SoFi Technologies, Inc. 10-Q

Item 5. Other Information Frequency of Say on Pay As previously reported on Form 8-K, in an advisory vote on the preferred frequency of future stockholder advisory votes on executive compensation held at the 2022 annual meeting on July 12, 2022, 407,528,398 shares voted for one year, 4,859,176 shares voted for two years, 2,696,243 shares voted for three years and 3,959,134 shares abstained. Our Company has considered the outcome of this advisory vote and has determined, as was recommended with respect to this proposal by our Board of Directors in the proxy statement for the 2022 annual meeting, that we will hold future votes to approve the compensation paid to the Company’s named executive officers (“say on pay votes”) on an annual basis until the next required vote on the frequency of say on pay votes. This disclosure is intended to satisfy Item 5.07(d) of Form 8-K. Resignation of Named Executive Officer On August 8, 2022, Ms. Michelle Gill, Executive Vice President and Group Business Unit Leader – Lending and Capital Markets, provided notice of her intention to resign from her position with the Company, effective at a date to be determined in September 2022. Ms. Gill resigned to pursue other opportunities and her resignation was not the result of any dispute or disagreement with the Company relating to the Company's operations, policies (including accounting or financial policies) or practices. Ms. Gill’s duties and responsibilities over lending will be assumed by Chad Borton, President, SoFi Bank, and her duties and responsibilities over capital markets will be assumed by Christopher Lapointe, Chief Financial Officer. 158 SoFi Technologies, Inc. TABLE OF CONTENTS The above disclosure is intended to satisfy the Company’s obligation under Item 5.02(b) of Form 8‐K. Item 6. Exhibits Exhibit No. Description 10.1+ Amended and Restated 2021 Stock Option and Incentive Plan and forms of agreement thereunder 31.1 + Certification of Chief Executive Officer pursuant to Section 302 of the Sarbanes-Oxley Act of 2002 31.2 + Certification of Chief Financial Officer pursuant to Section 302 of the Sarbanes-Oxley Act of 2002 32.1 +* Certification of Chief Executive Officer pursuant to 18 U.S.C. Section 1350, as adopted pursuant to Section 906 of the Sarbanes-Oxley Act of 2002 32.2 +* Certification of Chief Financial Officer pursuant to 18 U.S.C. Section 1350, as adopted pursuant to Section 906 of the Sarbanes-Oxley Act of 2002 101.INS Inline XBRL Instance Document - the instance document does not appear in the interactive data file because its XBRL tags are embedded within the Inline XBRL document 101.SCH+ Inline XBRL Taxonomy Extension Schema Document 101.CAL+ Inline XBRL Taxonomy Extension Calculation Linkbase Document 101.LAB+ Inline XBRL Taxonomy Extension Label Linkbase Document 101.PRE+ Inline XBRL Taxonomy Extension Presentation Linkbase Document 101.DEF+ Inline XBRL Taxonomy Extension Definition Linkbase Document 104 Cover Page Interactive Data File (formatted as inline XBRL and contained in Exhibit 101) ___________________ + Filed herewith. * Indicates a document being furnished with this Form 10-Q. Information furnished herewith shall not be deemed to be “filed” for the purposes of Section 18 of the Securities Exchange Act of 1934 or otherwise subject to the liabilities of that Section. Such exhibit shall not be deemed incorporated by reference into any filing under the Securities Act of 1933 or the Securities Exchange Act of 1934. 