SoFi Technologies Inc
For the period ended Sep 30, 2024. Filed Nov 7, 2024.
View on SEC.govAbout this filing
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, 2024 · Filed Nov 7, 2024
Extracted filing text, with the paragraph anchors used by the comparison.
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Net Interest Income
The table below presents average balance and interest information for each major category of interest-earning assets and interest-bearing liabilities, along with net interest income and net interest margin.
Average Balances and Net Interest Earnings Analysis
| Three Months Ended September 30, 2024 · Three Months Ended September 30, 2023 | ||||||||||
|---|---|---|---|---|---|---|---|---|---|---|
| ($ in thousands) · Average Balances(1) · Interest Income/Expense · Average Yield/Rate · Average Balances(1) · Interest Income/Expense · Average Yield/Rate | ||||||||||
| Assets | ||||||||||
| Interest-earning assets: | ||||||||||
| Interest-bearing deposits with banks | $2,593,113 | $29,353 | 4.50% | $2,342,361 | $24,485 | 4.15% | ||||
| Investment securities | 1,596,756 | 23,894 | 5.95 | 517,786 | 1,838 | 1.41 | ||||
| Loans | 26,589,180 | 670,127 | 10.03 | 19,996,570 | 537,947 | 10.67 | ||||
| Total interest-earning assets | 30,779,049 | 723,374 | 9.35 | 22,856,717 | 564,270 | 9.79 | ||||
| Total noninterest-earning assets | 3,291,442 | 3,116,217 | ||||||||
| Total assets | $34,070,491 | $25,972,934 | ||||||||
| Liabilities, Temporary Equity and Permanent Equity | ||||||||||
| Interest-bearing liabilities: | ||||||||||
| Demand deposits | $2,189,118 | $11,489 | 2.09% | $2,355,243 | $12,837 | 2.16% | ||||
| Savings deposits | 19,534,413 | 213,760 | 4.35 | 9,416,236 | 104,375 | 4.40 | ||||
| Time deposits | 1,847,094 | 23,043 | 4.96 | 2,244,196 | 28,351 | 5.01 | ||||
| Total interest-bearing deposits | 23,570,625 | 248,292 | 4.19 | 14,015,675 | 145,563 | 4.12 | ||||
| Warehouse facilities | 1,789,921 | 28,773 | 6.40 | 3,223,333 | 51,257 | 6.31 | ||||
| Securitization debt | 117,172 | 1,031 | 3.50 | 724,063 | 9,374 | 5.14 | ||||
| Other debt(2) | 1,798,092 | 14,268 | 3.16 | 1,644,295 | 13,113 | 3.16 | ||||
| Total debt | 3,705,185 | 44,072 | 4.73 | 5,591,691 | 73,744 | 5.23 | ||||
| Residual interests classified as debt | 688 | — | — | 10,744 | — | — | ||||
| Total interest-bearing liabilities | 27,276,498 | 292,364 | 4.26 | 19,618,110 | 219,307 | 4.44 | ||||
| Total noninterest-bearing liabilities | 794,151 | 783,925 | ||||||||
| Total liabilities | 28,070,649 | 20,402,035 | ||||||||
| Total temporary equity | — | 320,374 | ||||||||
| Total permanent equity | 5,999,842 | 5,250,525 | ||||||||
| Total liabilities, temporary equity and permanent equity | $34,070,491 | $25,972,934 | ||||||||
| Net interest income(3) | $431,010 | $344,963 | ||||||||
| Net interest margin(4) | 5.57% | 5.99% | ||||||||
(2)Interest expense on other debt primarily includes debt issuance and discount expense, as well as interest expense on the revolving credit facility and convertible senior notes.
(3)Net interest income is calculated as the excess of total interest income on interest-earning assets over total interest expense on interest-bearing liabilities.
(4)Net interest margin is calculated as net interest income divided by total average interest-earning assets.
| Nine Months Ended September 30, 2024 · Nine Months Ended September 30, 2023 | ||||||||||
|---|---|---|---|---|---|---|---|---|---|---|
| ($ in thousands) · Average Balances(1) · Interest Income/Expense · Average Yield/Rate · Average Balances(1) · Interest Income/Expense · Average Yield/Rate | ||||||||||
| Assets | ||||||||||
| Interest-earning assets: | ||||||||||
| Interest-bearing deposits with banks | $2,841,537 | $101,616 | 4.78% | $1,973,892 | $57,094 | 3.87% | ||||
| Investment securities | 1,281,815 | 54,761 | 5.71 | 486,931 | 11,259 | 3.09 | ||||
| Loans | 24,803,612 | 1,907,503 | 10.27 | 17,520,517 | 1,337,476 | 10.21 | ||||
| Total interest-earning assets | 28,926,964 | 2,063,880 | 9.53 | 19,981,340 | 1,405,829 | 9.41 | ||||
| Total noninterest-earning assets | 3,110,508 | 3,140,883 | ||||||||
| Total assets | $32,037,472 | $23,122,223 | ||||||||
| Liabilities, Temporary Equity and Permanent Equity | ||||||||||
| Interest-bearing liabilities: | ||||||||||
| Demand deposits | $2,166,523 | $36,928 | 2.28% | $2,100,866 | $38,611 | 2.46% | ||||
| Savings deposits | 17,267,554 | 565,816 | 4.38 | 7,409,745 | 225,649 | 4.07 | ||||
| Time deposits | 2,355,079 | 88,814 | 5.04 | 1,701,417 | 60,948 | 4.79 | ||||
| Total interest-bearing deposits | 21,789,156 | 691,558 | 4.24 | 11,212,028 | 325,208 | 3.88 | ||||
| Warehouse facilities | 1,586,955 | 76,731 | 6.46 | 3,093,592 | 139,513 | 6.03 | ||||
| Securitization debt | 223,034 | 6,517 | 3.90 | 823,457 | 30,570 | 4.96 | ||||
| Other debt(2) | 1,792,464 | 42,762 | 3.19 | 1,644,427 | 38,298 | 3.11 | ||||
| Total debt | 3,602,453 | 126,010 | 4.67 | 5,561,476 | 208,381 | 5.01 | ||||
| Residual interests classified as debt | 3,059 | — | — | 13,334 | 141 | 1.41 | ||||
| Total interest-bearing liabilities | 25,394,668 | 817,568 | 4.30 | 16,786,838 | 533,730 | 4.25 | ||||
| Total noninterest-bearing liabilities | 747,999 | 754,024 | ||||||||
| Total liabilities | 26,142,667 | 17,540,862 | ||||||||
| Total temporary equity | 160,187 | 320,374 | ||||||||
| Total permanent equity | 5,734,618 | 5,260,987 | ||||||||
| Total liabilities, temporary equity and permanent equity | $32,037,472 | $23,122,223 | ||||||||
| Net interest income(3) | $1,246,312 | $872,099 | ||||||||
| Net interest margin(4) | 5.76% | 5.84% | ||||||||
(2)Interest expense on other debt primarily includes debt issuance and discount expense, as well as interest expense on the revolving credit facility and convertible senior notes.
