What changed in this filing

/stocks — the workspaceLOADING

Item 8. Financial Statements and Supplementary Data

2025-02-24 compared with 2024-02-27 · 1128 added, 962 removed, 2358 unchanged (47% of the section changed)

5 unchanged sentences

Consolidated Balance Sheets

Consolidated Statements of Operations and Comprehensive Loss

Consolidated Statements of Operations and Comprehensive Income (Loss)

Consolidated Statements of Changes in Temporary Equity and Permanent Equity (Deficit)

13 unchanged sentences

Commitments, Guarantees, Concentrations and Contingencies

Loss Per Share

Earnings (Loss) Per Share

Business Segment and Geographic Information

7 unchanged sentences

We have audited the accompanying consolidated balance sheets of SoFi Technologies, Inc.

and subsidiaries (the "Company") as of December 31, 2023 and 2022, the related consolidated statements of operations and comprehensive loss, changes in temporary equity and permanent equity (deficit), and cash flows, for each of the three years in the period ended December 31, 2023, and the related notes (collectively referred to as the "financial statements").

and subsidiaries (the “Company”) as of December 31, 2024 and 2023, the related consolidated statements of operations and comprehensive income (loss), changes in temporary equity and permanent equity (deficit), and cash flows, for each of the three years in the period ended December 31, 2024, and the related notes (collectively referred to as the “financial statements”).

In our opinion, the financial statements present fairly, in all material respects, the financial position of the Company as of December 31, 2024 and 2023, and the results of its operations and its cash flows for each of the three years in the period ended December 31, 2024, in conformity with accounting principles generally accepted in the United States of America.

20 unchanged sentences

The significant unobservable assumptions used in the valuation model include conditional prepayment rate, annual default rate and discount rate.

We identified certain personal and student loans at fair value, as a critical audit matter because of the unobservable inputs management uses to estimate fair value.

We identified the valuation of certain personal and student loans, as a critical audit matter because of the unobservable inputs management uses to estimate fair value.

This required a high degree of auditor judgment and an increased extent of effort, including the need to involve our fair value specialists.

1 unchanged sentence

Our audit procedures related to the fair value measurement of the personal and student loans included the following, among others:

SoFi Technologies, Inc.

• We tested the effectiveness of internal controls over the fair value of personal and student loans, including management’s controls over the evaluation of the reasonableness of unobservable inputs used in the valuation.

SoFi Technologies, Inc.

• We tested the completeness and accuracy of the source information derived from the Company’s loan data, which is used in the valuation model.

• We evaluated the valuation models and the related assumptions, including significant unobservable inputs, and underlying loan data used by management.

• With the assistance of our fair value specialists, we developed independent fair value estimates of certain personal and student loans at fair value and compared our estimates to the Company’s estimates.

• We evaluated the valuation models and the related assumptions, including significant unobservable inputs.

• With the assistance of our fair value specialists, we developed a range of independent fair value estimates of certain personal and student loans and compared our estimates to the Company’s estimates.

Goodwill — Galileo and Technisys Reporting Units - Refer to Notes 1 and 8 to the financial statements

Critical Audit Matter Description

The Company tests goodwill for impairment at the reporting unit level annually or whenever indicators of impairment exist.

The Company’s evaluation of goodwill for impairment involves the comparison of the fair value of each reporting unit to its carrying amount.

The Company tests goodwill for impairment at the reporting unit level annually on October 1 st or whenever indicators of impairment exist.

As of the annual impairment testing date of October 1, 2024, the Company performed a quantitative goodwill impairment assessment (“quantitative assessment”) for its Galileo and Technisys reporting units The Company’s quantitative assessment involves the comparison of the fair value of each reporting unit to its carrying amount.

The Company determines the fair value of its reporting units using a combination of a discounted cash flow (“DCF”) calculation, which is a form of the income approach, and a market multiples calculation, which is a form of the market approach.

The determination of the fair value of a reporting unit requires management to make significant estimates and assumptions related to forecasted future revenues and cash flows, the discount rate, and the determination of market multiples.

Changes in these assumptions could have a significant impact on either the fair value of the reporting units, the amount of any goodwill impairment charge, or both.

During the third quarter of 2023, the Company performed an interim quantitative assessment on the Galileo and Technisys reporting units.

As a result of this assessment, the fair value of the Galileo and Technisys reporting units were determined to be below their carrying values by 9.9% and 14.8%, respectively, resulting in management recognizing goodwill impairment charges of $124.5 million and $122.7 million for the Galileo and Technisys reporting units, respectively.

We identified the Company’s interim quantitative assessment performed on the Galileo and Technisys reporting units as a critical audit matter because of certain significant estimates and assumptions made by management to estimate the fair values of these reporting units.

This required a high degree of auditor judgment and an increased extent of effort, including the need to involve our fair value specialists, when performing procedures to evaluate the reasonableness of management’s estimates and assumptions related to the forecasted future revenues and cash flows, the discount rate, and the determination of market multiples, specifically due to the sensitivity of the fair value and the goodwill impairment charge to changes in the assumptions.

Changes in these assumptions could have a significant impact on the fair value of the reporting units.

We identified the Company’s annual quantitative assessment of reporting units as a critical audit matter because of certain significant estimates and assumptions made by management to estimate the fair values of these reporting units.

This required a high degree of auditor judgment and an increased extent of effort, including the need to involve our fair value specialists, when performing procedures to evaluate the reasonableness of management’s estimates and assumptions related to the forecasted future revenues and cash flows, the discount rate, and the determination of market multiples, specifically due to the sensitivity of the fair value of the reporting units to changes in the assumptions.

How the Critical Audit Matter Was Addressed in the Audit

Our audit procedures related to the significant estimates and assumptions made by management to estimate the fair value of the Galileo and Technisys reporting units used in the interim quantitative assessment included the following, among others:

• We tested the effectiveness of controls over management's interim quantitative impairment assessment, including those controls related to management’s forecast of future revenues and cash flows, selection of discount rates and determination of market multiples.

Our audit procedures related to the significant estimates and assumptions made by management to estimate the fair value of the Galileo and Technisys reporting units used in the quantitative assessment included the following, among others:

• We tested the effectiveness of controls over management's quantitative impairment assessment, including those controls related to management’s forecast of future revenues and cash flows, selection of discount rates and determination of market multiples.

• With the assistance of our fair value specialists, we evaluated the reasonableness of the valuation methodology and the key assumptions used in the assessment, including the selection of discount rates for which we tested the mathematical accuracy of the calculation, and developed a range of independent estimates and compared those to the discount rate selected by management.