159 SIGNATURE Pursuant to the requirements of the Securities Exchange Act of 1934, as amended, the registrant has duly caused this report to be signed on its behalf by the undersigned thereunto duly authorized. SoFi Technologies, Inc. (Registrant) Date: August 9, 2022 By: /s/ Christopher Lapointe Christopher Lapointe Chief Financial Officer 160 SoFi Technologies, Inc. TABLE OF CONTENTS SOFI TECHNOLOGIES, INC. SUPPLEMENTAL INFORMATION Page Average Balances and Net Interest Earnings Analysis F-2 Analysis of Changes in Net Interest Income F-4 Loan Maturity Schedule F-5 Analysis of Allowance for Credit Losses F-5 Analysis of Charge-offs F-6 Deposits F-6 F-1 SoFi Technologies, Inc. TABLE OF CONTENTS SoFi Technologies, Inc. Unaudited Supplemental Financial Data As a bank holding company, we are providing the following supplemental information pursuant to Subpart 1400 of Regulation S-K. Certain other information required by Subpart 1400 of Regulation S-K is presented throughout this Quarterly Report on Form 10-Q. Average Balances and Net Interest Earnings Analysis Three Months Ended June 30, 2022 Three Months Ended June 30, 2021 ($ in thousands) Average Balances (1) Interest Income/Expense Average Rate Average Balances (1) Interest Income/Expense Average Rate Assets Interest-earning assets: Interest-bearing deposits with banks $ 1,064,672 $ 943 0.35 % $ 782,083 $ 180 0.09 % Investments in available-for-sale securities 199,542 437 0.88 — — — Loans (2) 7,804,416 145,337 7.45 4,839,883 79,677 6.59 Securitization investments 306,298 2,567 3.35 431,184 3,794 3.52 Related party receivables — — — — — — Total interest-earning assets 9,374,928 149,284 6.37 % 6,053,150 83,651 5.53 % Total noninterest-earning assets 3,011,591 1,886,758 Total assets $ 12,386,519 $ 7,939,908 Liabilities, Temporary Equity and Permanent Equity Interest-bearing liabilities: Demand deposits $ 1,137,097 $ 2,654 0.93 % $ — $ — — % Savings deposits 673,561 1,863 1.11 — — — Time deposits 17,660 26 0.59 — — — Total interest-bearing deposits 1,828,318 4,543 0.99 — — — Debt (2) 4,284,366 21,012 1.96 3,778,435 25,481 2.70 Residual interests classified as debt 61,388 1,037 6.76 110,828 2,146 7.75 Total interest-bearing liabilities 6,174,072 26,592 1.72 % 3,889,263 27,627 2.84 % Total noninterest-bearing liabilities 682,474 601,724 Total liabilities $ 6,856,546 $ 4,490,987 Total temporary equity 320,374 2,459,987 Total permanent equity 5,209,599 988,934 Total liabilities, temporary equity and permanent equity $ 12,386,519 $ 7,939,908 Net interest income (3) $ 122,692 $ 56,024 Net interest margin (4) 5.23 % 3.70 % ___________________ (1) Average balances were calculated on four-month ending balances and include accrued interest. (2) Interest income on loans measured at amortized cost includes amortization of deferred loan fees, net of deferred loan costs, of $2.1 million and $0.1 million for the three months ended June 30, 2022 and 2021, respectively. Interest expense on debt includes debt issuance and discount expense of $3.9 million and $5.5 million during the three months ended June 30, 2022 and 2021, respectively. (3) Net interest income is calculated as the excess of total interest income on interest-earning assets over total interest expense on interest-bearing liabilities. (4) Net interest margin is calculated as net interest income divided by total average interest-earning assets. F-2 SoFi Technologies, Inc. TABLE OF CONTENTS Six Months Ended June 30, 2022 Six Months Ended June 30, 2021 ($ in thousands) Average Balances (1) Interest Income/Expense Average Rate Average Balances (1) Interest Income/Expense Average Rate Assets Interest-earning assets: Interest-bearing deposits with banks $ 1,070,345 $ 1,401 0.26 % $ 781,404 $ 409 0.10 % Investments in available-for-sale securities 196,237 685 0.70 — — — Loans (2) 7,383,365 259,722 7.04 4,849,458 156,899 6.47 Securitization investments 329,400 5,325 3.23 454,927 8,261 3.63 Related party receivables — — — 5,140 211 8.21 Total interest-earning assets 8,979,347 267,133 5.95 % 6,090,929 165,780 5.44 % Total noninterest-earning assets 2,565,560 1,922,710 Total assets $ 11,544,907 $ 8,013,639 Liabilities, Temporary Equity and Permanent Equity Interest-bearing liabilities: Demand deposits $ 723,935 $ 2,927 0.81 % $ — $ — — % Savings deposits 410,332 2,016 0.98 — — — Time deposits 12,098 31 0.51 — — — Total