(3)Net interest income is calculated as the excess of total interest income on interest-earning assets over total interest expense on interest-bearing liabilities.
(4)Net interest margin is calculated as net interest income divided by total average interest-earning assets.
Three Months. For the three months ended September 30, 2024 compared to the three months ended September 30, 2023, net interest income increased by $86.0 million, or 25%, and net interest margin decreased by 42 bps. Average interest-earning assets increased by 35%, and average yields decreased by 44 bps, while average interest-bearing liabilities increased by 39% and the average cost of interest-bearing liabilities decreased by 18 bps.
The increases in net interest income were primarily driven by (i) higher interest income from personal loans and student loans of $105.0 million, which was primarily a function of increases in the average balance and origination volume, as well as longer loan holding periods, (ii) interest-bearing deposits with banks of $4.9 million, which reflected our strong liquidity position in a rising interest rate environment, (iii) higher interest income from investment securities of $22.1 million primarily attributable to higher average balances, and (iv) lower interest expense on warehouse facilities and securitizations of $30.8 million primarily attributable to lower average balances, which is reflective of our continued funding mix shift towards deposit funding, and partially offset by higher interest rates incurred on our facilities which is reflective of the higher interest rate environment year over year. These items were partially offset by higher interest expense on deposits of $102.7 million attributable to a higher average balance and higher interest rates offered to our members.
Nine Months. For the nine months ended September 30, 2024 compared to the nine months ended September 30, 2023, net interest income increased by $374.2 million, or 43%, and net interest margin decreased by 8 bps. Average interest-bearing liabilities increased by 51% and the average cost of interest-bearing liabilities increased by 5 bps, while average interest-earning assets increased by 45% and average yields increased by 12 bps.
The increases in net interest income were primarily driven by (i) higher interest income from personal loans and student loans of $522.0 million, which was primarily a function of increases in the average balance and origination volume, as well as longer loan holding periods, (ii) interest-bearing deposits with banks of $44.5 million, which reflected our strong liquidity position in a rising interest rate environment, (iii) higher interest income from investment securities of $43.5 million primarily attributable to higher average balances, and (iv) lower interest expense on warehouse facilities and securitizations of $86.8 million primarily attributable to lower average balances, which is reflective of our continued funding mix towards deposit funding, and partially offset by higher interest rates incurred on our facilities which is reflective of the higher interest rate environment year over year. These items were partially offset by higher interest expense on deposits of $366.4 million attributable to a higher average balance and higher interest rates offered to our members.
Analysis of Changes in Net Interest Income
The following table presents period-over-period changes in net interest income and the extent to which the variances are attributable to changes in the volume of our interest-earning assets and interest-bearing liabilities or changes in the interest rates related to these assets and liabilities:
| Three Months Ended September 30, · Nine Months Ended September 30, | ||||||
|---|---|---|---|---|---|---|
| 2024 vs. 2023 · 2024 vs. 2023 | ||||||
| Increase (Decrease) Due to Change in(1): | Increase (Decrease) Due to Change in(1): | |||||
| ($ in thousands) | Volume | Rate | Total Variance | Volume | Rate | Total Variance |
| Interest income: | ||||||
| Interest-bearing deposits with banks | $2,800 | $2,068 | $4,868 | $31,064 | $13,458 | $44,522 |
| Investment securities | 16,142 | 5,914 | 22,056 | 33,967 | 9,535 | 43,502 |
| Loans | 164,326 | (32,146) | 132,180 | 561,313 | 8,714 | 570,027 |
| Total interest income | 183,268 | (24,164) | 159,104 | 626,344 | 31,706 | 658,051 |
| Interest expense: | ||||||
| Interest-bearing deposits | 100,263 | 2,466 | 102,729 | 335,978 | 30,372 | 366,350 |
| Debt | (22,592) | (7,080) | (29,672) | (68,365) | (14,006) | (82,371) |
| Residual interests classified as debt | — | — | — | — | (141) | (141) |
| Total interest expense | 77,671 | (4,614) | 73,057 | 267,613 | 16,225 | 283,838 |
| Net interest income | $105,597 | $(19,550) | $86,047 | $358,731 | $15,481 | $374,213 |
(1)We calculate the changes in interest income and interest expense separately for each item. Volume and rate changes have been allocated on a consistent basis using the respective percentage changes in average balances and average rates.
The text of this filing, as the company filed it with the SEC, without its images or exhibits. This is not investment advice.