For the determination of market multiples, our specialist evaluated the peer set utilized, the selection and calculation of the multiples, and weighting of the multiples.

• We evaluated management's ability to accurately forecast future revenues and cash flows by (1) understanding management’s process for developing their forecasts, and (2) comparing the forecasts to historical results, projections utilized in the prior year goodwill impairment analysis, and forecasted information included in analyst and industry reports of the Company and companies in its peer group.

Valuation Allowance on Deferred Tax Assets - Refer to Note 1 and Note 17 to the financial statements

Critical Audit Matter Description

The Company recognizes deferred tax assets for the expected future tax benefits of temporary differences between the financial reporting and tax bases of assets, as well as for net operating loss and tax credit carryforwards.

A valuation allowance is recorded if, in management’s judgment, it is determined that it is not more-likely-than-not that all or some portion of the deferred tax asset will be realized.

In determining whether it is more likely than not that deferred tax assets are realizable, management reviews all evidence, both positive and negative, including cumulative income, projections of future profitability, future reversal of deferred tax liabilities, history of U.S.

federal and material state tax attributes expiring unused, as well as tax planning strategies.

In prior periods, the Company determined that it was not more-likely-than-not that all or some portion of the deferred tax assets would be realized due to historical cumulative losses and recorded a valuation allowance.

During the fourth quarter of 2024, management concluded that cumulative income combined with projections of future profitability provided substantial positive evidence that outweighs the negative evidence to support the realization of certain of the Company's deferred tax assets

SoFi Technologies, Inc.

primarily related to U.S.

and certain state jurisdictions and released $258 million of its valuation allowance (“valuation allowance release”).

We identified the Company’s valuation allowance release as a critical audit matter due to the significant judgments made by management in assessing the realizability of deferred tax assets subject to the valuation allowance release.

This required a high degree of auditor judgment and an increased extent of effort, including the need to involve our income tax specialists.

How the Critical Audit Matter Was Addressed in the Audit

Our audit procedures related to the Company’s valuation allowance release included the following, among others:

• We tested the effectiveness of management’s internal controls over the methods, assumptions, and judgements to determine whether it is more likely than not that the deferred tax assets will be realized, including management’s internal controls over the calculation of cumulative income, projections of future profitability, future reversal of deferred tax liabilities, history of U.S.

federal tax attributes and material state tax attributes expiring unused, and tax planning strategies.

• With the assistance of our income tax specialists:

◦ We evaluated management’s calculation of cumulative income including the appropriateness of the adjustments for certain non-taxable and non-deductible transactions as well as non-recurring items.

◦ We evaluated the nature and timing of the future reversal of the Company’s deferred tax liabilities.

◦ We evaluated the nature of the deferred tax assets, including any history of U.S.

federal and material state tax attributes expiring unused, and whether the sources of future taxable income were appropriate and sufficient such that the deferred tax assets would be realized under the relevant tax laws.

◦ We evaluated the plausibility of management’s potential tax strategies to realize the deferred tax assets.

• We evaluated the reasonableness of management's projections of future profitability by:

◦ Understanding management’s process for developing their projections

◦ Assessing the projections against internal communications to management and the board of directors, projected information included in analyst and industry reports and other areas of the audit.

/s/ Deloitte & Touche LLP

12 unchanged sentences

Loans held for investment, at fair value

Loans held for investment (less allowance for credit losses on loans at amortized cost of $ 54,695 and $ 40,788 as of December 31, 2023 and 2022, respectively)

8,597,368 6,725,484

Loans held for investment at amortized cost (less allowance for credit losses of $ 46,684 and $ 54,695 as of December 31, 2024 and 2023, respectively)

1,246,458 836,159

Servicing rights 342,128 180,469

19 unchanged sentences

100,000,000 and 100,000,000 shares authorized;

3,234,000 and 3,234,000 shares issued and outstanding as of December 31, 2023 and 2022, respectively

320,374 320,374

— and 3,234,000 shares outstanding as of December 31, 2024 and 2023, respectively

Permanent equity:

8 unchanged sentences

__________________

(1) Redemption amount is $ 323,400 as of December 31, 2023 and 2022.

(1) Redemption amount was $ 323,400 as of December 31, 2023.

Equity for additional information.

(2) Includes 100,000,000 non-voting common shares authorized and no non-voting common shares issued and outstanding as of December 31, 2024 and 2023.

8 unchanged sentences

Additionally, the assets and liabilities in the table below exclude intercompany balances, which eliminate upon consolidation.

Securitization and Variable Interest Entities for additional information.

Restricted cash and restricted cash equivalents $ 20,719 $ 50,547

9 unchanged sentences

SoFi Technologies, Inc.

Consolidated Statements of Operations and Comprehensive Loss

(In Thousands, Except for Share and Per Share Data)

Consolidated Statements of Operations and Comprehensive Income (Loss)

(In Thousands, Except for Per Share Data)

Year Ended December 31,

10 unchanged sentences

Corporate borrowings 48,346 36,833 18,438

454 917 1,946

Total interest expense 1,091,336 789,327 189,275

6 unchanged sentences

350,810 323,972 304,901

Loan platform fees

187,846 94,335 44,079

1 unchanged sentence

Total net revenue 2,674,859 2,122,789 1,573,535

Provision for credit losses 31,712 54,945 54,332

Noninterest expense

8 unchanged sentences

Goodwill impairment — 247,174 —

Provision for credit losses 54,945 54,332 7,573

Total noninterest expense 2,409,802 2,369,002 1,837,924

Loss before income taxes ( 301,158 ) ( 318,721 ) ( 481,177 )

Income (loss) before income taxes

233,345 ( 301,158 ) ( 318,721 )

Income tax benefit (expense)

265,320 416 ( 1,686 )

Net loss $ ( 300,742 ) $ ( 320,407 ) $ ( 483,937 )

Net income (loss)

$ 498,665 $ ( 300,742 ) $ ( 320,407 )

Other comprehensive income (loss)

4 unchanged sentences

( 7,156 ) 7,087 ( 6,825 )

Comprehensive loss $ ( 293,655 ) $ ( 327,232 ) $ ( 485,242 )

Loss per share (Note 19)

Loss per share – basic $ ( 0.36 ) $ ( 0.40 ) $ ( 1.00 )

Loss per share – diluted $ ( 0.36 ) $ ( 0.40 ) $ ( 1.00 )

Comprehensive income (loss)

$ 491,509 $ ( 293,655 ) $ ( 327,232 )

Earnings (loss) per share (Note 19)

Earnings (loss) per share – basic $ 0.46 $ ( 0.36 ) $ ( 0.40 )

