquisition 84,485 — Debt assumed in acquisition 2,000 — Deposits assumed in acquisition 158,016 — Deposits credited but not yet received in cash 36,072 — Available-for-sale securities received in acquisition 10,014 — Property, equipment and software received in acquisition 3,192 — Non-cash loan reduction 375 — Share-based compensation capitalized related to internally-developed software 4,596 — Redeemable preferred stock dividends accrued but unpaid 9,968 9,968 Securitization investments acquired via loan transfers — 26,381 Non-cash property, equipment, software and intangible asset additions — 888 The accompanying notes are an integral part of these unaudited condensed consolidated financial statements. 8 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”. Upon the closing of the Business Combination, 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 holders of our Series 1 Redeemable Preferred Stock, as defined in Note 10) 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. SoFi is a financial services platform that 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. The Company has continued to expand its product offerings through strategic acquisitions. During 2020, the Company expanded its investment product offerings into Hong Kong, and also began to operate 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. During 2022, the Company became a bank holding company and began operating as SoFi Bank, National Association, and expanded its platform to include a cloud-native digital and core banking platform with customers in Latin America, allowing the Company to expand its technology platform services to a broader international market. For additional information on our recent 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 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 months ended March 31, 2022 and 2021 are unaudited and should be read in conjunction with the annual consolidated statements included in our annual filing on Form 10-K filed with the SEC on March 1, 2022. 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 months ended March 31, 2022 are not necessarily indicative of the results to be expected for the full year ending December 31, 2022. In our unaudited condensed consolidated statements of operations and comprehensive income (loss), we renamed the financial statement line item for noninterest income—technology platform fees to noninterest income—technology products and solutions to accommodate noninterest income earned from Technisys, which we acquired in the first quarter of 2022. See Note 1 for our presentation of disaggregated revenue and Note 2 for our discussion of business combinations. 9 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 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 . 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) share-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. 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. 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, and collection balances. These accounts are earmarked as restricted because the 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. Loans Our loan portfolio consists of (i) personal loans, student loans and home loans, which are held for sale and measured at fair value, and (ii) credit card loans, and commercial and consumer banking loans acquired in the first quarter of 2022, which are measured at amortized cost. The commercial and consumer banking portfolio is primarily inclusive of commercial real estate loans, commercial and industrial loans and residential real estate and other consumer loans. Loans Measured at Fair Value Loans that we intend to sell to third-party purchasers or for which we do not have the ability and intent to hold for the foreseeable future are classified as held for sale. We elected the fair value option to measure our personal loans, student loans and home 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. Therefore, these loans are carried at fair value on a recurring basis. All direct fees and costs related to the origination process are recognized in earnings as earned or incurred. 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 unaudited condensed consolidated statements of operations and comprehensive income (loss). We record cash flows related to loans held for sale within cash flows from operating activities in the unaudited condensed consolidated statements of cash flows. Securitized loans are assets held by consolidated special purpose entities (“SPE”) as collateral for bonds issued, for which fair value changes are recorded within noninterest income—securitizations in the unaudited condensed consolidated statements of operations and comprehensive income (loss). Gains or losses recognized upon deconsolidation of a VIE are also recorded within noninterest income—securitizations . 10 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 Amortized Cost For our loans measured at amortized cost, direct loan origination costs are deferred and amortized on a straight-line basis over the privilege period (12 months) for credit card loans and amortized using the effective interest method over the contractual term of the loans for commercial and consumer banking loans, within interest income—loans in the unaudited condensed consolidated statements of operations and comprehensive income (loss). During the three months ended March 31, 2022, we amortized $ 1,597 of deferred costs into interest income and had a remaining balance of deferred costs of $ 4,127 as of March 31, 2022. Commercial and consumer banking loans are reported as delinquent when they become 30 or more days past due. For all commercial and consumer banking loans, we stop accruing interest and reverse all accrued but unpaid interest after 90 days of delinquency. For consumer banking loans, delinquent loans are charged off after 120 days of delinquency or on the date of confirmed loss. Purchased Credit Deteriorated Assets In connection with the Bank Merger, as further discussed in Note 2, we obtained purchased credit deteriorated (“PCD”) loans. PCD loans are acquired financial assets (or groups of financial assets with similar risk characteristics) that, as of the date of acquisition, have experienced a more-than-insignificant deterioration in credit quality since origination. Indicators that an acquired asset may meet the definition of a PCD asset include days past due status, nonaccrual status, troubled debt restructuring status and other loan agreement violations. We were required to record an allowance for the acquired PCD loans, with a corresponding increase to the amortized cost basis as of the acquisition date. Recognition of the initial allowance for credit losses upon the acquisition of PCD loans does not impact net income. Changes in estimates of expected credit losses after acquisition are recognized through the provision for credit losses. See Note 7 for the rollforward of our allowance for credit losses. Troubled Debt Restructuring In connection with the Bank Merger, as further discussed in Note 2, we obtained troubled debt restructuring (“TDR”) loans. TDR loans are those for which the contractual terms have been restructured to grant one or more concessions to a borrower who is experiencing financial difficulty. Concessions may include several types of assistance to aid customers and maximize payments received, and vary by borrower-specific characteristics. Loans with short-term and other insignificant modifications that are not considered concessions are not TDRs. TDRs identified by Golden Pacific prior to the acquisition were recorded at fair value with a new accounting basis established as of the date of acquisition. There were no modifications subsequent to acquisition. Allowance for Credit Losses As of March 31, 2022, we applied ASC 326, Financial Instruments—Credit Losses (“ASC 326”), to the following: (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, and commercial and consumer banking loans acquired during the first quarter of 2022, and (vi) investments in available-for-sale debt securities. Our approaches to measuring the allowance for credit losses are disclosed in our Annual Report on Form 10-K, with notable updates provided herein. Credit card : Our estimate of the allowance for credit losses on credit card as of March 31, 2022 and December 31, 2021 was $ 16,500 and $ 7,037 , respectively. Accrued interest receivables written off during the three months ended March 31, 2022 were $ 451 and during the three months ended March 31, 2021 were immaterial. See Note 7 for a rollforward of the allowance for credit losses related to credit card. Investments in Available-For-Sale Debt Securities An allowance for credit losses on our investments in available-for-sale (“AFS”) debt securities is required for any portion of impaired securities that is attributable to credit-related factors. As of March 31, 2022, we concluded that the credit- 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) related impairment was immaterial. We did not recognize an allowance for credit losses on impaired investments in AFS debt securities as of March 31, 2022. Equity Method Investments In August 2021, we purchased a 5 % interest in Lower Holding Company (“Lower”) for $ 20,000 and were granted a seat on Lower’s board of directors. We accounted 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). In January 2022, we relinquished our seat on Lower’s board of directors, and have no further rights to a seat on Lower’s board of directors. As such, we no longer have significant influence over the investee, and we ceased recognizing Lower equity investment income subsequent to that date. Our equity method investment income for the three months ended March 31, 2022 was immaterial. Additionally, we did not receive any distributions during the three months ended March 31, 2022. As of March 31, 2022, our investment was presented within other assets in the unaudited condensed consolidated balance sheets and was measured using the measurement alternative method of accounting, which is further discussed in Note 8. Property, Equipment and Software Software includes software acquired in business combinations, purchased software and capitalized software development costs. The capitalization of software development costs is based on whether the software is for internal use, or is to be sold or otherwise marketed. Costs related to internally-developed software for internal use are capitalized when preliminary project efforts are successfully completed, and it is probable that both the project will be completed and the software will be used as intended. For software to be sold or marketed, development costs are capitalized after the technological feasibility of the software has been established. Capitalized costs consist of salaries and compensation costs for employees, fees paid to third-party consultants who are directly involved in development efforts and costs incurred for upgrades and functionality enhancements. Research and development costs incurred prior to the establishment of technological feasibility (for software to be sold or marketed) or prior to completion of preliminary project efforts (for internal use software) are expensed as incurred. Deposits We commenced offering deposit accounts (referred to as “SoFi Checking and Savings” accounts) to our members through SoFi Bank in the first quarter of 2022. Our interest-bearing deposits primarily consist of demand deposits, savings deposits and, to a lesser extent, time deposits. We also have noninterest-bearing deposits. The following table presents a detail of interest-bearing deposits as of the date indicated: March 31, 2022 Interest-bearing deposits: Demand deposits (1) $ 753,134 Savings deposits (1) 293,003 Time deposits 14,187 Total interest-bearing deposits $ 1,060,324 _____________________ (1) For deposit liabilities with no defined maturities, the fair value of the liabilities reflects the amount payable on demand at the reporting 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) As of March 31, 2022, the amount of time deposits that exceeded the insured limit (referred to as “uninsured deposits”) totaled $ 7,537 . As of March 31, 2022, future maturities of our total time deposits were as follows: Remainder of 2022 $ 10,206 2023 2,774 2024 794 2025 30 2026 281 Thereafter 102 Total $ 14,187 Derivative Financial Instruments The following table presents the gains (losses) recognized on our derivative instruments during the periods indicated: Three Months Ended March 31, 2022 2021 Derivative contracts to manage future loan sale execution risk (1) $ 160,607 $ 36,071 Derivative contracts to manage securitization investment interest rate risk (1)(2) 6,319 — IRLCs (1) ( 6,798 ) ( 8,502 ) Interest rate caps (1) ( 2,124 ) — Purchase price earn-out (1) 831 — Third-party warrants (3) 75 — Total $ 158,910 $ 27,569 _____________________ (1) Recorded within noninterest income—loan origination and sales in the unaudited condensed consolidated statements of operations and comprehensive income (loss). (2) Represents derivative instruments utilized to manage interest rate risk associated with certain of our securitization investments. (3) For the three months ended March 31, 2022, includes $( 142 ) recorded within noninterest income—other and $ 217 recorded within noninterest expense—general and administrative in the unaudited condensed consolidated statements of operations and comprehensive income (loss), the latter of which represents the amortization of a deferred liability recognized at the initial fair value of the third party warrants acquired of $ 964 , as we are also a customer of the third party. The following table presents information about derivative instruments subject to enforceable master netting arrangements as of the dates indicated: March 31, 2022 December 31, 2021 Gross Derivative Assets Gross Derivative Liabilities Gross Derivative Assets Gross Derivative Liabilities Interest rate swaps $ — $ ( 7,985 ) $ 5,444 $ — Interest rate caps — ( 2,792 ) — ( 668 ) Home loan pipeline hedges 9,684 ( 150 ) 117 ( 313 ) Total, gross $ 9,684 $ ( 10,927 ) $ 5,561 $ ( 981 ) Less: derivative netting ( 2,942 ) 2,942 ( 117 ) 117 Total, net (1) $ 6,742 $ ( 7,985 ) $ 5,444 $ ( 864 ) _____________________ (1) As of March 31, 2022 and December 31, 2021, we had a cash collateral requirement of $ 7,985 and $ 299 , respectively, related to these instruments. 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) The following table presents the notional amounts of derivative contracts outstanding as of the dates indicated: March 31, 2022 December 31, 2021 Derivative contracts to manage future loan sale execution risk: Interest rate swaps $ 4,885,000 $ 4,210,000 Home loan pipeline hedges 457,000 421,000 Interest rate caps 405,000 405,000 Interest rate swaps (1) 310,000 — IRLCs (2) 465,491 357,529 Interest rate caps (3) 405,000 405,000 Total $ 6,927,491 $ 5,798,529 _____________________ (1) Represents interest rate swaps utilized to manage interest rate risk associated with certain of our securitization investments. (2) Amounts correspond with home loan funding commitments subject to IRLC agreements. (3) We sold an interest rate cap that was subject to master netting to offset an interest rate cap purchase made in conjunction with a contract to manage future loan sale execution risk. While the notional amounts of derivative instruments give an indication of the volume of our derivative 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. Foreign Currency Translation Adjustments We revalue assets, liabilities, income and expense denominated in non-United States currencies into United States dollars using applicable exchange rates. For foreign subsidiaries in which the functional currency is the subsidiary’s local currency, gains and losses relating to foreign currency translation adjustments are included in accumulated other comprehensive loss in our unaudited condensed consolidated balance sheets. For foreign subsidiaries in which the functional currency is the United States Dollar, gains and losses relating to foreign currency transaction adjustments are included within earnings in the unaudited condensed consolidated statements of operations and comprehensive income (loss). Due to the highly inflationary economic environment in Argentina, we use the United States Dollar as the functional currency of our Argentinian operations in accordance with ASC 830, Foreign Currency Matters . Our activities in Argentina are related to our Technology Platform segment and commenced in the first quarter of 2022 with the Technisys Merger. Revenue Recognition In accordance with ASC 606, Revenue From Contracts With Customers (“ASC 606”), 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. Our arrangements accounted for under ASC 606 are discussed in our Annual Report on Form 10-K, with notable updates provided herein. Technology Products and Solutions We earn fees for providing an integrated platform as a service for financial and non-financial institutions. Within our technology products and solutions 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. In these arrangements 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. In other arrangements, we receive software license and solutions fees in advance of performance, which are also deferred, and the revenue is not recognized until the related performance obligations are met. Commencing in March 2022 with the Technisys Merger, we earn subscription and service fees for providing software licenses and associated services. Software license and service arrangements comprise one or more software licenses, implementation, maintenance, and other software-related services. We recognize revenue related to software licenses upon delivery of the license, as we consider the license to be satisfied at a point in time. Software is considered delivered when 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) control passes to the customer following the user-acceptance testing period. We recognize revenue related to maintenance ratably over the maintenance period, as we stand ready to provide maintenance services during the period. We recognize revenue related to other software-related services over time using an input model based on hours incurred to provide the services, which directly correspond with the value to which the customer is entitled. We charge a recurring subscription fee for the software license and related maintenance services. Other software-related services are billed on a periodic basis as the services are provided. Certain arrangements for software and related services contain a provision for a fixed upfront payment, which represents an upfront payment for the license and an advance payment for future services. The standalone selling price of maintenance varies in proportion with the standalone selling price of the underlying license. We allocate upfront payments and any other combined fee between the license and maintenance based upon the standalone selling price. The portion of any upfront payment relating to the license is recognized upon delivery of the license (and deferred until that point in time). The portion of any upfront payment relating to future services is accounted for as deferred revenue and is recognized as the future services are provided. Non-maintenance software-related services fees are recognized over the period during which the services are provided, as we consider these services to be satisfied over time. We had deferred revenues of $ 6,887 and $ 2,553 as of March 31, 2022 and December 31, 2021, respectively, which are presented within accounts payable, accruals and other liabilities in the unaudited condensed consolidated balance sheets. During the three months ended March 31, 2022, we recognized revenue of $ 785 associated with deferred revenues within noninterest income—technology products and solutions in the unaudited condensed consolidated statements of operations and comprehensive income (loss). During the three months ended March 31, 2021, we recognized revenue of $ 156 associated with deferred revenues. Sales commissions: Capitalized sales commissions presented within other assets in the unaudited condensed consolidated balance sheets, which are incurred in connection with obtaining our technology products and solutions, were $ 850 and $ 678 as of March 31, 2022 and December 31, 2021, 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 months ended March 31, 2022 and 2021, commissions recorded within noninterest expense—sales and marketing in the unaudited condensed consolidated statements of operations and comprehensive income (loss) were $ 1,121 and $ 809 , respectively, of which $ 82 and $ 64 , respectively, represented amortization of capitalized sales commissions. Referrals We earn specified referral fees in connection with referral activities we facilitate through our platform. This arrangement contains variable consideration that is constrained due to the potential reversal of referral fulfillment fees. We recognize a liability within accounts payable, accruals and other liabilities in the unaudited condensed 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 $ 293 and $ 118 as of March 31, 2022 and December 31, 2021, respectively. Contract Balances As of March 31, 2022 and December 31, 2021, accounts receivable, net associated with revenue from contracts with customers were $ 53,103 and $ 33,748 , respectively, which were reported within other assets in the unaudited condensed consolidated balance sheets. The increase in contract balances during the current quarter includes the effect of the Technisys Merger, which contributed $ 17,390 to the balance as of March 31, 2022. 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 products and solutions and noninterest income—other in the unaudited condensed consolidated statements of operations and comprehensive income 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) (loss). There were no revenues from contracts with customers attributable to our Lending segment for any of the periods presented. Three Months Ended March 31, 2022 2021 Financial Services Referrals $ 7,768 $ 2,254 Brokerage 4,730 4,612 Payment network 4,286 1,202 Enterprise services 203 58 Total $ 16,987 $ 8,126 Technology Platform Technology services $ 59,157 $ 45,659 Software licenses 700 — Payment network 178 442 Total $ 60,035 $ 46,101 Total Revenue from Contracts with Customers Technology services $ 59,157 $ 45,659 Software licenses 700 — Referrals 7,768 2,254 Brokerage 4,730 4,612 Payment network 4,464 1,644 Enterprise services 203 58 Total $ 77,022 $ 54,227 Recently Adopted Accounting Standards In October 2021, the FASB issued Accounting Standards Update (“ASU”) 2021-08, Business Combinations (Topic 805): Accounting for Contract Assets and Contract Liabilities from Contracts with Customers . The ASU requires entities to recognize and measure contract assets and contract liabilities acquired in a business combination in accordance with ASC 606, rather than at fair value. The standard should be applied prospectively to business combinations occurring on or after the effective date of the amendments. We early adopted the standard effective January 1, 2022 and applied its provisions to our current quarter acquisitions. The adoption of this standard did not have a material impact on our consolidated financial statements. Recent Accounting Standards Issued, But Not Yet Adopted In March 2022, the FASB issued ASU 2022-02, Financial Instruments — Credit Losses (Topic 326): Troubled Debt Restructurings and Vintage Disclosures . The ASU addresses two topics: (i) TDR by creditors, and (ii) vintage disclosures for gross write offs. Under the TDR provisions, the ASU eliminates the recognition and measurement guidance under ASC 310-40, Receivables — Troubled Debt Restructurings by Creditors, and instead requires that an entity evaluate whether the modification represents a new loan or a continuation of an existing loan, consistent with the accounting for other loan modifications. Additionally, the ASU enhances existing disclosure requirements around TDRs and introduces new requirements related to certain modifications of receivables made to borrowers experiencing financial difficulty. Under the vintage disclosure provisions, the ASU requires the entity to disclose current period gross write offs by year of origination for financing receivables and net investments in leases within the scope of ASC 326-20, Financial Instruments — Credit Losses — Measured at Amortized Cost . The standard is effective for fiscal years and interim periods beginning after December 15, 2022. Early adoption is permitted. If an entity elects to early adopt this standard in an interim period, the guidance should be applied as of the beginning of the fiscal year that includes the interim period. An entity may elect to early adopt either of the two topics separately, or both. The standard should be applied prospectively; however, for the TDR provisions, an entity has the option to apply a modified retrospective transition method. We are currently evaluating the effect of adopting this standard on our consolidated financial statements and related disclosures. 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) In March 2022, the SEC released Staff Accounting Bulletin No. 121 (“SAB 121”), which provides interpretive guidance for an entity to consider when it has obligations to safeguard crypto-assets held for its platform users, whether directly or through an agent or another third party acting on its behalf, and regardless of its assessment as to who controls the crypto-assets. SAB 121 requires an entity to record a liability to reflect its obligation to safeguard the crypto-assets, as well as a corresponding asset, both of which should be measured at the fair value of the crypto-assets held for the entity’s users. Entities should evaluate any potential loss events, such as theft, loss or destruction of the cryptographic keys, that may affect the measurement of the asset. SAB 121 also requires financial statement disclosure, including the nature and amount of crypto-assets that the entity holds for its users, any vulnerabilities that may arise as a result of any concentration in crypto-assets, and information about who is responsible for the record-keeping of the crypto-assets, the holding of the cryptographic keys and safeguarding the crypto-assets, among other disclosure considerations. Disclosures must also be made in accordance with ASC 820, Fair Value Measurement (“ASC 820”). SAB 121 is effective for SEC registrants for the first interim or annual financial statements ending after June 15, 2022, with retrospective application as of the beginning of the fiscal year to which the interim or annual period relates. We are currently evaluating the approach to, and effect of, adopting SAB 121 on our consolidated financial statements and related disclosures. Note 2. Business Combinations Acquisition of Golden Pacific Bancorp, Inc. On February 2, 2022, we acquired Golden Pacific Bancorp, Inc., a bank holding company, and its wholly-owned subsidiary, which is a national bank (collectively referred to as “Golden Pacific”), pursuant to an Agreement and Plan of Merger dated as of March 8, 2021 by and among the Company, a wholly-owned subsidiary of the Company, and Golden Pacific. In the business combination, we acquired all of the outstanding equity interests in Golden Pacific for total cash purchase consideration of $ 22.3 million (the “Bank Merger”). After closing the Bank Merger, we became a bank holding company and Golden Pacific began operating as SoFi Bank, National Association (“SoFi Bank”). We are duly registered as a bank holding company with the Board of Governors of the Federal Reserve System (the “Federal Reserve”). SoFi Bank is a national banking association whose primary federal regulator is the Office of the Comptroller of the Currency (the “OCC”). Deposit accounts of SoFi Bank are insured by the Federal Deposit Insurance Corporation (the “FDIC”) through the Deposit Insurance Fund to the fullest extent permitted by law. The closing of the Bank Merger was subject to regulatory approval. On January 18, 2022, we received approval from the Federal Reserve of our application to become a bank holding company under the Bank Holding Company Act, and we received conditional approval from the OCC to close the Bank Merger. The OCC also approved our application to change the composition of Golden Pacific’s assets in connection with the Bank Merger. The OCC conditional approval imposed a number of conditions, including that SoFi Bank have initial paid-in capital of no less than $ 750 million and adhere to an operating agreement. Golden Pacific’s community bank business continues to operate as a division of SoFi Bank. A portion of the total cash purchase consideration ($ 0.6 million) was held back by the Company to satisfy any indemnification or certain other obligations (“Holdback Amount”), as certain legal proceedings with which Golden Pacific is involved as a plaintiff were not resolved at the time the Bank Merger closed. 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. Additionally, we held back a $ 3.3 million payable to a dissenting Golden Pacific shareholder pending resolution of the shareholder’s appraisal claim, which could possibly result in a lower or higher amount paid to the dissenting shareholder once a ruling is made regarding the appraisal claim. The Bank Merger was accounted for as a business combination. The preliminary purchase consideration was allocated to the tangible and intangible assets acquired and liabilities assumed based on the estimated fair values as of the acquisition date, which were measured in accordance with the principles outlined in ASC 820. The excess of the total purchase consideration over the fair value of the net assets acquired of $ 11.2 million was allocated to goodwill, none of which is expected to be deductible for tax purposes, and which is allocated to our Financial Services segment. Goodwill is primarily attributable to the expected benefits of operating a national bank. The results of operations of Golden Pacific are included in SoFi’s consolidated financial statements as of and for the three months ended March 31, 2022. As the acquisition was not determined to be a significant acquisition under ASC 805, we are not disclosing the pro forma impact of this acquisition to the results of operations in our interim and annual filings with the SEC. 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) Identifiable intangible net assets at the date of acquisition included finite-lived intangible assets for core deposits with an aggregate fair value of $ 1.0 million. The intangible assets are being amortized over a period of 7.3 years based on the estimated economic life of the underlying assets. We incurred total acquisition-related costs related to the Bank Merger of $ 2.2 million, which were incurred during the three months ended March 31, 2021, and are presented within noninterest expense—general and administrative in the unaudited condensed consolidated statements of operations and comprehensive income (loss). Acquisition of Technisys S.A. On March 3, 2022, we acquired Technisys S.A., a Luxembourg société anonyme (“Technisys”), pursuant to an Agreement and Plan of Merger dated as of February 19, 2022 and amended as of March 3, 2022, by and among the Company, Technisys, Atom New Delaware, Inc., a Delaware corporation and a wholly owned subsidiary of Atom, and Atom Merger Sub Corporation, a Delaware corporation and wholly owned subsidiary of SoFi Technologies (“Technisys Merger”). In the business combination, we acquired all of the outstanding equity interests in Technisys. Technisys is a cloud-native digital and core banking platform with an existing footprint of financial services customers in Latin America. The Technisys Merger was accounted for as a business combination. The following table presents the components of the purchase consideration to acquire Technisys: Fair value of common stock issued (1) $ 875,042 Fair value of awards assumed (2) 2,855 Amounts payable to settle vested employee performance awards (3) 37,297 Settlement of pre-combination transactions between acquirer and acquiree 235 Total purchase consideration $ 915,429 ___________________ (1) Reflects the shares of SoFi common stock issued upon closing the acquisition of 81,856,112 , inclusive of 6,903,663 shares held in escrow, multiplied by the closing stock price of SoFi common stock on the closing date of the Technisys Merger. As of March 31, 2022, the purchase price allocation process for Technisys was not finalized, as further discussed below. (2) We contemporaneously converted outstanding performance awards into restricted stock units (“RSUs”) to acquire common stock of SoFi (“Replacement Awards”). The fair value of awards assumed in the purchase consideration was based on the closing stock price of SoFi common stock on the closing date of the Technisys Merger. (3) We made payments of $ 2,868 related to this component of purchase consideration through March 31, 2022. Refer to Note 12 for additional information on our RSUs, including the Replacement Awards. As of March 31, 2022, the equity component of the total purchase consideration remained subject to further adjustment, pending final agreement regarding a closing net working capital calculation specified in the merger agreement. Any further adjustment to the equity consideration, which may increase or decrease by up to 598,068 shares, would similarly impact the carrying value of recognized goodwill, but would not impact the estimated fair values of the assets acquired and liabilities assumed in conjunction with the transaction. 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) The following table presents the allocation of the preliminary total purchase consideration to the estimated fair values of the identified assets acquired and liabilities assumed of Technisys as of the date of acquisition, as well as a reconciliation to the total consideration transferred: Assets acquired Cash and cash equivalents $ 25,710 Accounts receivable (1) 15,354 Intangible assets (2) 239,000 Operating lease right-of-use (“ROU”) assets 587 Other assets 1,011 Total identifiable assets acquired 281,662 Liabilities assumed Accounts payable, accruals and other liabilities 16,462 Operating lease liabilities 587 Deferred income taxes (3) 55,104 Total liabilities assumed 72,153 Total identified net assets acquired 209,509 Goodwill (4) 705,920 Total consideration $ 915,429 _________________ (1) Includes accounts receivable and unbilled revenue with a gross contractual amount of $ 17,710 . At the date of acquisition, the Company expected $ 2,356 to be uncollectible. (2) Intangible assets consist of finite-lived intangible assets, as follows: Gross carrying amount Weighted-average useful life (years) Developed technology (a) $ 187,000 8.8 Customer-related (b) 42,000 4.8 Trade names, trademarks and domain names (c) 10,000 8.8 __________________ (a) Valued using the Multi-Period Excess Earnings Method (“MPEEM”), which is a form of the income approach. The significant assumptions include: (i) the estimated annual net cash flows, which are a function of expected earnings attributable to the asset (and include an assumed technology migration curve), contributory asset charges and the applicable tax rate, and (ii) an assumed discount rate, which reflects the risk of the asset relative to the overall risk of Technisys. (b) Valued using the With and Without Method, which is a form of the income approach. The significant assumptions include: (i) the estimated annual revenues and net cash flows both with the existing customer base and without the existing customer base, which include assumptions regarding revenue ramp-up periods and attrition rates, and (ii) an assumed discount rate, consistent with (a) above. (c) Valued using the Relief from Royalty Method, which is a form of the income approach. The significant assumptions include: (i) the estimated annual net cash flows, which are a function of expected earnings attributable to the asset, the probability of use of the asset, the royalty rate and the applicable tax rate, and (ii) the discount rate, consistent with (a) above. (3) The deferred tax liabilities recognized in the acquisition were primarily related to the acquired intangible assets recognized at a fair value of $ 239.0 million, in which the acquiree had a significantly lower tax basis. (4) The excess of the total purchase consideration over the fair value of the identified net assets acquired was allocated to goodwill, none of which is expected to be deductible for tax purposes. The goodwill is subject to change based on the outcome of the net working capital calculation referenced earlier in this footnote. Goodwill is primarily attributable to expected growth opportunities at Technisys, and secondarily attributable to the expected synergies from leveraging the Technisys technology to enhance and expand Galileo’s product offerings and operations, as well as expand its market reach. As such, all of the goodwill is allocated to the Technology Platform segment. The Company incurred total acquisition-related costs related to the Technisys Merger of $ 19.8 million, of which $ 3.3 million were incurred during the year ended December 31, 2021, and $ 16.5 million were incurred during the three months ended March 31, 2022, which were presented within noninterest expense—general and administrative in the unaudited condensed consolidated statements of operations and comprehensive income (loss). 