SoFi Technologies Inc

In the table below, we present certain metrics related to our Lending segment:

(1)Inclusive of origination volume related to our Loan Platform Business. For the year ended December 31, 2024, we originated $2.1 billion of personal loans on behalf of third parties. We did not originate any loans on behalf of third parties during 2023 or 2022.

(2)Loans with a balance and average loan balance include Lending products on our balance sheet, as well as transferred loans and referred loans with which we have a continuing involvement through our servicing agreements.

(3)Includes in-school loans and student loan refinancing products. In-school loans carry a lower average balance than student loan refinancing products.

Total Products

Total products in our Lending segment is a subset of our total products metric. See “Key Business Metrics” and Part I, Item 1. “Our Reportable Segments” for further discussion of this measure as it relates to our Lending segment.

Origination Volume

We refer to the aggregate dollar amount of loans originated through our platform in a given period as origination volume. Origination volume is an indicator of the size and health of our Lending segment and an indicator (together with the relevant loan characteristics, such as interest rate and prepayment and default expectations) of revenues and profitability. We also originate and sell loans in support of our Loan Platform Business, through which we provide lending related services to third-party partners. We maintain the same lending relationship with borrowers across all loans that we originate, inclusive of those originated on behalf of a third-party partner and as such, reflect these products within our Lending segment total products. Changes in origination volume are driven by the addition of new members and existing members, the latter of which at times will either refinance into a new SoFi loan or secure an additional, concurrent loan, as well as macroeconomic factors impacting consumer spending and borrowing behavior.

Personal Loans. During the year ended December 31, 2024, total personal loan origination volume increased by 28% relative to 2023, inclusive of a $2.1 billion increase related to personal loans originated on behalf of third parties during the second half of 2024 in support of our Loan Platform Business. Overall increases in origination volume were primarily due to increased demand driven by expanded marketing efforts and increased demand for debt consolidation products in a rising interest rate environment during 2023 that remained elevated into the third quarter of 2024.

During the year ended December 31, 2023, personal loan origination volume increased by 41% relative to 2022, primarily due to increased demand driven by expanded marketing efforts and increased demand for debt consolidation products in a rising interest rate environment.

Student Loans. During the year ended December 31, 2024, student loan origination volume increased by 44% relative to 2023, as demand for student loan refinancing products increased after the resumption of principal and interest payments on federally-held student loans as borrowers looked to refinance at a lower rate or, given the high interest rate environment, to extend the loan term.

During the year ended December 31, 2023, student loan origination volume increased by 17% relative to 2022, as demand for student loan refinancing products increased ahead of the resumption of principal and interest payments on federally-held student loans as borrowers looked to refinance at a lower rate or, given the high interest rate environment, to extend the loan term. This was partially offset by the unfavorable impact of the suspension of principal and interest payments on federally-held student loans through August 30, 2023 and the expectation of debt cancellation for certain federal student loan borrowers which was struck down by the U.S. Supreme Court in June 2023, combined with a continued rising interest rate environment in 2023.

Home Loans. During the year ended December 31, 2024, home loan origination volume increased by 82% relative to 2023. Our home loan origination volume increased notably beginning in the second quarter of 2023 and throughout 2024, aided by the increased capacity and capabilities subsequent to our acquisition of Wyndham. In addition, interest rates began to decline in the third quarter of 2024, which tends to raise demand for home loans overall as well as shift demand towards refinance originations from purchase originations.

During the year ended December 31, 2023, home loan origination volume decreased by 3% relative to 2022 due to continued rising interest rates, which tends to lower demand for home loans overall and shift demand from refinance originations to purchase originations, the latter of which is a more competitive landscape. Although purchase originations historically represented a smaller percentage of our home loan originations, our mix during the 2023 period has shifted toward more purchase originations, which we would expect to continue under similar macroeconomic conditions. Our home loan origination volume increased notably beginning in the second quarter of 2023, aided by the increased capacity and capabilities subsequent to our acquisition of Wyndham.