Earnings (loss) per share – diluted $ 0.39 $ ( 0.36 ) $ ( 0.40 )

Weighted average common stock outstanding – basic 1,050,219 945,024 900,886

6 unchanged sentences

Common Stock Additional Paid-In Capital

Accumulated Other Comprehensive Income (Loss)

Accumulated Other Comprehensive Loss

Accumulated Deficit

Permanent Equity (Deficit)

Permanent Equity

Temporary Equity

6 unchanged sentences

Exercise of common stock options 1,955,031 — 2,610 — — 2,610 — —

Issuance of common stock in acquisition 81,700,318 8 873,369 — — 873,377 — —

Vested awards assumed in acquisition — — 2,855 — — 2,855 — —

Redeemable preferred stock dividends — — ( 40,425 ) — — ( 40,425 ) — —

Issuance of contingently issuable stock 1,601,781 — — — — — — —

Conversion of common stock warrants issued in connection with Business Combination and PIPE Investment into permanent equity — — 185,762 — — 185,762 — —

Issuance of common stock related to exercise of warrants 15,193,668 2 95,045 — — 95,047 — —

Cancellation of redeemable preferred stock related to a business combination — — — — — — ( 83,856 ) ( 743 )

Conversion of redeemable preferred stock warrants into permanent equity — — 161,775 — — 161,775 — —

Conversion of redeemable preferred stock to common stock 450,832,666 45 2,702,524 — — 2,702,569 ( 450,832,666 ) ( 2,702,569 )

Issuance of common stock in connection with Business Combination and PIPE Investment 222,878,889 22 1,789,579 — — 1,789,601 — —

Costs directly attributable to the issuance of common stock in connection with Business Combination and PIPE Investment — — ( 27,539 ) — — ( 27,539 ) — —

Repurchase of redeemable common stock — — — — — — ( 15,000,000 ) ( 150,000 )

Change in par for historical SoFi common stock — 12 ( 12 ) — — — — —

Purchase of capped calls — — ( 113,760 ) — — ( 113,760 ) — —

Net loss — — — — ( 320,407 ) ( 320,407 ) — —

Other comprehensive loss, net of taxes — — — ( 6,825 ) — ( 6,825 ) — —

— — — ( 1,305 ) — ( 1,305 ) — —

Balance at December 31, 2022 933,896,120

1 unchanged sentence

Share-based compensation expense — — 302,342 — — 302,342 — —

— — 328,571 — — 328,571 — —

Equity-based payments to non-employees

100,000 — — — — — — —

Vesting of RSUs 33,564,543 3 ( 3 ) — — — — —

1 unchanged sentence

Exercise of common stock options 796,883 — 1,145 — — 1,145 — —

Issuance of common stock in acquisition 81,700,318 8 873,369 — — 873,377 — —

Vested awards assumed in acquisition — — 2,855 — — 2,855 — —

Common stock retired ( 19,319 )

Extinguishment of convertible notes by issuance of common stock 9,490,000

Redeemable preferred stock dividends — — ( 40,425 ) — — ( 40,425 ) — —

Net loss — — — — ( 300,742 ) ( 300,742 ) — —

Other comprehensive loss, net of taxes — — — ( 6,825 ) — ( 6,825 ) — —

Other comprehensive income, net of taxes

— — — 7,087 — 7,087 — —

Balance at December 31, 2023 975,861,793 $ 97 $ 7,039,987 $ ( 1,209 ) $ ( 1,804,263 ) $ 5,234,612 3,234,000 $ 320,374

3 unchanged sentences

Exercise of common stock options 3,070,270 — 21,407 — — 21,407 — —

Common stock retired ( 19,319 ) — — — — — — —

Extinguishment of convertible notes by issuance of common stock 83,213,674 8 614,138 — — 614,146 — —

9,490,000 1 72,402 — — 72,403 — —

Purchase of capped calls —

Unwind of capped calls —

Redeemable preferred stock dividends — — ( 16,503 ) — — ( 16,503 ) — —

Net loss — — — — ( 300,742 ) ( 300,742 ) — —

Other comprehensive income, net of taxes

Preferred stock redemption —

( 3,234,000 )

Other comprehensive loss, net of taxes

— — — ( 7,156 ) — ( 7,156 ) — —

Balance at December 31, 2024 1,095,357,781 $ 109 $ 7,838,988 $ ( 8,365 ) $ ( 1,305,598 ) $ 6,525,134 — $ —

7 unchanged sentences

Operating activities

Net loss $ ( 300,742 ) $ ( 320,407 ) $ ( 483,937 )

Adjustments to reconcile net loss to net cash used in operating activities:

Net income (loss) $ 498,665 $ ( 300,742 ) $ ( 320,407 )

Adjustments to reconcile net income (loss) to net cash used in operating activities:

Share-based compensation expense 246,152 271,216 305,994

8 unchanged sentences

( 158,215 ) ( 44,007 ) —

Fair value changes in residual interests classified as debt 425 6,608 22,802

Fair value changes in securitization investments ( 2,842 ) ( 48 ) 13,600

Fair value changes in warrant liabilities — — 107,328

Equity method investment earnings

Other 10,039 ( 13,621 ) 20,034

2 unchanged sentences

Changes in loans previously classified as held for sale, net

1,373,101 140,856 —

Servicing assets ( 161,659 ) ( 31,604 ) 18,405

1 unchanged sentence

Accounts payable, accruals and other liabilities 23,552 42,088 6,365

Related party notes receivable interest income — — 1,399

Net cash used in operating activities

$ ( 1,119,807 ) $ ( 7,227,139 ) $ ( 7,255,858 )

Investing activities

5 unchanged sentences

Proceeds from maturities and paydowns of available-for-sale investments 807,804 153,828 15,240

Changes in loans held for investment, net ( 1,362,418 ) ( 173,728 ) —

Proceeds from sales of loans held for investment 677,587 — —

Other changes in loans held for investment, net

( 4,183,379 ) ( 1,362,418 ) ( 173,728 )

Proceeds from securitization investments 79,799 108,291 118,825

2 unchanged sentences

Acquisition of businesses, net of cash acquired — ( 72,301 ) 58,540

Proceeds from repayment of related party notes receivable — — 16,693

Net cash (used in) provided by investing activities $ ( 1,889,864 ) $ ( 106,333 ) $ 110,193

Net cash used in investing activities

$ ( 4,820,990 ) $ ( 1,889,864 ) $ ( 106,333 )

The accompanying notes are an integral part of these consolidated financial statements.