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) From the date of acquisition through March 31, 2022, the acquired results of operations for Technisys contributed total net revenue of $ 6.2 million and net loss of $ 1.8 million to the Company’s consolidated results, which was inclusive of amortization expense recognized on the acquired intangible assets. The following unaudited supplemental pro forma financial information presents the Company’s consolidated results of operations for the three months ended March 31, 2022 and 2021 as if the business combination had occurred on January 1, 2021: Three Months Ended March 31, 2022 2021 Total net revenue $ 342,109 $ 208,943 Net loss ( 103,983 ) ( 201,317 ) 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; • an adjustment to reflect post-combination share-based compensation expense associated with the Replacement Awards as if the conversion had occurred on January 1, 2021; • an adjustment to reflect acquisition-related costs for both parties as if they were incurred during the earliest period presented; and • the related income tax effects, at the statutory tax rate applicable for each period, of the pro forma adjustments noted above. 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 Technisys. Goodwill A rollforward of our goodwill balance is presented below as of the date indicated: March 31, 2022 Beginning balance $ 898,527 Less: accumulated impairment — Beginning balance, net 898,527 Additional goodwill recognized (1) 717,167 Ending balance (2) $ 1,615,694 _____________________ (1) The additional goodwill recognized as of March 31, 2022 includes $ 705,920 related to the Technisys Merger and $ 11,247 related to the Bank Merger. (2) As of March 31, 2022, we had goodwill attributable to the following reportable segments: $ 1,578,535 to Technology Platform and $ 37,159 to Financial Services. Note 3. Investments in AFS Debt Securities In the third quarter of 2021, we began investing in debt securities. As of March 31, 2022 and December 31, 2021, all of our investments in debt securities were classified as available-for-sale. During the first quarter of 2022, we acquired 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) additional investments in AFS debt securities with the Bank Merger. The following table presents our investments in AFS debt securities as of the dates indicated. March 31, 2022 Amortized Cost (1) Accrued Interest Gross Unrealized Gains Gross Unrealized Losses (2) Fair Value Investments in AFS debt securities (3) : U.S. Treasury securities $ 119,450 $ 181 $ — $ ( 2,597 ) $ 117,034 Multinational securities (4) 19,849 74 — ( 594 ) 19,329 Corporate bonds 43,081 239 — ( 1,883 ) 41,437 Agency mortgage-backed securities 10,393 26 — ( 281 ) 10,138 Other asset-backed securities 9,596 5 — ( 366 ) 9,235 Other (5) 2,745 10 — ( 88 ) 2,667 Total investments in AFS debt securities $ 205,114 $ 535 $ — $ ( 5,809 ) $ 199,840 December 31, 2021 Amortized Cost Accrued Interest Gross Unrealized Gains Gross Unrealized Losses (2) Fair Value Investments in AFS debt securities (3) : U.S. Treasury securities $ 103,014 $ 73 $ — $ ( 584 ) $ 102,503 Multinational securities (4) 19,911 109 — ( 154 ) 19,866 Corporate bonds 39,894 235 — ( 480 ) 39,649 Agency TBA (6) 7,457 13 4 ( 8 ) 7,466 Agency mortgage-backed securities 4,153 14 — ( 31 ) 4,136 Other asset-backed securities 9,610 5 — ( 91 ) 9,524 Commercial paper 9,939 — — — 9,939 Other (5) 1,818 13 — ( 7 ) 1,824 Total investments in AFS debt securities $ 195,796 $ 462 $ 4 $ ( 1,355 ) $ 194,907 _____________________ (1) Amortized cost basis reflects the amortization of premiums of $ 291 during the three months ended March 31, 2022. (2) As of March 31, 2022 and December 31, 2021, we determined that our unrealized loss positions related to credit losses were immaterial. Additionally, we do not intend to sell the securities in loss positions nor is it more likely than not that we will be required to sell the securities prior to recovery of the amortized cost basis. Further, no such investments have been in a continuous unrealized loss position for more than 12 months. (3) Investments in AFS debt securities are recorded at fair value. (4) Includes sovereign foreign and supranational bonds. (5) Includes state and city municipal bond securities. (6) Represented to-be-announced (“TBA”) securities, which were securities that were delivered under the purchase contract at a later date when the underlying security was issued. The December 31, 2021 balance was paid in cash during 2022. 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) The following table presents the amortized cost and fair value of our investments in AFS debt securities by contractual maturity as of the date indicated: Due Within One Year Due After One Year Through Five Years Due After Five Years Through Ten Years Due After Ten Years Total March 31, 2022 Investments in AFS debt securities—Amortized cost: U.S. Treasury securities $ 25,336 $ 94,114 $ — $ — $ 119,450 Multinational securities — 19,849 — — 19,849 Corporate bonds — 39,716 3,365 — 43,081 Agency mortgage-backed securities 3 20 824 9,546 10,393 Other asset-backed securities — 7,600 1,996 — 9,596 Other 600 1,212 — 933 2,745 Total investments in AFS debt securities $ 25,939 $ 162,511 $ 6,185 $ 10,479 $ 205,114 Weighted average yield for investments in AFS debt securities (1) ( 3.68 ) % ( 8.77 ) % ( 10.94 ) % ( 10.29 ) % ( 8.27 ) % Investments in AFS debt securities—Fair value (2) : U.S. Treasury securities $ 24,974 $ 91,879 $ — $ — $ 116,853 Multinational securities — 19,255 — — 19,255 Corporate bonds — 37,952 3,246 — 41,198 Agency mortgage-backed securities 3 20 801 9,288 10,112 Other asset-backed securities — 7,309 1,921 — 9,230 Other 597 1,186 — 874 2,657 Total investments in AFS debt securities $ 25,574 $ 157,601 $ 5,968 $ 10,162 $ 199,305 _____________________ (1) The weighted average yield represents the effective yield for the investment securities and is computed based on the amortized cost of each security as of March 31, 2022. (2) Presentation of fair values of our investments in AFS debt securities by contractual maturity excludes total accrued interest of $ 535 as of March 31, 2022. The following table presents the gross proceeds and gross realized gains and losses from sales, maturities and paydowns of our investments in AFS debt securities during the three months ended March 31, 2022. Realized gains and losses are presented within noninterest income—other in the unaudited condensed consolidated statements of operations and comprehensive income (loss). There were no transfers between classifications of our investments in AFS debt securities during the period presented. Three Months Ended March 31, 2022 Investments in AFS debt securities Gross realized gains included in earnings $ — Gross realized losses included in earnings ( 161 ) Net realized losses ( 161 ) Gross proceeds from sales, maturities and paydowns (1) $ 29,615 _____________________ (1) Proceeds from maturities and paydowns of investments in AFS debt securities were $ 11,964 during the three months ended March 31, 2022. See Note 11 for unrealized gains and losses on our investments in AFS debt securities and amounts reclassified out of accumulated other comprehensive income (loss) (“AOCI”). 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) Note 4. Loans As of March 31, 2022, our loan portfolio consisted of personal loans, student loans and home loans, which are measured at fair value under the fair value option election, and loans measured at amortized cost, including credit card, and commercial and consumer banking loans. Below is a disaggregated presentation of our loans, inclusive of fair market value adjustments and accrued interest income and net of the allowance for credit losses, as applicable, as of the dates indicated: March 31, December 31, 2022 2021 Loans at fair value Securitized student loans $ 513,378 $ 574,328 Securitized personal loans 177,179 234,576 Student loans 3,224,061 2,876,509 Home loans 146,658 212,709 Personal loans 2,941,609 2,054,850 Total loans at fair value 7,002,885 5,952,972 Loans at amortized cost (1) Credit card 139,388 115,912 Commercial and consumer banking: Commercial real estate 67,627 — Commercial and industrial 8,760 — Residential real estate and other consumer 3,341 — Total commercial and consumer banking 79,728 — Total loans at amortized cost 219,116 115,912 Total loans $ 7,222,001 $ 6,068,884 _____________________ (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. 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 March 31, 2022 Unpaid principal (1) $ 3,683,512 $ 153,222 $ 3,006,363 $ 6,843,097 Accumulated interest 9,740 182 17,893 27,815 Cumulative fair value adjustments (1) 44,187 ( 6,746 ) 94,532 131,973 Total fair value of loans $ 3,737,439 $ 146,658 $ 3,118,788 $ 7,002,885 December 31, 2021 Unpaid principal (1) $ 3,356,344 $ 210,111 $ 2,188,773 $ 5,755,228 Accumulated interest 9,990 190 12,310 22,490 Cumulative fair value adjustments (1) 84,503 2,408 88,343 175,254 Total fair value of loans $ 3,450,837 $ 212,709 $ 2,289,426 $ 5,952,972 __________________ (1) These items are impacted by charge-offs during the period. 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) 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 March 31, 2022 Unpaid principal $ 1,959 $ 4,163 $ 6,122 Accumulated interest 26 156 182 Cumulative fair value adjustments ( 1,160 ) ( 3,658 ) ( 4,818 ) Fair value of loans 90 days or more delinquent $ 825 $ 661 $ 1,486 December 31, 2021 Unpaid principal $ 1,589 $ 4,765 $ 6,354 Accumulated interest 32 149 181 Cumulative fair value adjustments ( 865 ) ( 4,189 ) ( 5,054 ) Fair value of loans 90 days or more delinquent $ 756 $ 725 $ 1,481 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 March 31, 2022 Fair value as of January 1, 2022 $ 3,450,837 $ 212,709 $ 2,289,426 $ 5,952,972 Origination of loans 983,804 312,383 2,026,004 3,322,191 Principal payments ( 227,115 ) ( 4,400 ) ( 372,454 ) ( 603,969 ) Sales of loans ( 544,150 ) ( 365,370 ) ( 977,920 ) ( 1,887,440 ) Purchases (1) 116,433 498 160,748 277,679 Change in accumulated interest ( 250 ) ( 8 ) 5,583 5,325 Change in fair value (2) ( 42,120 ) ( 9,154 ) ( 12,599 ) ( 63,873 ) Fair value as of March 31, 2022 $ 3,737,439 $ 146,658 $ 3,118,788 $ 7,002,885 Three Months Ended March 31, 2021 Fair value as of January 1, 2021 $ 2,866,459 $ 179,689 $ 1,812,920 $ 4,859,068 Origination of loans 1,004,685 735,604 805,689 2,545,978 Principal payments ( 250,219 ) ( 1,479 ) ( 258,199 ) ( 509,897 ) Sales of loans ( 936,160 ) ( 677,566 ) ( 779,441 ) ( 2,393,167 ) Purchases (1) 71 119 1,001 1,191 Change in accumulated interest ( 1,249 ) ( 35 ) ( 2,187 ) ( 3,471 ) Change in fair value (2) ( 16,794 ) ( 4,429 ) ( 5,875 ) ( 27,098 ) Fair value as of March 31, 2021 $ 2,666,793 $ 231,903 $ 1,573,908 $ 4,472,604 __________________ (1) Purchases reflect unpaid principal balance and relate to previously transferred loans. Purchase activity during the three months ended March 31, 2022 included securitization clean-up calls (purchases we elect to make when the risk retention period has sunset) of $ 275,499 . The remaining purchases during the periods presented related to standard representations and warranties pursuant to our various loan sale agreements. (2) Changes in fair value of loans are recorded in the unaudited condensed 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 included in earnings attributable to changes in instrument-specific credit risk were $ 6,496 and $ 6,926 during the three months ended March 31, 2022 and 2021, respectively. The gains 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. 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) Loans Measured at Amortized Cost Loan Portfolio Composition and Aging The following table presents the amortized cost basis of our credit card and commercial and consumer banking portfolios (excluding accrued interest and before the allowance for credit losses) by either current status 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) March 31, 2022 Credit card $ 143,161 $ 3,330 $ 2,625 $ 4,714 $ 10,669 $ 153,830 Commercial and consumer banking: Commercial real estate 68,385 — — — — 68,385 Commercial and industrial 8,946 129 — — 129 9,075 Residential real estate and other consumer (3) 3,343 — — — — 3,343 Total commercial and consumer banking 80,674 129 — — 129 80,803 Total loans $ 223,835 $ 3,459 $ 2,625 $ 4,714 $ 10,798 $ 234,633 December 31, 2021 Credit card $ 115,356 $ 1,893 $ 1,683 $ 2,658 $ 6,234 $ 121,590 _______________ (1) All of the credit card loans ≥ 90 days past due continued to accrue interest. As of March 31, 2022 and December 31, 2021, there were no credit card loans on nonaccrual status. As of March 31, 2022, commercial and consumer banking loans on nonaccrual status were immaterial, and there were no loans that were 90 days or more past due. (2) For credit card, the balance is presented before allowance for credit losses of $ 16,500 and $ 7,037 as of March 31, 2022 and December 31, 2021, respectively, and accrued interest of $ 2,058 and $ 1,359 , respectively. For commercial and consumer banking, the balance is presented before allowance for credit losses of $ 1,366 and accrued interest of $ 289 as of March 31, 2022. (3) Includes residential real estate loans acquired in the Bank Merger, for which we did not elect the fair value option for this portfolio of loans. Credit Quality Indicators Credit Card The following table presents the amortized cost basis of our credit card portfolio (excluding accrued interest and before the allowance for credit losses) as of the dates indicated based on FICO scores, which are obtained at the origination of the 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) account, and are updated as new credit information is available. The pools estimate the likelihood of borrowers with similar FICO scores to pay credit obligations based on aggregate credit performance data. FICO March 31, 2022 December 31, 2021 ≥ 800 $ 7,532 $ 10,016 780 – 799 6,429 8,624 760 – 779 7,968 9,976 740 – 759 9,744 13,581 720 – 739 13,487 18,358 700 – 719 18,763 22,579 680 – 699 22,127 21,736 660 – 679 21,369 14,044 640 – 659 16,352 1,969 < 640 30,059 707 Total credit card $ 153,830 $ 121,590 Commercial and Consumer Banking We evaluate the credit quality of our commercial and consumer banking loan portfolio on a quarterly basis based on regulatory risk ratings. Loans are categorized into risk ratings based on relevant information about the ability of borrowers to service their debt, such as current financial information, historical payment experience, collateral adequacy, credit documentation, and current economic trends, among other factors. We analyze loans individually by classification based on their associated credit risk, and perform an analysis on an ongoing basis as new information is obtained. Risk rating classifications are further described below. Loans with a lower expectation of credit losses are classified as Pass, while loans with a higher expectation of credit losses are classified as Substandard. • Pass — Loans that management believes will fully repay in accordance with the contractual loan terms. • Watch —  Loans that management believes will fully repay in accordance with the contractual loan terms, but for which certain credit attributes have changed from origination and warrant further monitoring. • Special mention — Loans with a potential weakness that deserves management’s close attention. If left uncorrected, these potential weaknesses may result in deterioration of the repayment prospects for the loan or our credit position at some future date. • Substandard — Loans that are inadequately protected by the current net worth and paying capacity of the obligor or of the collateral pledged, if any. Loans so classified have a well-defined weakness or weaknesses that jeopardize the full repayment. They are characterized by the distinct possibility that we will sustain some loss if the deficiencies are not corrected. 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) The following table presents the amortized cost basis of our commercial and consumer banking portfolio (excluding accrued interest and before the allowance for credit losses) by origination year and credit quality indicator as of March 31, 2022. Term Loans by Origination Year 2022 2021 2020 2019 2018 Prior Total Term Loans Revolving Loans Commercial real estate Pass $ 2,856 $ 5,827 $ 8,153 $ 12,437 $ 6,994 $ 17,638 $ 53,905 $ 208 Watch — 1,708 — 2,807 1,143 4,082 9,740 — Special mention — — — 689 2,269 416 3,374 — Substandard — — — — 81 1,077 1,158 — Total commercial real estate $ 2,856 $ 7,535 $ 8,153 $ 15,933 $ 10,487 $ 23,213 $ 68,177 $ 208 Commercial and industrial Pass $ — $ 259 $ 120 $ — $ 115 $ 5,313 $ 5,807 $ 399 Watch — — — — — 296 296 30 Special mention — — — — — 763 763 — Substandard — — — — 553 1,102 1,655 125 Total commercial and industrial $ — $ 259 $ 120 $ — $ 668 $ 7,474 $ 8,521 $ 554 Residential real estate and other consumer Pass $ — $ — $ — $ — $ — $ 3,234 $ 3,234 $ 65 Watch — — — — — 44 44 — Total residential real estate and other consumer $ — $ — $ — $ — $ — $ 3,278 $ 3,278 $ 65 Total commercial and consumer banking $ 2,856 $ 7,794 $ 8,273 $ 15,933 $ 11,155 $ 33,965 $ 79,976 $ 827 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. 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. As of March 31, 2022 and December 31, 2021, we had 12 and 13 consolidated VIEs, respectively, on our unaudited condensed consolidated balance sheets. The following table presents the assets and liabilities of consolidated VIEs that were included in our unaudited condensed consolidated balance sheets. The assets in the below table may only be used to settle 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) 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. March 31, December 31, 2022 2021 Assets: Restricted cash and restricted cash equivalents $ 40,906 $ 53,161 Loans 690,557 808,904 Total assets $ 731,463 $ 862,065 Liabilities: Accounts payable, accruals and other liabilities $ 344 $ 388 Debt (1) 576,897 660,419 Residual interests classified as debt 70,532 93,682 Total liabilities $ 647,773 $ 754,489 ___________________ (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 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 VIEs 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 As of March 31, 2022 and December 31, 2021, we had investments in nine and nine nonconsolidated personal loan VIEs, respectively. We did no t establish any personal loan trusts during the three months ended March 31, 2022 and 2021. We did not provide financial support to any personal loan trusts beyond our initial equity investment and we did no t deconsolidate any personal loan VIEs during the three months ended March 31, 2022 and 2021. Student Loans As of March 31, 2022 and December 31, 2021, we had investments in 24 and 24 nonconsolidated student loan VIEs, respectively. We did no t establish any student loan trusts during the three months ended March 31, 2022 and established two student loan trusts during the three months ended March 31, 2021, which were not consolidated as of the balance sheet date. We did not provide financial support to any student loan trusts beyond our initial equity investment during the periods presented. We deconsolidated one student loan VIE during the three months ended March 31, 2022. We did not deconsolidate any student loan VIEs during the three months ended March 31, 2021. 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 table presents the aggregate outstanding value of asset-backed bonds and residual interests owned by the Company in nonconsolidated VIEs as of the dates indicated. March 31, December 31, 2022 2021 Personal loans $ 52,230 $ 62,925 Student loans 273,140 311,763 Securitization investments $ 325,370 $ 374,688 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-Federal National Mortgage Association (“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. The following table summarizes our student loan securitization transfers qualifying for sale accounting treatment for the three months ended March 31, 2021. There were no loan securitization transfers qualifying for sale accounting treatment during the three months ended March 31, 2022. Three Months Ended March 31, 2021 Student loans Fair value of consideration received: Cash $ 500,041 Securitization investments 26,381 Servicing assets recognized 28,731 Total consideration 555,153 Aggregate unpaid principal balance and accrued interest of loans sold 526,126 Gain from loan sales $ 29,027 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) The following table summarizes our whole loan sales during the periods indicated: Three Months Ended March 31, 2022 2021 Student loans Fair value of consideration received: Cash $ 548,911 $ 422,341 Servicing assets recognized 5,824 4,858 Repurchase liabilities recognized ( 80 ) ( 79 ) Total consideration 554,655 427,120 Aggregate unpaid principal balance and accrued interest of loans sold 546,287 413,090 Gain from loan sales $ 8,368 $ 14,030 Home loans Fair value of consideration received: Cash $ 359,700 $ 696,197 Servicing assets recognized 4,238 6,539 Repurchase liabilities recognized ( 420 ) ( 939 ) Total consideration 363,518 701,797 Aggregate unpaid principal balance and accrued interest of loans sold 365,560 677,569 Gain (loss) from loan sales $ ( 2,042 ) $ 24,228 Personal loans Fair value of consideration received: Cash $ 1,018,689 $ 811,252 Servicing assets recognized 6,424 6,003 Repurchase liabilities recognized ( 2,298 ) ( 2,084 ) Total consideration received 1,022,815 815,171 Aggregate unpaid principal balance and accrued interest of loans sold 981,855 782,529 Gain from loan sales $ 40,960 $ 32,642 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 information as of the dates indicated about the unpaid principal balances of transferred loans that are not recorded in our unaudited condensed consolidated balance sheets, but with which we have a continuing involvement through our servicing agreements: Student Loans Home Loans Personal Loans Total March 31, 2022 Loans in repayment $ 9,302,518 $ 4,805,945 $ 5,075,573 $ 19,184,036 Loans in-school/grace/deferment 31,450 — — 31,450 Loans in forbearance 45,096 13,554 753 59,403 Loans in delinquency 93,259 9,445 79,590 182,294 Total loans serviced $ 9,472,323 $ 4,828,944 $ 5,155,916 $ 19,457,183 December 31, 2021 Loans in repayment $ 9,852,957 $ 4,575,001 $ 5,138,299 $ 19,566,257 Loans in-school/grace/deferment 37,949 — — 37,949 Loans in forbearance 44,833 40,353 1,120 86,306 Loans in delinquency 112,885 7,465 75,275 195,625 Total loans serviced $ 10,048,624 $ 4,622,819 $ 5,214,694 $ 19,886,137 The following table presents additional information during the periods indicated about the servicing cash flows received and net charge-offs related to transferred loans with which we have a continuing involvement: Three Months Ended March 31, 2022 2021 Student loans Servicing fees collected $ 9,168 $ 9,025 Charge-offs, net of recoveries (1) 8,220 3,053 Home Loans Servicing fees collected $ 2,636 $ 1,613 Charge-offs, net of recoveries — — Personal Loans Servicing fees collected $ 8,637 $ 9,490 Charge-offs, net of recoveries (1) 17,138 37,817 Total Servicing fees collected $ 20,441 $ 20,128 Charge-offs, net of recoveries 25,358 40,870 _____________________ (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. Note 7. Allowance for Credit Losses We measure our allowance for credit losses on accounts receivable under ASC 326, which primarily relates to our Technology Platform segment, and on loans measured at amortized cost, including credit card as well as commercial and consumer banking loans acquired in the Bank Merger. 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. 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) The following table summarizes the activity in the balances of allowance for credit losses during the periods indicated. Accounts Receivable (1) Credit Card (1) Commercial and Consumer Banking (1) Three Months Ended March 31, 2022 Balance at December 31, 2021 $ 2,292 $ 7,037 $ — Provision for credit losses (2) ( 591 ) 11,977 984 Allowance for PCD loans (3) — — 382 Write-offs charged against the allowance (4) ( 49 ) ( 2,514 ) — Balance at March 31, 2022 $ 1,652 $ 16,500 $ 1,366 Three Months Ended March 31, 2021 Balance at December 31, 2020 $ 562 $ 219 $ — Provision for credit losses (2) 1,135 — — Write-offs charged against the allowance ( 778 ) ( 48 ) — Balance at March 31, 2021 $ 919 $ 171 $ — _____________________ (1) Accounts receivable balances, net of allowance for credit losses, are presented within other assets in the unaudited condensed consolidated balance sheets. Credit card and commercial and consumer banking loans measured at amortized cost, net of allowance for credit losses, are presented within loans in the unaudited condensed consolidated balance sheets. (2) The provision for credit losses on accounts receivable is presented within noninterest expense—general and administrative in the unaudited condensed consolidated statements of operations and comprehensive income (loss). During the three months ended March 31, 2022 and 2021, recoveries of amounts previously reserved related to accounts receivable were $ 1,392 and $ 547 , respectively. The provision for credit losses on credit card and commercial and consumer banking loans is presented within noninterest expense—provision for credit losses. There were no recoveries of credit card losses during the three months ended March 31, 2022 and 2021 and immaterial recoveries on the commercial and consumer banking portfolio through March 31, 2022. (3) We measured a PCD allowance for the loans acquired in the Bank Merger upon acquisition, which resulted in a gross-up to the allowance for credit losses, but had no impact on earnings. (4) The increase in credit card write-offs charged against the allowance during the three months ended March 31, 2022 was commensurate with our increased loan portfolio combined with increased loss rates. 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) 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 unaudited condensed consolidated balance sheets as of the dates presented. March 31, 2022 Fair Value Carrying Value Level 1 Level 2 Level 3 Total Assets Cash and cash equivalents (1) $ 1,325,135 $ 1,325,135 $ — $ — $ 1,325,135 Restricted cash and restricted cash equivalents (1) 377,077 377,077 — — 377,077 Investments in AFS debt securities (2)(4) 199,840 136,363 63,477 — 199,840 Loans at fair value (2) 7,002,885 — — 7,002,885 7,002,885 Loans at amortized cost (1) 219,116 — — 227,917 227,917 Servicing rights (2) 173,505 — — 173,505 173,505 Asset-backed bonds (2)(5) 218,693 — 218,693 — 218,693 Residual investments (2)(5) 106,677 — — 106,677 106,677 Non-securitization investments – ETFs (2)(6) 1,419 1,419 — — 1,419 Non-securitization investments – other (3) 25,176 — — 25,176 25,176 Third party warrants (2)(7) 1,227 — — 1,227 1,227 Derivative assets (2)(8)(9) 9,684 9,684 — — 9,684 Purchase price earn-out (2)(10) 2,285 — — 2,285 2,285 Student loan commitments (2)(11) 23 — — 23 23 Interest rate caps (2)(9) 3,116 — 3,116 — 3,116 Total assets $ 9,665,858 $ 1,849,678 $ 285,286 $ 7,539,695 $ 9,674,659 Liabilities Deposits (1) $ 14,187 $ — $ 14,145 $ — $ 14,145 Debt (1) 4,916,175 968,280 3,759,066 — 4,727,346 Residual interests classified as debt (2) 70,532 — — 70,532 70,532 Derivative liabilities (2)(8)(9) 10,927 150 10,777 — 10,927 Interest rate lock commitments (2)(11) 3,039 — — 3,039 3,039 Total liabilities $ 5,014,860 $ 968,430 $ 3,783,988 $ 73,571 $ 4,825,989 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) December 31, 2021 Fair Value Carrying Value Level 1 Level 2 Level 3 Total Assets Cash and cash equivalents (1) $ 494,711 $ 494,711 $ — $ — $ 494,711 Restricted cash and restricted cash equivalents (1) 273,726 273,726 — — 273,726 Investments in AFS debt securities (2)(4) 194,907 129,835 65,072 — 194,907 Loans at fair value (2) 5,952,972 — — 5,952,972 5,952,972 Loans at amortized cost (1) 115,912 — — 118,412 118,412 Servicing rights (2) 168,259 — — 168,259 168,259 Asset-backed bonds (2)(5) 253,669 — 253,669 — 253,669 Residual investments (2)(5) 121,019 — — 121,019 121,019 Non-securitization investments – ETFs (2)(6) 1,486 1,486 — — 1,486 Non-securitization investments – other (3) 6,054 — — 6,054 6,054 Third party warrants (2)(7) 1,369 — — 1,369 1,369 Derivative assets (2)(8)(9) 5,444 — 5,444 — 5,444 Purchase price earn-out (2)(10) 4,272 — — 4,272 4,272 Interest rate lock commitments (2)(11) 3,759 — — 3,759 3,759 Student loan commitments (2)(11) 2,220 — — 2,220 2,220 Interest rate caps (2)(9) 493 — 493 — 493 Total assets $ 7,600,272 $ 899,758 $ 324,678 $ 6,378,336 $ 7,602,772 Liabilities Debt (1) $ 3,947,983 $ 1,240,560 $ 2,807,253 $ — $ 4,047,813 Residual interests classified as debt (2) 93,682 — — 93,682 93,682 Derivative liabilities (2)(8)(9) 864 196 668 — 864 Total liabilities $ 4,042,529 $ 1,240,756 $ 2,807,921 $ 93,682 $ 4,142,359 _____________________ (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 value of our convertible notes issued in October 2021 was classified as Level 1, as it was based on an observable market quote. The fair values of our warehouse facility debt, revolving credit facility debt and credit card loans were based on market factors and credit factors specific to these financial instruments. The fair value of our 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 fair value of our commercial and consumer banking loans was determined using a discounted cash flow model with key inputs relating to the underlying contractual coupons, terms, discount rate and expectations for defaults. 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 time-based deposits is estimated by a discounted cash flow method using rates currently offered for deposits of similar remaining maturities. (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 March 31, 2022 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 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 classified as Level 1 are based on utilizing quoted prices in actively traded markets. (7) The key unobservable assumption used in the fair value measurement of the third party warrants is the price of the stock underlying the warrants. The fair value is measured as the difference between the stock price and the strike price of the warrants. As the strike price is insignificant, we concluded that the impact of time value on the fair value measure was immaterial. (8) For certain derivative instruments for which an enforceable master netting agreement exists, we elected to net derivative assets and derivative liabilities by counterparty. These instruments are presented on a gross basis herein. See Note 1 for additional information. (9) Derivative liabilities classified as Level 1 are based on broker quotes in active markets and represent economic hedges of either loans or securitization investment fair values. Interest rate swaps and interest rate caps 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 and interest rate caps are valued using a Secured Overnight Financing Rate (“SOFR”) curve and the implied volatilities suggested by the SOFR rate curve, which are all observable inputs from active markets. (10) 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. (11) 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. 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) Loans The following key unobservable assumptions were used in the fair value measurement of our loans as of the dates indicated: March 31, 2022 December 31, 2021 Range Weighted Average Range Weighted Average Student loans Conditional prepayment rate 16.8 % – 26.1 % 19.6 % 16.5 % – 26.3 % 19.2 % Annual default rate 0.2 % – 3.1 % 0.4 % 0.2 % – 4.2 % 0.4 % Discount rate 3.2 % – 7.8 % 3.5 % 1.9 % – 7.1 % 2.9 % Home loans Conditional prepayment rate 3.9 % – 8.2 % 7.4 % 4.8 % – 16.4 % 12.4 % Annual default rate 0.1 % – 0.3 % 0.1 % 0.1 % – 0.2 % 0.1 % Discount rate 3.8 % – 13.0 % 3.8 % 2.5 % – 13.0 % 2.6 % Personal loans Conditional prepayment rate 16.1 % – 42.8 % 20.1 % 18.4 % – 37.7 % 20.5 % Annual default rate 4.2 % – 35.6 % 4.4 % 4.2 % – 30.0 % 4.4 % Discount rate 5.0 % – 7.6 % 5.2 % 3.9 % – 7.0 % 4.0 % 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. 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) The following key unobservable inputs were used in the fair value measurement of our classes of servicing rights as of the dates presented: March 31, 2022 December 31, 2021 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 15.2 % – 24.8 % 19.9 % 15.2 % – 25.6 % 20.4 % Annual default rate 0.2 % – 4.3 % 0.4 % 0.2 % – 4.3 % 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 5.7 % – 12.8 % 6.1 % 10.0 % – 16.4 % 11.5 % Annual default rate 0.1 % – 0.1 % 0.1 % 0.1 % – 0.2 % 0.1 % Discount rate 7.5 % – 7.5 % 7.5 % 7.5 % – 7.5 % 7.5 % Personal loans Market servicing costs 0.2 % – 1.3 % 0.2 % 0.2 % – 1.1 % 0.2 % Conditional prepayment rate 22.6 % – 44.6 % 25.7 % 22.5 % – 41.4 % 26.0 % Annual default rate 3.3 % – 7.0 % 4.4 % 3.2 % – 7.0 % 4.4 % 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. 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 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: March 31, 2022 December 31, 2021 Market servicing costs 2.5 basis points increase $ ( 10,651 ) $ ( 10,822 ) 5.0 basis points increase ( 21,303 ) ( 21,644 ) Conditional prepayment rate 10% increase $ ( 5,675 ) $ ( 6,260 ) 20% increase ( 11,200 ) ( 12,031 ) Annual default rate 10% increase $ ( 206 ) $ ( 205 ) 20% increase ( 410 ) ( 408 ) Discount rate 100 basis points increase $ ( 4,698 ) $ ( 3,782 ) 200 basis points increase ( 9,084 ) ( 7,349 ) 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. 