Loans with a Balance and Average Loan Balance

Loans with a balance refers to the number of loans that have a balance greater than zero dollars as of the reporting date. Loans with a balance allows management to better understand the unit economics of acquiring a loan in relation to the lifetime value of that loan. Average loan balance is defined as the total unpaid principal balance of the loans divided by loans with a balance within the respective loan product category as of the reporting date. Average loan balance tends to fluctuate based on the pace of loan originations relative to loan repayments and the initial loan origination size.

In the table below, we present additional information related to our lending products:

(1)Inclusive of activity related to loans originated and subsequently sold as part of our Loan Platform Business. For the year ended December 31, 2024, included $2.1 billion related to loans originated on behalf of third parties. We did not originate any loans on behalf of third parties during the 2023 and 2022 periods presented.

(2)Weighted average interest rate earned represents annualized interest income recognized divided by the average of the unpaid principal balances of loans outstanding during the period, which are impacted by loan holding periods as well as interest rates charged to borrowers. Weighted average interest rate earned was determined on a daily basis for the 2024 and 2023 periods and on a thirteen-month basis for the 2022 period, as the daily analysis in the prior period would have involved undue burden. Both average calculations are representative of our operations.

Lending Segment Results of Operations

The following table presents the measure of contribution profit for the Lending segment.

(1)Reflects changes in fair value inputs and assumptions on servicing rights, including conditional prepayment, default rates and discount rates. These assumptions are highly sensitive to market interest rate changes and are not indicative of our performance or results of operations. These non-cash charges, which are recorded within noninterest income in the consolidated statements of operations and comprehensive income (loss), are unrealized during the period and, therefore, have no impact on our cash flows from operations.

(2)Reflects changes in fair value inputs and assumptions on residual interests classified as debt, including conditional prepayment, default rates and discount rates. When third parties finance our consolidated securitization VIEs by purchasing residual interests, we receive proceeds at the time of the closing of the securitization and, thereafter, pass along contractual cash flows to the residual interest owner. These obligations are measured at fair value on a recurring basis, with fair value changes recorded within noninterest income in the consolidated statements of operations and comprehensive income (loss). These residual debt obligations are measured at fair value on a recurring basis, but they have no impact on our initial financing proceeds, our future obligations to the residual interest owner (because future residual interest claims are limited to contractual securitization collateral cash flows), or the general operations of our business.

(3)Adjusted net revenue is a non-GAAP financial measure. For information regarding our use and definition of this measure and for a reconciliation to the most directly comparable U.S. GAAP measure, total net revenue, see“Non-GAAP Financial Measures” herein.

2024 vs. 2023. Net interest income in our Lending segment increased by $246.5 million, or 26%, for the year ended December 31, 2024 compared to 2023. This was primarily attributable to increases in aggregate average personal and student loan unpaid principal balances of $3.5 billion (29%) and $1.6 billion (29%), respectively, combined with higher weighted average interest rates. The personal and student loan average balance increases were primarily attributable to higher origination volume and longer loan holding periods. Interest expense associated with funding our lending activities increased by $410.0 million, or 44%, primarily due to higher average loan balances.

2023 vs. 2022. Net interest income in our Lending segment increased by $429.3 million, or 81%, for the year ended December 31, 2023 compared to 2022. This was primarily attributable to increases in average personal and student loan unpaid principal balances of $7.0 billion (161%) and $1.7 billion (49%), respectively, combined with a higher weighted average interest rate. The personal loan average balance increase was primarily attributable to higher origination volume and longer loan holding periods. The student loan average balance increase was primarily attributable to longer loan holding periods. Interest expense associated with funding our lending activities increased by $732.1 million, or 356%, primarily due to the sharp increases in benchmark rates which are reflective of the higher interest rate environment year over year, as well as higher average loan balances.

2024 vs. 2023. Noninterest income in our Lending segment decreased by $131.9 million, or 32%, for the year ended December 31, 2024 compared to 2023, which was primarily attributable to lower loan origination, sales, and securitizations income of $115.9 million.

