Happen, Inc.

We manage liquidity to meet our cash flow and collateral obligations in a timely manner at a reasonable cost. We must maintain operating liquidity to meet our expected daily and forecasted cash flow requirements, as well as contingent liquidity to meet unexpected funding requirements.

As our primary business at Happen Bank involves taking deposits and originating loans, a key role of liquidity management is to ensure that customers have timely access to funds from deposits and for loans. Liquidity management also involves maintaining sufficient liquidity to repay borrowings, pay operating expenses and support extraordinary funding requirements when necessary.

Happen Bank Liquidity

The following table summarizes Happen Bank’s primary sources of short-term liquidity as of the periods presented:

(1)Excludes illiquid securities available for sale.

(2)As of September 30, 2026 and December 31, 2025, the Company had $4.6 billion and $4.2 billion in loans pledged under the FRB Discount Window, respectively.

(3)As of September 30, 2026, the Company had $469.2 million in loans and $379.9 million in securities pledgedto the Federal Home Loan Bank (FHLB) of Des Moines. As of December 31, 2025, the Company had $486.2 million in loans and $375.7 million in securities pledgedto the FHLB of Des Moines.

The primary uses of Happen Bank liquidity include (i) the funding/acquisition of loans and securities purchases, (ii) withdrawals, maturities and the payment of interest on deposits, (iii) compensation and benefits expense, (iv) taxes, (v) capital expenditures and (vi) costs associated with the continued development and support of our digital marketplace bank.

Deposits

Deposits represent an important source of funding for Happen Bank. We offer deposit accounts to our members, which include both interest-bearing and noninterest-bearing deposits. As of September 30, 2026 and December 31, 2025, the amount of uninsured deposits totaled $1.3 billion and $1.2 billion, respectively, or 11% and 12% of total deposits, respectively. Uninsured time deposits as of September 30, 2026, by remaining time to maturity, were as follows:

(1)Consist of certificates of deposit accounts that are in excess of the FDIC insurance limit of $250 thousand per account holder.

Capital Expenditures

Net capital expenditures were $72.0 million, or 9.3% of total net revenue, and $124.8 million, or 17.4% of total net revenue, for the first nine months of 2026 and 2025, respectively. Capital expenditures in 2026 are expected to be approximately $90 million, primarily driven by costs associated with the continued development and support of our digital marketplace bank as well as improvements to the office building we purchased.

Happen, Inc. Liquidity

The primary source of liquidity at the holding company is $92.7 million and $127.1 million in cash and cash equivalents as of September 30, 2026 and December 31, 2025, respectively. The decrease in cash and cash equivalents was primarily driven by share repurchases. Additionally, the holding company has the ability to access the capital markets through additional registrations and public equity offerings.

Uses of cash at the holding company include the routine cash flow requirements as a bank holding company, such as interest and expenses, share repurchases, the needs of Happen Bank for additional equity and, as required, its need for debt financing and support for extraordinary funding requirements when necessary.

Factors Impacting Liquidity

Our liquidity could be adversely impacted by deteriorating financial and market conditions, the inability or unwillingness of a creditor to provide funding, an idiosyncratic event (e.g., a major loss, causing a perceived or actual deterioration in our financial condition), an adverse systemic event (e.g., default or bankruptcy of a significant capital markets participant), or others.

We believe, based on our projections, that our cash on hand, liquid available for sale (AFS) securities, deposits, available borrowing capacity, and net cash flows from operating, investing and financing activities are sufficient to meet our liquidity needs for the next twelve months, as well as beyond the next twelve months. See “Item 1. Financial Statements – Condensed Consolidated Statements of Cash Flows” for additional detail regarding our cash flows.