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 March 31, 2022 Fair value as of January 1, 2022 $ 90,003 $ 50,533 $ 27,723 $ 168,259 Recognition of servicing from transfers of financial assets 5,824 4,238 6,424 16,486 Servicing rights assumed from third parties — — 629 629 Derecognition of servicing via loan purchases ( 1,041 ) — ( 369 ) ( 1,410 ) Change in valuation inputs or other assumptions 1,292 7,740 2,548 11,580 Realization of expected cash flows and other changes ( 10,121 ) ( 2,926 ) ( 8,992 ) ( 22,039 ) Fair value as of March 31, 2022 $ 85,957 $ 59,585 $ 27,963 $ 173,505 Three Months Ended March 31, 2021 Fair value as of January 1, 2021 $ 100,637 $ 23,914 $ 25,046 $ 149,597 Recognition of servicing from transfers of financial assets 33,589 6,539 6,003 46,131 Change in valuation inputs or other assumptions ( 15,728 ) 3,329 290 ( 12,109 ) Realization of expected cash flows and other changes ( 12,160 ) ( 1,744 ) ( 8,475 ) ( 22,379 ) Fair value as of March 31, 2021 $ 106,338 $ 32,038 $ 22,864 $ 161,240 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) 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: March 31, 2022 December 31, 2021 Discount rate (range) 1.5 % – 4.1 % 0.6 % – 3.7 % Conditional prepayment rate (range) 18.4 % – 33.0 % 19.5 % – 32.2 % 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: March 31, 2022 December 31, 2021 Range Weighted Average Range Weighted Average Residual investments Conditional prepayment rate 18.4 % – 33.7 % 22.7 % 19.5 % – 33.6 % 23.0 % Annual default rate 0.3 % – 5.6 % 0.9 % 0.3 % – 5.7 % 0.9 % Discount rate 3.1 % – 10.5 % 4.8 % 2.6 % – 10.5 % 4.4 % Residual interests classified as debt Conditional prepayment rate 19.3 % – 44.2 % 30.7 % 20.0 % – 41.8 % 31.5 % Annual default rate 0.5 % – 5.4 % 2.8 % 0.5 % – 5.6 % 3.2 % Discount rate 5.5 % – 9.5 % 6.2 % 5.0 % – 9.5 % 5.7 % 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 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 unaudited condensed consolidated statements of operations and comprehensive income (loss), a portion of which is subsequently reclassified to 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 March 31, 2022 Fair value as of January 1, 2022 $ 121,019 $ 93,682 Change in valuation inputs or other assumptions (1) 762 2,963 Payments ( 15,104 ) ( 26,113 ) Fair value as of March 31, 2022 $ 106,677 $ 70,532 Three Months Ended March 31, 2021 Fair value as of January 1, 2021 $ 139,524 $ 118,298 Additions 26,381 — Change in valuation inputs or other assumptions (1) 3,497 7,951 Payments ( 18,441 ) ( 11,367 ) Fair value as of March 31, 2021 $ 150,961 $ 114,882 ___________________ (1) For residual investments, the estimated amount of losses included in earnings attributable to changes in instrument-specific credit risk were immaterial during the periods presented. 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: March 31, 2022 December 31, 2021 Range Weighted Average Range Weighted Average IRLCs Loan funding probability (1) 48.0 % – 59.0 % 58.6 % 75.0 % – 75.0 % 75.0 % Student loan commitments Loan funding probability (1) 95.0 % – 95.0 % 95.0 % 95.0 % – 95.0 % 95.0 % ___________________ (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 $ 4,888 as of March 31, 2022. 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. 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 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) income—loan origination and sales in the unaudited condensed consolidated statements of operations and comprehensive income (loss). IRLCs Student Loan Commitments Three Months Ended March 31, 2022 Fair value as of January 1, 2022 $ 3,759 $ 2,220 Revaluation adjustments ( 3,039 ) 23 Funded loans (1) ( 2,201 ) ( 2,121 ) Unfunded loans (1) ( 1,558 ) ( 99 ) Fair value as of March 31, 2022 $ ( 3,039 ) $ 23 Three Months Ended March 31, 2021 Fair value as of January 1, 2021 $ 15,620 $ — Revaluation adjustments 7,118 — Funded loans (1) ( 10,210 ) — Unfunded loans (1) ( 5,410 ) — Fair value as of March 31, 2021 $ 7,118 $ — ___________________ (1) For each quarter presented, funded and unfunded loan fair value adjustments represent the unpaid principal balance of funded and unfunded loans, respectively, during the quarter multiplied by the IRLC or student loan commitment price in effect at the beginning of the quarter. Non-Securitization Investments Non-securitization investments — ETFs of $ 1,419 and $ 1,486 as of March 31, 2022 and December 31, 2021, respectively, include investments in exchange-traded funds (“ETF”), which have targeted investment strategies. Our investments as of March 31, 2022 and December 31, 2021 included an ETF with investment grade and high-yield fixed income securities. 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 unaudited condensed consolidated balance sheets. Non-securitization investments — Other of $ 25,176 and $ 6,054 as of March 31, 2022 and December 31, 2021, respectively, include 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 unaudited condensed consolidated balance sheets. Adjustments to the carrying value, such as impairments and unrealized gains, are recognized within noninterest income—other in the unaudited condensed 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. In the first quarter of 2022, we measured a former equity method investment under the measurement alternative method, which primarily drove the increase in the balance from year end. There were no observed changes in the fair value through March 31, 2022. For an investment with a fair value of $ 2,168 as of March 31, 2022 and December 31, 2021, respectively, we recognized a gain of $ 3,967 during the second quarter of 2021, which reflected a value based on the investee’s latest round of financing in an orderly transaction in an issuance similar to our investment holding. In the same quarter, we sold a portion of our investment for $ 2,000 at the same valuation. We also had another investment with a fair value of $ 2,000 as of March 31, 2022 and December 31, 2021, respectively. We did not make any adjustments to the investment value through March 31, 2022. 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) Purchase Price Earn-Out We recognize a derivative asset for a purchase price earn-out in conjunction with a loan sale agreement we entered into during 2018. 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. 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 dates indicated. Purchase Price Earn-Out March 31, 2022 December 31, 2021 Conditional prepayment rate 22.7 % 22.9 % Annual default rate 35.6 % 30.0 % Discount rate 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. • 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. • 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 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 unaudited condensed consolidated statements of operations and comprehensive income (loss). Changes during the three months ended March 31, 2021 were immaterial. Purchase Price Earn-Out Three Months Ended March 31, 2022 Fair value as of January 1, 2022 $ 4,272 Payments ( 2,817 ) Changes in valuation inputs or assumptions (1) 830 Fair value as of March 31, 2022 $ 2,285 ___________________ (1) The estimated amount of losses included in earnings attributable to changes in instrument-specific credit risk were immaterial during the three months ended March 31, 2022. 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. 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) 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 March 31, 2022 (5) December 31, 2021 Student Loan Warehouse Facilities SoFi Funding I $ 66,038 SOFR + 100 bps April 2023 $ 200,000 $ 62,499 $ — SoFi Funding III (6) 9,720 PR –  134 bps September 2024 75,000 8,673 3,930 SoFi Funding V (7) — 1ML + 135 bps May 2023 350,000 — — SoFi Funding VI 161,378 3ML + 125 bps March 2024 600,000 153,396 56,709 SoFi Funding VII — SOFR + 85 bps September 2024 500,000 — 284,475 SoFi Funding VIII 291,106 1ML + 90 bps May 2022 300,000 266,281 245,723 SoFi Funding IX (8) 362,672 SOFR+ 210 bps and CP + 87.5 bps May 2025 500,000 339,467 9,816 SoFi Funding X (9) 342,018 CP + 95 bps April 2025 500,000 306,705 29,647 SoFi Funding XI (10) 467,093 CP + 100 bps November 2024 500,000 424,041 — SoFi Funding XII (11) — CP + 115 bps November 2024 200,000 — 20,267 SoFi Funding XIII 461,666 SOFR + 55 bps April 2024 450,000 408,384 424,348 Total, before unamortized debt issuance costs $ 2,161,691 $ 4,175,000 $ 1,969,446 $ 1,074,915 Unamortized debt issuance costs $ ( 7,706 ) $ ( 7,540 ) Personal Loan Warehouse Facilities SoFi Funding PL I (12) $ 146,768 CP + 137.5 bps September 2023 $ 250,000 $ 123,036 $ 11,911 SoFi Funding PL II — 3ML + 225 bps July 2023 400,000 — — SoFi Funding PL III — 1ML + 175 bps May 2023 250,000 — — SoFi Funding PL IV (13) — CP + 170 bps November 2023 500,000 — — SoFi Funding PL VI (14) — CP + 170 bps September 2024 50,000 — — SoFi Funding PL VII 97,052 1ML + 115 bps June 2022 250,000 81,518 71,572 SoFi Funding PL X 88,974 1ML + 142.5 bps February 2023 200,000 74,267 — SoFi Funding PL XI 112,854 SOFR + 125 bps January 2023 200,000 107,071 — SoFi Funding PL XIII 123,953 SOFR + 110 bps January 2032 300,000 108,597 — SoFi Funding PL XIV — SOFR + 100 bps October 2024 300,000 — 144,662 Total, before unamortized debt issuance costs $ 569,601 $ 2,700,000 $ 494,489 $ 228,145 Unamortized debt issuance costs $ ( 3,551 ) $ ( 3,898 ) Home Loan Warehouse Facilities Mortgage Warehouse VI $ — SOFR + 200 bps October 2022 $ 1,000 $ — $ — Total, before unamortized debt issuance costs $ — $ 1,000 $ — $ — Unamortized debt issuance costs $ — $ — Credit Card Warehouse Facilities SoFi Funding CC I LLC (15) $ — CP + 175 bps March 2023 $ 100,000 $ — $ 11,810 Total, before unamortized debt issuance costs $ — $ 100,000 $ — $ 11,810 Unamortized debt issuance costs $ ( 214 ) $ ( 312 ) Risk Retention Warehouse Facilities (16) SoFi RR Funding I $ 38,380 3ML + 200 bps January 2024 $ 100,000 $ 28,148 $ 22,608 SoFi RR Repo — 3ML + 185 bps January 2022 — — 69,843 SoFi RR Funding II 97,380 1ML + 125 bps November 2024 87,333 98,031 SoFi RR Funding III 39,058 1ML + 125 bps November 2024 35,475 39,158 SoFi RR Funding IV 73,167 SOFR + 150 bps October 2027 100,000 57,814 66,555 SoFi RR Funding V 44,221 298 bps December 2025 17,431 29,453 Total, before unamortized debt issuance costs $ 292,206 $ 226,201 $ 325,648 Unamortized debt issuance costs $ ( 1,626 ) $ ( 2,086 ) 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) Borrowing Description Collateral Balances (1) Interest Rate (2) Termination/ Maturity (3) Total Capacity (4) Outstanding as of March 31, 2022 (5) December 31, 2021 Revolving Credit Facility SoFi Corporate Revolver (17) n/a 1ML + 100 bps September 2023 $ 560,000 $ 486,000 $ 486,000 Total, before unamortized debt issuance costs $ 560,000 $ 486,000 $ 486,000 Unamortized debt issuance costs $ ( 536 ) $ ( 626 ) Other Financing Convertible senior notes n/a — % October 2026 $ 1,200,000 $ 1,200,000 Total, before unamortized debt issuance costs and discount $ 1,200,000 $ 1,200,000 Unamortized debt issuance costs $ ( 1,549 ) $ ( 1,634 ) Unamortized discount ( 21,676 ) ( 22,858 ) Other financing (18) $ 19,131 $ 19,620 $ — $ — Student Loan Securitizations SoFi PLP 2016-B LLC $ 43,122 1ML + ( 120 – 380 bps) April 2037 $ 38,608 $ 43,186 SoFi PLP 2016-C LLC 49,566 1ML + ( 110 – 335 bps) May 2037 44,549 49,685 SoFi PLP 2016-D LLC 63,585 1ML + ( 95 – 323 bps) January 2039 57,096 61,760 SoFi PLP 2016-E LLC 73,983 1ML + ( 85 – 443 bps) October 2041 67,138 74,242 SoFi PLP 2017-A LLC 92,500 1ML + ( 70 – 443 bps) March 2040 83,744 92,972 SoFi PLP 2017-B LLC 77,538 274  –  444 bps May 2040 70,405 78,811 SoFi PLP 2017-C LLC 102,963 1ML + ( 60 – 421 bps) July 2040 92,915 102,814 Total, before unamortized debt issuance costs and discount $ 503,257 $ 454,455 $ 503,470 Unamortized debt issuance costs $ ( 3,424 ) $ ( 3,851 ) Unamortized discount ( 981 ) ( 1,094 ) Personal Loan Securitizations SoFi CLP 2018-3 LLC $ 64,281 467  bps August 2027 $ 59,918 $ 76,535 SoFi CLP 2018-4 LLC 73,628 417  –  476 bps November 2027 68,297 86,835 Total, before unamortized debt issuance costs, premiums and discount $ 137,909 $ 128,215 $ 163,370 Unamortized debt issuance costs $ ( 1,528 ) $ ( 1,683 ) Unamortized premium 160 207 Total, before unamortized debt issuance costs, premiums and discounts $ 4,958,806 $ 3,993,358 Less: unamortized debt issuance costs, premiums and discounts ( 42,631 ) ( 45,375 ) Total reported debt $ 4,916,175 $ 3,947,983 _________________ (1) As of March 31, 2022, 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 70 basis points (“bps”) on our various warehouse facilities are recognized as noninterest expense—general and administrative in our unaudited condensed consolidated statements of operations and comprehensive income (loss). “ML” stands for “Month LIBOR”. As of March 31, 2022, 1ML and 3ML was 0.45% and 0.96%, respectively. As of December 31, 2021, 1ML and 3ML was 0.10% and 0.21%, respectively. As of March 31, 2022 and December 31, 2021, SOFR was 0.29% and 0.05%, respectively. “PR” stands for “Prime Rate”. As of March 31, 2022 and December 31, 2021, PR was 3.50% 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 March 31, 2022. (5) There were no debt discounts or premiums issued during the three months ended March 31, 2022. We paid $ 700 during the three months ended March 31, 2022 related to debt issuance costs accrued in 2021. (6) Warehouse facility has a prime rate floor of 309 bps. (7) Warehouse facility has a 1ML floor of 25 bps. 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) (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 March 31, 2022 and December 31, 2021, the CP rate for this facility was 0.50 % and 0.19 %, respectively. (9) Warehouse facility incurs interest based on a CP rate, which is determined by the facility lender. As of March 31, 2022 and December 31, 2021, the CP rate for this facility was 0.55 % and 0.24 %, respectively. (10) Warehouse facility incurs interest based on a CP rate, which is determined by the facility lender. As of March 31, 2022 and December 31, 2021, the CP rate for this facility was 0.50 % and 0.19 %, respectively. The facility was amended in the first quarter of 2022 to allow up to $ 250 million of securitization risk retention securities to be pledged to the warehouse. As of March 31, 2022, $ 49.8 million of the collateral balance for the facility was related to securitization risk retention securities, with the remainder of the collateral balance related to student loans. (11) Warehouse facility incurs interest based on a CP rate, which is determined by the facility lender. As of March 31, 2022 and December 31, 2021, the CP rate for this facility was 0.50 % and 0.19 %, respectively. Under certain conditions, warehouse facility could incur an interest rate spread of 215 bps. (12) Warehouse facility incurs interest based on a CP rate, which is determined by the facility lender. As of March 31, 2022 and December 31, 2021, the CP rate for this facility was 0.50 % and 0.18 %, respectively. (13) Warehouse facility incurs interest based on a CP rate, which is determined by the facility lender. As of March 31, 2022 and December 31, 2021, the CP rate for this facility was 0.50 % and 0.16 %, respectively. (14) Warehouse facility incurs interest based on a CP rate, which is determined by the facility lender. As of March 31, 2022 and December 31, 2021, the CP rate for this facility was 0.50 % and 0.16 %, respectively. (15) 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 March 31, 2022 and December 31, 2021, the CP rate for this facility was 0.51 % and 0.24 %, respectively. (16) 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 March 31, 2022. (17) As of March 31, 2022, $ 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. Additionally, the 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) Includes $ 19.1 million of loans pledged as collateral to secure $ 12.0 million of available borrowing capacity with the Federal Home Loan Bank (“FHLB”), of which $ 8.2 million was not available as it was utilized to secure letters of credit. Refer to our letter of credit disclosures in Note 15 for more details. Also includes unsecured available borrowing capacity of $ 7.6 million with correspondent banks. Material Changes to Debt Arrangements During the three months ended March 31, 2022, we closed one risk retention warehouse facility that had a maximum available capacity of $ 192,141 . 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 unaudited condensed 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. We assumed $ 2,000 of debt in the Bank Merger, which was paid off during the first quarter of 2022. We act as a guarantor for our wholly-owned subsidiaries in several arrangements in the case of default. As of March 31, 2022, we have not identified any risks of nonpayment by our wholly-owned subsidiaries. Maturities of Borrowings As of March 31, 2022, future maturities of our outstanding debt with scheduled payments, which included our revolving credit facility and convertible notes, were as follows: Remainder of 2022 $ — 2023 486,000 2024 — 2025 — 2026 1,200,000 Thereafter — Total $ 1,686,000 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) 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. As of March 31, 2022, there were no shares of SoFi Technologies Preferred Stock issued and outstanding and there were 3,234,000 shares of Series 1 Redeemable Preferred Stock issued and outstanding, which had an original issuance price of $ 100.00 . Dividends During the three months ended March 31, 2022 and 2021, the holders of Series 1 Redeemable Preferred Stock were entitled to dividends of $ 9,968 and $ 9,968 , respectively. Dividends payable were $ 9,968 as of March 31, 2022. There were no dividends payable as of December 31, 2021. There have been no dividend deferrals related to the Series 1 Redeemable Preferred Stock. 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 unaudited condensed consolidated balance sheets. Prior to 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 unaudited condensed 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. At that time, we reclassified the Series H warrant liability into permanent equity, as the terms of the Series H instrument no longer necessitated liability accounting. Therefore, we did not measure the warrants at fair value subsequent to May 28, 2021. The following table presents the changes in the fair value of the Series H warrant liabilities during the three months ended March 31, 2021, which was prior to the reclassification to permanent equity. Warrant Liabilities Three Months Ended March 31, 2021 Fair value as of January 1, 2021 $ 39,959 Change in valuation inputs or other assumptions 89,920 Fair value as of March 31, 2021 $ 129,879 Note 11. Permanent Equity On June 1, 2021, the Company’s common stock began trading on the Nasdaq Global Select Market under the ticker symbol “SOFI”. 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 March 31, 2022, the Company had 915,673,855 shares of common stock and no shares of non-voting common stock issued and outstanding. 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 Company reserved the following common stock for future issuance as of the dates indicated: March 31, December 31, 2022 2021 Outstanding stock options, RSUs and performance stock units (“PSU”) 105,784,967 92,829,067 Outstanding common stock warrants 12,170,990 12,170,990 Conversion of convertible notes (1) 53,538,000 53,538,000 Possible future issuance under stock plans 21,335,246 32,470,481 Potentially issuable contingent common stock (2) 598,068 — Total common stock reserved for future issuance 193,427,271 191,008,538 ____________________ (1) Represents the number of common stock issuable upon conversion of all convertible notes at the conversion rate in effect at the balance sheet date. (2) As of March 31, 2022, includes potentially issuable contingent common stock in connection with the Technisys Merger, which determination is pending final agreement regarding a closing net working capital calculation specified in the merger agreement. See Note 2 for additional information. Dividends There were no dividends declared or paid to common stockholders during the three months ended March 31, 2022 and 2021. 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. The following table presents the rollforward of AOCI, inclusive of the changes in the components of other comprehensive loss for the periods indicated. AFS Debt Securities Foreign Currency Translation Adjustments Total Three Months Ended March 31, 2022 AOCI, beginning balance $ ( 1,351 ) $ ( 120 ) $ ( 1,471 ) Other comprehensive loss before reclassifications (1) ( 4,616 ) ( 38 ) ( 4,654 ) Amounts reclassified from AOCI into earnings 161 — 161 Net current-period other comprehensive loss (2) ( 4,455 ) ( 38 ) ( 4,493 ) AOCI, ending balance $ ( 5,806 ) $ ( 158 ) $ ( 5,964 ) Three Months Ended March 31, 2021 AOCI, beginning balance $ — $ ( 166 ) $ ( 166 ) Other comprehensive loss before reclassifications (1) — ( 80 ) ( 80 ) Net current-period other comprehensive loss (2) — ( 80 ) ( 80 ) AOCI, ending balance $ — $ ( 246 ) $ ( 246 ) ____________________ (1) Gross realized gains and losses from sales of our investments in AFS debt securities that were reclassified from AOCI to earnings are recorded within noninterest income—other in the unaudited condensed consolidated statements of operations and comprehensive income (loss). We did not have investments in AFS debt securities during the three months ended March 31, 2021. Additionally, there were no reclassifications related to foreign currency translation adjustments during the three months ended March 31, 2022 and 2021. (2) There were no tax impacts during any of the periods presented due to reserves against deferred tax assets in jurisdictions where other comprehensive loss 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 is recognized within interest income—other in the unaudited condensed consolidated statements of operations and comprehensive income (loss). 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) Note 12. Share-Based Compensation 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 2021 Plan allows for the number of authorized shares to increase on the first day of each fiscal year beginning on January 1, 2022 and ending on and including January 1, 2030. Effective January 1, 2022, our Board of Directors authorized the issuance of an additional 8,937,242 shares under this provision. 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. Shares associated with option exercises and RSU vesting are issued from the authorized pool. During the three months ended March 31, 2022 and 2021, we incurred cash outflows of $ 3,593 and $ 25,989 , respectively, related to the payment of withholding taxes for vested RSUs. These cash outflows are presented within net cash provided by (used in) financing activities in the unaudited condensed consolidated statements of cash flows. Share-based compensation expense related to stock options, RSUs and PSUs is presented within the following line items in the unaudited condensed consolidated statements of operations and comprehensive income (loss) for the periods indicated: Three Months Ended March 31, 2022 2021 Technology and product development $ 17,492 $ 11,616 Sales and marketing 5,133 2,445 Cost of operations 4,143 1,481 General and administrative 50,253 21,912 Total $ 77,021 $ 37,454 Stock Options 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, 2022 21,171,147 $ 6.81 5.8 Granted (1) — n/a Exercised ( 1,055,775 ) 1.77 Forfeited ( 692 ) 6.82 Expired ( 55,365 ) 0.61 Outstanding as of March 31, 2022 20,059,315 $ 7.09 5.6 Exercisable as of March 31, 2022 19,906,559 $ 7.10 5.6 ____________________ (1) There were no stock options granted during the three months ended March 31, 2022. Total compensation cost related to unvested stock options not yet recognized as of March 31, 2022 was $ 4.5 million and will be recognized over a weighted average period of approximately 0.9 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. For employees hired on or after January 1, 2022, new hire RSU grants typically vest 12.5 % on the first vesting date, which occurs approximately six months after the date of grant, and ratably each quarter of the ensuing 14-quarter period. For 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) employees hired before January 1, 2022, new hire RSU grants typically vest 25 % on the first vesting date, which occurs approximately one year after the date of grant, and ratably each quarter of the ensuing 12-quarter period. RSUs have been issued under other vesting schedules, including grants to existing employees. The following table summarizes RSU activity for the period indicated: Number of RSUs Weighted Average Grant Date Fair Value Outstanding as of January 1, 2022 48,687,524 $ 12.23 Granted 19,548,471 9.78 Replacement Awards (1) 630,654 10.69 Vested (2) ( 4,951,204 ) 11.57 Forfeited ( 1,282,379 ) 11.34 Outstanding as of March 31, 2022 (3) 62,633,066 $ 11.52 ________________________ (1) In connection with the Technisys Merger, we converted outstanding Technisys performance awards into RSUs to acquire common stock of SoFi, and for which $ 2,855 of the fair value was attributed to pre-combination services. See Note 2 for additional information. (2) The total fair value, based on grant date fair value, of RSUs that vested during the three months ended March 31, 2022 was $ 57.3 million. (3) Includes 178,021 RSUs that were granted in 2020 and later modified in an improbable-to-probable modification (Type III), related to which $ 954 of share-based compensation expense was recorded during the three months ended March 31, 2022. As of March 31, 2022, there was $ 664.6 million of unrecognized compensation cost related to unvested RSUs, which will be recognized over a weighted average period of approximately 3.2 years. Performance Stock Units The following table summarizes PSU activity for the period indicated: Number of PSUs Weighted Average Grant Date Fair Value Outstanding as of January 1, 2022 22,970,396 $ 9.52 Granted 122,190 3.71 Outstanding as of March 31, 2022 23,092,586 $ 9.49 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 value of PSUs utilizing a Monte Carlo simulation model. The following table summarizes the inputs used for estimating the fair value of PSUs granted during the period indicated: Three Months Ended Input March 31, 2022 Risk-free interest rate 1.6 % Expected volatility 37.7 % Fair value of common stock $ 12.06 Dividend yield 0 % Our use of a Monte Carlo simulation model requires the use of subjective assumptions: • The risk-free interest rate assumption was based on the U.S. Treasury rate at the time of grant commensurate with the remaining term of the PSUs. • The expected volatility assumption was based on the implied volatility of our common stock from a set of comparable publicly-traded companies. • The fair value of our common stock was based on the closing stock price on the date of grant. • We assumed no dividend yield because we have historically not paid out dividends to common stockholders. 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) As of March 31, 2022, there was $ 137.0 million of unrecognized compensation cost related to unvested PSUs, which will be recognized over a weighted average period of approximately 1.6 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 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 months ended March 31, 2022 and 2021, we recorded income tax expense of $ 752 and $ 1,099 , respectively, which was primarily due to income tax expense associated with the profitability of SoFi Lending Corp. in some state jurisdictions where separate company filing is required. For the three-month 2022 period, this expense was partially offset by income tax benefits from foreign losses in jurisdictions with net deferred tax liabilities related to the Technisys Merger. See Note 2 for additional information. There were no material changes to our unrecognized tax benefits during the three months ended March 31, 2022 and we do not expect to have any significant changes to unrecognized tax benefits over the next 12 months. During the three months ended March 31, 2022, we maintained a full valuation allowance against our net deferred tax assets in applicable jurisdictions. In certain foreign and 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. Apex Loan In February 2021, Apex Clearing Holdings, LLC (“Apex”), in which we historically had a minority ownership, 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 months ended March 31, 2021, we recognized interest income of $ 211 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 unaudited condensed consolidated statements of operations and comprehensive income (loss). Note 15. Commitments, Guarantees, Concentrations and Contingencies Leases We primarily lease our office premises under multi-year, non-cancelable operating leases. Our operating leases have terms expiring from 2022 to 2040, exclusive of renewal option periods. Our office leases contain renewal option periods ranging from one 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 $ 764 during the three months ended March 31, 2022, all of which were related to our recent acquisitions. Our finance leases expire in 2040. 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) 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. 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. In the absence of this concession, we would have recognized additional operating lease cost of $ 566 during the three months ended March 31, 2021. 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. We are dependent on third-party funding sources to originate loans. Additionally, we sell loans to various third parties. We have historically sold loans to a limited pool of third-party buyers. 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 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. 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. 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 to seek to engage 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. The valuation 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 March 31, 2022, 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 March 31, 2022, we have not recorded additional expense related to this contingency. 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) Juarez et al v. SoFi Lending Corp. On January 27, 2022, the parties advised the court that they had reached agreement on nearly all material terms of the settlement and were in the process of documenting the settlement and accompanying class action settlement notice and claim form. The settlement agreement was fully executed on April 18, 2022 and the plaintiffs have moved for preliminary approval of the settlement. The proposed class settlement, which contemplates an aggregate payment by SoFi in an immaterial amount, remains subject to final court review and approval, which we expect to occur in 2023. In re Renren Inc. Derivative Litigation. On April 13, 2022, the Court held a mediation with the parties and announced that, given the parties' inability to reach an agreement, the Court is going to approve a settlement over objections, and on April 30, 2022, the plaintiffs filed an order to show cause seeking to enforce the October 2021 stipulation of settlement with minor amendments. We do not expect these orders ultimately to affect the plaintiffs’ agreement to dismiss the claims against Social Finance with prejudice. Guarantees We have three types of repurchase obligations that we account for as financial guarantees, which are disclosed in our Annual Report on Form 10-K. In the event of a repurchase, we are typically required to pay the purchase price of the loans transferred. As of March 31, 2022 and December 31, 2021, the Company accrued liabilities within accounts payable, accruals and other liabilities in the unaudited condensed consolidated balance sheets of $ 5,201 and $ 7,441 , respectively, related to our estimated repurchase obligation, with the corresponding charges recorded within noninterest income—loan origination and sales in the unaudited condensed consolidated statements of operations and comprehensive income (loss). As of both March 31, 2022 and December 31, 2021, the amount associated with loans sold that were subject to the terms and conditions of our repurchase obligations totaled $ 6.5 billion. As of March 31, 2022 and December 31, 2021, the Company had a total of $ 9.1 million in letters of credit outstanding with financial institutions, which 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 $ 3.1 million of the Company’s cash, which is included within restricted cash and restricted cash equivalents in the unaudited condensed consolidated balance sheets. As of March 31, 2022, the Company had a total of $ 8.2 million in letters of credit outstanding with the FHLB, which serve as collateral for public deposits and were collateralized by loans. 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. As of March 31, 2022 and December 31, 2021, 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 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 Redeemable 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 holders of Series 1 Redeemable 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 Redeemable 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 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) computed by dividing net loss, adjusted for the impact of Series 1 Redeemable 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 March 31, 2022 2021 Numerator: Net loss $ ( 110,357 ) $ ( 177,564 ) Less: Redeemable preferred stock dividends ( 9,968 ) ( 9,968 ) Net loss attributable to common stockholders – basic and diluted $ ( 120,325 ) $ ( 187,532 ) Denominator: Weighted average common stock outstanding – basic 852,853,596 116,152,593 Weighted average common stock outstanding – diluted 852,853,596 116,152,593 Loss per share – basic $ ( 0.14 ) $ ( 1.61 ) Loss per share – diluted $ ( 0.14 ) $ ( 1.61 ) 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 March 31, 2022 2021 Common stock options 20,059,315 28,188,953 Common stock warrants 12,170,990 — Unvested RSUs 62,633,066 46,762,343 Unvested PSUs 23,092,586 — Convertible notes (1) 53,538,000 — Contingent common stock (2) 6,903,663 1,601,781 Potentially issuable contingent common stock (3) 598,068 — Redeemable preferred stock exchangeable for common stock — 465,916,522 Redeemable preferred stock warrants exchangeable for common stock — 12,170,990 ________________________ (1) Represents the number of common stock issuable upon conversion of all convertible notes at the conversion rate in effect at the balance sheet date. (2) For the three months ended March 31, 2022, includes contingently returnable common stock in connection with the Technisys Merger, which remains subject to further adjustment, pending final agreement regarding a closing net working capital calculation specified in the merger agreement. See Note 2 for additional information. For the three months ended March 31, 2021, included 320,649 contingently issuable common stock in connection with our acquisition of 8 Limited, which was subsequently issued during the fourth quarter of 2021, as well as 1,281,132 contingently issuable common stock related to an adjustment to a common stock issuance in December 2020, which was subsequently issued at the time of the closing of the Business Combination. (3) For the three months ended March 31, 2022, includes the maximum amount of potentially issuable contingent common stock in connection with the Technisys Merger, which is pending final agreement regarding a closing net working capital calculation specified in the merger agreement. See Note 2 for additional information. 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) Note 17. Business Segment Information Segment Organization and Reporting Framework The Company has three reportable segments: Lending, Technology Platform and Financial Services. 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. The reportable segments also reflect the Company’s organizational structure. Each segment has a segment manager who reports directly to the Chief Operating Decision Maker (“CODM”). The CODM has ultimate authority and responsibility over resource allocation decisions and performance assessment. The operations of acquired businesses have been integrated into, or managed as part of, our existing reportable segments. Activities that are not part of a reportable segment, such as management of our corporate investment portfolio and asset/liability management by our centralized treasury function (as further discussed below), are included in the Corporate/Other non-reportable segment (previously referred to as the “Other” non-reportable segment). Contribution profit (loss) is the primary measure of segment profit and loss reviewed by the CODM and is intended to measure the direct profitability of each segment in the manner in which management evaluates performance and makes decisions about funding our operations and allocating resources. 