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
−Removed: SoFi Technologies, Inc.
−Removed: impacted by fluctuations in exchange rates.
+Added: 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 the periods presented.
+Added: For additional information on our market risks, see Part II, Item 7A “Quantitative and Qualitative Disclosures About Market Risk” in our Annual Report on Form 10-K for the year ended December 31, 2021.
Interest Rate Risk
−Removed: 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.
+Added: We are subject to interest rate risk associated with our 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.
5 unchanged sentences
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.
−Removed: 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.
+Added: 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 or above the interest rate we offer on deposits, which can negatively impact our realized net interest income.
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.
5 unchanged sentences
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.
−Removed: 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.
+Added: 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 sheets, 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.
6 unchanged sentences
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 reputational damage and 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
+Added: SoFi Technologies, Inc.
+Added: 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
−Removed: SoFi Technologies, Inc.
−Removed: counterparty.
+Added: 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.
−Removed: We incurred no losses due to nonperformance by any of our counterparties during the six months ended June 30, 2022.
−Removed: 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.
+Added: We incurred no losses due to nonperformance by any of our counterparties during the nine months ended September 30, 2022.
+Added: As of September 30, 2022, gross derivative asset and liability positions subject to master netting arrangements were $6.0 million and $21.7 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 June 30, 2022, we had total borrowing capacity under loan warehouse facilities of $7.1 billion, of which $1.4 billion was utilized.
+Added: As of September 30, 2022, we had total borrowing capacity under loan warehouse facilities of $7.1 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.
2 unchanged sentences
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.
−Removed: under “ Regulatory, Tax and Other Legal Risks ” for additional information on our counterparty risk as it relates to our digital assets product offering.
+Added: Risk Factors 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.