4 unchanged sentences
We may in the future be subject to increasing foreign currency exchange rate risk with our recent acquisition of a foreign company.
−Removed: 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.
−Removed: Exchange rate risk was not a material risk for the Company during any of the periods presented.
+Added: Foreign currency exchange rate risk is the risk that our financial position or results of operations could be positively or negatively
+Added: SoFi Technologies, Inc.
+Added: impacted by fluctuations in exchange rates.
+Added: Exchange rate risk was not a material risk for the Company during the periods presented.
Interest Rate Risk
5 unchanged sentences
Additionally, we are subject to interest rate risk on our variable-rate warehouse facilities and our revolving credit facility.
−Removed: Market interest rates may
−Removed: also drive the interest we offer to members on their deposits.
+Added: Market interest rates may 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.
6 unchanged sentences
In addition, we believe that this risk is mitigated through the quality of our loan portfolio.
−Removed: 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.
+Added: 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 or overall market conditions.
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.
3 unchanged sentences
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.
+Added: We are also exposed to market risk through our investments in equity securities, which are either measured at fair value using the net asset value practical expedient or which may have positive or negative adjustments that impact our results of operations resulting from observable price changes based on current market conditions.
Counterparty Risk
−Removed: 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.
+Added: We are subject to risk that arises from our debt warehouse facilities, interest rate risk hedging activities, third-party custodians, 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”.
−Removed: 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.
+Added: If a counterparty was to default, we could potentially be exposed to reputational damage and 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.
2 unchanged sentences
Such margin requirements limit our overall counterparty exposure.
−Removed: The master netting agreements contain a legal right to offset amounts due to and from the same counterparty.
+Added: The master netting agreements contain a legal right to offset amounts due to and from the same
+Added: SoFi Technologies, Inc.
+Added: 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.
−Removed: We incurred no losses due to nonperformance by any of our counterparties during the three months ended March 31, 2022.
−Removed: 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.
+Added: We incurred no losses due to nonperformance by any of our counterparties during the six months ended June 30, 2022.
+Added: As of June 30, 2022, gross derivative asset and liability positions subject to master netting arrangements were $2.2 million and $25.7 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.
−Removed: 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.
+Added: As of June 30, 2022, we had total borrowing capacity under loan warehouse facilities of $7.1 billion, of which $1.4 billion was utilized.
Refer to Note 9 to the Notes to Unaudited Condensed Consolidated Financial Statements for a listing of our loan warehouse facilities.
−Removed: 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
−Removed: 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.
+Added: 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 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.
+Added: We are also subject to counterparty risk associated with our use of third-party custodians to safeguard digital assets on behalf of our members.
+Added: Refer to Note 1 to the Notes to Unaudited Condensed Consolidated Financial Statements under the section entitled “Safeguarding Asset and Liability” and to Part II, Item 1A.
+Added: under “ Regulatory, Tax and Other Legal Risks ” for additional information on our counterparty risk as it relates to our digital assets product offering.
Compared sentence by sentence after normalising whitespace, quotation marks, case and digits, so re-formatting and restated figures do not read as changed language. Wording changes appear as one removal and one addition. The current filing and the prior one are authoritative.