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 • 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. During the three months ended March 31, 2022, we implemented a funds transfer pricing (“FTP”) framework to attribute net interest income to our business segments based on their usage and/or provision of funding. The primary objective of the FTP framework is to transfer interest rate risk from the business segments by providing matched duration of funding of assets and liabilities to allocate interest income and interest expense to each segment. Therefore, the financial impact, management and reporting of interest rate risk is centralized in Corporate/Other, where it is monitored and managed. Under the FTP framework, treasury provides a funds credit for sources of funds, such as deposits generated by our Financial Services segment, and a funds charge for the use of funds, such as loan originations in our Lending segment. The process for determining FTP credits and charges is based on a number of factors and assumptions, including prevailing market interest rates, the expected duration of interest-earning and interest-bearing assets and liabilities, contingent risks and behaviors, and the Company’s broader funding profile. As the durations of asset and liabilities are typically not perfectly matched, the residual impact of the FTP framework is reflected within Corporate/Other. We regularly assess the assumptions, methodologies and reporting classifications used for segment reporting, which may result in further refinements or changes to the framework in future periods. The application of the FTP framework impacts the measure of net interest income and, thereby, total net revenue and contribution profit (loss) for our Lending and Financial Services segments, as well as the total net revenue of Corporate/Other, but has no impact on our consolidated results of operations. Prior to implementing the FTP framework, the presentation of our Lending and Financial Services segments’ net interest income reflected the difference between interest income earned on our loans and the actual interest expense incurred on any loans that were financed. Under the FTP framework, such interest expense is incurred by treasury within Corporate/Other and replaced by an FTP charge. Application of our current FTP framework during the comparative period ended March 31, 2021, would have impacted Lending and Financial Services segment net interest income by $( 110 ) and $( 29 ), respectively. The offsetting impact would have been reflected within net interest income in Corporate/Other. 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) The accounting policies of our reportable segments are consistent with those described in Note 1 and in our Annual Report on Form 10-K, except for the application of the FTP framework and the allocations of consolidated income and consolidated expenses. Assets are not allocated to reportable segments, as our CODM does not evaluate reportable segments using discrete asset information. Segment Information Lending. The Lending segment includes our personal loan, student loan and home loan products and the related servicing activities. 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 (inclusive of our economic hedging activities), gains or losses recognized on transfers that meet the true sale requirements, and our servicing-related activities, which mainly consist of servicing fees and the changes in our servicing assets over time. In our Lending segment, we also earn the difference between interest income earned on our loans and interest expense, as determined using the FTP framework for a portion of the 2022 period, and from our warehouse financing in the remainder of the 2022 period and the full 2021 period. Our CODM considers net interest income in addition to contribution profit in evaluating the performance of our Lending segment and making resource allocation decisions. Therefore, we present interest income net of interest expense. Technology Platform. The Technology Platform segment includes our technology products and solutions revenue, which was primarily related to our platform-as-a-service through Galileo, which provides the infrastructure to facilitate core client-facing and back-end capabilities, such as account setup, accounting funding, direct deposit, authorizations and processing, payments functionality and check account balance features. Beginning in March 2022, this segment also includes our revenue earned by Technisys, which expanded our segment to include a cloud-native digital and core banking platform offering and which results in the sale of software licenses and the provision of related technology solutions. See Note 2 for additional information on the Technisys Merger. Financial Services. The Financial Services segment primarily includes our SoFi Checking and Savings product (which commenced in the first quarter of 2022), SoFi Money cash management product, SoFi Invest product, SoFi Credit Card product, 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 Checking and Savings provides members a digital banking experience that offers no account fees, 2-day early paycheck and a competitive annual percentage yield. SoFi Money cash management 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 interest income earned and interest expense incurred under the FTP framework, payment network fees on our member transactions and pay for order flow, digital assets transaction fees and share lending arrangements in SoFi Invest. 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. Our CODM considers net interest income in addition to contribution profit (loss) in evaluating the performance of our Financial Services segment and making resource allocation decisions. Under the FTP framework, the Financial Services segment earns interest income that is reflective of an FTP credit for deposits provided to the overall business, as well as incurs interest expense that is reflective of an FTP charge related to the use of funding for SoFi Credit Card. Corporate/Other. Non-segment operations are classified as Corporate/Other (previously referred to as “Other”), which includes net revenues associated with corporate functions that are not directly related to a reportable segment. Beginning in the first quarter of 2022, net interest income within Corporate/Other reflects the residual impact from FTP charges and FTP credits allocated to our reportable segments under our FTP framework. These non-segment net revenues also 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 other corporate borrowings, such as our revolving credit facility, the seller note issued in connection with our acquisition of Galileo (which was repaid in February 2021), and the amortization of debt issuance costs and original issue discount on our convertible notes. During the three months ended March 31, 2021, net 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) revenues within Corporate/Other also included $ 211 of interest income and $ 169 of reversal of loss on discount to fair value in connection with related party transactions. Refer to Note 14 for further discussion of our related party transactions. Segment Results The following tables present financial information, including the measure of contribution profit (loss), for each reportable segment for the periods indicated. Three Months Ended March 31, 2022 Lending (2) Technology Platform (1) Financial Services (1)(2) Reportable Segments Total (2) Corporate/Other (1)(2) Total Net revenue Net interest income (loss) $ 94,354 $ — $ 5,882 $ 100,236 $ ( 5,303 ) $ 94,933 Noninterest income (loss) 158,635 60,805 17,661 237,101 ( 1,690 ) 235,411 Total net revenue (loss) $ 252,989 $ 60,805 $ 23,543 $ 337,337 $ ( 6,993 ) $ 330,344 Servicing rights – change in valuation inputs or assumptions (3) ( 11,580 ) — — ( 11,580 ) Residual interests classified as debt – change in valuation inputs or assumptions (4) 2,963 — — 2,963 Directly attributable expenses ( 111,721 ) ( 42,550 ) ( 73,058 ) ( 227,329 ) Contribution profit (loss) $ 132,651 $ 18,255 $ ( 49,515 ) $ 101,391 Three Months Ended March 31, 2021 Lending Technology Platform (1) Financial Services (1) Reportable Segments Total Corporate/Other (1) Total Net revenue Net interest income (loss) $ 51,777 $ ( 36 ) $ 229 $ 51,970 $ ( 4,690 ) $ 47,280 Noninterest income 96,200 46,101 6,234 148,535 169 148,704 Total net revenue (loss) $ 147,977 $ 46,065 $ 6,463 $ 200,505 $ ( 4,521 ) $ 195,984 Servicing rights – change in valuation inputs or assumptions (3) 12,109 — — 12,109 Residual interests classified as debt – change in valuation inputs or assumptions (4) 7,951 — — 7,951 Directly attributable expenses ( 80,351 ) ( 30,380 ) ( 41,982 ) ( 152,713 ) Contribution profit (loss) $ 87,686 $ 15,685 $ ( 35,519 ) $ 67,852 ____________________ (1) During the three months ended March 31, 2022, total net revenue for the Technology Platform segment included $ 770 of intercompany fees earned by Galileo from SoFi, which is a Galileo client. There is an equal and offsetting expense reflected within the Financial Services segment directly attributable expenses representing the intercompany fees incurred to Galileo. The intercompany revenue and expense are eliminated in consolidation. The revenue is eliminated within Corporate/Other and the expense is adjusted in our reconciliation of directly attributable expenses below. We did not recast the segment information for these intercompany amounts for the three months ended March 31, 2021, but rather reflected the full year 2021 impact within the fourth quarter of 2021, as inter-quarter amounts were determined to be immaterial. (2) During the three months ended March 31, 2022, we implemented a centralized FTP framework to attribute net interest income to our business segments based on their usage and/or provision of funding, which impacted the measure of net interest income and, thereby, total net revenue and contribution profit (loss) in our Lending and Financial Services segments, as well as the total net revenue in Corporate/Other, but had no impact on our consolidated results of operations. The net interest income presented within Corporate/Other represents the residual impact of the FTP charges and FTP credits on our reportable segments. (3) 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 unaudited condensed 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. 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) (4) 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 unaudited condensed 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. 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 March 31, 2022 2021 Reportable segments total contribution profit $ 101,391 $ 67,852 Corporate/Other total net loss ( 6,993 ) ( 4,521 ) Intercompany technology platform expenses 770 — Servicing rights – change in valuation inputs or assumptions 11,580 ( 12,109 ) Residual interests classified as debt – change in valuation inputs or assumptions ( 2,963 ) ( 7,951 ) Expenses not allocated to segments: Share-based compensation expense ( 77,021 ) ( 37,454 ) Depreciation and amortization expense ( 30,698 ) ( 25,977 ) Fair value change of warrant liabilities — ( 89,920 ) Employee-related costs (1) ( 42,690 ) ( 32,280 ) Other corporate and unallocated expenses (2) ( 62,981 ) ( 34,105 ) Loss before income taxes $ ( 109,605 ) $ ( 176,465 ) __________________ (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 corporate overhead costs that are not allocated to reportable segments, which primarily includes corporate marketing and advertising costs, tools and subscription costs, professional services costs, corporate insurance expense and transaction-related expenses. No single customer accounted for more than 10% of our consolidated revenues for any of the periods presented. Note 18. Regulatory Capital SoFi Technologies, a bank holding company, and SoFi Bank, a nationally chartered association, are required to comply with applicable capital adequacy regulations established by U.S banking regulators. These requirements establish required minimum ratios for Common Equity Tier 1 (“CET1”) risk-based capital, Tier 1 risk-based capital, total risk-based capital and a Tier 1 leverage ratio; set risk-weighting for assets and certain other items for purposes of the risk-based capital ratios; and define what qualifies as capital for purposes of meeting the capital requirements. Failure to meet minimum capital requirements can result in certain mandatory and possibly additional discretionary actions by regulators that, if undertaken, could have a material effect on the Company’s financial statements. Additionally, regulatory capital rules include a capital conservation buffer of 2.5% that is added on top of each of the minimum risk-based capital ratios in order to avoid restrictions on capital distributions and discretionary bonuses. 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) The risk- and leverage-based capital ratios and amounts as of March 31, 2022 are presented below. March 31, 2022 Amount Ratio Required Minimum (1) Well-Capitalized Minimum (2) SoFi Bank CET1 risk-based capital $ 761,780 68.6 % 7.0 % 6.5 % Tier 1 risk-based capital 761,780 68.6 % 8.5 % 8.0 % Total risk-based capital 762,765 68.7 % 10.5 % 10.0 % Tier 1 leverage 761,780 59.4 % 6.5 % 5.0 % Risk-weighted assets $ 1,110,072 Quarterly adjusted average assets 1,282,720 SoFi Technologies CET1 risk-based capital $ 3,144,337 34.0 % 7.0 % N/A Tier 1 risk-based capital 3,144,337 34.0 % 8.5 % N/A Total risk-based capital 3,482,197 37.7 % 10.5 % N/A Tier 1 leverage 3,144,337 35.7 % 6.5 % N/A Risk-weighted assets $ 9,240,958 Quarterly adjusted average assets 8,810,780 ____________________ (1) Required minimums presented include a capital conservation buffer. (2) The well-capitalized minimum measure is applicable at the bank level only. As of March 31, 2022, our regulatory capital ratios exceeded the thresholds required to be regarded as a well-capitalized institution, and meet all capital adequacy requirements to which we are subject. There have been no events or conditions since March 31, 2022 that management believes would change the categorization. Note 19. 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 and determined that there were no subsequent events to report. 57 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 our Annual Report on Form 10-K filed with the SEC on March 1, 2022. 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. Business Overview We are a member-centric, one-stop shop for financial services that, through our Lending and Financial Services products, allows members to borrow, save, spend, invest and protect their money. We refer to our customers as “members”. 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 offerings as of March 31, 2022 were as follows: Lending Technology Platform Financial Services • Student Loans (1) • Technology Products and Solutions • SoFi Checking and Savings • Loan referrals • Personal Loans • SoFi Money • SoFi At Work • Home Loans • SoFi Invest (2) • SoFi Protect • SoFi Relay • Lantern Credit • SoFi Credit Card • 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. SoFi Invest also includes our brokerage accounts through 8 Limited in Hong Kong. We define a member as someone who has a lending relationship with us through origination and/or 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, and our tools and calculators, which are provided 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 March 31, 2022, we have served approximately 3.9 million members who have used approximately 5.9 million products on the SoFi platform. 58 TABLE OF CONTENTS Members In Thousands We offer our members a suite of financial products and services, enabling them to borrow, save, spend, invest and protect their finances across 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. 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 our Financial Services Productivity Loop. 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 called SoFi At Work, and have become interconnected with the SoFi platform. We have continued to expand our platform capabilities for enterprises through our acquisition of Galileo in 2020, which provides technology platform services to financial and non-financial institutions and which has allowed us to vertically integrate across more of our financial services, and the Technisys Merger in the first quarter of 2022, through which we expanded our technology platform services to a broader international market. We believe that these expansions will deepen our participation in the entire technology ecosystem powering digital financial services, allowing us to not only reduce costs to operate our member-centric business, but also deliver increasing value to our enterprise customers. While our enterprises are not considered members, they are important contributors to the growth of the SoFi platform, and also have their own constituents who might benefit from our products in the future. While we primarily operate in the United States, we expanded into Hong Kong with our acquisition of 8 Limited (an investment business), we gained clients in Mexico and Colombia with our acquisition of Galileo, and we further expanded into Latin America with the Technisys Merger. National Bank Charter. In February 2022, we closed the Bank Merger, pursuant to which we acquired all of the outstanding equity interests in Golden Pacific and its wholly-owned subsidiary, which is a national bank. Upon closing the Bank Merger, we became a bank holding company and Golden Pacific began operating as SoFi Bank. Golden Pacific’s community bank business continues to operate as a division of SoFi Bank. As a bank holding company, we allow existing members to convert their SoFi Money cash management accounts into SoFi Checking and Savings accounts held at SoFi Bank, which allows us to offer both checking and savings features and higher interest rates on the accounts, and through which SoFi Bank can use the deposit accounts as an alternative and more cost-effective source of funding for loans, as compared to our loan warehouse facility financing arrangements. Additionally, through SoFi Bank, we expect to, among other things, issue debit cards and provide ACH, check, and wire transaction services over time. Further, we began to originate new loans within SoFi Bank and intend to transfer other lending products, as well as the SoFi Credit Card, to SoFi Bank. The key expected financial benefits to us of operating a national bank include: (i) lowering our cost to fund loans, as we can utilize member deposits held at SoFi Bank to fund loans, which have a lower borrowing cost of funds than our warehouse and securitization financing model, (ii) holding loans on our balance sheet for longer periods, thereby enabling us to 59 TABLE OF CONTENTS earn interest on these loans for a longer period, and (iii) supporting origination volume growth by providing an alternative financing option, while also maintaining our warehouse capacity. See Part II, Item 1A “ Risk Factors ” for a discussion of certain potential risks related to being a bank holding company . IPO Investment Center. Through our Financial Industry Regulatory Authority (“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 (“IPOs”). Through this offering, we earn underwriting fees for participating in the underwriting syndicates for IPOs, or we recognize dealer fees for providing dealer services in partnership with underwriting syndicates for IPOs. Together, these services are referred to as “equity capital markets services” and are presented within noninterest income—other in the unaudited condensed consolidated statements of operations and comprehensive income (loss). See Note 1 to the Notes to Unaudited Condensed Consolidated Financial Statements for additional information. Our Reportable Segments We conduct our business through three reportable segments: Lending, Technology Platform and Financial Services. Below is a discussion of our segments, their corresponding products and the ways in which those products generate revenues and/or incur expenses for the Company. Lending Segment We offer personal loans, student loans and home loans and related services. We believe that our market opportunity within each of these lending channels is significant. Our lending process primarily leverages an in-application, digital borrowing experience, which we believe serves as a competitive advantage as digital lending becomes increasingly ubiquitous. We began accepting new loan applications and originating new loans within SoFi Bank during the first quarter of 2022. 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. Our lending business is primarily a gain-on-sale model, whereby we seek to 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, for which we target 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. In securitization transactions that do not qualify for sale accounting, the related assets remain on our 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, and with the exception of certain of our home loans, we also continue to retain servicing rights to our originated loans following transfer. 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 that we originate and on which we retain servicing, which provides a meaningful data asset. Prior to selling our loans, we rely upon warehouse financing and our own capital to enable us to expand our origination capabilities. By securing our national bank charter, we believe we can lower our overall cost of asset-backed financing over time by utilizing our members’ deposits held at SoFi Bank to fund our loans. 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. In the first quarter of 2022, we implemented a funds transfer pricing (“FTP”) framework to attribute net interest income to our business segments based on their usage and/or provision of funding, which impacts the net interest income in our Lending segment. See Note 17 to the Notes to Unaudited Condensed Consolidated Financial Statements for additional information on the FTP framework. Technology Platform Segment Our Technology Platform segment consists of Galileo, which we acquired in May 2020, and Technisys, which we acquired in March 2022. Galileo is a provider of technology platform services to financial and non-financial institutions. 60 TABLE OF CONTENTS Through Galileo, we provide services through a suite of program, event and authorization application programming interfaces for financial and non-financial institutions. Technisys is a cloud-native digital and core banking platform with financial services customers in Latin America. Through Technisys, we earn technology product and solutions revenue through sales of software licenses and provision of maintenance and support services related to those software licenses. We also provide additional technology solutions for our customers as their business needs evolve over time, which we refer to as “evolution labs.” Many technology platform segment contracts are multi-year contracts. In certain of our contracts, we provide for a variety of integrated platform services, which vary by client and are 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. Some of these contracts contain minimum monthly payments with agreed upon monthly service levels and may contain penalties if service levels are not met. Our technology platform software licenses are either perpetual or term based, and are recognized at a point in time, with the transaction price dependent upon the enforceable term of the software license in the case of a term-based license. We also have arrangements that are time and materials based, wherein the contractual term varies by customer. Finally, maintenance and support services are performed over time, and typically have a defined period of service. Financial Services Segment Our digital suite of financial services products, by nature, provides more daily interactions with our members and is, therefore, differentiated from our lending products, which inherently have less consistent touchpoints with our members. We offer a suite of financial services solutions across our SoFi Checking and Savings account, SoFi Money cash management account, SoFi Invest, SoFi Credit Card and SoFi Relay products. We also acquired commercial and consumer banking loans in the Bank Merger, which we do not expect to have a material impact on our segment performance. SoFi Checking and Savings provides a digital banking experience, while a SoFi Money cash management account provides a digital cash management experience for our members. Following the Bank Merger, we began to allow members to convert their SoFi Money cash management accounts into SoFi Checking and Savings accounts held at SoFi Bank. Effective June 5, 2022, our SoFi Money cash management accounts will no longer earn interest, as we implement our plan to only build new features for SoFi Checking and Savings and reduce support of SoFi Money cash management accounts. SoFi Invest is a mobile-first investment platform offering members access to trading and advisory solutions, such as active investing, robo-advisory and digital assets accounts. SoFi Credit Card has no annual fee and is designed to help our members save, invest and pay down debt through a variable rewards program, with higher rewards offerings when redeeming into other SoFi products. To complement these products, we offer financial tracking through SoFi Relay, and partner with other enterprises through loan referrals and our SoFi At Work service. We also developed a financial services marketplace platform branded Lantern Credit to help applicants that do not qualify for SoFi products with alternative products from other providers, as well as providing a product comparison experience. We earn revenues in connection with our Financial Services segment through various partnerships and our SoFi Checking and Savings accounts, SoFi Money cash management accounts and SoFi Invest products in the following ways: • Brokerage fees : We earn brokerage fees from our share lending and payment for order flow arrangements related to our SoFi Invest product (for which our clearing broker serves as principal, and we are an agent), exchange conversion services and digital assets activity. In our share lending arrangements and payment for order flow arrangements, 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 payment for order flow volume. 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. Beginning in the fourth quarter of 2021, we introduced a flat monthly platform fee that is charged to members associated with our 8 Limited business in Hong Kong. The fee is assessed at each month end on all members with at least one open 8 Limited brokerage account (with the exception of accounts for which the applicable fee exceeds the account’s net asset value at month end) regardless of the volume or frequency of trading activity during the month. The fee is deducted directly from the member’s primary brokerage account. • 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, we entered into another type of referral arrangement whereby we earn referral fulfillment fees for providing pre-qualified 61 TABLE OF CONTENTS borrower referrals to a third-party partner who separately contracts with a loan originator. The referral fulfillment fee is determined as either of two fixed amounts based on the aggregate origination principal balance of the loan. • Payment network fees : We earn payment network fees, which primarily constitute interchange fees from our SoFi-branded debit cards issued by one of our Member Banks and our SoFi Credit Card product, which are reduced by fees payable to card associations and the Member Banks. 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. As we continue to transition our former SoFi Money cash management accounts to SoFi Checking and Savings accounts held at SoFi Bank, we expect to decrease certain fees payable to third parties over time. • Enterprise service fees : These fees are earned in connection with services we provide to enterprise partners through our At Work product, such as when we facilitate transactions for the benefit of their employees, such as 529 plan contributions or student loan payments. • Equity capital markets fees : Equity capital markets fees consist of underwriting fees and dealer fees. Beginning in the second quarter of 2021, we earned underwriting fees related to our membership in underwriting syndicates for IPOs. Beginning in the fourth quarter of 2021, we also earned dealer fees for providing dealer services in partnership with underwriting syndicates for IPOs. We are engaged to place IPO shares that are allocated to us by the underwriters with third-party investors for which we have received a confirmed order. We recognize both types of equity capital markets fees on the applicable trade date. • Net Interest Income: Our Financial Services segment earns interest income from deposits held at SoFi Bank through our implementation of an FTP framework in the first quarter of 2022, whereby the Financial Services segment is credited for the deposit funding it provides to our Lending segment. This interest income has no impact on our consolidated financial statements. See Note 17 to the Notes to Unaudited Condensed Consolidated Financial Statements for additional information on this framework. To a lesser degree, we generate interest income from deposits sitting in our Member Banks, which are member bank holding companies that we exclusively relied on prior to becoming a bank holding company to provide cash management services to our members through our bank sweep program at our broker-dealer subsidiary. While we continue to utilize Member Banks, we now also sweep cash management accounts to SoFi Bank. We also generate interest income on SoFi Credit Card and on cash balances that we hold through SoFi Invest, which amount is not significant to the segment. Finally, we earn interest income on legacy Golden Pacific loans that are held on our balance sheet, which primarily involve commercial real estate and other commercial lending, such as small business lending. We incur interest expense on SoFi Credit Card through the FTP framework, which eliminates in consolidation, as well as incur interest expense related to SoFi Checking and Savings and SoFi Money cash management balances. COVID-19 Pandemic On March 11, 2020, the World Health Organization designated the novel coronavirus (“COVID-19”) as a global pandemic and various governmental restrictions were imposed in an attempt to contain the spread of COVID-19. Although many government mandates to restrict daily activities have been lifted in the United States, the ongoing COVID-19 pandemic and its effects continue to evolve. Worker shortages, supply chain issues, inflationary pressures, vaccine and testing requirements, and the measures taken in response to the emergence of new variants have contributed to the volatility of ongoing recovery. We are unable to predict the future path or impact of any global or regional COVID-19 resurgences, including existing or future variants, or other public health crises. There can be no assurance that economic recovery will continue or that consumer behavior will be the same as or return to pre-pandemic levels. The extent to which the COVID-19 pandemic ultimately impacts our business, results of operations and financial condition will depend on future developments that are still uncertain and cannot be predicted. 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 ongoing impacts from 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, adjusted for fair value adjustments attributable to 62 TABLE OF CONTENTS assumption changes associated with our servicing rights and residual interests classified as debt. See “ Results of Operations ” , “ Summary Results by Segment ” and “ Non-GAAP Financial Measures ” herein for discussion and analysis of these key financial measures. Three Months Ended March 31, ($ in thousands) 2022 2021 Lending Net interest income (1) $ 94,354 $ 51,777 Total noninterest income 158,635 96,200 Total net revenue 252,989 147,977 Adjusted net revenue (2)(3) 244,372 168,037 Contribution profit 132,651 87,686 Technology Platform Net interest income (loss) $ — $ (36) Total noninterest income 60,805 46,101 Total net revenue (4) 60,805 46,065 Contribution profit 18,255 15,685 Financial Services Net interest income (1) $ 5,882 $ 229 Total noninterest income 17,661 6,234 Total net revenue 23,543 6,463 Contribution loss (4) (49,515) (35,519) Corporate/Other (5) Net interest loss $ (5,303) $ (4,690) Total noninterest income (loss) (1,690) 169 Total net loss (4) (6,993) (4,521) Consolidated Net interest income $ 94,933 $ 47,280 Total noninterest income 235,411 148,704 Total net revenue 330,344 195,984 Adjusted net revenue (2)(3) 321,727 216,044 Net loss (110,357) (177,564) Adjusted EBITDA (3) 8,684 4,132 ___________________ (1) Net interest income for our Lending and Financial Services segments reported for the three months ended March 31, 2022 reflect the implementation of an FTP framework. See Note 17 to the Notes to Unaudited Condensed Consolidated Financial Statements for additional information on this framework. (2) 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. (3) 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 ” herein. (4) Technology Platform segment total net revenue for the three months ended March 31, 2022 includes $770 of intercompany fees earned by Galileo from SoFi, which is a Galileo client. There is an equal and offsetting expense reflected within the Financial Services segment contribution loss representing the intercompany fees incurred to Galileo. The intercompany revenue and expense are eliminated in consolidation. The revenue is eliminated within Corporate/Other and the expense represents a reconciling item of segment contribution profit (loss) to consolidated loss before income taxes. For the year ended December 31, 2021, all intercompany amounts were reflected in the fourth quarter, as inter-quarter amounts were determined to be immaterial. See Note 17 to the Notes to Unaudited Condensed Consolidated Financial Statements for additional information. 63 TABLE OF CONTENTS (5) Corporate/Other (previously referred to as “Other”) primarily 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. Beginning in the first quarter of 2022, net interest income within Corporate/Other also reflects the residual impact from FTP charges and FTP credits allocated to our reportable segments under our FTP framework. See Note 17 to the Notes to Unaudited Condensed Consolidated Financial Statements for additional information on this framework. Key Recent Developments We continue to execute on our growth and other strategic initiatives and we continue to celebrate launches across our product suite and strategic partnerships, further 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. In March 2022, we closed the Technisys Merger, which added a cloud-native digital and core banking platform with an existing footprint of clients in Latin America to our technology platform offerings. The combination with our existing technology platform offerings is expected to provide an end-to-end vertically integrated technology stack, which we expect will meet both the expanding needs of our existing and expected future clients. See Note 2 to the Notes to Unaudited Condensed Consolidated Financial Statements for additional information on the Technisys Merger. In February 2022, we closed the Bank Merger, after which we became a bank holding company and Golden Pacific began operating as SoFi Bank. We believe operating a national bank will allow us to provide members and prospective members broader and more competitive options across their financial services needs and lower our cost of asset-backed financing (by utilizing our members’ deposits held at SoFi Bank to fund our loans). We also believe that operating as a national bank will enable us to offer lower interest rates on loans to members as well as offer higher interest rates on member deposit accounts. See “Business Overview—National Bank Charter” herein and Note 2 to the Notes to Unaudited Condensed Consolidated Financial Statements for additional information on the Bank Merger. 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. 