2023 vs. 2022. Noninterest income in our Lending segment decreased by $198.7 million, or 33%, for the year ended December 31, 2023 compared to 2022, which was primarily attributable to lower loan origination, sales, and securitizations income of $193.3 million.

Loan Originations, Sales, and Securitizations

The following table presents the components ofnoninterest income—loan origination, sales, and securitizations:

(1)Includes fair value adjustments on loans originated during the period, fair value adjustments of loans and securitization bond and residual interest positions held at the balance sheet date, as well as gains (losses) on loans sold and consolidated securitization transactions during the period. Fair value adjustments are impacted by interest rates, weighted average coupon, credit spreads and loss estimates, prepayment speeds, duration and previous loan sale execution on similar loans.

(2)Includes gains (losses) on IRLCs and interest rate caps. Also includes losses related to credit derivatives in 2024, as well as gains on purchase price earn-out during 2023 and 2022.

(3)For the years ended December 31, 2024, 2023 and 2022, includes gross write-offs of $730.1 million, $533.3 million and $131.6 million, respectively. Total recoveries were $102.4 million, $78.1 million and $30.4 million, respectively, of which $78.8 million, $53.7 million and $10.5 million, respectively, were captured via loan sales to a third-party collection agency.

(4)Represents the (expense) benefit associated with our estimated loan repurchase obligation. See Note 18. Commitments, Guarantees, Concentrations and Contingencies to the Notes to Consolidated Financial Statements for additional information.

2024 vs. 2023. The decrease in loan origination, sales, and securitizations income of $115.9 million, or 31%, was primarily driven by: (i) higher personal loan as well as student loan write-offs in the 2024 period, primarily driven by higher loan origination volume, longer loan holding periods and elevated charge off rates during 2024 ($170.7 million); (ii) a net decrease of $111.0 million related to the following: lower fair value gains on personal loans, which were primarily impacted by smaller decreases in discount rate assumptions during 2024 ($371.2 million); lower fair value gains on student loans, which were primarily impacted by higher discount rate assumptions ($77.7 million); and gains on student loan, personal loan and risk retention interest rate swap positions during 2024 compared to losses in 2023, primarily driven by larger increases in interest rates in the 2024 period ($337.9 million); and (iii) higher losses of $66.1 million on personal loan sales in the 2024 period, and were due to both price and volume factors, as well as delinquent loan sales in the 2024 period only.

These decreases were partially offset by higher origination fees primarily related to a new product feature offered on personal loans, whereby a borrower may optionally elect to pay origination fees to qualify for a lower annual percentage rate ($242.9 million).

2023 vs. 2022. The decrease in loan origination, sales, and securitizations income was primarily driven by: (i) higher personal loan write-offs in the 2023 period, primarily driven by longer loan holding periods and elevated charge off rates, (ii) losses in 2023 compared to gains in 2022 on student loan, personal loan and risk retention interest rate swap positions primarily driven by smaller increases in interest rates during the 2023 period, and (iii) lower gains on home loan pipeline hedges primarily driven by larger increases in the underlying hedge price index during the 2023 period.

These decreases were partially offset by: (i) higher fair value gains on personal loans and lower fair value losses on student loans in the 2023 period, which were primarily impacted by higher origination volume and lower prepayment assumptions, respectively, (ii) higher origination fees primarily related to a new product feature offered on personal loans, whereby a borrower may optionally elect to pay origination fees to qualify for a lower annual percentage rate, (iii) improvement in securitizations income primarily driven by an increase in securitization loan and residual interests in securitization trusts fair market values primarily associated with consolidated securitization transactions in the first and third quarters of 2023, and a positive variance in our securitization bond and residual interest position fair values, (iv) fair value gains on home loans (compared to losses in the 2022 period), which were primarily impacted by smaller decreases in benchmark rates, and (v) losses on home loan and student loan sale execution in the 2022 period, which were due to both volume and price factors.