11 unchanged sentences

Payment of debt issuance costs ( 7,620 ) ( 11,903 ) ( 8,287 )

Purchase of capped calls ( 90,649 ) — —

Unwind of capped calls

Taxes paid related to net share settlement of share-based awards ( 22,601 ) ( 15,300 ) ( 8,983 )

1 unchanged sentence

Payment of redeemable preferred stock dividends ( 16,503 ) ( 40,425 ) ( 40,425 )

Redemption of Series 1 preferred stock

( 323,400 ) — —

Finance lease principal payments ( 530 ) ( 509 ) ( 488 )

Purchases of common stock — — ( 526 )

Redemptions of redeemable common and preferred stock — — ( 282,859 )

Proceeds from Business Combination and PIPE Investment — — 1,989,851

Payment of costs directly attributable to the issuance of common stock in connection with Business Combination and PIPE Investment — — ( 26,951 )

Proceeds from warrant exercises — — 95,047

Purchase of capped calls — — ( 113,760 )

Payment of deferred equity costs — — ( 56 )

Net cash provided by financing activities

$ 5,034,577 $ 10,885,602 $ 8,439,485

Effect of exchange rates on cash and cash equivalents 2 677 571

24 unchanged sentences

Organization, Summary of Significant Accounting Policies and New Accounting Standards

Social Finance, Inc.

(“Social Finance”) entered into a merger agreement (the “Agreement”) with 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”.

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.

2 unchanged sentences

Since its founding, SoFi has expanded its lending and financial services strategy to offer personal loans, home loans and credit cards.

The Company also developed additional 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 also developed additional 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 through the acquisition of 8 Limited, 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 through the acquisition of Galileo.

During 2022, the Company became a bank holding company and began operating as SoFi Bank, National Association, through its acquisition of Golden Pacific Bancorp, Inc., and expanded its platform to include a cloud-native digital and core banking platform with customers in Latin America through its acquisition of Technisys S.A., allowing the Company to expand its technology platform services to a broader international market.

During 2022, the Company became a bank holding company and began operating as SoFi Bank, National Association, through its acquisition of Golden Pacific Bancorp, Inc., and expanded its platform to include a cloud-native digital and core banking platform with customers in Latin America through its acquisition of Technisys, allowing the Company to expand its technology platform services to a broader international market.

During 2023, the Company acquired Wyndham Capital Mortgage, a fintech mortgage lender.

3 unchanged sentences

Business Segment and Geographic Information .

The Company has elected to be treated as a financial holding company pursuant to Section 4(l) of the BHCA.

As a financial holding company, the Company is authorized to engage in a broader set of financial activities than a bank holding company that has not elected to be treated as a financial holding company.

Financial holding companies may also engage in activities that are determined by the Federal Reserve to be complementary to financial activities.

Summary of Significant Accounting Policies

4 unchanged sentences

In our consolidated financial statements, we made the following presentation changes in 2024:

• in our consolidated statements of operations and comprehensive loss, (i) combined the financial statement line items for interest income—loans and interest income—securitizations and presented within interest income—loans and securitizations ;

• in our consolidated statements of operations and comprehensive loss, (i) combined the financial statement line items for noninterest income—loan origination and sales and noninterest income—securitizations and presented within noninterest income—loan origination, sales and securitizations .

• in our consolidated statements of cash flows beginning in the first quarter of 2024, reclassified amounts related to fair value changes in residual interests classified as debt into other within the adjustments to reconcile net income (loss) to net cash provided used in operating activities .

There was no impact to net cash used in operating activities;

• in our consolidated statements of operations and comprehensive income (loss) beginning in the third quarter of 2024, reclassified amounts related to our Loan Platform Business previously included within the financial statement line item noninterest income—other to separate presentation in noninterest income—loan platform fees .

Revenue for presentation of disaggregated revenue;

• in our consolidated statements of operations and comprehensive income (loss) beginning in the fourth quarter of 2024, updated the presentation to present the provision for credit losses below total net revenue and above noninterest expenses , from its previous presentation within total noninterest expense .

In all instances, the respective prior period amounts were recast to conform to the current period presentation.

Use of Judgments, Assumptions and Estimates

The preparation of our consolidated financial statements and related disclosures in conformity with GAAP requires management to make assumptions and estimates that affect the reported amounts of assets, liabilities, revenue, expenses, and the disclosures of contingent assets and liabilities.

The preparation of our consolidated financial statements and related disclosures in conformity with GAAP requires management to make assumptions and estimates that affect the reported amounts of assets, liabilities, revenue and expenses as well as the disclosures of contingent assets and liabilities.

These estimates and assumptions are inherently subjective in nature and, therefore, actual results may differ from our estimates and assumptions, and the differences could be material.

Management bases its estimates on historical experience and on various other factors it believes to be reasonable under the circumstances.

These assumptions and estimates include, but are not limited to, the following:

(i) fair value measurements, (ii) business combinations, and (iii) goodwill.

Management bases its estimates on historical experience and on various other factors it believes to be reasonable under the

SoFi Technologies, Inc.

2 unchanged sentences

(In Thousands, Unless Otherwise Stated and Except for Share and Per Share Data)

circumstances.

These assumptions and estimates include, but are not limited to, the following:

(i) fair value measurements, (ii) business combinations, (iii) goodwill, and (iv) valuation allowance on deferred tax assets.

Business Combinations

6 unchanged sentences

During the measurement period, which may be up to one year from the acquisition date, we may record adjustments to the allocation of purchase consideration and to the fair values of assets acquired and liabilities assumed to the extent that additional information becomes available.

After this period, any subsequent adjustments are recorded in the consolidated statements of operations and comprehensive loss.

After this period, any subsequent adjustments are recorded in the consolidated statements of operations and comprehensive income (loss).

Variable Interest Entities

We enter into arrangements in which we originate loans, establish a SPE, and transfer loans to the SPE.

We retain the servicing rights of those loans and hold additional interests in the SPE.

We evaluate each such arrangement to determine whether we have a variable interest.

If we determine that we have a variable interest in an SPE, we then determine whether the SPE is a VIE.

If the SPE is a VIE, we assess whether we are the primary beneficiary of the VIE, such that we must consolidate the VIE on our consolidated balance sheets.

To determine if we are the primary beneficiary, we identify the most significant activities and determine who has the power over those activities, and who absorbs the variability in the economics of the VIE.

We periodically reassess our involvement with each VIE in which we have a variable interest.

We monitor matters related to our ability to control economic performance, such as management of the SPE and its underlying loans, contractual changes in the services provided, the extent of our ownership, and the rights of third parties to terminate us as the VIE servicer.