64 TABLE OF CONTENTS Quarterly Adjusted Net Revenue We reconcile adjusted net revenue to total net revenue, the most directly comparable GAAP measure, as presented below for the periods indicated. Three Months Ended March 31, ($ in thousands) 2022 2021 Total net revenue $ 330,344 $ 195,984 Servicing rights – change in valuation inputs or assumptions (1) (11,580) 12,109 Residual interests classified as debt – change in valuation inputs or assumptions (2) 2,963 7,951 Adjusted net revenue $ 321,727 $ 216,044 ___________________ (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 below for the quarterly periods indicated. Quarter Ended ($ in thousands) March 31, 2022 December 31, 2021 September 30, 2021 June 30, 2021 March 31, 2021 Total net revenue $ 330,344 $ 285,608 $ 272,006 $ 231,274 $ 195,984 Servicing rights – change in valuation inputs or assumptions (1) (11,580) (9,273) (409) 224 12,109 Residual interests classified as debt – change in valuation inputs or assumptions (2) 2,963 3,541 5,593 5,717 7,951 Adjusted net revenue $ 321,727 $ 279,876 $ 277,190 $ 237,215 $ 216,044 ___________________ (1) See footnote (1) to the table above. (2) See footnote (2) to the table above. 65 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 March 31, ($ in thousands) 2022 2021 Total net revenue – Lending (1) $ 252,989 $ 147,977 Servicing rights – change in valuation inputs or assumptions (2) (11,580) 12,109 Residual interests classified as debt – change in valuation inputs or assumptions (3) 2,963 7,951 Adjusted net revenue – Lending $ 244,372 $ 168,037 ___________________ (1) The total net revenue for our Lending segment reported for the three months ended March 31, 2022 reflects the implementation of an FTP framework to attribute net interest income to our business segments based on their usage and/or provision of funding. See Note 17 to the Notes to Unaudited Condensed Consolidated Financial Statements for additional information on the FTP framework. (2) See footnote (1) to the table above. (3) See footnote (2) to the table above. Adjusted EBITDA Adjusted EBITDA is defined as net income (loss), adjusted to exclude, as applicable: (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 tax expense (benefit), (iii) depreciation and amortization, (iv) share-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) fair value changes in warrant liabilities, and (viii) fair value changes in each of 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. Quarterly Adjusted EBITDA 66 TABLE OF CONTENTS We reconcile adjusted EBITDA to net loss, the most directly comparable GAAP measure, below for the periods indicated. Three Months Ended March 31, ($ in thousands) 2022 2021 Net loss $ (110,357) $ (177,564) Non-GAAP adjustments: Interest expense – corporate borrowings (1) 2,649 5,008 Income tax expense (2) 752 1,099 Depreciation and amortization (3) 30,698 25,977 Share-based expense 77,021 37,454 Transaction-related expense (4) 16,538 2,178 Fair value changes in warrant liabilities (5) — 89,920 Servicing rights – change in valuation inputs or assumptions (6) (11,580) 12,109 Residual interests classified as debt – change in valuation inputs or assumptions (7) 2,963 7,951 Total adjustments 119,041 181,696 Adjusted EBITDA $ 8,684 $ 4,132 ___________________ (1) Our adjusted EBITDA measure adjusts for corporate borrowing-based interest expense, as these expenses are a function of our capital structure. Corporate borrowing-based interest expense primarily included (i) interest on our revolving credit facility, (ii) for the 2022 period, the amortization of debt discount and debt issuance costs on our convertible notes, and (iii) for the 2021 period, interest on the seller note issued in connection with our acquisition of Galileo. 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 unaudited condensed 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 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. Revolving credit facility interest expense remained relatively consistent for the three-month periods, primarily due to identical outstanding debt and relatively consistent average interest rates. (2) Our income tax expense positions were primarily a function of SoFi Lending Corp.’s profitability in state jurisdictions where separate filings are required. The income tax expense in the 2022 period was partially offset by an income tax benefit at Technisys. See Note 13 to the Notes to Unaudited Condensed Consolidated Financial Statements for additional information. (3) Depreciation and amortization expense for the 2022 period increased compared to the 2021 period primarily in connection with our recent acquisitions and growth in our software balance, partially offset by the acceleration of core banking infrastructure amortization during the 2021 period. (4) Transaction-related expenses primarily included financial advisory and professional services costs associated with our acquisition of Technisys in the 2022 period and associated with our then-pending acquisition of Golden Pacific in the 2021 period. (5) Our adjusted EBITDA measure excludes the non-cash fair value changes in warrants accounted for as liabilities, which were measured at fair value through earnings. The amounts in the 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. (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. 67 TABLE OF CONTENTS We reconcile adjusted EBITDA to net loss, the most directly comparable GAAP measure, for the quarterly periods indicated below. Quarter Ended ($ in thousands) March 31, 2022 December 31, 2021 September 30, 2021 June 30, 2021 March 31, 2021 Net loss $ (110,357) $ (111,012) $ (30,047) $ (165,314) $ (177,564) Non-GAAP adjustments: Interest expense – corporate borrowings 2,649 2,593 1,366 1,378 5,008 Income tax expense (benefit) 752 1,558 181 (78) 1,099 Depreciation and amortization 30,698 26,527 24,075 24,989 25,977 Share-based expense 77,021 77,082 72,681 52,154 37,454 Transaction-related expense 16,538 2,753 1,221 21,181 2,178 Fair value changes in warrant liabilities — 10,824 (64,405) 70,989 89,920 Servicing rights – change in valuation inputs or assumptions (11,580) (9,273) (409) 224 12,109 Residual interests classified as debt – change in valuation inputs or assumptions 2,963 3,541 5,593 5,717 7,951 Total adjustments 119,041 115,605 40,303 176,554 181,696 Adjusted EBITDA $ 8,684 $ 4,593 $ 10,256 $ 11,240 $ 4,132 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. March 31, 2022 March 31, 2021 % Change Members 3,868,334 2,281,092 70 % Total Products 5,862,137 3,184,554 84 % Total Products — Lending segment 1,138,566 945,227 20 % Total Products — Financial Services segment 4,723,571 2,239,327 111 % Total Accounts — Technology Platform segment (1) 109,687,014 69,572,680 58 % ___________________ (1) Beginning in the fourth quarter of 2021, we included SoFi accounts on the Galileo platform-as-a-service in our total accounts metric to better align with the Technology Platform segment revenue reported in Note 17 to the Notes to Unaudited Condensed Consolidated Financial Statements. Intercompany revenue is eliminated in consolidation. We did not recast the total accounts as of March 31, 2021 to conform to the current year presentation, as the impact was determined to be immaterial. See “Summary Results by Segment” for additional metrics we review at the segment level. Members We refer to our customers as “members”, which we define as someone who has a lending relationship with us through origination and/or ongoing servicing, opened a financial services account, linked an external account to our platform, or signed up for our credit score monitoring service. See “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 that 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 complimentary product, SoFi Relay) provide direct sources of revenue. 68 TABLE OF CONTENTS 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 (presented inclusive of SoFi Money cash management accounts and SoFi Checking and Savings accounts held at SoFi Bank), SoFi Invest accounts, SoFi Credit Card accounts (including accounts with a zero dollar balance at the reporting date), referred loans (which relate to an arrangement in the third quarter of 2021 and are originated by a third-party partner to which we provide pre-qualified borrower referrals), 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 assets 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. Products In Thousands Total lending products were composed of the following as of the dates indicated. Lending Products March 31, 2022 March 31, 2021 Variance % Change Home loans 24,244 15,961 8,283 52 % Personal loans 657,549 517,042 140,507 27 % Student loans 456,773 412,224 44,549 11 % Total lending products 1,138,566 945,227 193,339 20 % 69 TABLE OF CONTENTS Total financial services products were composed of the following as of the dates indicated. Financial Services Products March 31, 2022 March 31, 2021 Variance % Change SoFi Money (1) 1,625,000 823,003 801,997 97 % Invest 1,807,478 854,383 953,095 112 % Credit Card 117,009 19,365 97,644 504 % Referred loans (2) 17,239 — 17,239 n/m Relay 1,115,564 523,451 592,113 113 % At Work 41,281 19,125 22,156 116 % Total financial services products 4,723,571 2,239,327 2,484,244 111 % ___________________ (1) This category is presented including SoFi Money cash management accounts, as well as SoFi Checking and Savings accounts held at SoFi Bank, which began operating in the first quarter of 2022. (2) This product type is limited to loans wherein we provide third party fulfillment services. 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. Beginning in the fourth quarter of 2021, we included SoFi accounts on the Galileo platform-as-a-service in our total accounts metric to better align with the Technology Platform segment revenue reported in Note 17 to the Notes to Unaudited Condensed Consolidated Financial Statements, which includes intercompany revenue from SoFi. Intercompany revenue is eliminated in consolidation. We did not recast total accounts as of March 31, 2021 to conform to the current year presentation, as the impact was determined to be immaterial. Total accounts is a primary indicator of the accounts dependent upon our 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 revenues for the Technology Platform segment. We do not measure total accounts for the Technisys products and solutions, as the revenue model is not primarily dependent upon being a fully integrated, stand-ready service. 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 technology platform customers, competition and industry trends, general economic conditions and our ability to optimize our national bank charter. The key factors affecting our operating results are discussed in our Annual Report on Form 10-K, with notable updates provided herein. Student Loan Relief In April 2022, President Biden directed a sixth extension of the federal student loan payment moratorium to August 31, 2022. We anticipate that there could be an additional extension beyond August 2022 by the Biden administration. Increased focus by policymakers and the current 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. Should there be further student loan relief measures, we expect that this would decrease the demand for our student loan refinancing products and would likely have an adverse impact on our results of operations and overall business. Industry Trends and General Economic Conditions Interest Rates In its May 2022 meeting, the Federal Reserve increased the benchmark interest rate by 50 basis points after increasing the benchmark interest rate previously at its March 2022 meeting. We expect additional increases in the benchmark interest rate during 2022, partially in response to increasing inflation. We anticipate that in a rising interest rate environment, and operating under a bank charter, we will be able to offer more competitive interest rates to our members on their deposits, which we believe would result in increasing demand for our deposits. However, rising interest rates could unfavorably impact demand for refinancing loan activities and reduce demand across our loan products. In addition, if the Federal Reserve does not effectively curb inflation or interest rates rise unexpectedly or too quickly, it could have a negative impact on the overall economy which could adversely impact our results of operations. 70 TABLE OF CONTENTS Results of Operations The following table sets forth condensed consolidated statements of income data for the periods indicated. Three Months Ended March 31, 2022 vs 2021 % Change ($ in thousands) 2022 2021 Interest income Loans $ 114,385 $ 77,221 48 % Securitizations 2,758 4,467 (38) % Related party notes — 211 (100) % Other 1,269 629 102 % Total interest income 118,412 82,528 43 % Interest expense Securitizations and warehouses 19,906 29,808 (33) % Deposits 431 — n/m Corporate borrowings 2,649 5,008 (47) % Other 493 432 14 % Total interest expense 23,479 35,248 (33) % Net interest income 94,933 47,280 101 % Noninterest income Loan origination and sales 157,704 110,345 43 % Securitizations (11,281) (2,036) 454 % Servicing 12,236 (12,109) (201) % Technology products and solutions 59,857 45,659 31 % Other 16,895 6,845 147 % Total noninterest income 235,411 148,704 58 % Total net revenue 330,344 195,984 69 % Noninterest expense Technology and product development 81,908 65,948 24 % Sales and marketing 138,138 87,234 58 % Cost of operations 70,437 57,570 22 % General and administrative 136,505 161,697 (16) % Provision for credit losses 12,961 — n/m Total noninterest expense 439,949 372,449 18 % Loss before income taxes (109,605) (176,465) (38) % Income tax expense (752) (1,099) (32) % Net loss $ (110,357) $ (177,564) (38) % Other comprehensive loss Unrealized losses on available-for-sale securities, net (4,455) — n/m Foreign currency translation adjustments, net (38) (80) (53) % Total other comprehensive loss (4,493) (80) n/m Comprehensive loss $ (114,850) $ (177,644) (35) % 71 TABLE OF CONTENTS Interest Income The following table presents the components of our total interest income for the periods indicated. Three Months Ended March 31, 2022 vs 2021 % Change ($ in thousands) 2022 2021 Loans $ 114,385 $ 77,221 48 % Securitizations 2,758 4,467 (38) % Related party notes — 211 (100) % Other 1,269 629 102 % Total interest income $ 118,412 $ 82,528 43 % Total interest income increased by $35.9 million, or 43%, for the three months ended March 31, 2022 compared to the three months ended March 31, 2021 due to the following: Loans. Loans interest income increased by $37.2 million, or 48%, primarily driven by increases in non-securitization personal loan and student loan interest income of $35.8 million (115%) and $9.4 million (44%), respectively, which were primarily a function of increases in aggregate average balances for personal loans and student loans of $1.3 billion (112%) and $1.3 billion (65%), respectively. The personal loan average balance increase was primarily attributable to higher origination volume combined with longer loan holding periods. The student loan average balance increase was primarily attributable to longer loan holding periods. These increases were offset by an aggregate decline of $11.6 million (48%) in interest income from consolidated personal loan and student loan securitizations, which were impacted by declines in average balances for personal loans and student loans of $312.8 million (60%) and $302.0 million (36%), respectively. The declines in aggregate average balances were primarily attributable to payment activity and the absence of additions to our consolidated securitization loan balances. We also had a decline in our whole loan interest rates. The remaining increase in interest income included $2.6 million attributable to credit card, $0.6 million attributable to the acquired loan portfolio in the Bank Merger, and $0.4 million attributable to home loans. Securitizations. Securitizations interest income decreased by $1.7 million, or 38%, which was primarily attributable to decreases in residual investment interest income of $0.9 million and asset-backed bonds of $0.8 million related to decreases in average securitization investment balances period over period, as securitization payments outpaced new securitization investments. This outcome was impacted by the absence of any securitization transactions during the 2022 period. Related Party Notes. We did not have any related party notes interest income in the 2022 period. Related party notes interest income in the 2021 period of $0.2 million was attributable 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. Other. Other interest income increased by $0.6 million, or 102%, primarily due to interest rate increases and higher average balances period over period that impacted the interest income we earned on both our interest-bearing cash and cash equivalents balances and Member Bank deposits. In addition, we earned interest income of $0.2 million on our investments in AFS debt securities, which we did not own during the comparable 2021 period. Interest Expense The following table presents the components of our total interest expense for the periods indicated. Three Months Ended March 31, 2022 vs 2021 % Change ($ in thousands) 2022 2021 Securitizations and warehouses $ 19,906 $ 29,808 (33) % Deposits 431 — n/m Corporate borrowings 2,649 5,008 (47) % Other 493 432 14 % Total interest expense $ 23,479 $ 35,248 (33) % 72 TABLE OF CONTENTS Total interest expense decreased by $11.8 million, or 33%, for the three months ended March 31, 2022 compared to the three months ended March 31, 2021 due to the following: Securitizations and Warehouses. The following tables present the components of securitizations and warehouses interest expense and other pertinent information. Three Months Ended March 31, 2022 vs 2021 % Change ($ in thousands) 2022 2021 Securitization debt interest expense $ 5,533 $ 10,948 (49) % Warehouse debt interest expense 9,903 10,531 (6) % Residual interests classified as debt interest expense 1,528 2,199 (31) % Debt issuance cost interest expense 2,942 6,130 (52) % Securitizations and warehouses interest expense $ 19,906 $ 29,808 (33) % Three Months Ended March 31, 2022 vs 2021 % Change ($ in thousands) 2022 2021 Average debt balances (1) Securitization debt $ 624,250 $ 1,166,366 (46) % Warehouse facilities 2,628,279 2,505,274 5 % Weighted average interest rates (2) Securitization debt 3.5 % 3.8 % n/m Warehouse facilities 1.5 % 1.7 % n/m ___________________ (1) Average balances were calculated based on four-month ending balances. (2) Calculated as annualized interest expense divided by average debt balance for the respective debt category. Interest rates on securitization debt and warehouse facilities exclude the effect of debt issuance cost interest expense and amortization of debt discounts and premiums. 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. Securitizations and warehouses interest expense decreased by $9.9 million, or 33%, driven by the following: • Securitization debt interest expense (exclusive of debt issuance and discount amortization) decreased by $5.4 million (49%), primarily driven by a decline in the average balance of 46%, which was attributable to payment activity and the absence of additional securitization debt during the current period. • Warehouse debt interest expense (exclusive of debt issuance amortization) decreased by $0.6 million, which was primarily related to the utilization of warehouse facilities with lower spreads versus benchmark rates during the 2022 period, which was partially offset by an increase in our borrowing base consistent with an increase in the time we held certain loans on our balance sheet. • Residual interests classified as debt interest expense decreased by $0.7 million, which was correlated with a lower balance of residual interests classified as debt during the 2022 period, as the residual debt balances continue to pay down over time and there were no additions to the balance during the current period. • Debt issuance cost interest expense decreased by $3.2 million, which was primarily driven by a lower run rate on our issuance cost amortization related to our loan warehouse facilities, as we have extended certain loan warehouse facilities over time, which had the effect of lowering the quarterly debt issuance cost amortization. The variance was also impacted by the acceleration of certain debt issuance costs during the 2021 period, which contributed to a favorable variance of $1.4 million period over period. Deposits. Deposits interest expense of $0.4 million for the three months ended March 31, 2022 was related to interest earned by members on deposits held at SoFi Bank. We expect this expense to correlate in future periods with the size of our member deposits balances, as well as the interest rate offered on our SoFi Checking and Savings product. 73 TABLE OF CONTENTS Corporate Borrowings. Corporate borrowings interest expense decreased by $2.4 million, or 47%, primarily due to the following: • Interest expense incurred on the Galileo seller note, which was repaid in February 2021, decreased by $3.6 million. • We incurred interest expense of $1.3 million in the 2022 period associated with our issuance of convertible notes in the fourth quarter of 2021, which consisted of the amortization of the debt discount and debt issuance costs. • Interest expense on the revolving credit facility was materially consistent period over period, as the average balance remained consistent and one-month LIBOR volatility had a marginal impact on the interest expense variance. Other. Other interest expense increased by $0.1 million, or 14%, primarily due to an increase in interest expense related to our SoFi Money cash management and SoFi Checking and Savings products, primarily associated with an increase in member cash balances and deposits. Noninterest Income and Net Revenue The following table presents the components of our total noninterest income, as well as total net revenue for the periods indicated. Three Months Ended March 31, 2022 vs 2021 % Change ($ in thousands) 2022 2021 Loan origination and sales $ 157,704 $ 110,345 43 % Securitizations (11,281) (2,036) 454 % Servicing 12,236 (12,109) (201) % Technology products and solutions 59,857 45,659 31 % Other 16,895 6,845 147 % Total noninterest income $ 235,411 $ 148,704 58 % Total net revenue $ 330,344 $ 195,984 69 % Total noninterest income increased by $86.7 million, or 58%, for the three months ended March 31, 2022 compared to the three months ended March 31, 2021, due to the following: Loan Origination and Sales. Loan origination and sales increased by $47.4 million, or 43%, primarily due to the following: • an increase of $64.5 million in personal loan origination and sales income, of which $15.1 million was attributable to the net effect of higher origination volume during the 2022 period, fair value markdowns of loans, and lower execution prices on sales activity. Our economic hedging activities by design offset the effects of fair value markdowns and lower sales price execution. Overall, we had higher gains of $48.6 million on our personal loan economic hedging activities in the 2022 period, which was inclusive of gains on loan origination economic hedges made during the period, as well as economic hedges of loans that remained on our balance sheet from December 31, 2021 or were sold during 2022, and was amplified by the interest rate volatility during the current period as compared to the 2021 comparative period; • an increase of $5.0 million in student loan origination and sales income, which was inclusive of losses on related student loan commitments of $2.2 million and interest rate caps of $2.1 million. We had an aggregate $56.6 million decline due to the impact of lower origination volume in the current quarter at lower prices, fair value markdowns of loans and lower execution prices on 2022 sales activity. Offsetting these declines were increases of $65.9 million on our student loan economic hedging activities for the same reasons as stated in the foregoing personal loan discussion; • a decrease of $19.8 million in home loan origination and sales related income, which was inclusive of the favorable impact related to IRLCs of $1.7 million and higher gains on home loan pipeline hedges of $9.9 million, which by design offset some of our period over period declines in home loan fair values. The remaining home loan origination and sales decrease was primarily attributable to the effect of originating loans during the quarter at a price below par compared to a price above par in the prior year quarter, as well as lower execution prices on sales activity; and • a decrease of $2.7 million (68%) in home loan origination fees in conjunction with a 58% decrease in origination volume. 74 TABLE OF CONTENTS Securitizations. Securitizations income decreased by $9.2 million, or 454%, for the three months ended March 31, 2022 compared to the same period in 2021, primarily due to an aggregate decrease of $14.0 million in securitization loan fair market value changes, principally due to increases in market interest rates. We also had a decline in securitization investment fair values of $8.6 million, which was primarily attributable to negative fair value adjustments on our student loan securitization bonds that were impacted by the interest rate volatility during the 2022 period. These unfavorable variances were partially offset by gains on our economic hedges of securitization investments, which resulted in gains of $6.3 million in the 2022 period. Partially offsetting these effects was a reduction in securitization loan write-offs of $2.7 million in the 2022 period, which was correlated with lower average securitization loan balances and stronger securitization loan credit performance during the 2022 period. Additionally, we had a decline in residual debt fair value adjustments of $4.3 million, exclusive of the portion reclassified to interest expense. The table below presents additional information related to loan gains and losses and overall performance. Three Months Ended March 31, 2022 vs 2021 % Change ($ in thousands) 2022 2021 Gains from non-securitization loan transfers $ 47,286 $ 70,900 (33) % Gains from loan securitization transfers (1) — 29,027 (100) % Economic derivative hedges of securitization investments (2) 6,319 — n/m Economic derivative hedges of loan fair values (3) 160,607 36,071 345 % Home loan origination fees (4) 1,293 4,020 (68) % Loan write-off expense – whole loans (5) (8,074) (5,125) 58 % Loan write-off expense – securitization loans (6) (1,651) (4,381) (62) % Loan repurchase (expense) benefit (7) 1,880 (1,483) (227) % ___________________ (1) Represents the gain recognized on loan securitization transfers qualifying for sale accounting treatment, excluding the impact of economic hedging activities. We had no loan securitization transfers during the 2022 period. (2) Represents the gain on interest rate swaps utilized to manage interest rate risk associated with certain of our securitization investments. (3) During the three months ended March 31, 2022, we had gains on interest rate swap positions of $134.5 million, comprising $84.5 million related to student loan hedges and $50.0 million related to personal loan hedges. We also had gains on interest rate caps of $2.6 million. All of these gains were primarily attributable to increases in interest rates during the period. We had gains of $23.5 million on home loan pipeline hedges primarily due to decreases in the underlying hedge price index during the period. During the three months ended March 31, 2021, we had gains of $22.5 million on interest rate swap positions, comprising $21.2 million related to student loan hedges and $1.3 million related to personal loan hedges, which were primarily due to increases in interest rates during the period. We also had gains of $13.5 million on mortgage pipeline hedges primarily due to decreases in the underlying hedge price index during the period. Our economic hedge gains during the periods also included the impact of hedging of loan origination volume. Amounts presented herein exclude IRLCs and student loan commitments, as they are not economic hedges of loan fair values. (4) For the three months ended March 31, 2022, the decrease was correlated with a 58% decrease in home loan origination volume relative to 2021. (5) For the three months ended March 31, 2022 and 2021, includes gross write-offs of $11.8 million and $7.4 million, respectively. During the 2022 period, $0.8 million of the $3.7 million of recoveries were captured via loan sales to a third-party collection agency. During the 2021 period, $0.5 million of the $2.3 million of recoveries were captured via loan sales to a third-party collection agency. (6) For the three months ended March 31, 2022 and 2021, includes gross write-offs of $3.3 million and $7.4 million, respectively. During the 2022 period, $0.2 million of the $1.6 million of recoveries were captured via loan sales to a third-party collection agency. During the 2021 period, $1.3 million of the $3.0 million of recoveries were captured via loan sales to a third-party collection agency. (7) Represents the (expense) benefit associated with our estimated loan repurchase obligation. See Note 15 to the Notes to Unaudited Condensed Consolidated Financial Statements for additional information. Servicing. Servicing income increased by $24.3 million, or 201%, for the three months ended March 31, 2022 compared to the same period in 2021, of which $23.7 million was related to favorable changes in valuation inputs and assumptions, consisting of $17.0 million related to student loans, $4.4 million related to home loans and $2.2 million related to personal loans. The favorable variance was primarily attributable to prepayment rates. Student and personal loans servicing prepayment rates increased from the fourth quarter of 2020 to the first quarter of 2021, resulting in a decrease in servicing asset valuations, versus slightly declining from the fourth quarter of 2021 to the first quarter of 2022. Home loans servicing prepayment rates declined in both the 2021 and 2022 periods, but had a larger rate of decline during the current period. 75 TABLE OF CONTENTS We own the master servicing on all of the servicing rights that we retain and, in each case, recognize the gross servicing rate applicable to each serviced loan. Sub-servicers are utilized for all serviced student loans and home loans, which represents a cost to SoFi, but these arrangements do not impact our calculation of the weighted average basis points earned for each loan type serviced. Further, there is no impact on servicing income due to forbearance and moratoriums on certain debt collection activities, and there are no waivers of late fees. The table below presents additional information related to our loan servicing activities. Three Months Ended March 31, 2022 vs 2021 % Change ($ in thousands) 2022 2021 Servicing income recognized Home loans (1) $ 2,926 $ 1,744 68 % Student loans (2) 10,121 12,160 (17) % Personal loans (3) 8,992 8,475 6 % Servicing rights fair value change Home loans (4) $ 9,052 $ 8,124 11 % Student loans (5) (4,046) 5,701 (171) % Personal loans (6) 240 (2,182) (111) % ______________ (1) The contractual servicing earned on our home loan portfolio was 25 bps and 25 bps during the three months ended March 31, 2022 and 2021, respectively. (2) The weighted average bps earned for student loan servicing was 42 bps and 41 bps during the three months ended March 31, 2022 and 2021, respectively. (3) The weighted average bps earned for personal loan servicing was 70 bps and 70 bps during the three months ended March 31, 2022 and 2021, respectively. (4) The impact on the fair value change resulting from changes in valuation inputs and assumptions was $7.7 million and $3.3 million during the three months ended March 31, 2022 and 2021, respectively. (5) The impact of the fair value change resulting from changes in valuation inputs and assumptions was $1.3 million and $(15.7) million during the three months ended March 31, 2022 and 2021, respectively. In addition, the impact of the fair value change resulting from the derecognition of servicing due to loan purchases was $(1.0) million for the three months ended March 31, 2022. (6) The impact of the fair value change resulting from changes in valuation inputs and assumptions was $2.5 million and $0.3 million during the three months ended March 31, 2022 and 2021, respectively. In addition, the impact of the fair value change resulting from the derecognition of servicing due to loan purchases was $(0.4) million for the three months ended March 31, 2022. Technology Products and Solutions. Technology Products and Solutions increased by $14.2 million, or 31%, for the three months ended March 31, 2022 compared to the same period in 2021. The current period was bolstered by $6.2 million of revenue contribution from the Technisys Merger, which closed on March 3, 2022. In addition, our existing integrated technology solutions contributed an increase of $8.0 million in revenue period over period, which was predominantly a function of account growth and activity related to clients that were on our platform for both the 2021 and 2022 periods. Other. Other income increased by $10.1 million, or 147%, for the three months ended March 31, 2022 compared to the same period in 2021 primarily due to period-over-period increases in payment network fees of $2.8 million and referral fees of $5.5 million. The increase in payment network fees (which includes interchange fees) was primarily attributable to increased credit card spending on our platform. Lastly, the increase in referral fees was primarily attributable to growth in our partner relationships and related activity, as we continue to onboard new partners and help drive volume to our partners, as well as an increase associated with a referral fulfillment arrangement we entered into in the third quarter of 2021. Lastly, we had a decline in SoFi Invest trading losses of $2.1 million period over period. 