interest-bearing deposits 1,146,365 4,974 0.87 — — — Debt (2) 4,547,852 42,039 1.85 4,045,285 58,099 2.87 Residual interests classified as debt 72,238 2,565 7.10 112,370 4,345 7.73 Total interest-bearing liabilities 5,766,455 49,578 1.72 % 4,157,655 62,444 3.00 % Total noninterest-bearing liabilities 602,256 576,020 Total liabilities $ 6,368,711 $ 4,733,675 Total temporary equity 320,374 2,765,858 Total permanent equity 4,855,822 514,106 Total liabilities, temporary equity and permanent equity $ 11,544,907 $ 8,013,639 Net interest income (3) $ 217,555 $ 103,336 Net interest margin (4) 4.85 % 3.39 % __________________ (1) Average balances were calculated on seven-month ending balances and include accrued interest. (2) Interest income on loans measured at amortized cost includes amortization of deferred loan fees, net of deferred loan costs, of $3.7 million and $0.1 million for the six months ended June 30, 2022 and 2021, respectively. Interest expense on debt includes debt issuance and discount expense of $8.1 million and $11.5 million during the six months ended June 30, 2022 and 2021, respectively. (3) Net interest income is calculated as the excess of total interest income on interest-earning assets over total interest expense on interest-bearing liabilities. (4) Net interest margin is calculated as net interest income divided by total average interest-earning assets. F-3 SoFi Technologies, Inc. TABLE OF CONTENTS Analysis of Changes in Net Interest Income The following table presents period-over-period changes in net interest income and the extent to which the variance is attributable to changes in the volume of our interest-earning assets and interest-bearing liabilities or changes in the interest rates related to these assets and liabilities: Three Months Ended June 30, Six Months Ended June 30, 2022 vs. 2021 2022 vs. 2021 Increase (Decrease) Due to Change in (1) : Increase (Decrease) Due to Change in (1) : ($ in thousands) Volume Rate Total Variance Volume Rate Total Variance Interest income: Interest-bearing deposits with banks $ 250 $ 513 $ 763 $ 378 $ 614 $ 992 Investments in available-for-sale securities 437 — 437 685 — 685 Loans 55,207 10,453 65,660 89,134 13,689 102,823 Securitization investments (1,047) (180) (1,227) (2,029) (907) (2,936) Related party receivables — — — — (211) (211) Total interest income $ 54,847 $ 10,786 $ 65,633 $ 88,168 $ 13,185 $ 101,353 Interest expense: Interest-bearing deposits $ 4,543 $ — $ 4,543 $ 4,974 $ — $ 4,974 Debt 2,481 (6,950) (4,469) 4,646 (20,706) (16,060) Residual interests classified as debt (835) (274) (1,109) (1,425) (355) (1,780) Total interest expense $ 6,189 $ (7,224) $ (1,035) $ 8,195 $ (21,061) $ (12,866) Net interest income $ 48,658 $ 18,010 $ 66,668 $ 79,973 $ 34,246 $ 114,219 ___________________ (1) We calculate the change in interest income and interest expense separately for each item. Volume and rate changes have been allocated on a consistent basis using the respective percentage changes in average balances and average rates. F-4 SoFi Technologies, Inc. TABLE OF CONTENTS Loan Maturity Schedule The following table presents the maturities of our loan portfolio, as well as the separate presentation of the total amount of loans in each loan category that are due after one year that have variable rates and fixed rates: As of June 30, 2022 (1) ($ in thousands) Within 1 year After 1 year through 5 years After 5 years through 15 years After 15 years Total Loan Portfolio: Student loans $ 5,584 $ 633,872 $ 2,375,064 $ 643,173 $ 3,657,693 Home loans — — 5,623 136,495 142,118 Personal loans 52,301 3,372,256 519,211 — 3,943,768 Credit card (2) 192,824 — — — 192,824 Commercial and consumer banking 2,812 7,227 15,676 54,487 80,202 Total loans $ 253,521 $ 4,013,355 $ 2,915,574 $ 834,155 $ 8,016,605 Loans with variable rates: Student loans $ 59,294 $ 99,500 $ 6,974 $ 165,768 Home loans — — — — Personal loans 10,607 — — 10,607 Commercial and