Happen, Inc.
For the period ended Sep 30, 2026. Filed Oct 29, 2026.
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A company's report for each of its first three quarters. The financial statements are not audited. It shows how the business has moved since the last annual report, and what management says changed.
Sep 30, 2026 · Filed Oct 29, 2026
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Overview
On June 22, 2026, we changed our corporate name from LendingClub Corporation to Happen, Inc., and the name of our wholly-owned banking subsidiary from LendingClub Bank, National Association to Happen Bank, National Association (Happen Bank). Happen, Inc. operates a leading, nationally chartered, digital marketplace bank that leverages data and technology to increase access to credit, reduce borrowing costs, and improve returns on savings for our members. Happen, Inc. is registered as a bank holding company and operates the vast majority of its business through its wholly-owned subsidiary, Happen Bank.
Election of Fair Value Option
Effective January 1, 2026, we elected the fair value option to account for held for investment (HFI) loans that were originated on or after that date (fair value option election). Prior to this election, loans that were originated as HFI were, and will continue to be, accounted for at amortized cost, which required the initial recognition of a CECL allowance for lifetime expected credit losses. We believe that applying the fair value option, rather than amortized cost accounting with the CECL methodology, to HFI loans more accurately reflects the in-period economic performance of the loans by better aligning the value of the loan to its then fair value. Under the fair value option, origination fee revenue and marketing costs are recognized in earnings at the time of loan origination, rather than being deferred. Fair value adjustments on loans are recognized in current period earnings within “Net fair value adjustments” and include the impact of credit losses that previously would have been recorded as a provision expense under CECL. Further, by applying the fair value option to HFI loans, we are applying the same accounting methodology to all loans we originate on or after January 1, 2026, as both HFI and held for sale (HFS) loans are now measured at fair value.
Financial Highlights
We delivered several financial achievements in the third quarter of 2026, including record pre-tax income. This growth was primarily driven by an increase in loan origination volume, higher net interest income due to an increase in total interest-earning assets, as well as strong credit performance. Net income grew to $59.3 million, with diluted EPS of $0.50, compared to $44.3 million, with diluted EPS of $0.37, in the prior year.
The following tables summarize our selected financial data:
| As of and for the three months ended · As of and for the nine months ended September 30, | |||||
|---|---|---|---|---|---|
| September 30,2026 | June 30,2026 | September 30,2025 | 2026 | 2025 | |
| Net interest income | $183,071 | $179,017 | $158,439 | $538,322 | $462,645 |
| Non-interest income | 80,089 | 83,838 | 107,792 | 239,944 | 269,732 |
| Total net revenue | 263,160 | 262,855 | 266,231 | 778,266 | 732,377 |
| Provision for credit losses | (15,930) | (10,917) | 46,280 | (26,457) | 144,162 |
| Non-interest expense | 202,315 | 198,115 | 162,713 | 584,963 | 461,298 |
| Income before income tax expense | 76,775 | 75,657 | 57,238 | 219,760 | 126,917 |
| Income tax expense | (17,499) | (17,509) | (12,964) | (50,733) | (32,794) |
| Net income | $59,276 | $58,148 | $44,274 | $169,027 | $94,123 |
| Diluted EPS | $0.50 | $0.50 | $0.37 | $1.44 | $0.81 |
| Total loan originations (in millions)(1) | $3,336 | $3,145 | $2,656 | $9,151 | $7,121 |
| Current period originations sold or held for sale | $2,145 | $2,039 | $2,027 | $5,900 | $5,044 |
| Current period originations held for investment | $1,192 | $1,107 | $629 | $3,250 | $2,077 |
| Total servicing portfolio (in millions)(2) | $15,469 | $14,596 | $12,986 | ||
| Loans serviced for others | $8,133 | $8,231 | $7,612 | ||
| As of and for the three months ended · As of and for the nine months ended September 30, | |||||
|---|---|---|---|---|---|
| September 30,2026 | June 30,2026 | September 30,2025 | 2026 | 2025 | |
| Performance Metrics: | |||||
| Net interest margin | 6.05% | 6.14% | 6.18% | 6.15% | 6.10% |
| Profit margin(3) | 29.2% | 28.8% | 21.5% | 28.2% | 17.3% |
| Return on average equity (ROE)(4) | 15.0% | 15.1% | 12.4% | 14.6% | 9.1% |
| Return on tangible common equity (ROTCE)(5)(6) | 15.8% | 15.9% | 13.2% | 15.4% | 9.6% |
| Return on average total assets (ROA)(7) | 1.9% | 1.9% | 1.7% | 1.9% | 1.2% |
| Marketing expense as a % of loan originations(1) | 2.18% | 1.99% | 1.53% | 2.08% | 1.45% |
| Average balance - total loans and leases held for investment | $5,449,330 | $5,108,678 | $4,890,619 | $5,120,936 | $4,939,852 |
| Net charge-offs - total loans and leases held for investment | $41,637 | $40,599 | $41,899 | $124,729 | $164,105 |
| Net charge-off ratio - total loans and leases held for investment(8) | 3.1% | 3.2% | 3.4% | 3.2% | 4.4% |
| Capital Metrics: | |||||
| Common equity tier 1 capital ratio | 15.7% | 16.9% | 18.0% | ||
| Tier 1 leverage ratio | 12.0% | 11.9% | 12.3% | ||
| Book value per common share | $13.81 | $13.58 | $12.68 | ||
| Tangible book value per common share(6) | $13.11 | $12.89 | $11.95 | ||
(1) Beginning in the first quarter of 2026, includes all loans originated during the respective periods (unsecured consumer loans, auto loans and small business loans). Previously this included unsecured consumer loans and auto loans only. Prior periods have been reclassified to conform to the current period presentation. See “Non-Interest Income” for additional information.