76 TABLE OF CONTENTS Noninterest Expense The following table presents the components of our total noninterest expense for the periods indicated. Three Months Ended March 31, 2022 vs 2021 % Change ($ in thousands) 2022 2021 Technology and product development $ 81,908 $ 65,948 24 % Sales and marketing 138,138 87,234 58 % Cost of operations 70,437 57,570 22 % General and administrative 136,505 161,697 (16) % Provision for credit losses 12,961 — n/m Total noninterest expense $ 439,949 $ 372,449 18 % Total noninterest expense increased by $67.5 million, or 18%, for the three months ended March 31, 2022 compared to the three months ended March 31, 2021, due to the following: Technology and Product Development. Technology and product development expenses increased by $16.0 million, or 24%, primarily due to: • an increase in employee compensation and benefits of $11.0 million, inclusive of an increase in share-based compensation expense of $5.9 million, which was related to an increase in technology and product personnel in support of our growth. Moreover, the impact of the Technisys Merger contributed $4.3 million to the period-over period-variance. We also had an increase in average compensation in the 2022 period; • an increase in purchased and internally-developed software amortization of $4.4 million, which was primarily reflective of increased investments in technology in our Technology Platform segment; • an increase in software licenses, and tools and subscriptions expense of $1.2 million related to headcount increases and internal technology initiatives; and • a decrease in amortization expense on intangible assets of $1.0 million, which was related to the acceleration of our core banking infrastructure through the first half of 2021, partially offset by other intangible asset amortization of $1.7 million associated with the Technisys Merger. Sales and Marketing. Sales and marketing expenses increased by $50.9 million, or 58%, primarily due to: • an increase in advertising expenditures of $20.5 million, which was primarily attributable to an increase in direct mail, search and social network advertising expenditures in the 2022 period; • an increase of $14.9 million related to increasing utilization of lead generation channels during the 2022 period; • an increase in employee compensation and benefits of $6.9 million, inclusive of an increase in share-based compensation expense of $2.7 million, which was correlated with an increase in sales and marketing personnel to support our growth. We also had an increase in average compensation in the 2022 period; • an increase in direct customer promotional expenditures of $3.7 million, which is one of our levers for stimulating member product adoption and engagement; • an increase of SoFi Stadium related expenditures of $2.3 million, which is exclusive of depreciation and interest expense on the embedded lease portion of our SoFi Stadium agreement; and • the remaining increase was primarily related to travel and entertainment-related expenditures and software licenses and tools and subscriptions expenses. Cost of Operations. Cost of operations increased by $12.9 million, or 22%, primarily due to: • an increase in employee compensation and benefits of $8.9 million, which was correlated with an increase in cost of operations personnel in support of our growth, in addition to an increase in average compensation in the 2022 period; • an increase of $2.2 million in third-party fulfillment costs, which was primarily related to payment processing network association fees associated with increased activity in the Technology Platform segment; 77 TABLE OF CONTENTS • an increase in software licenses, tools and subscriptions and other related fees of $1.8 million consistent with headcount increases and internal technology initiatives; • an increase in operational losses of $1.7 million; • an increase in credit card processing and fulfillment costs of $1.0 million related to increased credit card activity; and • a decrease in loan origination and servicing expenses of $3.3 million, of which $4.2 million was related to home loans and was correlated with a decline in home loan originations during the 2022 period; General and Administrative. General and administrative expenses decreased by $25.2 million, or 16%, primarily due to: • favorability resulting from $89.9 million of expense in the 2021 period associated with the fair value increase of our warrant liabilities. The Series H warrants were reclassified to permanent equity in the second quarter of 2021 in conjunction with the Business Combination and, therefore, had no impact on the 2022 period; • an increase in employee compensation and benefits of $39.1 million, inclusive of an increase in share-based compensation expense of $28.3 million, which was related to an increase in general and administrative personnel to support our growing infrastructure and administrative needs in addition to an increase in average compensation in the 2022 period; • an increase in transaction-related expenses of $14.4 million associated with our acquisitions during the 2022 period; • an increase of $9.3 million related to aggregate credit card and personal loan third party fraud events in the 2022 period; • an increase in corporate insurance of $2.6 million, which was primarily attributable to the increased costs of being a public company; and • an increase in occupancy-related costs of $0.6 million. Provision for Credit Losses. The provision for credit losses of $13.0 million during the three months ended March 31, 2022 reflects the expected credit losses of $12.0 million associated with our credit card loans, which reflected elevated credit card loss rates during the current period, and the remainder associated with loans acquired in the Bank Merger in the 2022 period. Net Loss We had a net loss of $110.4 million for the three months ended March 31, 2022 compared to $177.6 million for the three months ended March 31, 2021. The decrease in loss for the current period was due to the factors discussed above, net of the change in income taxes. For the three months ended March 31, 2022 and 2021, we recorded income tax expense of $752 and $1,099, respectively, which was primarily due to income tax expense associated with the profitability of SoFi Lending Corp. in some state jurisdictions where a separate company filing is required. For the three-months ended March 31, 2022, this expense was partially offset by income tax benefits from foreign losses in jurisdictions with net deferred tax liabilities related to the Technisys Merger. 78 TABLE OF CONTENTS Summary Results by Segment Lending Segment In the table below, we present certain metrics related to our Lending segment. Three Months Ended March 31, 2022 vs 2021 % Change Metric 2022 2021 Total products (number, as of period end) 1,138,566 945,227 20 % Origination volume ($ in thousands, during period) Home loans $ 312,383 $ 735,604 (58) % Personal loans 2,026,004 805,689 151 % Student loans 983,804 1,004,685 (2) % Total $ 3,322,191 $ 2,545,978 30 % Loans with a balance (number, as of period end) (1) 629,755 582,069 8 % Average loan balance ($, as of period end) (1) Home loans $ 284,111 $ 285,654 (1) % Personal loans 23,635 21,515 10 % Student loans (2) 49,297 52,493 (6) % __________________ (1) Loans with a balance and average loan balance include loans on our balance sheet and transferred loans with which we have a continuing involvement through our servicing agreements. (2) In-school loans carry a lower average balance than student loan refinancing products. The following table presents additional information on the terms as of March 31, 2022 of the lending products we offer. Product Loan Size Rates (1) Term Student Loan Refinancing $5,000+ (2) Variable rate: 1.74% – 7.74% 5 – 20 years Fixed rate: 2.74% – 7.74% In-School Loans $5,000+ (2) Variable rate: 1.25% – 11.29% 5 – 15 years Fixed rate: 3.22% – 10.90% Personal Loans $5,000 – $100,000 (2) Fixed rate: 5.74% – 21.78% 2 – 7 years Home Loans $100,000 – $647,200 (3)(4) Fixed rate: 2.13% – 6.00% 10, 15, 20 or 30 years (Conforming Normal Cost Areas) OR $970,800 (4) (Conforming High Cost Areas) OR $3,000,000 (4) (Jumbo Loans) __________________ (1) Loan annual percentage rates presented reflect rates as advertised as of the date indicated, inclusive of an auto-pay discount. (2) Minimum loan size may be higher within certain states due to legal or licensing requirements. (3) Exceptions for loan sizes less than $100,000 are considered on a case-by-case basis. (4) Represents the maximum loan size offered within each category as of the reporting date. “Conforming High Cost Areas” refers to FNMA eligible loans above the normal conforming limit, which is determined by county. “Jumbo Loans” refers to loans in the jumbo loan program. 79 TABLE OF CONTENTS In the table below, we present additional information related to our lending products. Three Months Ended March 31, 2022 2021 Overall weighted average origination FICO 755 767 Student Loans Weighted average origination FICO 775 774 Weighted average interest rate earned (1) 4.02 % 4.63 % Interest income recognized ($ in thousands) (2) $ 37,762 $ 32,277 Sales of loans ($ in thousands) $ 544,150 $ 936,160 Home Loans Weighted average origination FICO 751 762 Weighted average interest rate earned (1) 2.69 % 1.61 % Interest income recognized ($ in thousands) (2) $ 1,180 $ 731 Sales of loans ($ in thousands) $ 365,370 $ 677,566 Personal Loans Weighted average origination FICO 746 762 Weighted average interest rate earned (1) 11.02 % 10.65 % Interest income recognized ($ in thousands) (2) $ 72,110 $ 44,001 Sales of loans ($ in thousands) $ 977,920 $ 779,441 __________________ (1) Weighted average interest rate earned represents annualized interest income recognized divided by the average of the four-month unpaid principal balances of loans outstanding during the period, which are impacted by the timing and extent of loan sales. (2) See “ Results of Operations—Interest Income ” for a discussion of interest income recognized during the periods indicated. Total Products Total products in our Lending segment is a subset of our total products metric. See “ Key Business Metrics ” for further discussion of this measure as it relates to our Lending segment. Origination Volume We refer to the aggregate dollar amount of loans originated through our platform in a given period as origination volume. Origination volume is an indicator of the size and health of our Lending segment and an indicator (together with the relevant loan characteristics, such as interest rate and prepayment and default expectations) of revenues and profitability. Changes in origination volume are driven by the addition of new members and existing members, the latter of which at times will either refinance into a new SoFi loan or secure an additional, concurrent loan, as well as macroeconomic factors impacting consumer spending and borrowing behavior. Since the profitability of the Lending segment is largely correlated with origination volume, management relies on origination volume trends to assess the need for external financing to support the Financial Services segment and the expense budgets for unallocated expenses. During the three months ended March 31, 2022, home loan origination volume declined relative to the corresponding 2021 period due to rising interest rates relative to the 2021 levels, which tends to lower demand for home loans overall and shift demand from refinance originations to purchase originations, the latter of which is a more competitive landscape. During the three months ended March 31, 2022, personal loan origination volume increased significantly relative to the corresponding 2021 period, primarily due to the improved economic outlook and consumer confidence levels in the 2022 period relative to the 2021 period, which we believe increased the overall demand for our personal loans. We also increased our loan application approval rate during the second half of 2021 and maintained those approval levels during 2022, which positively impacted the 2022 period. During the three months ended March 31, 2022, student loan origination volume decreased modestly relative to the 2021 period, as demand for student loan refinancing products continued to be unfavorably impacted by the automatic suspension of principal and interest payments on federally-held student loans that was extended most recently through August 2022. Loans with a Balance and Average Loan Balance Loans with a balance refers to the number of loans that have a balance greater than zero dollars as of the reporting date. Loans with a balance allows management to better understand the unit economics of acquiring a loan in relation to the lifetime value of that loan. Average loan balance is defined as the total unpaid principal balance of the loans divided by loans 80 TABLE OF CONTENTS with a balance within the respective loan product category as of the reporting date. Average loan balance tends to fluctuate based on the pace of loan originations relative to loan repayments and the initial loan origination size. Lending Segment Results of Operations The following table presents the measure of contribution profit for the Lending segment for the periods indicated. The information is derived from our internal financial reporting used for corporate management purposes. During the three months ended March 31, 2022, we implemented an FTP framework to attribute net interest income to our business segments based on their usage and/or provision of funding, as further discussed below. Refer to Note 17 to the Notes to Unaudited Condensed Consolidated Financial Statements for more information on the FTP framework. Three Months Ended March 31, 2022 vs 2021 % Change ($ in thousands) 2022 2021 Net revenue Net interest income (1) $ 94,354 $ 51,777 82 % Noninterest income 158,635 96,200 65 % Total net revenue 252,989 147,977 71 % Servicing rights – change in valuation inputs or assumptions (2) (11,580) 12,109 (196) % Residual interests classified as debt – change in valuation inputs or assumptions (3) 2,963 7,951 (63) % Directly attributable expenses (4) (111,721) (80,351) 39 % Contribution profit $ 132,651 $ 87,686 51 % Adjusted net revenue (5) $ 244,372 $ 168,037 45 % ___________________ (1) Net interest income and, thereby, total net revenue and contribution profit for our Lending segment reported for the three months ended March 31, 2022 reflects the implementation of an FTP framework, under which Lending segment net interest income represents the difference between interest income earned on our loans and an FTP charge for the segment’s use of funds to originate loans, which can fluctuate based on changes in interest rates, funding curves, the composition of our balance sheet and the availability of capital. For the comparative period ended March 31, 2021, Lending segment net interest income reflected the external financing costs for our loans. If we had applied our current FTP framework during the comparative period, the Lending segment net interest income would have decreased by $0.1 million, which we deemed immaterial. (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 unaudited condensed 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 unaudited condensed 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 contractual securitization collateral cash flows), or the general operations of our business. As such, this non-cash change in fair value is adjusted to provide management and financial users with better visibility into the cash flows available to finance our operations. (4) For a disaggregation of the directly attributable expenses allocated to the Lending segment in each of the periods presented, see “ Directly Attributable Expenses ” below. (5) Adjusted net revenue is a non-GAAP financial measure. For information regarding our use and definition of this measure and for a reconciliation to the most directly comparable U.S. GAAP measure, total net revenue, see “ Non-GAAP Financial Measures ” herein. Net interest income Net interest income in our Lending segment increased by $42.6 million, or 82%, for the three months ended March 31, 2022 compared to the three months ended March 31, 2021, due to the following: Loans Interest Income. Loans interest income increased by $34.0 million, or 44%, period over period. See “Results of Operations—Interest Income—Loans” for information on the primary drivers of the variance related to our personal loans, student loans and home loans. Securitizations Interest Income. Securitizations interest income decreased by $1.7 million, or 38%, period over period. See “Results of Operations—Interest Income—Securitizations” for information on the primary drivers of the variance. 81 TABLE OF CONTENTS Interest Expense. Interest expense in our Lending segment decreased by $10.3 million, or 35%, period over period. For the full 2022 period compared to the full 2021 period, interest expense in our Lending segment reflected the following: (i) a decline in securitization debt interest expense (exclusive of debt issuance and discount amortization) of $5.4 million; (ii) a decline in residual interests classified as debt interest expense of $0.7 million; and (iii) a decline in debt issuance cost interest expense of $3.2 million. Additionally, in the 2022 period, we recognized the actual interest incurred on our use of securitizations and warehouse facilities for one month of $1.7 million and FTP interest expense for two months of $7.8 million, which was a framework we implemented during the quarter. In the 2021 period, which was prior to our implementation of an FTP framework, we recognized the actual interest incurred on our use of securitizations and warehouse facilities for the full quarter of $10.5 million. See Note 17 to the Notes to Unaudited Condensed Consolidated Financial Statements for further discussion of the FTP framework. Noninterest income Noninterest income in our Lending segment increased by $62.4 million, or 65%, for the three months ended March 31, 2022 compared to the three months ended March 31, 2021, due to the following: Loan Origination and Sales. Loan origination and sales increased by $47.4 million, or 43%, period over period. See “Results of Operations—Noninterest Income and Net Revenue—Loan Origination and Sales” for information on the primary drivers of the variance. Securitizations. Securitizations income decreased by $9.2 million, or 454%, period over period. See “Results of Operations—Noninterest Income and Net Revenue—Securitizations” for information on the primary drivers of the variance. Servicing. Servicing income increased by $24.3 million, or 201%, period over period. See “Results of Operations—Noninterest Income and Net Revenue—Servicing” for information on the primary drivers of the variance. Directly attributable expenses The directly attributable expenses allocated to the Lending segment that were used in the determination of the segment's contribution profit were as follows. Three Months Ended March 31, 2022 vs 2021 % Change ($ in thousands) 2022 2021 Direct advertising $ 41,794 $ 27,849 50 % Compensation and benefits 23,568 21,398 10 % Lead generation 21,883 6,710 226 % Loan origination and servicing costs 10,631 13,992 (24) % Unused warehouse line fees 2,684 3,701 (27) % Professional services 1,520 1,441 5 % Other (1) 9,641 5,260 83 % Directly attributable expenses $ 111,721 $ 80,351 39 % ______________ (1) Other expenses primarily include loan marketing expenses, third party loan fraud, member promotional expenses, tools and subscriptions, travel and occupancy-related costs. Lending segment directly attributable expenses for the three months ended March 31, 2022 increased by $31.4 million, or 39%, compared to the three months ended March 31, 2021, primarily due to the following: • increases of $15.2 million due to increasing utilization of lead generation channels associated with increased personal loan origination volume in the 2022 period; • increases of $13.9 million in direct advertising related to direct mail, search engine and social network advertising, partially offset by declines in television advertisement; • increases of $2.2 million in allocated compensation and related benefits, which primarily reflected increases in headcount allocated to the lending segment, partially offset by declines in home loan commissions of $0.8 million attributable to a decline in home loan originations period over period; • increases of $0.1 million in professional services costs, which were largely audit and advisory related costs; 82 TABLE OF CONTENTS • increases of $4.4 million in other expenses, primarily related to third-party personal loan fraud of $5.3 million during the 2022 period, which was offset by a decline in bad debt expense of $0.8 million; • decreases of $3.4 million in loan origination and servicing costs, which was largely attributable to declines in home loan origination costs of $4.4 million that correlated with the decline in period-over-period home loan origination volume. This decline was partially offset by an increase in personal loan origination costs of $1.2 million, which corresponded with the increase in personal loan origination volume period over period; and • decreases of $1.0 million in unused warehouse line fees due to higher average committed warehouse line usage and lower unused fee rates. Technology Platform Segment In the table below, we present a metric that is related to Galileo within our Technology Platform segment. March 31, 2022 March 31, 2021 2022 vs 2021 % Change Total accounts 109,687,014 69,572,680 58 % See “ Key Business Metrics ” for further discussion of this measure as it relates to our Technology Platform segment. Technology Platform Segment Results of Operations The following table presents the measure of contribution profit for the Technology Platform segment for the periods indicated. The information is derived from our internal financial reporting used for corporate management purposes. Refer to Note 17 to the Notes to Unaudited Condensed Consolidated Financial Statements for further information regarding Technology Platform segment performance. Three Months Ended March 31, 2022 vs 2021 % Change ($ in thousands) 2022 2021 Net revenue Net interest income (loss) $ — $ (36) (100) % Noninterest income 60,805 46,101 32 % Total net revenue 60,805 46,065 32 % Directly attributable expenses (1) (42,550) (30,380) 40 % Contribution profit $ 18,255 $ 15,685 16 % ___________________ (1) For a disaggregation of the directly attributable expenses allocated to the Technology Platform segment in each of the periods presented, see “ Directly Attributable Expenses ” below. Noninterest income Noninterest income in our Technology Platform segment increased by $14.7 million, or 32%, for the three months ended March 31, 2022 compared to the three months ended March 31, 2021, due to the following: Technology Products and Solutions. Technology products and solutions revenues increased by $15.0 million, or 33%, period over period. See “Results of Operations—Noninterest Income and Net Revenue—Technology Products and Solutions” for information on the primary drivers of the variance. In addition, the variance includes $0.8 million of intercompany revenue during the 2022 period. Other. Other income decreased by $0.3 million, or 60%, period over period, which was correlated with a decline in payment network transaction volume on our technology platform. 83 TABLE OF CONTENTS Directly attributable expenses The directly attributable expenses allocated to the Technology Platform segment that were used in the determination of the segment's contribution profit were as follows. Three Months Ended March 31, 2022 vs 2021 % Change ($ in thousands) 2022 2021 Compensation and benefits $ 25,277 $ 16,181 56 % Product fulfillment 9,360 6,998 34 % Tools and subscriptions 3,246 1,860 75 % Professional services 2,299 2,069 11 % Other (1) 2,368 3,272 (28) % Directly attributable expenses $ 42,550 $ 30,380 40 % ___________________ (1) Other expenses are primarily related to advertising and marketing, occupancy-related costs, bad debt and data center expenses. Technology Platform segment directly attributable expenses for the three months ended March 31, 2022 increased by $12.2 million, or 40%, compared to the three months ended March 31, 2021, primarily due to the following: • increases of $9.1 million in compensation and benefits expense, which was correlated with an increase in personnel to support segment growth, as well as an increase in average compensation during the 2022 period. In addition, the segment had expense of $5.1 million related to Technisys compensation and benefits during the 2022 period; • increases of $2.4 million in product fulfillment costs, primarily related to payment processing network association fees associated with increased activity on the platform. These fees grew by 27% during the 2022 period compared to 2021, which positively correlated with the applicable integrated platform-as-a-service growth in our technology products and solutions revenues; • increases of $1.4 million in tools and subscriptions costs related to headcount increases and internal technology initiatives to support the growth of the platform, along with the inclusion of Technisys in our 2022 results; • increases of $0.2 million in professional services costs, of which $0.8 million were related to the operations of Technisys in the 2022 period, with a partially offsetting decrease due to a decline in legal fees period over period; and • decreases of $0.9 million in other expenses, which were primarily related to a reversal of provision for credit losses in the 2022 period associated with the recovery of significantly aged accounts receivable. Financial Services Segment In the table below, we present a key metric related to our Financial Services segment. Metric March 31, 2022 March 31, 2021 2022 vs. 2021 % Change Total products (number, as of period end) 4,723,571 2,239,327 111 % Total products in our Financial Services segment is a subset of our total products metric. See “Key Business Metrics” for a further discussion of this measure as it relates to our Financial Services segment. Financial Services Segment Results of Operations The following table presents the measure of contribution loss for the Financial Services segment for the periods indicated. The information is derived from our internal financial reporting used for corporate management purposes. During the three months ended March 31, 2022, we implemented an FTP framework to attribute net interest income to our business 84 TABLE OF CONTENTS segments based on their usage and/or provision of funding, as further discussed below. Refer to Note 17 to the Notes to Unaudited Condensed Consolidated Financial Statements for more information on the FTP framework. Three Months Ended March 31, 2022 vs 2021 % Change ($ in thousands) 2022 2021 Net revenue Net interest income (1) $ 5,882 $ 229 n/m Noninterest income 17,661 6,234 183 % Total net revenue 23,543 6,463 264 % Directly attributable expenses (2) (73,058) (41,982) 74 % Contribution loss $ (49,515) $ (35,519) 39 % ___________________ (1) Net interest income and, thereby, total net revenue and contribution loss for our Financial Services segment reported for the three months ended March 31, 2022 reflects the implementation of an FTP framework, under which Financial Services segment net interest income reflects the difference between an FTP credit for the segment’s provision of deposits as a source of funding and an FTP charge for the segment’s use of funds to originate credit card loans. For the comparative period ended March 31, 2021, our Financial Services segment net interest income was nominal, as it did not have deposits and the credit card product was nascent. As such, the Financial Services segment net interest income would not have been materially impacted by the application of the FTP framework to the comparative 2021 period. (2) For a disaggregation of the directly attributable expenses allocated to the Financial Services segment in each of the periods presented, see “ Directly Attributable Expenses ” below. Net interest income Net interest income in our Financial Services segment increased by $5.7 million for the three months ended March 31, 2022 compared to the three months ended March 31, 2021. For the 2022 period, net interest income primarily reflected net interest income earned on our credit card loans, and net interest income based on our FTP framework, which corresponded with the level of deposits at SoFi Bank. The gross interest income FTP credit applied to the Financial Services segment was $3.2 million during the 2022 period and eliminates in consolidation. In addition, net interest income earned on our credit card loans increased by $2.3 million period over period, which was attributable to a growth in average balance. Noninterest income Noninterest income in our Financial Services segment increased by $11.4 million, or 183%, for the three months ended March 31, 2022 compared to the three months ended March 31, 2021, primarily due to the following: • increases in referral fees of $5.5 million, which were primarily attributable to growth in our partner relationships and related activity, as we continue to onboard new partners and help drive volume to these partners, as well as increases associated with a referral fulfillment arrangement we entered into in the third quarter of 2021; • increases in payment network fees of $3.1 million and brokerage-related fees of $0.1 million, the former of which coincided with increased credit card and debit card transaction volume; • a reduction in trading losses related to our SoFi Invest product of $2.1 million; and • increases of $0.5 million in non-payment network related credit card fees. 85 TABLE OF CONTENTS Directly attributable expenses The directly attributable expenses allocated to the Financial Services segment that were used in the determination of the segment's contribution loss were as follows: Three Months Ended March 31, 2022 vs 2021 % Change ($ in thousands) 2022 2021 Compensation and benefits $ 23,938 $ 18,784 27 % Provision for credit losses 12,961 — n/m Product fulfillment 7,197 5,043 43 % Direct advertising 6,852 3,768 82 % Member incentives 6,603 4,981 33 % Lead generation 2,509 2,818 (11) % Professional services 1,100 1,568 (30) % Intercompany technology platform expenses 770 — n/m Other (1) 11,128 5,020 122 % Directly attributable expenses $ 73,058 $ 41,982 74 % ___________________ (1) Other expenses primarily include tools and subscriptions, operational product losses, third party fraud expense, travel and occupancy-related costs, and marketing-related expenses. Financial Services directly attributable expenses for the three months ended March 31, 2022 increased by $31.1 million, or 74%, compared to the three months ended March 31, 2021, primarily due to the following: • increases of $13.0 million related to our provision for credit losses, to which our credit card loans contributed $12.0 million, and the remainder was associated with loans acquired in the Bank Merger during the 2022 period. The increase in provision for credit losses for credit card loans was reflective of both an increase in average balance and an increase in our estimate of the expected future credit loss rate; • increases of $5.2 million in compensation and benefits expense, which was consistent with our ongoing prioritization of growth in the Financial Services segment, which required additional staffing; • increases of $3.1 million in direct advertising costs primarily driven by an increase in search engine and social network marketing. All marketing initiatives were primarily related to the continued promotion of, and growth in, our Financial Services products; • increases of $2.2 million in product fulfillment costs related to SoFi Invest, SoFi Checking and Savings, and SoFi Money cash management, which included such activities as brokerage expenses and debit card fulfillment services, operating SoFi Bank, and operating our cash management sweep program. In addition, we had $1.1 million of higher costs related to credit card fulfillment in the 2022 period; • increases of $1.6 million primarily related to direct member incentives utilized to drive adoption and usage of our various Financial Services products, the most significant of which was SoFi Money cash management and SoFi Checking and Savings; • increases of $6.1 million in other costs, which were primarily related to operational product losses of $2.1 million and third-party credit card fraud of $4.0 million; • decreases of $0.5 million in professional services costs, which were primarily related to reduced third-party technology and product consulting and contractor usage; and • decreases of $0.3 million related to lead generation, which was consistent with our efforts to rely less on referrals period over period for product growth. Corporate/Other Non-Reportable Segment Non-segment operations are classified as Corporate/Other (previously referred to as “Other”), which includes net revenues associated with corporate functions that are not directly related to a reportable segment, as well as, beginning in the first quarter of 2022, the financial impact of our capital management activities within the treasury function, which reflects the 86 TABLE OF CONTENTS residual impact from the FTP charges and FTP credits on our reportable segments under our FTP framework. Refer to Note 17 to the Notes to Unaudited Condensed Consolidated Financial Statements for more information on the FTP framework. Reconciliation of Directly Attributable Expenses The following table reconciles directly attributable expenses allocated to our reportable segments to total noninterest expense in the unaudited condensed consolidated statements of operations and comprehensive income (loss) for the periods indicated. Three Months Ended March 31, ($ in thousands) 2022 2021 Reportable segments directly attributable expenses $ (227,329) $ (152,713) Intercompany technology platform expenses 770 — Expenses not allocated to segments: Share-based compensation expense (77,021) (37,454) Depreciation and amortization expense (30,698) (25,977) Employee-related costs (1) (42,690) (32,280) Fair value changes in warrant liabilities — (89,920) Other corporate and unallocated expenses (2) (62,981) (34,105) Total noninterest expense $ (439,949) $ (372,449) ___________________ (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) Includes corporate overhead costs that are not allocated to reportable segments, such as certain advertising, promotional and corporate marketing costs, transaction-related expenses, certain tools and subscription costs, and professional services costs. Liquidity and Capital Resources We require substantial liquidity to fund our current operating requirements, which primarily include loan originations and the losses generated by our Financial Services segment. We expect these requirements to increase as we continue to pursue our strategic growth goals. Historically, our Lending cash flow variability has related to loan origination and sales volume, our available funding sources and utilization of our warehouse facilities. Moreover, given our continued growth initiatives, we have seen variability in financing cash flows due to the timing and extent of common stock and redeemable preferred stock raises, redemptions and additional uses and repayments of debt, and our convertible notes issuance. Remaining operating cash flow variability is largely related to our investments in our business, such as technology and product investments and sales and marketing initiatives. Our capital expenditures have historically been less significant relative to our operating and financing cash flows, and we expect this trend to continue for the foreseeable future. To continue to achieve our liquidity objectives, we analyze and monitor liquidity needs and strive to maintain excess liquidity and access to diverse funding sources. We define our liquidity risk as the risk that we will not be able to: • Originate loans at our current pace, or at all; • Sell our loans at favorable prices, or at all; • Meet our minimum capital requirements as a bank holding company and a national banking association; • Meet our contractual obligations as they become due; • Increase or extend the maturity of our revolving credit facility capacity; • Satisfy our obligation to repay the convertible notes if they do not convert into common stock before maturity; • Meet margin requirements associated with hedging or financing agreements; • Fund continued operating losses in our business, especially if such operating losses continue at the current level for an extended period of time; or • Make future investments in the necessary technological and operating infrastructure to support our business. During the three months ended March 31, 2022, we generated negative cash flows from operations. The primary drivers of operating cash flows related to our Lending segment are origination volume, the holding period of our loans, loan sale execution and, to a lesser extent, the timing of loan repayments. We either fund our loan originations entirely using our 87 TABLE OF CONTENTS own capital, through proceeds from securitization transactions (applicable to 2021 only), via SoFi bank deposits or receive an advance rate from our various warehouse facilities to finance the majority of the loan amount. Our cash flows from operations were also impacted by material net losses in both periods. If our current net losses continue for the foreseeable future, we may raise additional capital in the form of equity or debt, which may not be at favorable terms when compared to previous financing transactions. We have also utilized our revolving credit facility capacity to fund current liquidity needs in the normal course of business, such as general corporate activities. Our revolving credit facility had remaining capacity of $74.0 million as of March 31, 2022, of which $6.0 million was not available for general borrowing purposes because it was utilized to secure the uncollateralized portion of certain letters of credit issued to secure certain of our operating lease obligations. As of March 31, 2022, the remaining $3.1 million of the $9.1 million letters of credit outstanding was collateralized by cash deposits with the banking institution, which were presented within restricted cash and restricted cash equivalents in the unaudited condensed consolidated balance sheets. As of March 31, 2022, we also maintained letters of credit associated with our banking activities of $8.2 million, which serve as collateral for public deposits and are collateralized by loans. Our warehouse facility and securitization debt is secured by a continuing lien on, and security interest in, the loans financed by the proceeds. Our operating lease obligations consist of our leases of real property from third parties under non-cancellable operating lease agreements, which primarily include the leases of office space, as well as our rights to certain suites and event space within SoFi Stadium, the latter of which we apply the short-term lease exemption practical expedient and do not capitalize the lease obligation. Our finance lease obligations consist of our rights to certain physical signage within SoFi Stadium. Additionally, our securitization transactions require us to maintain a continuing financial interest in the form of securitization investments when we deconsolidate the SPE or in consolidation of the SPE when we have a significant financial interest. In either instance, the continuing financial interest requires us to maintain capital in the SPE that would otherwise be available to us if we had sold loans through a different channel. We are currently dependent on the success of our lending business. Our ability to access whole loan buyers, to sell our loans on favorable terms, to maintain adequate warehouse capacity at favorable terms, to access new SoFi bank deposits and grow existing bank deposits and to strategically manage our continuing financial interest in securitization-related transfers is critical to our growth strategy and our ability to have adequate liquidity to fund our balance sheet. There is no guarantee that we will be able to execute on our strategy as it relates to the timing and pricing of securitization-related transfers. Therefore, we may hold securitization interests for longer than planned or be forced to liquidate at suboptimal prices. Securitization transfers are also negatively impacted during recessionary periods, wherein purchasers may be more risk averse. Further, future uncertainties around the demand for our personal loans and around the student loan refinance market in general should be considered when assessing our future liquidity and solvency prospects. Principal and interest payments on federally-held student loans were suspended most recently through August 2022, which in turn has continued to lower the propensity for borrowers to refinance into SoFi student loans relative to pre-COVID levels. To the extent that additional measures, such as student loan forgiveness or a further extension of the student loan payment moratorium, are implemented, it may negatively impact our future student loan origination volume. In the future, our loan origination volume and our resulting loan balances, and any positive cash flows thereof, could be lower based on strategic decisions to tighten our credit standards. See “Key Factors Affecting Operating Results—Student Loan Relief” . As a bank holding company, we are subject to regulatory capital and liquidity rules issued by the Federal Reserve and other U.S. banking regulators, including the OCC and FDIC. Shortly after we closed the Bank Merger, we allocated $750 million in capital to SoFi Bank. Golden Pacific’s community bank business continues to operate as a division of SoFi Bank. We are required to manage our capital position to maintain sufficient capital to satisfy these regulatory rules and support our business activities, including the requirement to maintain minimum regulatory capital ratios in accordance with the Basel Committee on Banking Supervision standardized approach for U.S. banking organizations (U.S. Basel III). If the Federal Reserve finds that we are not “well-capitalized” or “well-managed”, we would be required to take remedial action to comply with all applicable capital and management requirements, which may contain additional limitations or conditions relating to our activities. Additionally, the applicable federal regulatory authority is authorized to determine, under certain circumstances relating to the financial condition of a bank or bank holding company, that the payment of dividends would be an unsafe or unsound practice and to prohibit payment thereof. As of March 31, 2022, our regulatory capital ratios exceeded the thresholds required to be regarded as a well-capitalized institution, and meet all capital adequacy requirements to which we are subject. There have been no events or conditions since March 31, 2022 that management believes would change our categorization. See Note 18 to the Notes to Unaudited Condensed Consolidated Financial Statements for additional information on our regulatory capital requirements. 