In addition, we monitor the financial performance of each VIE for indications that we may or may not have the right to absorb benefits or the obligation to absorb losses associated with variability in the financial performance of the VIE that could potentially be significant to that VIE, which we define as a variable interest of greater than 10 %.

A significant change to the pertinent rights of us or other parties, or a significant change to the ranges of possible financial performance outcomes used in our assessment of the variability of cash flows due to us, could impact the determination of whether or not a VIE should be consolidated in future periods.

VIE consolidation and deconsolidation may lead to increased volatility in our financial results and impact period-over-period comparability.

Our maximum exposure to loss as a result of our involvement with consolidated VIEs is limited to our investment, which is eliminated in consolidation.

There are no liquidity arrangements, guarantees or other commitments by third parties that may affect the fair value or risk of our variable interests in consolidated VIEs.

VIEs are entities that, by design, either (a) lack sufficient equity to permit the entity to finance its activities without additional subordinated financial support from other parties;

or (b) have equity investors that lack any of (i) the ability to make significant decisions relating to the entity’s operations through voting rights, (ii) the obligation to absorb the expected losses, or (iii) the right to receive the residual returns of the entity.

The primary beneficiary of a VIE (i.e., the party that has a controlling financial interest) is required to consolidate the assets and liabilities of the VIE.

The primary beneficiary is the party that has both (a) the power to direct the activities of the VIE that most significantly impact the VIE’s economic performance;

and (b) the obligation to absorb losses or the right to receive benefits from the VIE that could potentially be significant to the VIE.

The most common type of VIE with which we are involved is an SPE.

SPEs are commonly used in whole loans sales and securitization transactions to isolate certain assets and distribute their related cash flows to investors.

In determining whether we have the power to direct the activities of a VIE that most significantly impact that VIE’s economic performance, we consider all the facts and circumstances, including our role in establishing the VIE and our ongoing rights and responsibilities.

First, we identify the activities that most significantly impact the VIE’s economic performance;

second, we identify which party, if any, has power over those activities.

In general, the parties that make the most significant decisions affecting the VIE (such as collateral managers, servicers, or owners of call options or liquidation rights over the VIE’s assets) or have the right to unilaterally remove those decision-makers are deemed to have the power to direct the activities that most significantly impact the VIE’s economic performance.

In determining whether we have the obligation to absorb losses of the VIE or the right to receive benefits from the VIE that could potentially be significant to the VIE, we consider all of our economic interests, including debt and equity investments, servicing fees, and other arrangements deemed to be variable interests in the VIE.

This assessment requires that we apply judgment in determining whether these interests, in the aggregate, are considered potentially significant to the VIE.

Factors considered in assessing significance include:

the design of the VIE, including its capitalization structure;

subordination of interests;

payment priority;

relative share of interests held across various classes within the VIE’s capital structure;

and the reasons for which we hold the interests.

We perform on-going reassessments to evaluate whether changes in the facts and circumstances regarding each identified VIE, such as changes in the entity’s capital structure or changes in the nature of our involvement with the entity, cause a change to the VIE designation or change to our consolidation conclusion.

Refer to Note 7.

2 unchanged sentences

Fair value is defined as the price that would be received for an asset or paid to transfer a liability (an exit price) in the principal or most advantageous market for the asset or liability in an orderly transaction between market participants on the measurement date.

We use a three-level fair value hierarchy to classify and disclose all assets and liabilities measured at fair value on a recurring basis in periods subsequent to their initial measurement.

We use a three-level fair value hierarchy to classify and disclose all assets and liabilities measured at fair

SoFi Technologies, Inc.

Notes to Consolidated Financial Statements (continued)

(In Thousands, Unless Otherwise Stated and Except for Share and Per Share Data)

value on a recurring basis in periods subsequent to their initial measurement.

The hierarchy requires us to use observable inputs when available and to minimize the use of unobservable inputs when determining fair value.

4 unchanged sentences

These unobservable assumptions reflect estimates of inputs that market participants would use in pricing the asset or liability.

Valuation techniques include the use of option pricing models, discounted

SoFi Technologies, Inc.

Notes to Consolidated Financial Statements (continued)

(In Thousands, Unless Otherwise Stated and Except for Share and Per Share Data)

cash flow models, or similar techniques, which incorporate management’s own estimates of assumptions that market participants would use in pricing the asset or liability.

Valuation techniques include the use of option pricing models, discounted cash flow models, or similar techniques, which incorporate management’s own estimates of assumptions that market participants would use in pricing the asset or liability.

A financial instrument’s categorization within the fair value hierarchy is based on the lowest level of input that is significant to the fair value measurement.

17 unchanged sentences

As a component of the loan sale agreements, we make certain representations to third parties that purchase our previously-held loans, some of which include GSE repurchase requirements and all of which are standard in nature and do not constrain our ability to recognize a sale for accounting purposes.

Any significant estimated post-sale obligations or contingent obligations to the purchaser of the loans arising from these representations are accrued if probable and estimable.

Any significant estimated post-sale obligations or contingent obligations to the purchaser of the loans arising from these representations are accrued if probable and estimable, which approximates fair value.

We establish a loan repurchase liability, which is based on historical experience and any current developments which would make it probable that we would buy back loans previously sold to third parties at the historical sales price.

The loan repurchase liability is presented within accounts payable, accruals and other liabilities in the consolidated balance sheets, with the corresponding charges recorded within noninterest income—loan origination, sales, and securitizations in the consolidated statements of operations and comprehensive income (loss) or within noninterest income - loan platform fees in the consolidated statements of operations and comprehensive income (loss) in connection with transfers of loans held for sale and carried at the lower of amortized cost or fair value as part of our Loan Platform Business.

SoFi Technologies, Inc.

Notes to Consolidated Financial Statements (continued)

(In Thousands, Unless Otherwise Stated and Except for Share and Per Share Data)

Cash and Cash Equivalents

3 unchanged sentences

Restricted cash and restricted cash equivalents primarily include 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

Investments in Debt Securities

The accounting and measurement framework for our investments in debt securities is determined based on the security classification.

We do not hold investments in debt securities for trading purposes, nor do we have investments in debt securities that we have the intent and ability to hold to maturity.

Therefore, we classify our investments in debt securities as available-for-sale.

We record investments in AFS debt securities at fair value in our consolidated balance sheets, with unrealized gains and losses recorded, net of tax, as a component of AOCI.

Fair Value Measurements for additional information on our fair value estimates for investments in AFS debt securities.

The amortized cost basis of our investments in AFS debt securities reflects the security’s acquisition cost, adjusted for amortization of premium or accretion of discount, and collection of cash and charge-offs, as applicable.

For purposes of determining gross realized gains and losses on AFS debt securities, the cost of securities sold is based on specific identification.