(2) Reflects loans serviced on our platform, which includes unsecured consumer loans and auto loans serviced for others for which servicing rights are retained by the Company.
(3) Calculated as the ratio of income before income tax expense to total net revenue.
(4) Calculated as annualized net income divided by average equity for the period presented.
(5) Calculated as annualized net income divided by average tangible common equity for the period presented.
(6) Represents a non-GAAP financial measure. See “Non-GAAP Financial Measures” for additional information.
(7) Calculated as annualized net income divided by average total assets for the period presented.
(8) Beginning in the first quarter of 2026, the net charge-off ratio is calculated as annualized net charge-offs for total loans and leases held for investment (at amortized cost and fair value) divided by average total outstanding loans and leases held for investment during the period. Prior to the first quarter of 2026, this was calculated based on loans and leases held for investment at amortized cost only. Prior period amounts have been reclassified to conform to the current period presentation.
| As of the period ended | |||
|---|---|---|---|
| September 30,2026 | June 30,2026 | September 30,2025 | |
| Balance Sheet Data: | |||
| Securities available for sale | $3,921,057 | $4,046,761 | $3,742,304 |
| Loans held for sale | $2,063,910 | $1,773,052 | $1,213,140 |
| Loans and leases held for investment | $5,734,040 | $5,078,318 | $4,573,425 |
| Total loans and leases | $7,797,950 | $6,851,370 | $5,786,565 |
| Total assets | $13,286,814 | $12,549,040 | $11,072,515 |
| Total deposits(1) | $11,481,409 | $10,765,267 | $9,388,233 |
| Total liabilities | $11,693,741 | $10,981,575 | $9,610,302 |
| Total equity | $1,593,073 | $1,567,465 | $1,462,213 |
(1) As of September 30, 2026, Federal Deposit Insurance Corporation (FDIC)-insured deposits represent approximately 89% of total deposits.
Credit Quality Indicators
We evaluate the credit quality of our loan and leases held for investment based on delinquency status and payment activity. The following tables present loans and leases held for investment (at amortized cost and fair value) by delinquency status:
| September 30, 2026 | Current | 30-59Days | 60-89Days | 90 or MoreDays | Total | Guaranteed Amount(1) |
|---|---|---|---|---|---|---|
| Unsecured consumer | $4,465,668 | $22,577 | $17,734 | $15,884 | $4,521,863 | $— |
| Residential mortgages | 141,043 | 313 | 2,707 | — | 144,063 | — |
| Secured consumer | 498,492 | 3,047 | 874 | 296 | 502,709 | — |
| Total consumer loans held for investment | 5,105,203 | 25,937 | 21,315 | 16,180 | 5,168,635 | — |
| Equipment finance(2) | 27,264 | — | — | 3,207 | 30,471 | — |
| Commercial real estate(3) | 507,133 | 441 | 1,181 | 5,531 | 514,286 | 49,354 |
| Commercial and industrial | 139,952 | 4,661 | 351 | 27,580 | 172,544 | 123,740 |
| Total commercial loans and leases held for investment | 674,349 | 5,102 | 1,532 | 36,318 | 717,301 | 173,094 |
| Total loans and leases held for investment | $5,779,552 | $31,039 | $22,847 | $52,498 | $5,885,936 | $173,094 |
| December 31, 2025 | Current | 30-59Days | 60-89Days | 90 or MoreDays | Total | Guaranteed Amount(1) |
|---|---|---|---|---|---|---|
| Unsecured consumer(4) | $3,600,434 | $24,075 | $19,685 | $18,929 | $3,663,123 | $— |
| Residential mortgages | 150,099 | — | 888 | 86 | 151,073 | — |
| Secured consumer | 257,063 | 3,015 | 596 | 395 | 261,069 | — |
| Total consumer loans held for investment | 4,007,596 | 27,090 | 21,169 | 19,410 | 4,075,265 | — |
| Equipment finance(2) | 35,973 | 696 | — | 3,088 | 39,757 | — |
| Commercial real estate(3) | 461,307 | — | — | 11,182 | 472,489 | 39,507 |
| Commercial and industrial | 133,526 | 1,540 | 1,878 | 20,074 | 157,018 | 108,826 |
| Total commercial loans and leases held for investment | 630,806 | 2,236 | 1,878 | 34,344 | 669,264 | 148,333 |
| Total loans and leases held for investment | $4,638,402 | $29,326 | $23,047 | $53,754 | $4,744,529 | $148,333 |
(1) Represents loan balances guaranteed by the Small Business Administration (SBA).
(2) Comprised of sales-type leases for equipment.
(3) Includes $332.2 million and $286.8 million in loans originated through the SBA as of September 30, 2026 and December 31, 2025, respectively.
(4) Excludes basis adjustment for loans previously designated in fair value hedges under the portfolio layer method of $1.6 million as of December 31, 2025.
The above summary should be read in conjunction with this Management’s Discussion and Analysis of Financial Condition and Results of Operations in its entirety. For additional discussion related to our operating segments, see “Segment Information.”
The text of this filing, as the company filed it with the SEC, without its images or exhibits. This is not investment advice.