88 TABLE OF CONTENTS Our material commitments requiring, or potentially requiring, the use of cash in future periods are primarily composed of the following: • warehouse facility borrowings, which primarily carry variable interest rates and have terms expiring through January 2032. See Note 9 to the Notes to Unaudited Condensed Consolidated Financial Statements for additional key terms; • revolving credit facility borrowings, which includes principal balance and variable interest. See Note 9 for additional information; • convertible senior notes, which do not bear regular interest, and will mature in October 2026 unless earlier repurchased, redeemed or converted. See “ Borrowings ” below for additional information; • operating lease obligations, primarily composed of leases of office premises with terms expiring from 2022 through 2031, as well as operating leases associated with SoFi Stadium, which expire in 2040; • finance lease obligations, composed of our rights to certain physical signage within SoFi Stadium, which expire in 2040; • the remaining commitment arising out of our agreement (which does not include the foregoing operating lease and finance lease obligations, but includes certain payments for which we are applying the short-term lease exemption) for the naming and sponsorship rights to SoFi Stadium, which pertain primarily to sponsorship and advertising opportunities related to the stadium itself, as well as the surrounding performance venue and planned retail district. See Note 15 to the Notes to Unaudited Condensed Consolidated Financial Statements for additional information on our SoFi Stadium arrangement, including a contingent matter associated with SoFi Stadium payments; and • the remaining commitment related to a four-year cloud computing services arrangement that we executed in the fourth quarter of 2021. As it relates to our 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, the timing of which cannot be reasonably estimated. Our own liquidity resources are not required to make any contractual payments on our securitization borrowings. We may require liquidity resources associated with our guarantee arrangements. We have a three-year obligation to FNMA on loans that we sell to FNMA, to repurchase any originated loans that do not meet FNMA guidelines, and we are required to pay the full initial purchase price back to FNMA. In addition, we make standard representations and warranties related to other student, personal and non-FNMA home loan transfers, as well as limited credit-related repurchase guarantees on certain such transfers. If realized, any of the repurchases would require the use of cash. See “ Other Arrangements ”, as well as Note 15 to the Notes to Unaudited Condensed Consolidated Financial Statements for further information on our guarantee obligations. We believe we have adequate liquidity to meet these expected obligations. Our long-term liquidity strategy includes growing our SoFi bank deposit base, maintaining adequate warehouse capacity (which we expect to decrease as a percentage of our total funding base over time), maintaining corporate debt and other sources of financing, as well as effectively managing the capital raised through debt and equity transactions. Although our goal is to increase our cash flow from operations, there can be no assurance that our future operating plans will lead to improved operating cash flows. We had unrestricted cash and cash equivalents of $1.3 billion as of March 31, 2022. We believe our existing cash and cash equivalents balance, investments in AFS debt securities, SoFi Bank deposits, available capacity under our revolving credit facility, together with additional warehouses or other financing we expect to be able to obtain at reasonable terms, will be sufficient to cover net losses, meet our existing working capital and capital expenditure needs, as well as our planned growth for at least the next 12 months. Our non-securitization loans also represent a key source of liquidity for us, and should be considered in assessing our overall liquidity. We have relationships with whole loan buyers who we believe we will be able to continue to rely on to generate near-term liquidity. Securitization markets can also generate additional liquidity, albeit to a lesser extent, as it involves accessing a much less liquid securitization residual investment market, and in certain cases we are required to maintain a minimum investment due to securitization risk retention rules. 89 TABLE OF CONTENTS Borrowings Our borrowings as of March 31, 2022 primarily included our loan and risk retention warehouse facilities, asset-backed securitization debt, revolving credit facility and convertible notes. A detailed description of each of our borrowing arrangements is included in Note 9 to the Notes to Unaudited Condensed Consolidated Financial Statements. The amount of financing actually advanced on each individual loan under our loan warehouse facilities, as determined by agreed-upon advance rates, may be less than the stated advance rate depending, in part, on changes in underlying loan characteristics of the loans securing the financings. Each of our loan warehouse facilities allows the lender providing the funds to evaluate the market value of the loans that are serving as collateral for the borrowings or advances being made. As it relates to our current risk retention warehouse facilities, if the lender determines that the value of the collateral has decreased, the lender can require us to provide additional collateral or reduce the amount outstanding with respect to those loans (e.g., initiate a margin call). Our inability or unwillingness to satisfy the request could result in the termination of the facilities and possible default under our other loan funding facilities. In addition, a large unanticipated margin call could have a material adverse effect on our liquidity. The amount owed and outstanding on our loan warehouse facilities fluctuates significantly based on our origination volume, sales volume, the amount of time it takes us to sell our loans, and the amount of loans being self-funded with cash. We may, from time to time, use surplus cash to self-fund a portion of our loan originations and risk retention in the case of securitization transfers. We have various affirmative and negative financial covenants, as well as non-financial covenants, related to our warehouse debt and revolving credit facility, as well as our Series 1 Redeemable Preferred Stock. Additionally, we have compliance requirements associated with our convertible notes, and certain provisions of the arrangement could change in the event of a “Make-Whole Fundamental Change”, as defined in the indenture. The availability of funds under our warehouse facilities and revolving credit facility is subject to, among other conditions, our continued compliance with the 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. A breach of these covenants can result in an event of default under these facilities and allows the lenders to pursue certain remedies. Our subsidiaries are restricted in the amount that can be distributed to SoFi only to the extent that such distributions would cause the financial covenants to not be met. In addition, pursuant to our amended and restated agreement related to our Series 1 Redeemable Preferred Stock, we are subject to the following financial covenants: • Tangible net worth to total debt ratio requirement, which excludes our warehouse, risk retention and securitization related debt; • Tangible net worth to Series 1 Redeemable Preferred Stock ratio requirement; and • Minimum excess equity requirements, where the measure of equity includes permanent equity and SoFi Technologies Redeemable Preferred Stock (exclusive of Series 1 Redeemable Preferred Stock), as applicable. We were in compliance with all covenants. Additionally, in October 2021, we closed on the issuance and sale of $1.2 billion aggregate principal amount of convertible senior notes, which do not bear regular interest, will mature in October 2026 (unless earlier repurchased, redeemed or converted) and will be convertible by the noteholders beginning in April 2026 under certain circumstances. 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). The convertible notes will be redeemable, in whole or in part, at our option at any time, and from time to time, beginning in October 2024 at a cash redemption price equal to the principal amount of the notes to be redeemed, plus accrued interest, if any. 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 Fundamental Change” (as defined in the indenture) occur, then the conversion rate will, in certain circumstances, be increased for a specified period of time. In addition, calling any note for redemption will also constitute a Make-Whole Fundamental Change with respect to that note, in which case the conversion rate applicable to the conversion of that note will be increased in certain circumstances if it is converted after it is called for redemption. Therefore, redemption events and conversion events (to the extent we elect to cash settle) could require a material use of cash at the time of the event. Additionally, the convertible notes may incur special interest in the event of default, or additional interest if the Company has not satisfied certain reporting conditions or the convertible notes are not otherwise freely tradable, as such term is 90 TABLE OF CONTENTS defined in the indenture. If special interest or additional interest is incurred on the convertible notes, it could require an additional use of cash. In connection with the pricing of the convertible notes and with the exercise by the initial purchasers of their option to purchase additional notes, which option was exercised, we entered into privately negotiated capped call transactions with certain financial institutions (the “Capped Call Transactions”). The Capped Call Transactions are expected to generally reduce the potential dilutive effect on the common stock upon any conversion of the notes and/or offset any cash payments we are required to make in excess of the principal amount of the converted notes, as the case may be. The net proceeds from the convertible debt issuance were $1.176 billion. We used $113.8 million of the net proceeds to fund the cost of entering into the Capped Call Transactions. We allotted the remainder of the net proceeds (i) to pay related expenses and (ii) for general corporate purposes. Cash Flow and Liquidity Analysis The following table provides a summary of cash flow data during the periods indicated. Three Months Ended March 31, ($ in thousands) 2022 2021 Net cash provided by (used in) operating activities $ (1,011,224) $ 340,051 Net cash provided by investing activities 49,879 180,947 Net cash provided by (used in) financing activities 1,895,158 (1,145,779) Cash Flows from Operating Activities For the three months ended March 31, 2022, net cash used in operating activities of $1.0 billion stemmed from a net loss of $110.4 million and an unfavorable change in our operating assets net of operating liabilities of $1.0 billion, partially offset by a positive adjustment for non-cash items of $137.6 million. The change in operating assets net of operating liabilities was primarily a result of our loan origination and sales activities. We originated loans of $3.3 billion during the period and also purchased loans of $0.3 billion. These cash uses were largely offset by principal payments on loans of $0.6 billion and proceeds from loan sales of $1.9 billion. For the three months ended March 31, 2021, net cash provided by operating activities of $340.1 million stemmed from a net loss of $177.6 million that was positively adjusted for non-cash items of $164.8 million, and a favorable change in our operating assets net of operating liabilities of $352.8 million. The change in operating assets net of operating liabilities was primarily a result of our loan origination and sales activities. We originated loans of $2.6 billion during the period and also purchased loans of $1.2 million. These cash uses were offset by principal payments from members of $0.5 billion and proceeds from loan sales of $2.4 billion. Cash Flows from Investing Activities For the three months ended March 31, 2022, net cash provided by investing activities of $49.9 million was primarily attributable to proceeds of $42.8 million from our securitization investments, the aggregate net cash acquired from the Technisys Merger and Bank Merger of $73.3 million, and proceeds of $29.6 million from sales, maturities and paydowns of our investments in AFS debt securities. These sources were offset by cash uses of $33.9 million related to loan activities, $25.1 million for purchases of property, equipment and software, which primarily included internally-developed software and purchased software, and cash uses of $36.8 million related to purchases of AFS debt securities. For the three months ended March 31, 2021, net cash provided by investing activities of $180.9 million was primarily attributable to proceeds of $107.5 million from the call on our equity method investment in Apex and proceeds of $64.2 million from our securitization investments. Additionally, Apex repaid its outstanding principal balance of $16.7 million. Lastly, we used $7.4 million for purchases of property, equipment and software. Cash Flows from Financing Activities For the three months ended March 31, 2022, net cash provided by financing activities was $1.9 billion. We received $3.6 billion of proceeds from debt financing activities related to our lending activities, all of which was related to our warehouse activities. These debt proceeds were partially offset by $2.6 billion of debt repayments, of which $2.5 billion were related to our warehouse facilities. Our payments of debt issuance costs were in the normal course of business and reflective of our recurring debt warehouse facility activity, which involves securing new warehouse facilities and extending existing 91 TABLE OF CONTENTS warehouse facilities. Additionally, we had net cash sources from our SoFi Bank deposits of $961.8 million. Finally, we paid taxes of $3.6 million related to RSU vesting. For the three months ended March 31, 2021, net cash used in financing activities was $1.1 billion. We received $1.9 billion of proceeds from debt financing activities related to our lending activities. These debt proceeds were more than offset by $2.9 billion of debt repayments, of which $2.5 billion were related to our warehouse facilities. Our payments of debt issuance costs were in the normal course of business and reflective of our recurring debt warehouse facility activity. We also paid taxes of $26.0 million related to RSU vesting. Finally, we paid $132.9 million to repurchase redeemable preferred stock and $0.5 million to repurchase common stock during the period. Other Arrangements We enter into arrangements in which we originate loans, establish an SPE and transfer loans to the SPE, which has historically served as an important source of liquidity. We also retain the servicing rights of the underlying loans and hold additional interests in the SPE. When an SPE is determined not to be a VIE or when an SPE is determined to be a VIE but we are not the primary beneficiary, the SPE is not consolidated. In addition, a significant change to the pertinent rights of other parties or our pertinent rights, 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 is consolidated. VIE consolidation and deconsolidation may lead to increased volatility in our financial results and impact period-over-period comparability. Historically, we have established personal loan trusts and student loan trusts that were created and designed to transfer credit and interest rate risk associated with the underlying loans through the issuance of collateralized notes and residual certificates. We hold a variable interest in the trusts through our ownership of collateralized notes in the form of asset-backed bonds and residual certificates in the trusts. The residual certificates absorb variability and represent the equity ownership interest in the equity portion of the personal loan trusts and student loan trusts. We are also the servicer for all trusts in which we hold a financial interest. Although we have the power as servicer to perform the activities that most impact the economic performance of the VIE, we do not hold a significant financial interest in the trusts and, therefore, we are not the primary beneficiary. Further, we do not provide financial support beyond our initial equity investment, and our maximum exposure to loss as a result of our involvement with nonconsolidated VIEs is limited to our investment. For a more detailed discussion of nonconsolidated VIEs, including activity in relation to the establishment of trusts, the aggregate outstanding values of variable interests and the deconsolidation of VIEs, see Note 5 to the Notes to Unaudited Condensed Consolidated Financial Statements. As a component of our loan sale agreements, we make certain representations to third parties that purchased our previously held loans, which includes FNMA repurchase requirements, general representations and warranties and credit-related repurchase requirements, all of which are standard in nature and, therefore, do not constrain our ability to recognize a sale for accounting purposes. 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. Our credit-related repurchase requirements are assessed for credit losses. During the three months ended March 31, 2022, we made repurchases of $2.6 million associated with these arrangements. As of March 31, 2022 and December 31, 2021, we accrued liabilities of $5.2 million and $7.4 million, respectively, related to our estimated repurchase obligation. Financial Condition Summary March 31, 2022 compared to December 31, 2021 Changes in the composition and balance of our assets and liabilities as of March 31, 2022 compared to December 31, 2021 were principally attributed to the following: • an increase of $933.8 million in cash and cash equivalents and restricted cash and restricted cash equivalents. See “ Cash Flow and Liquidity Analysis ” for further discussion of our cash flow activity; • an increase of $4.9 million in investments in AFS debt securities, which we began purchasing during the third quarter of 2021, and was inclusive of an increase of $9.5 million attributable to the Golden Pacific acquisition assets; • an increase in total loans of $1.2 billion, which was primarily related to personal and student loans; • a decrease in securitization investments of $49.3 million, of which $42.8 million was related to cash receipts. There were no securitization investments made during the first quarter of 2022; 92 TABLE OF CONTENTS • an increase in intangible assets of $220.9 million, of which $240.0 million was related to our two acquisitions during the current quarter, with a partially offsetting decrease attributable to amortization expense; • an increase in goodwill of $717.2 million related to our two acquisitions during the current quarter; • an increase in deposits of $1.2 billion, which was attributable to our launch of SoFi bank during the current quarter; • an increase in deferred tax liabilities of $55.1 million, which was primarily attributable to the separately identifiable intangible assets acquired in the Technisys Merger; • an increase of $1.0 billion in gross warehouse facility debt to support our originations during the current quarter, which reflected the net impact of $3.6 billion of cash borrowings and $2.5 billion of cash repayments; and • a decrease of $84.2 million in liabilities related to gross securitization debt, which was settled with proceeds from related collateral repayments. Critical Accounting Policies and Estimates Our consolidated financial statements have been prepared in accordance with accounting principles generally accepted in the United States. In preparing our consolidated financial statements, we make judgments, estimates and assumptions that affect reported amounts of assets and liabilities, as well as revenues and expenses. We base our assumptions, judgments and estimates on historical experience and various other factors that we believe to be reasonable under the circumstances. The results involve judgments about the carrying values of assets and liabilities not readily apparent from other sources. Actual results could differ materially from these estimates under different assumptions or conditions. We regularly evaluate our estimates, assumptions and judgments, particularly those that include the most difficult, subjective or complex judgments and are often about matters that are inherently uncertain. We evaluate our critical accounting policies and estimates on an ongoing basis and update them as necessary based on changes in market conditions or factors specific to us. There have been no material changes in our significant accounting policies or critical accounting estimates during the first quarter of 2022. For a complete discussion of our significant accounting policies and critical accounting estimates, see Note 1 to the Notes to Consolidated Financial Statements for a summary of our significant accounting policies and “Management’s Discussion and Analysis of Financial Condition and Results of Operations—Critical Accounting Policies and Estimates ” in our Annual Report on Form 10-K for the year ended December 31, 2021. Recent Accounting Standards Issued, But Not Yet Adopted See Note 1 to the Notes to Unaudited Condensed Consolidated Financial Statements and Note 1 to the Notes to Consolidated Financial Statements in our Annual Report on Form 10-K for the year ended December 31, 2021. Item 3. Quantitative and Qualitative Disclosures about Market Risk In the normal course of business, we are subject to a variety of market-related risks that can affect our operations and profitability. We broadly define these areas of risk as interest rate risk, credit risk, market risk, and counterparty risk. Historically, substantially all of our revenue and operating expenses were denominated in United States dollars. We may in the future be subject to increasing foreign currency exchange rate risk with our recent acquisition of a foreign company. Foreign currency exchange rate risk is the risk that our financial position or results of operations could be positively or negatively impacted by fluctuations in exchange rates. Exchange rate risk was not a material risk for the Company during any of the periods presented. Interest Rate Risk We are subject to interest rate risk associated with our consolidated loans, securitization investments (including residual investments and asset-backed bonds), servicing rights, variable-rate debt, deposit accounts and investments in AFS debt securities. Our loans with variable interest rates are exposed to interest rate volatility, which impacts the amount of recognized interest income. Our securitization residual investments are carried at fair value, which is subject to changes in market value by virtue of the impact of interest rates on the market yield of the residual investments. The value and earnings of our asset-backed bonds, which are associated with our personal loans and student loans, have a converse relationship to the movement of interest rates. That is, as interest rates rise, bond values and earnings fall and vice versa. Additionally, we are subject to interest rate risk on our variable-rate warehouse facilities and our revolving credit facility. Market interest rates may 93 TABLE OF CONTENTS also drive the interest we offer to members on their deposits. Future funding activities may increase our exposure to interest rate risk, as the interest rates payable on such funding may be tied to SOFR or another representative alternative reference rate. Interest rate risk also occurs in periods where changes in short-term interest rates result in loans being originated with terms that provide a smaller interest rate spread above the financing terms of our warehouse facilities, which can negatively impact our realized net interest income. Credit Risk We are subject to credit risk, which is the risk of default that results from a borrower’s inability or unwillingness to make contractually required loan payments, inclusive of our credit card product, or declines in home loan collateral values. Generally, all loans sold into the secondary market are sold without recourse. For such loans, our credit risk is limited to repurchase obligations due to fraud or origination defects. For loans that were repurchased or not sold in the secondary market, we are subject to credit risk to the extent a borrower defaults and we are not able to fully recover the principal balance. We believe that this risk is mitigated through the implementation of stringent underwriting standards, strong fraud detection tools and technology designed to comply with applicable laws and our standards. In addition, we believe that this risk is mitigated through the quality of our loan portfolio. Market Risk We are exposed to the risk of loss to future earnings, values or future cash flows that may result from changes in market discount rates. We are exposed to such market risk directly through our investments in AFS debt securities, loans, servicing rights and securitization investments held on our unaudited condensed consolidated balance sheet, all of which are measured at fair value on a recurring basis. Investments in AFS debt securities are valued utilizing quoted prices in actively traded markets or 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. The other assets mentioned are measured at fair value using a discounted cash flow methodology in which the discount rate represents an estimate of the required rate of return by market participants. The discount rates for our loans and securitization investments may change due to expected loan performance or changes in the expected returns of similar financial instruments available in the market. For our servicing rights, the discount rate is commensurate with the risk of the servicing asset cash flow, which varies based on the characteristics of the serviced loan portfolio. Counterparty Risk We are subject to risk that arises from our debt warehouse facilities, interest rate risk hedging activities and capped call options on our common stock. These activities generally involve an exchange of obligations with unaffiliated lenders or other individuals or entities, referred to in such transactions as “counterparties”. If a counterparty was to default, we could potentially be exposed to financial loss if such counterparty was unable to meet its obligations to us. We manage this risk by selecting only counterparties that we believe to be financially strong, spreading the risk among multiple such counterparties, placing contractual limits on the amount of dependence on any single counterparty, and entering into netting agreements with the counterparties, as appropriate. In accordance with Treasury Market Practices Group’s recommendation, we execute Securities Industry and Financial Markets Association trading agreements with all material trading partners. Each such agreement provides for an exchange of margin money should either party’s exposure exceed a predetermined contractual limit. Such margin requirements limit our overall counterparty exposure. The master netting agreements contain a legal right to offset amounts due to and from the same counterparty. Derivative assets represent derivative contracts in a gain position net of loss positions with the same counterparty and, therefore, also represent our maximum counterparty credit risk. We incurred no losses due to nonperformance by any of our counterparties during the three months ended March 31, 2022. As of March 31, 2022, gross derivative asset and liability positions subject to master netting arrangements were $9.7 million and $10.9 million, respectively. In the case of our loan warehouse facilities, we are subject to risk if the counterparty chooses not to renew a borrowing agreement and we are unable to obtain financing to originate loans. With our loan warehouse facilities, we seek to mitigate this risk by ensuring that we have sufficient borrowing capacity with a variety of well-established counterparties to meet our funding needs. As of March 31, 2022, we had total borrowing capacity under loan warehouse facilities of $7.0 billion, of which $2.5 billion was utilized. Refer to Note 9 to the Notes to Unaudited Condensed Consolidated Financial Statements for a listing of our loan warehouse facilities. In the case of our call options on our common stock (referred to herein as the “Capped Call Transactions”), if the Capped Call Counterparties, which are financial institutions and initial purchasers of our convertible notes, are unable to meet their obligations under the contract, we may not be able to mitigate the dilutive effect on our common stock upon conversions 94 TABLE OF CONTENTS of our convertible notes or offset any potential cash payments we may be required to make in excess of the principal amount of converted convertible notes. Item 4. Controls and Procedures Evaluation of Disclosure Controls and Procedures Our management, with the participation of our Chief Executive Officer and Chief Financial Officer, has evaluated the effectiveness of our disclosure controls and procedures (as defined in Rules 13a-15(e) and 15d-15(e) under the Securities Exchange Act of 1934, as amended (the “Exchange Act”)). Based on that evaluation, our Chief Executive Officer and Chief Financial Officer concluded that such disclosure controls and procedures were effective as of the end of the period covered by this Quarterly Report on Form 10-Q and designed to ensure that information required to be disclosed in our reports filed or submitted under the Exchange Act is recorded, processed, summarized and reported within the requisite time periods specified in the applicable rules and forms, and that it is accumulated and communicated to our management, including our Chief Executive Officer and Chief Financial Officer, as appropriate, to allow timely decisions regarding required disclosure. Management recognizes that any controls and procedures, no matter how well designed and operated, can provide only reasonable assurance of achieving their objectives and management necessarily applies its judgment in evaluating the cost-benefit relationship of possible controls and procedures. Changes in Internal Control over Financial Reporting There have not been any changes in our internal control over financial reporting (as defined in Rules 13a-15(f) and 15d-15(f) under the Exchange Act) during the period covered by this Quarterly Report on Form 10-Q that have materially affected, or are reasonably likely to materially affect, our internal control over financial reporting. 