Servicing

We own the master servicing on all of the servicing rights that we retain and, in each case, recognize the gross servicing rate applicable to each serviced loan. Sub-servicers are utilized for all serviced student loans and home loans, which represents a cost to SoFi, but these arrangements do not impact our calculation of the weighted average basis points earned for each loan type serviced. Further, there is no impact on servicing income due to forbearance and moratoriums on certain debt collection activities, and there are no waivers of late fees. The table below presents information related to our loan servicing assets:

(1)Increases during the 2024 periods were primarily attributable to higher loan sales.

The directly attributable expenses allocated to the Lending segment that were used in the determination of the segment's contribution profit were as follows:

(1)Other expenses primarily include loan marketing expenses, member promotional expenses, tools and subscriptions, travel and occupancy-related costs, and third-party loan fraud (net of related insurance recoveries).

2024 vs. 2023. Lending segment directly attributable expenses increased by $75.4 million, or 15%, for the year ended December 31, 2024 compared to 2023, primarily due to: (i) an increase in direct advertising primarily related to online and digital advertising, (ii) an increase in personal and student loan lead generation channels, (iii) an increase in allocated compensation and related benefits, which reflected increases in average compensation in 2024, and (iv) a decrease in other expenses, primarily related to third-party loan fraud.

2023 vs. 2022. Lending segment directly attributable expenses increased by $70.1 million, or 16%, for the year ended December 31, 2023 compared to 2022, primarily due to: (i) an increase in personal loan lead generation channels during 2023, (ii) an increase in allocated compensation and related benefits, which reflected increases in average compensation and average headcount in 2023, (ii) an increase in direct advertising primarily related to direct mail advertising, and (iv) an increase in other expenses, primarily related to loan marketing expenses and third-party loan fraud.

We regularly transfer financial assets and account for such transfers as either sales or secured borrowings depending on the facts and circumstances of the transfer. See Note 4. Loans to the Notes to Consolidated Financial Statements for additional information.

The following table summarizes our whole loan sales:

(1)Sale execution represents the ratio of cash proceeds and servicing assets recognized to the aggregate unpaid principal balance and accrued interest of the loans sold. Amounts included in repurchase liabilities are excluded from the calculation, as they typically would not materially differ from the fair value markdown on the loans over the repurchase period had they been held on balance sheet and entered delinquency.

(2)Excludes net origination fees, which are recognized in earnings at the time of origination. Personal loans sold during the year ended December 31, 2024, had related origination fees of $60.5 million. Sales execution including these origination fees would be 108.0%. Personal loans sold during the year ended December 31, 2023, had related origination fees of $4.7 million. Sales execution including these origination fees would be 106.3%.

The following table summarizes our delinquent whole loan sales during the year ended December 31, 2024. There were no delinquent whole loan sales during the years ended December 31, 2023 and 2022.

(1)For the year ended December 31, 2024, includes $302.9 million of aggregate unpaid principal balance sold, related to late-stage delinquent loans for which we retained servicing and portions of recoveries. For the year ended December 31, 2024, $197.4 million of unpaid principal balance was recorded in prior periods as a write down innoninterest income—loan origination, sales, and securitizations in the consolidated statements of operations and comprehensive income (loss). These loans were sold prior to charge-off during the year ended December 31, 2024 and otherwise would have been charged off as of December 31, 2024 consistent with our policy. In our other charged off whole loan sales, we typically do not retain servicing or recoveries.

(2)Sale execution represents the ratio of cash proceeds and servicing assets recognized to the aggregate unpaid principal balance and accrued interest of the loans sold. Amounts included in repurchase liabilities are excluded from the calculation, as they typically would not materially differ from the fair value markdown on the loans over the repurchase period had they been held on balance sheet and entered delinquency.

In addition to the previously disclosed personal, student and home loan sale activity, during the year ended December 31, 2024 we also sold secured loans at par with an aggregate unpaid principal balance and accrued interest of $555.9 million.