SoFi Technologies Inc

The following table presents the components of our total noninterest expense:

Three Months. Total noninterest expense increased by $35.9 million, or 7%, for the three months ended June 30, 2024 compared to the three months ended June 30, 2023, primarily driven by: (i) increases in amortization of purchased and internally-developed software, and tools and subscriptions costs, reflective of continued investments in technology, (ii) increases in professional services costs, (iii) an increase in product fulfillment costs, which included debit card fulfillment services, primarily related to our SoFi Money product, as well as payment processing network association fees associated with increased activity on our technology platform, (iv) increases in direct member incentives, advertising and marketing expenditures, and (v) amortization of premiums on a credit default swap related to our student loans during the 2024 period. This increase was partially offset by decreased employee compensation and benefits, which was attributable to decreases in share-based compensation expense, partially offset by increases in headcount and salary related to support of our growth and impacts of the inflationary environment.

Six Months. Total noninterest expense increased by $78.5 million, or 7%, for the six months ended June 30, 2024 compared to the six months ended June 30, 2023, primarily driven by: (i) increases in amortization of purchased and internally-developed software, and tools and subscriptions costs, reflective of continued investments in technology, (ii) increases in professional services costs, (iii) an increase in product fulfillment costs, which included debit card fulfillment services, primarily related to our SoFi Money product, as well as payment processing network association fees associated with increased activity on our technology platform, and (iv) amortization of premiums on a credit default swap related to our student loans during the 2024 period. This increase was partially offset by decreased employee compensation and benefits, which was attributable to decreases in share-based compensation expense and restructuring charges during the first quarter of 2023, partially offset by increases in headcount and salary related to support of our growth and impacts of the inflationary environment.

Provision for Credit Losses

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:

(1)Loans outstanding balance excludes accrued interest.

(2)The decrease in the ratio was primarily attributable to senior secured loans, for which we did not recognize an allowance for credit losses as we determined that our expected exposure to credit losses was immaterial, partially offset by credit cards, which was primarily reflective of an increase in total balances and associated loss reserves.

We omitted the credit ratios associated with nonaccrual loans, as the balance of nonaccrual loans was immaterial.

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:

(1)Loans outstanding balances exclude accrued interest.

(2)For the periods presented, we did not recognize an allowance for credit losses on senior secured loans, as we determined that our expected exposure to credit losses was immaterial.

Analysis of Charge-offs

The following table presents information regarding average loans outstanding, net charge-offs and the annualized ratio of net charge-offs to average loans outstanding:

(2)Net charge-offs include both credit- and certain non-credit-related charge-offs.

The provision for credit losses for the three and six months ended June 30, 2024 decreased by $1.0 million, or 8%, and $2.2 million, or 10%, respectively, compared to the same periods in 2023. The decreases during the three and six months ended June 30, 2024 were primarily related to improvement in credit card delinquency rates.