95 TABLE OF CONTENTS PART II – OTHER INFORMATION Item 1. Legal Proceedings The information required by Item 103 of Regulation S-K is included in Note 15 to the Notes to Unaudited Consolidated Financial Statements in Part I, Item 1 of this Quarterly Report on Form 10-Q. Item 1A. Risk Factors In evaluating our company and our business, y ou should carefully consider the risks and uncertainties described below, together with the other information in this Quarterly Report on Form 10-Q, including our unaudited condensed consolidated financial statements and the related notes and the section titled “Management’s Discussion and Analysis of Financial Condition and Results of Operations”. The occurrence of one or more of the events or circumstances described in these risk factors, alone or in combination with other events or circumstances, may have a material adverse effect on our business, reputation, revenue, financial condition, results of operations or future prospects, in which case the market price of our common stock could decline, and you could lose part or all of your investment. Unless otherwise indicated, references in this section and elsewhere in this Quarterly Report on Form 10-Q to our business being adversely affected, negatively impacted or harmed will include an adverse effect on, or a negative impact or harm to, our business, reputation, financial condition, results of operations, revenue or our future prospects. The material and other risks and uncertainties summarized in this Quarterly Report on Form 10-Q and described below are not intended to be exhaustive and are not the only ones we face. Additional risks and uncertainties not presently known to us or that we currently deem immaterial may also impair our business. This Quarterly Report on Form 10-Q also contains forward-looking statements that involve risks and uncertainties. Our actual results could differ materially from those anticipated in the forward-looking statements as a result of a number of factors, including the risks described below. See the section titled “Cautionary Statement Regarding Forward-Looking Statements”. Summary Risk Factors Our business is subject to numerous risks and uncertainties, which illuminate challenges that we face in connection with the successful implementation of our strategy and the growth of our business. Our business, prospects, financial condition or operating results could be harmed by any of these risks, as well as other risks not currently known to us or that we currently consider immaterial. These risks are discussed more fully below and include, but are not limited to, risks related to: Business, Financial and Operational Risks • our ability to successfully identify and address the risks and uncertainties we face; • demands on our resources, intense and increasing competition, and success of our business model (including future profitability); • legislative and regulatory policies and related actions that apply or may apply to us, particularly in connection with student loans or as a result of our acquisition of SoFi Bank; • loss of one or more significant purchasers of our loans; • impact of the ongoing COVID-19 pandemic, including regulatory responses, increasing inflation, supply shortages and economic uncertainty; Risks related to Strategic and New Products • potential and recent acquisitions that could require significant attention, disrupt our business and adversely affect our financials; • failure to innovate or respond to evolving technological or other changes; • an increase in fraudulent activity; • failure of third party service providers or systems on which we rely; • increased business, economic and regulatory risks from continued expansion abroad, including as a result of the Technisys Merger; Credit Related Risks • worsening economic conditions, including increasing inflation and market volatility, the cyclical nature of our industry and ability to maintain expected levels of liquidity; • inability to make accurate credit and pricing decisions or effectively forecast our loss rates; • the discharge of student loans in certain circumstances; • failure of a third-party service provider to perform various functions related to the origination and servicing of loans; 96 TABLE OF CONTENTS • failure of third-party home loan fulfillment partner to provide fulfillment services for home loans we originate; • risk of litigation by consumers related to non-qualified home loans; Risks related to Market and Interest Rates • cost and availability of funding in the capital markets and fluctuations in interest rates; • higher than expected payment speeds of loans or longer holding periods of loans could negatively impact our returns; • transition away from the London Inter-Bank Offered Rate (“LIBOR”) as a benchmark reference and financial risks that cannot be eliminated by our hedging activities, which carry their own risks; Risks related to Funding and Liquidity • ability to retain, increase or secure new or alternative financing; • termination of one or more of our warehouse facilities on which we are highly dependent; • increases in member loan default rates or possibility of being required to repurchase loans or indemnify the purchaser of our loans; • ability to finance the receivables that we originate or other assets that we hold; Regulatory, Tax and Other Legal Risks • exposure to evolving laws, rules, regulations and government enforcement policies, including an extension of the student loan payment moratorium or loan group, and potential enforcement actions, litigation, investigations, exams or inquiries or impairment of licenses; • ability to effectively mitigate risk exposure; • changes in business, economic or political conditions; • failure to comply with laws and regulations, including anti-corruption or privacy laws; • application of regulations and supervision under banking laws; • ability to efficiently protect our intellectual property rights; • failure to comply with open source licenses for open source software included in our or any of our subsidiaries’ platforms; • the risk that we are, or any of our subsidiaries is, determined to have been subject to registration as an investment company under the Investment Company Act; Personnel and Business Continuity Risks • loss of key management members or key employees, or an inability to hire key personnel; • increased business continuity and cyber risks due to our primarily remote workforce; • natural disasters, power outages, telecommunications failures, man-made problems and similar; • employee misconduct; Risk Management and Financial Reporting Risks • ability to establish and maintain proper and effective internal control over financial reporting and risk management processes and procedures; • changes in accounting principles generally accepted in the United States; • as a result of our business combination with a special purpose acquisition company, regulatory obligations may impact us differently than other publicly traded companies; • incorrect estimates or assumptions by management in connection with the preparation of our financial statements; Information Technology and Data Risks • breach or violation of law by a third party on which we depend; • cyberattacks and other security breaches or disruptions of our systems or third-party systems on which we rely, including disruptions that may impact our ability to collect loan payments and maintain accurate accounts; • liabilities related to the collection, processing, use, storage and transmission of personal data; Risks related to Ownership of Our Securities • volatility in the price of our common stock and future dilution of our stockholders; • possibility of securities litigation, which is expensive and time consuming; and • failure to comply with Nasdaq continued listing standards. 97 TABLE OF CONTENTS Business, Financial and Operational Risks We operate in a rapidly evolving industry, and have limited experience in parts of our Financial Services and Technology Platform segments, which may make it difficult for us to successfully identify and address the risks and uncertainties we face. We operate in a rapidly evolving industry, and have limited experience in parts of our Financial Services and Technology Platform segments, which may make it difficult to identify risks to our business and evaluate our future prospects. In particular, we have limited experience offering cash management, investment services and technology solutions. In the first quarter of 2022, we acquired a bank charter and face risks as a result of our lack of experience operating a bank and as a bank holding company. We also acquired Technisys in the first quarter of 2022 which furthered our international expansion into Latin America and introduced new risks due to our limited history of operations in certain Latin American countries. In addition to the recent events above, we face numerous challenges to our success, including our ability to: • increase or maintain the number, volume and types of, and add new features to, the loans we extend to our members as the market for loans evolves and as we face new and increasing competitive threats; • increase the number of members utilizing non-lending products, including our direct deposit feature, and maintain and build on the loyalty of existing members by increasing their use of new or additional products; • successfully maintain and enhance our diversified funding strategy, including through securitization financing from consolidated and nonconsolidated VIEs, whole loan sales and debt warehouse facilities; • further establish, diversify and refine our checking and savings, cash management, investment and brokerage offerings to meet evolving consumer needs and preferences; • diversify our revenue streams across our products and services; • favorably compete with other companies, including traditional and alternative technology-enabled lenders, financial service providers, broker dealers, and technology platform-as-a-service providers; • realize the benefits of operating a bank; • introduce new products or other offerings to meet the needs of our existing and prospective members or to keep pace with competitive lending, checking and savings, cash management, investment and other developments; • maintain or increase the effectiveness of our direct marketing, and other sales and marketing efforts; • successfully navigate economic conditions and fluctuations in the credit markets, including inflation and rising interest rates; • establish fraud prevention strategies that proactively identify threat vectors and mitigate losses; • defend our platform from information security vulnerabilities, cyberattacks or malicious attacks; • effectively manage the growth of our business; • effectively manage our expenses; • obtain debt or equity capital on attractive terms or at all; • successfully continue to expand internationally; • adequately respond to macroeconomic and other exogenous challenges, including the ongoing impacts from the COVID-19 pandemic and the ongoing conflict in Ukraine; and • anticipate and react to changes in an evolving regulatory and political environment. We may not be able to successfully address the risks and uncertainties we face, which could negatively impact our business, financial condition, results of operations, cash flows and future prospects. 98 TABLE OF CONTENTS We have a history of losses, may not achieve profitability in the future, and there is no assurance that our revenue and business model will be successful. We have a history of net losses. We may continue to incur net losses in the future, and such losses may fluctuate significantly from quarter to quarter. We will need to generate and sustain significant revenues for our business generally, and achieve greater scale and generate greater operating cash flows from our Financial Services segment, in particular, in future periods in order to achieve, maintain or increase our level of profitability. We intend to continue to invest in sales and marketing, technology, and new products and services in order to enhance our brand recognition and our value proposition to our members, and these additional costs will create further challenges to generating near-term profitability. Our general and administrative expenses may also increase to meet the increased compliance and other requirements associated with operating as a public company, operating a bank, and evolving regulatory requirements. See “ We recently acquired a national bank, which subjects us to significant additional regulation ”. We are continually refining our revenue and business model, which is premised on creating a virtuous cycle for our members to engage with more products across our platform, a strategy we refer to as the Financial Services Productivity Loop. There is no assurance that our revenue and business model or any changes to our revenue and business model to better compete with our competitors will be successful. Our efforts to grow our business may be more costly than we expect, and we may not be able to increase our revenue sufficiently to offset our higher operating expenses. We may continue to incur losses and not achieve future profitability or, if achieved, be unable to maintain such profitability, due to a number of reasons, including the risks described in this Quarterly Report on Form 10-Q, unforeseen expenses, difficulties, complications and delays, and other unknown events. We have experienced rapid growth in recent years, including through the addition of new lines of business and into new geographies, which may place significant demands on our operational, risk management, sales and marketing, technology, compliance, and finance and accounting resources. Our rapid growth in certain areas of our business in recent years, primarily within our Financial Services and Technology Platform segments, has placed significant demands on our operational, risk management, sales and marketing, technology, compliance, and finance and accounting infrastructure, and has resulted in increased expenses, a trend that we expect to continue as our business grows. In addition, we are required to continuously develop and adapt our systems and infrastructure in response to the increasing sophistication of the consumer financial services market, evolving fraud and information security landscape, and regulatory developments, both domestically and internationally, relating to existing and projected business activities. Our future growth will depend, among other things, on our ability to maintain an operating platform and management system able to address such growth, and will require us to incur significant additional expenses, expand our workforce and commit additional time from senior management and operational resources. We may not be able to manage supporting and expanding our operations effectively, and any failure to do so would adversely affect our ability to increase the scale of our business, generate projected revenue and control expenses. Our results of operations and future prospects depend on our ability to retain existing members and attract new members. We face intense and increasing competition and, if we do not compete effectively, our competitive positioning and our operating results will be harmed. We refer to our customers as “members”. We define a member as someone who has a lending relationship with us through origination and/or ongoing servicing, opened a financial services account, linked an external account to our platform, or signed up for our credit score monitoring service. We operate in a rapidly changing and highly competitive industry, and our results of operations and future prospects depend on, among others: • the continued growth of our member base; • our ability to monetize our member base, including through the use of additional products by our existing members; • our ability to acquire members at a lower cost; and • our ability to increase the overall value to us of each of our members while they remain on our platform (which we refer to as a member’s lifetime value). We expect our competition to continue to increase, as there are generally no substantial barriers to entry to the markets we serve. In addition to established enterprises, we may also face competition from early-stage companies attempting to capitalize on the same, or similar, opportunities as we are. Some of our current and potential competitors have longer operating histories, particularly with respect to our financial services products, significantly greater financial, technical, marketing and other resources and a larger customer base than we do. This allows them to potentially offer more competitive pricing or other 99 TABLE OF CONTENTS terms or features, a broader range of financial products, or a more specialized set of specific products or services, as well as respond more quickly than we can to new or emerging technologies and changes in member preferences. Our existing or future competitors may develop products or services that are similar to our products and services or that achieve greater market acceptance than our products and services. This could attract current or potential members away from our services and reduce our market share in the future. Additionally, when new competitors seek to enter our markets, or when existing market participants seek to increase their market share, these competitors sometimes undercut, or otherwise exert pressure on, the pricing terms prevalent in that market, which could adversely affect our market share and/or our ability to capitalize on new market opportunities. We currently compete at multiple levels with a variety of competitors, including: • other personal loan, student loan refinancing, in-school student loan and mortgage lenders, including other banks and other non-bank financial institutions, as well as credit card issuers, that can offer more competitive interest rates or terms; • banks and other non-bank financial institutions, for our checking and savings accounts and cash management accounts; • rewards credit cards provided by other financial institutions, for our SoFi Credit Card; • other brokerage firms, including online or mobile platforms, and technology and other companies for our SoFi Invest accounts; • other technology platforms for the enterprise services we provide, such as technology products and solutions via Galileo and Technisys; • with other content providers for subscribers to our financial services content, including content from alternative providers available to our subscribers through our Lantern Credit service, which is a financial services aggregator providing marketplace lending products, and various enterprise partnerships; and • other financial services firms offering leading employers a comprehensive platform for employees to build financial well-being through student loan and 529 educational plan contributions, educational tools, and financial resources, all of which we provide through SoFi at Work. We believe that our ability to compete depends upon many factors both within and beyond our control, including, among others, the following: • the size, diversity and activity levels of our member base; • our ability to introduce successful new products and services, or to iterate and innovate on existing products or services to satisfy evolving member preferences or to keep pace with market trends; • our ability to diversify our revenue streams across our products and services; • the timing and market acceptance of our products and services, including developments and enhancements to those products and services, offered by us and our competitors; • member service and support efforts; • selling and marketing and promotional efforts; • the ease of use, performance, price and reliability of solutions developed either by us or our competitors; • our ability to attract and retain talent; • changes in economic conditions, regulatory and policy developments; • our ability to successfully operate a national bank and realize the potential benefits to our members; • our ability to successfully execute on the Financial Services Productivity Loop and our other business plans; • general credit markets conditions and their impact on our liquidity and ability to access funding; 100 TABLE OF CONTENTS • the ongoing impact of the COVID-19 pandemic and related developments on the lending and financial services markets we serve; and • our brand strength relative to our competitors. Our current and future business prospects demand that we act to meet these competitive challenges but, in doing so, our revenues and results of operations could be adversely affected if we, for example, increase marketing or other expenditures or make new expenditures in other areas. Competitive pressures could also result in us reducing the annual percentage rate on the loans we originate, incurring higher member acquisition costs, or making it more difficult for us to grow our loan originations in both number of loans and volume for new as well as existing members. All of the foregoing factors and events could adversely affect our business, financial condition, results of operations, cash flows and future prospects. We recently acquired a national bank and became a bank holding company, which subjects us to significant additional regulation. In March 2021, we entered into an agreement to acquire Golden Pacific, a bank holding company, and its wholly-owned subsidiary, which is a national bank. We closed the Bank Merger in February 2022, after which we became a bank holding company and Golden Pacific Bank began operating as SoFi Bank. As a bank holding company, we are subject to regulation, supervision and examination by the Federal Reserve, and SoFi Bank is subject to regulation, supervision and examination by the OCC and the FDIC, as well as regulations issued by the Consumer Financial Protection Bureau (the “CFPB”). Federal laws and regulations govern numerous matters affecting us, including changes in the ownership or control of banks and bank holding companies, maintenance of adequate capital and the financial condition of a financial institution, permissible types, amounts and terms of extensions of credit and investments, permissible nonbanking activities, the level of reserves against deposits and restrictions on dividend payments. The OCC possesses the power to issue cease and desist orders to prevent or remedy unsafe or unsound practices or violations of law by banks subject to their regulation, and the Federal Reserve possesses similar powers with respect to bank holding companies. In general, the bank supervisory framework is intended to protect insured depositors and the safety, soundness and stability of the U.S. financial system and not shareholders in depository institutions or their holding companies. In addition, due to the fact that SoFi and certain of its affiliates act as service-providers to SoFi Bank, we are subject to audit standards for third-party vendors in accordance with OCC guidance and examinations by the OCC. In connection with applying for approval to become a bank holding company, we developed a financial and bank capitalization plan and enhanced our governance, compliance, controls and management infrastructure and capabilities in order to ensure compliance with all applicable regulations, which required, and will continue to require, substantial time, monetary and human resource commitments. If any new regulations or interpretations of existing regulations to which we are subject impose requirements on us that are impractical or that we cannot satisfy, our financial performance, and our stock price, may be adversely affected. Additionally, certain of our stockholders may need to comply with applicable federal banking statutes and regulations, including the Change in Bank Control Act and the Bank Holding Company Act. Specifically, stockholders holding 10.0% or more of our voting interests may be required to provide certain information and/or commitments on a confidential basis to, among other regulators, the Federal Reserve. This requirement may deter certain existing or potential stockholders from purchasing shares of our common stock, which may suppress demand for our stock and cause the price to decline. Finally, we intend to continue to explore other products for SoFi Bank. Some of those products may require, or be deemed to require, additional data, procedures, partnerships, regulatory approvals, or capabilities that we have not yet obtained or developed. Should we fail to expand and evolve SoFi Bank products in a successful manner, or should these new products, or new regulations or interpretations of existing regulations, impose requirements on us that are cumbersome or that we cannot satisfy, our business may be materially and adversely affected. Our future growth depends significantly on our branding and marketing efforts, and if our marketing efforts are not successful, our business and results of operations will be harmed. We have dedicated and intend to continue to dedicate significant resources to marketing efforts. Our ability to attract members depends in large part on the success of these marketing efforts and the success of the marketing channels we use to promote our products. Our marketing channels include, but are not limited to, earned media through press and social media, as well as traditional advertising, such as online affiliations, search engine optimization and digital marketing, offline partnerships, out-of-home, direct mail, lifecycle marketing and television and radio advertising. While our goal remains to increase the strength, recognition and trust in our brand by increasing our member base and expanding our products and services, if any of our current marketing channels become less effective, if we are unable to 101 TABLE OF CONTENTS continue to use any of these channels, if the cost of using these channels significantly increases or if we are not successful in generating new channels, we may not be able to attract new members in a cost-effective manner or increase the activity of our existing members on our platform, including by using additional products or services we offer. If we are unable to recover our marketing costs through increases in the size, value or the overall number of loans we originate, or member selection and utilization of other SoFi products such as SoFi Checking and Savings, SoFi Invest and SoFi Credit Card, it could have a material adverse effect on our business, financial condition, results of operations, cash flows and future prospects. Legislative and regulatory policies and related actions in connection with student loans could have a material adverse effect on our student loan portfolios. In recent years, there has been increased focus by policymakers on outstanding student loans, including, among other things, on the total volume of outstanding loans and on the number of loans outstanding per borrower. In response, there has been discussion of potential legislative and regulatory actions and other possible steps to, among other things: • permit private education loans such as our refinanced student loan and in-school student loan products to be discharged in bankruptcy without the need to show undue hardship; • amend the federal postsecondary education loan programs, including to reduce interest rates on certain loans, to revise repayment plans, to implement loan forgiveness plans, to provide for refinancing of private education loans into federal student loans at low interest rates, to reduce or eliminate the Grad PLUS program (which authorizes loans that comprise a substantial portion of our student loan refinancing business) and to provide for refinancing of existing federally held student loans into new federal student loans at low interest rates; • require private education lenders to reform loan agreements to provide for income-based repayment plans and other payment plans; and • make sweeping changes to the entire cost structure and financial aid system for higher education in the United States, including proposals to provide free postsecondary education. The Biden administration has introduced and continues to advocate for student loan debt forgiveness initiatives. Prominent politicians, including Senator Elizabeth Warren and Majority Leader Senator Chuck Schumer, have also advocated for executive action to forgive student loan debt. If student loans were forgiven or canceled in any meaningful scale, or if federal loan borrowers were permitted to refinance at lower interest rates, our profitability, results of operations, financial condition, cash flows or future business prospects could be materially and adversely affected as a result. In particular, our student loan refinancing business within our Lending segment, which is our largest segment, would be materially and adversely affected. There has also been pressure on policymakers to address underlying factors that contributed to the current volume of outstanding student loans, such as the cost of higher education and the ability for additional methods by the federal government and other organizations to subsidize the same, such as through increased use of Pell grants in lieu of loans. Further, proposals to eliminate or amend Section 523(a)(8) of the Bankruptcy Code, which makes student loans presumptively non-dischargeable in bankruptcy, could make whole loan purchasers less likely to purchase our student loans, securitization investors less likely to purchase securities backed by our student loans or warehouse lenders less likely to lend against our student loans at attractive advance rates. If steps were taken to materially reduce future demand by students for student loan refinancing and in-school student loan products, our student loan originations would be materially and adversely affected. As a result of any material adverse effect to our Lending segment, our overall profitability, results of operations, financial condition, cash flows or future business prospects may be adversely affected. See “ COVID-19 Pandemic Risks — Legislative and regulatory responses to the COVID-19 pandemic and related economic uncertainty could have a material adverse effect on our current student loan portfolios and our loan origination volume ” . Negative publicity could result in a decline in our member growth, or a loss of members, and impact our ability to compete for lending counterparties and corporate partners, and have a material adverse effect on our business, our brand and our results of operations. We have invested significantly in our brand. We believe that maintaining and enhancing our brand identity is critical to our success. Our ability to compete for, attract and maintain members, lending counterparties, marketing partners and other partners relies to a large extent on their trust in our business and the value of our brand. The failure or perceived failure to maintain our brand could adversely affect our brand value, financial condition and results of operations. Negative publicity can adversely affect our reputation and damage our brand, and may arise from many sources, including actual or alleged misconduct, errors or improper business practices by employees, employee claims of discrimination or harassment, product failures, existing or future litigation or regulatory actions, inadequate protection of consumer information, data breaches, matters affecting our financial reporting or compliance with SEC and Nasdaq listing requirements and media coverage, whether 102 TABLE OF CONTENTS accurate or not. Negative publicity or allegations of unfavorable business practices, poor governance, or workplace misconduct can be rapidly and widely shared over social or traditional media or other means, and could reduce demand for our products, undermine the loyalty of our members and the confidence of our lending counterparties, impact our partnerships, reduce our ability to recruit and retain employees or lead to greater regulatory scrutiny of our operations. In addition, we and our officers, directors and/or employees have been, and may in the future be, named or otherwise involved in litigation or claims, including employment-related claims such as workplace discrimination or harassment, which could result in negative publicity and/or adversely impact our business, even if we are ultimately successful in defending against such claims. We may experience fluctuations in our quarterly operating results. We may experience fluctuations in our quarterly operating results due to a number of factors, including changes in the fair values of our instruments (including, but not limited to, our loans), the level of our expenses, the degree to which we encounter competition in our markets, general economic conditions, the rate and credit market environment, legal or regulatory developments, legislative or policy changes and the ongoing impact of the COVID-19 pandemic. In light of these factors, results for any period should not be relied upon as being indicative of performance in future periods. We sell a significant percentage of our loans to a concentrated number of whole loan purchasers and the loss of one or more significant purchasers could have a negative impact on our operating results. We sell a significant percentage of our personal loans, student loans and home loans to a concentrated number of whole loan purchasers. There are inherent risks whenever a large percentage of a business is concentrated with a limited number of parties. It is not possible for us to predict the future level of demand for our loans by these or other purchasers. In addition, purchases of our loans by these purchasers have historically fluctuated and may continue to fluctuate based on a number of factors, some of which may be outside of our control, including economic conditions, the availability of alternative investments, changes in the terms of the loans, loans offered by competitors and prevailing interest rates. If any of these purchasers significantly reduce the dollar amount of the loans they purchase from us, we may be unable to sell those loans to another purchaser on favorable terms or at all, which may have a material adverse effect on our revenues, results of operations, liquidity and cash flows. The accounting method for reflecting the convertible notes on our balance sheet, accruing interest expense for the convertible notes and reflecting the underlying shares of our common stock in our reported diluted earnings per share may adversely affect our reported earnings and financial condition. In August 2020, the Financial Accounting Standards Board issued Accounting Standards Update (“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 (“ASU 2020-06”), which, among other things, simplifies the accounting for certain convertible instruments. We early adopted the provisions of ASU 2020-06 effective January 1, 2021. In accordance with ASU 2020-06, the convertible notes we issued in October 2021 (the “notes”) are reflected as a liability on our consolidated balance sheets, with the initial carrying amount equal to the principal amount of the notes, net of issuance costs. The issuance costs were treated as a debt discount for accounting purposes, which will be amortized into interest expense over the term of the notes. As a result of this amortization, the interest expense that we expect to recognize for the notes for accounting purposes will be greater than the cash interest payments we will pay on the notes, which will result in lower reported earnings. In addition, the shares underlying the notes will be reflected in our diluted earnings per share using the “if converted” method. Under that method, if the conversion value of the notes exceeds their principal amount for a reporting period, then we will calculate our diluted earnings per share assuming that all of the notes were converted at the beginning of the reporting period and that we issued shares of our common stock to settle the excess. However, if reflecting the notes in diluted earnings per share in this manner is anti-dilutive, or if the conversion value of the notes does not exceed their principal amount for a reporting period, then the shares underlying the notes will not be reflected in our diluted earnings per share. The application of the if-converted method may reduce our reported diluted earnings per share, and accounting standards may change in the future in a manner that may adversely affect our diluted earnings per share. The conditional conversion feature of the notes, if triggered, may adversely affect our financial condition. Holders of notes may be entitled to convert the notes during specified periods at their option. If one or more holders elect to convert their notes, we may sett