We elected to present accrued interest for AFS debt securities within investment securities in the consolidated balance sheets.

Purchase discounts, premiums, and other basis adjustments for investments in AFS debt securities are generally amortized into interest income over the contractual life of the security using the effective interest method.

However, premiums on certain callable debt securities are amortized to the earliest call date.

Amortization of premiums and discounts and other basis adjustments for investments in AFS debt securities, as well as interest income earned on the investments, are recognized within interest income—other , and realized gains and losses on investments in AFS debt securities are recognized within noninterest income—other in the consolidated statements of operations and comprehensive income (loss).

An investment in AFS debt security is evaluated for an impairment if its fair value is less than its amortized cost.

If we determine that we have the intent to sell the impaired investment in AFS debt security, or if it is more likely than not that we will be required to sell the impaired investment in AFS debt security before recovery of its amortized cost, we recognize the full impairment loss reflecting the difference between the amortized cost (net of any prior recognized allowance) and the fair value of the investment in AFS debt security within noninterest income—other in the consolidated statements of operations and comprehensive income (loss).

If neither of the above conditions exists, we evaluate whether the impairment loss is attributable to credit-related or non-credit-related factors.

Any impairment that is not credit-related is recognized within other comprehensive income (loss) , net of taxes.

See the section “Allowance for Credit Losses” in this Note for the factors we consider in identifying credit-related impairment and the treatment of credit losses.

Investment Securities for additional information on our investments in AFS debt securities.

Securitization Investments

In Company-sponsored securitization transactions that meet the applicable criteria to be accounted for as a sale, we retain certain residual interests and asset-backed bonds that we report within investment securities in the consolidated balance sheets.

We elected the fair value option for these investments and gains and losses are reported within noninterest income—loan origination, sales, and securitizations in the consolidated statements of operations and comprehensive income (loss).

We determine the fair value of our securitization investments using a discounted cash flow methodology, while also considering market data as it becomes available.

SoFi Technologies, Inc.

2 unchanged sentences

(In Thousands, Unless Otherwise Stated and Except for Share and Per Share Data)

awaiting disbursement, consolidated VIE cash balances that we cannot use for general operating purposes, or other legally restricted balances.

Our residual investments accrete interest income over the expected life using the effective yield method , which reflects a portion of the overall fair value adjustment recorded each period on our residual investments.

On a quarterly basis, we reevaluate the cash flow estimates over the life of the residual investments to determine if a change to the accretable yield is required on a prospective basis.

Additionally, we record interest income associated with asset-backed bonds over the term of the underlying bond using the effective interest method on unpaid bond amounts.

Interest income on residual investments and asset-backed bonds is presented within interest income—loans and securitizations in the consolidated statements of operations and comprehensive income (loss).

Fair Value Measurements for the key inputs used in the fair value measurements of our residual investments and asset-backed bonds.

Investments in Equity Securities

Our investments in equity securities primarily consist of investments for which fair values are not readily determinable, which we elect to measure using the alternative method of accounting, under which they are measured 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.

Our investments in equity securities are presented within other assets in the consolidated balance sheets.

Adjustments to the carrying values of our investments in equity securities, such as impairments and unrealized gains, are recognized within noninterest income—other in the consolidated statements of operations and comprehensive income (loss).

Loan Classification

6 unchanged sentences

Our loan portfolio primarily consists of:

(i) personal loans, student loans and home loans, which are measured at fair value and held for sale or held for investment, and (ii) senior secured loans, credit cards, and commercial and consumer banking loans, which are measured at amortized cost and held for investment.

(i) personal loans, student loans and home loans, which are measured at fair value and held for sale or held for investment, and (ii) secured loans, credit cards, and commercial and consumer banking loans, which are measured at amortized cost and held for investment.

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 Held For Sale, at Lower of Amortized Cost or Fair Value

During 2024, we began originating personal loans on behalf of third parties as part of our Loan Platform Business.

These loans are generally held for a short period of time prior to sale and are held for sale and carried at the lower of amortized cost or fair value.

Direct origination fees and costs for these loans are deferred and included as part of the carrying value of the loans and, upon the sale of a loan, are recognized as part of the gain or loss included within noninterest income - loan platform fees in the consolidated statements of operations and comprehensive income (loss).

Servicing rights recognized in connection with the sale of these loans are initially measured at fair value and recognized as a component of the gain or loss from sales of loans and the initial capitalization is reported within noninterest income—loan platform fees in the consolidated statements of operations and comprehensive income (loss).

Subsequent measurement changes for all servicing rights, including servicing fee payments and fair value changes, are included within noninterest income—servicing in the consolidated statements of operations and comprehensive income (loss).

Upon sale of these loans, we establish a loan repurchase liability, which is based on historical experience and any current developments which would make it probable that we would buy back loans previously sold to third parties at the historical sales price.

The loan repurchase liability is presented within accounts payable, accruals and other liabilities in the

SoFi Technologies, Inc.

Notes to Consolidated Financial Statements (continued)

(In Thousands, Unless Otherwise Stated and Except for Share and Per Share Data)

consolidated balance sheets, with the corresponding charges recorded within noninterest income—loan platform fees in the consolidated statements of operations and comprehensive income (loss).

Interest income on loans held for sale at the lower of amortized cost or fair value is accrued and recognized based on the contractual rate of interest within interest income—loans and securitizations in the consolidated statements of operations and comprehensive income (loss).

As of December 31, 2024, there were no material personal loans held for sale, at lower of amortized cost or fair value.

Loans Measured at Fair Value

1 unchanged sentence

Therefore, these loans are carried at fair value on a recurring basis.

During the year ended December 31, 2023, we transferred home loans out of Level 3 and into Level 2 due to an update to pricing sources utilized by third-party valuation specialists, as part of the integration of Wyndham.

During the year ended December 31, 2023, we transferred certain home loans out of Level 3 and into Level 2 due to an update to pricing sources utilized by third-party valuation specialists, as part of the integration of Wyndham.

Other loans do not trade in an active market with readily observable prices and are classified as Level 3.

We determine the fair value of our loans using a discounted cash flow methodology, while also considering market data as it becomes available.

Direct fees, which primarily relate to personal and home loan originations, are recognized in earnings as earned and are recorded within noninterest income—loan origination, sales, and securitizations in the consolidated statements of operations and comprehensive loss.

Direct loan origination costs are recognized in earnings as incurred and are recorded within noninterest expense—cost of operations in the consolidated statements of operations and comprehensive loss.

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, sales, and securitizations in the consolidated statements of operations and comprehensive loss.