consumer banking 3,554 11,736 49,371 64,661 Total loans $ 73,455 $ 111,236 $ 56,345 $ 241,036 Loans with fixed rates: Student loans $ 574,578 $ 2,275,564 $ 636,199 $ 3,486,341 Home loans — 5,623 136,495 142,118 Personal loans 3,361,649 519,211 — 3,880,860 Commercial and consumer banking 3,673 3,940 5,116 12,729 Total loans $ 3,939,900 $ 2,804,338 $ 777,810 $ 7,522,048 __________________ (1) Maturities presented are based upon the contractual terms of the loans. Amounts represent unpaid principal balance of loans outstanding at period end. (2) Due to the revolving nature of credit card loans, we report all of our credit card loans as due in one year or less. Analysis of Allowance for Credit Losses Allowance for Credit Losses Ratios The following table presents the ratio of allowance for credit losses to total loans outstanding that are measured at amortized cost as of the dates indicated: ($ in thousands) June 30, 2022 June 30, 2021 Allowance for credit losses to total loans outstanding Allowance for credit losses $ 23,178 $ 691 Total loans outstanding (1) $ 273,026 $ 42,625 Ratio (2) 8.49 % 1.62 % __________________ (1) Total loans outstanding excludes accrued interest. (2) The increase in the ratio was attributable to credit card and was reflective of both an increase in the average balance and an increase in our estimate of expected future credit losses. We omitted the credit ratios associated with nonaccrual loans, as the balance of nonaccrual loans was immaterial. F-5 SoFi Technologies, Inc. TABLE OF CONTENTS Allocation of Allowance for Credit Losses The following table presents the allocation of the allowance for credit losses and the percentage of loans outstanding by category to total loans outstanding that are measured at amortized cost as of the dates indicated: June 30, 2022 June 30, 2021 ($ in thousands) Allowance for credit losses Percent of loans to total loans (1) Allowance for credit losses Percent of loans to total loans (1) Credit card $ 21,974 71 % $ 691 100 % Commercial and consumer banking 1,204 29 % — — % Total $ 23,178 100 % $ 691 100 % __________________ (1) Loans outstanding balances used in the calculation exclude accrued interest. Analysis of Charge-offs The following tables present information regarding average loans outstanding during the period, net charge-offs during the period, and the annualized ratio of net charge-offs to average loans outstanding: Three Months Ended June 30, 2022 Three Months Ended June 30, 2021 ($ in thousands) Average Loans (1) Net Charge-offs Ratio Average Loans (1) Net Charge-offs Ratio Student loans $ 3,791,179 $ 2,687 0.28 % $ 2,844,432 $ 1,586 0.22 % Home loans 137,757 — — 205,465 — — Personal loans 3,637,657 11,340 1.25 1,762,731 5,310 1.20 Credit card 157,642 4,488 11.39 27,255 — — Commercial and consumer banking 80,181 1 — — — — Total loans $ 7,804,416 $ 18,516 0.95 % $ 4,839,883 $ 6,896 0.57 % Six Months Ended June 30, 2022 Six Months Ended June 30, 2021 ($ in thousands) Average Loans (1) Net Charge-offs Ratio Average Loans (1) Net Charge-offs Ratio Student loans $ 3,830,197 $ 5,301 0.28 % $ 2,891,535 $ 3,986 0.28 % Home loans 157,943 — — 191,636 — — Personal loans 3,193,601 18,451 1.16 1,745,704 12,415 1.42 Credit card 143,836 7,305 10.16 18,224 — — Commercial and consumer banking 57,788 1 — 2,359 — — Total loans $ 7,383,365 $ 31,058 0.84 % $ 4,849,458 $ 16,401 0.68 % ___________________ (1) Average balances were calculated on four-month or seven-month ending balances and include accrued interest. Deposits Uninsured Deposits As of June 30, 2022, the amount of uninsured deposits totaled $241.0 million. We did not have any deposits as of June 30, 2021. The following table presents uninsured time deposits by remaining time to maturity: ($ in thousands) June 30, 2022 Uninsured Time Deposits 3 months or less $ 3,098 Over 3 months through 6 months 7,304 Over 6 months through 12 months 505 Over 12 months 62 Total $ 10,969 F-6