We record cash flows related to loans held for sale within cash flows from operating activities in the consolidated statements of cash flows.

Securitized loans are assets held by consolidated SPEs as collateral for bonds issued, for which fair value changes are recorded within noninterest income—loan origination, sales, and securitizations in the consolidated statements of operations and comprehensive loss.

Gains or losses recognized upon deconsolidation of a VIE are also recorded within noninterest income—loan origination, sales, and securitizations .

Direct origination fees, which primarily relate to personal and home loans, are recognized in earnings as earned and are recorded within noninterest income—loan origination, sales, and securitizations in the consolidated statements of operations and comprehensive income (loss).

We record cash flows related to loans originally designated as held for sale within cash flows from operating activities in the consolidated statements of cash flows.

We record cash flows related to loans originally designated as held for investment within cash flows from investing activities in the consolidated statements of cash flows.

We consider a loan to be delinquent when the borrower has not made the scheduled payment amount within one day after the scheduled payment date, provided the borrower is not in school or in deferment, forbearance or within an agreed-upon grace period.

6 unchanged sentences

At the conclusion of a forbearance period, the contractual monthly payment is recalculated and is generally higher as a result.

SoFi Technologies, Inc.

Notes to Consolidated Financial Statements (continued)

(In Thousands, Unless Otherwise Stated and Except for Share and Per Share Data)

For personal loans and student loans, delinquent loans are charged off after 120 days of delinquency or on the date of confirmed loss.

6 unchanged sentences

Loans Measured at Amortized Cost

For our senior secured and commercial and consumer banking loans, direct loan origination costs are deferred and amortized using the effective interest method over the contractual term of the loans within interest income—loans and securitizations in the consolidated statements of operations and comprehensive loss.

For our secured and commercial and consumer banking loans, direct loan origination costs are deferred and amortized using the effective interest method over the contractual term of the loans within interest income—loans and securitizations in the consolidated statements of operations and comprehensive income (loss).

As of December 31, 2024, the remaining balance of deferred costs was immaterial

2 unchanged sentences

We record cash flows related to loans held for investment within cash flows from investing activities in the consolidated statements of cash flows.

SoFi Technologies, Inc.

Notes to Consolidated Financial Statements (continued)

(In Thousands, Unless Otherwise Stated and Except for Share and Per Share Data)

Credit card receivables are reported at the amounts due from members, including accrued interest and fees, and unamortized net deferred loan origination fees and costs.

Loan origination fees and direct loan origination costs are amortized on a straight-line basis over a 12-month period as adjustments to income through interest income—loans and securitizations in the consolidated statements of operations and comprehensive loss.

Credit card balances are reported as delinquent when they become 30 or more days past due.

2 unchanged sentences

When recovery payments are received against charged off credit card balances, we record a direct reduction to the provision for credit losses.

Credit card receivables associated with alleged or potential fraudulent transactions are charged off through noninterest expense—general and administrative in the consolidated statements of operations and comprehensive loss.

Credit card receivables associated with alleged or potential third-party fraudulent transactions are charged off through noninterest expense—general and administrative in the consolidated statements of operations and comprehensive income (loss).

Commercial and consumer banking loans are reported as delinquent when they become 30 or more days past due.

2 unchanged sentences

For commercial loans, performance is monitored on an individual loan basis and delinquent loans are charged off when collectability of interest and principal on the loan is not reasonably assured.

Senior secured loans are term loan arrangements secured by underlying loans owned by the debtor.

Senior secured loans are reported as delinquent when they become 30 or more days past due, and are charged off after 120 days of delinquency or on the date of confirmed loss.

Financial Guarantees

We entered into a credit default swap related to our student loans which meets the definition of a financial guarantee and is excluded from derivative accounting treatment.

We apply the insurance contract claim method by deferring the full estimated amount of premiums paid and payable at inception.

The deferred premium is estimated using a discounted cash flow model considering the expected performance of the reference portfolio and recorded within other assets and accounts payable, accruals and other liabilities in the consolidated balance sheets.

Deferred premiums are amortized based on actual premiums due and recognized in noninterest expense—general and administrative in the consolidated statements of operations and comprehensive loss.

We recognize a receivable and related earnings when a loss event occurs, we have the right to submit a claim, and recovery is probable.

Secured loans are term loan arrangements secured by underlying loans owned by the debtor, which were previously originated, sold and in most cases continue to be serviced by the Company.

Secured loans are reported as delinquent when they become 30 or more days past due, and are charged off after 120 days of delinquency or on the date of confirmed loss.

Allowance for Credit Losses

2 unchanged sentences

Our approaches to measuring the allowance for credit losses on the applicable financial assets are as follows:

SoFi Technologies, Inc.

Notes to Consolidated Financial Statements (continued)

(In Thousands, Unless Otherwise Stated and Except for Share and Per Share Data)

Cash equivalents and restricted cash equivalents :

8 unchanged sentences

Based on this analysis, we determined that our historical loss rates remained most indicative of our lifetime expected losses.

We record the provision for credit losses on accounts receivable from contracts with customers within noninterest expense—general and administrative in the consolidated statements of operations and comprehensive loss.

When we determine that a receivable is not collectible, we write off the uncollectible amount as a reduction to both the allowance and the gross asset balance.

2 unchanged sentences

Allowance for Credit Losses for a rollforward of the allowance for credit losses related to our accounts receivable.

Senior secured loans :

We evaluate the credit quality of our senior secured loan portfolio based on the fair value of underlying collateral, which are subject to the requirements of our loan underwriting process and risk models upon origination.

Secured loans :

We evaluate the credit quality of our secured loan portfolio based on the fair value of underlying collateral, which are subject to the requirements of our loan underwriting process and risk models upon origination.

This analysis is performed on a quarterly basis utilizing a third-party valuation specialist, whereby the fair value of underlying collateral is reassessed based on relevant information such as funded loan rates and historical loss experience, among other factors.

An allowance for credit losses is required when there is an expected credit loss after considering the fair value of the collateral as well as any anticipated future changes in the underlying collateral.

As of and for the year ended December 31, 2023, we determined that our expected exposure to credit losses was immaterial, and as such did not recognize an allowance for credit losses on senior secured loans.

Credit cards :

We segment pools of credit cards based on consumer credit score bands as measured using FICO scores, which are obtained at origination of the account and are refreshed monthly thereafter, and also by delinquency status, which may be adjusted using other risk-differentiating attributes to model charge-off probabilities and the average life over which expected credit losses may occur for the credit cards within each pool.

The pools estimate the likelihood of borrowers with similar FICO scores to pay credit obligations based on aggregate credit performance data.

When necessary, we apply separate credit loss assumptions to assets that have deteriorated in credit quality such that they no longer share similar risk characteristics with other assets in the same FICO score band.

We either estimate the allowance for credit losses on such non-performing assets individually based on individual risk characteristics or as part of a distinct pool of assets that shares similar risk characteristics.

We reassess our credit card pools periodically to confirm that all loans within each pool continue to share similar risk characteristics.

We establish an allowance within each pool of credit cards utilizing the risk model described above, which may then be adjusted for current conditions and reasonable and supportable forecasts of future conditions, including economic conditions.

We apply the probability-of-default and loss-given-default assumptions to the drawn balance of credit cards within each pool to estimate the lifetime expected credit losses within each pool, which are then aggregated to determine the allowance for credit losses.

We do not measure credit losses on the undrawn credit exposure, as such undrawn credit exposure is unconditionally cancellable by us.

Additionally, management evaluates whether to include qualitative reserves to cover losses that are expected but may not be adequately represented in the quantitative methods or the economic assumptions.

The qualitative reserves address possible limitations within the models, such as external conditions including regulatory requirements, emerging portfolio trends, the nature and size of the portfolio, portfolio concentrations, the volume and severity of past due accounts, or management risk actions.

We record the provision for credit losses on credit cards within noninterest expense—provision for credit losses in the consolidated statements of operations and comprehensive loss.

An allowance for credit losses is required when there is an expected credit loss after considering the fair value of the

SoFi Technologies, Inc.

2 unchanged sentences

(In Thousands, Unless Otherwise Stated and Except for Share and Per Share Data)

collateral as well as any anticipated future changes in the underlying collateral.

As of and for the year ended December 31, 2024, based on this evaluation we did not recognize an allowance for credit losses on our secured loan.

Credit cards :

We use a combination of statistical-based loan level models that incorporate current and historical credit performance data, which includes both internal and external industry data.

The process of estimating expected credit losses is based on an account-level PD model, a segment-level EAD model, and a portfolio-level recovery rate.

In addition, the Company incorporates qualitative reserves to cover losses that are expected but may not be adequately represented in our quantitative methods.

The PD model estimates the likelihood of default at different points in time over the life of each loan.

The PD model analyzes a wide range of borrower characteristics, including credit scores and customer behaviors such as credit limit usage, revolving vs.

transactors trends, and number of credit inquires.

The EAD model estimates the balance of an account at the time of default.

This includes balances less expected repayments based on historical payment and revolve behavior.

A recovery rate reflecting an estimate of amounts expected to be received after default occurs is estimated separately based on historical recovery performance and applied to the final CECL calculation.

For delinquent accounts we use roll rates based on historical data to determine the probabilities of default which is included in the final CECL calculation.

The qualitative reserves address possible limitations within the models, such as macroeconomic conditions, regulatory requirements, emerging portfolio trends, the nature and size of the portfolio, portfolio concentrations, the volume and severity of past due accounts, changes in underwriting or lending staff, or other management risk actions.

We record the provision for credit losses on credit cards within provision for credit losses in the consolidated statements of operations and comprehensive income (loss).

When we determine that balances are not collectible, we charge-off the uncollectible amounts as a reduction to both the allowance for credit loss and gross asset balances.

Recoveries are recorded when received as a direct reduction to provision for credit losses.

We do not measure credit losses on the undrawn credit exposure, as such undrawn credit exposure is unconditionally cancellable by us.

We elected to exclude interest on credit cards from the measurement of our allowance, as our policy allows for accrued interest to be reversed in a timely manner.

8 unchanged sentences

Investments in AFS debt securities :

Credit-related impairment is recognized as an allowance for credit losses in the consolidated balance sheets with a corresponding adjustment to noninterest expense—provision for credit losses in the statements of operations and comprehensive loss.

Credit-related impairment is recognized as an allowance for credit losses in the consolidated balance sheets with a corresponding adjustment to provision for credit losses in the statements of operations and comprehensive income (loss).

For certain securities that are guaranteed by the U.S.

3 unchanged sentences

For the year ended December 31, 2024, we did not recognize an allowance for credit losses on impaired investments in AFS debt securities.

SoFi Technologies, Inc.

Notes to Consolidated Financial Statements (continued)

(In Thousands, Unless Otherwise Stated and Except for Share and Per Share Data)

Servicing Rights

Each time we enter into a servicing agreement, either in connection with transfers of our financial assets or in connection with a referral fulfillment arrangement in which we are a sub-servicer for financial assets that we do not legally own, we determine whether we should record a servicing asset or servicing liability.

We enter into servicing agreements in connection with transfers of our financial assets and referral fulfillment arrangements in which we are a sub-servicer for financial assets that we do not legally own, and on a standalone basis.

Under such servicing agreements, we earn servicing fees, generally expressed as a percentage of the serviced outstanding principal balance, portions of which may be subjected to subordination provisions.

At the inception of each servicing relationship, we determine whether we should record a servicing asset or servicing liability, measured at the fair value of the servicing right, which may be zero.

We elected the fair value option to measure our servicing rights subsequent to initial recognition.

3 unchanged sentences

For servicing rights retained in connection with loan transfers that do not meet the requirements for sale accounting treatment, there is no recognition of a servicing asset or liability.

Servicing rights in connection with transfers of financial assets are initially measured at fair value and recognized as a component of the gain or loss from sales of loans and the initial capitalization is reported within noninterest income—loan origination, sales, and securitizations in the consolidated statements of operations and comprehensive loss.

Servicing rights assumed from third parties for financial assets for which we are not the loan originator are initially measured at fair value and recognized within noninterest income—servicing in the consolidated statements of operations and comprehensive loss.

For loans originated on behalf of third parties for our Loan Platform Business, servicing rights recognized as a component of the gain on sale are reported within noninterest income—loan platform fees in the consolidated statements of operations and comprehensive income (loss).

Servicing rights assumed from third parties as referral fees for financial assets for which we are not the loan originator are initially measured at fair value and recognized within noninterest income—loan platform fees in the consolidated statements of operations and comprehensive income (loss).

Servicing rights are measured at fair value at each subsequent reporting date and changes in fair value are reported in earnings in the period in which they occur.

For servicing rights with adequate compensation resulting in an initial and subsequent value of zero, we recognize servicing fees received during the period within noninterest income—servicing .

We elected the fair value option to measure our servicing rights to better align with the valuation of our transferred loans, which also tend to share a similar risk profile to the personal loan servicing we assume from third parties when we are not the loan originator.

4 unchanged sentences

Fair Value Measurements for the key inputs used in the fair value measurements of our classes of servicing rights.