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SoFi Technologies, Inc. - Quarter Report: 2023 June (Form 10-Q)


UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM 10-Q
(Mark One)
QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934
For the quarterly period ended June 30, 2023
or
TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934
For the transition period from     to
Commission file number 001-39606
SoFi_horz_RGB_Turquoise_CircleR_Upward-v2.jpg
SoFi Technologies, Inc.
(Exact name of registrant as specified in its charter)
Delaware
98-1547291
(State or other jurisdiction of incorporation or organization)
(I.R.S. Employer Identification No.)
234 1st Street
San Francisco, California
94105
(Address of principal executive offices)(Zip Code)
(855) 456-7634
(Registrant’s telephone number, including area code)
Securities registered pursuant to Section 12(b) of the Act:
Title of each classTrading Symbol(s)Name of each exchange on which registered
Common stock, $0.0001 par value per shareSOFIThe Nasdaq Global Select Market
Indicate by check mark whether the registrant (1) has filed all reports required to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during the preceding 12 months (or for such shorter period that the registrant was required to file such reports), and (2) has been subject to such filing requirements for the past 90 days.    Yes  ☒    No   ☐ 
Indicate by check mark whether the registrant has submitted electronically every Interactive Data File required to be submitted and posted pursuant to Rule 405 of Regulation S-T (§232.405 of this chapter) during the preceding 12 months (or for such shorter period that the registrant was required to submit such files).     Yes  ☒   No  ☐
Indicate by check mark whether the registrant is a large accelerated filer, an accelerated filer, a non-accelerated filer, a smaller reporting company, or an emerging growth company. See the definitions of “large accelerated filer,” “accelerated filer,” “smaller reporting company,” and “emerging growth company” in Rule 12b-2 of the Exchange Act.
Large accelerated filer
Accelerated filer
Non-accelerated filer  
Smaller reporting company
Emerging growth company
If an emerging growth company, indicate by check mark if the registrant has elected not to use the extended transition period for complying with any new or revised financial accounting standards provided pursuant to Section 13(a) of the Exchange Act. ☐ 
Indicate by check mark whether the registrant is a shell company (as defined in Rule 12b-2 of the Exchange Act).     Yes   ☐     No  ☒
The number of shares of the registrant’s common stock, par value $0.0001 per share, outstanding as of July 31, 2023 was 950,114,369 shares.



SOFI TECHNOLOGIES, INC.
TABLE OF CONTENTS
Page
PART I – FINANCIAL INFORMATION
Item 1.
Item 2.
Item 3.
Item 4.
PART II – OTHER INFORMATION
Item 1.
Item 1A.
Item 2.
Item 3.
Item 4.
Item 5.
Item 6.

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SoFi Technologies, Inc.
As used in this Quarterly Report on Form 10-Q, unless the context requires otherwise, references to “SoFi”, the “Company”, “we”, “us”, and “our”, and similar references refer to SoFi Technologies, Inc. and its wholly-owned subsidiaries following the Business Combination (as defined herein) and to Social Finance, Inc. prior to the Business Combination.
Social Finance, Inc. (“Social Finance”) entered into a merger agreement (the “Agreement”) with Social Capital Hedosophia Holdings Corp. V (“SCH”) on January 7, 2021. The transactions contemplated by the terms of the Agreement were completed on May 28, 2021 (the “Closing”), in conjunction with which SCH changed its name to SoFi Technologies, Inc. (hereafter referred to, collectively with its subsidiaries, as “SoFi”, the “Company”, “we”, “us” or “our”, unless the context otherwise requires). The transactions contemplated in the Agreement are collectively referred to as the “Business Combination”.
In March 2021, we entered into an agreement to acquire Golden Pacific Bancorp, Inc. (“Golden Pacific”), a bank holding company, and its wholly-owned subsidiary, Golden Pacific Bank, National Association, a national bank (the “Bank Merger”). The Bank Merger closed in February 2022, after which we became a bank holding company and renamed Golden Pacific Bank as SoFi Bank, National Association (“SoFi Bank”).
In February 2022, we entered into an agreement to acquire Technisys S.A. (“Technisys”), a Luxembourg société anonyme and a cloud-native digital multi-product core banking platform (the “Technisys Merger”). The Technisys Merger closed in March 2022.
In April 2023, we acquired Wyndham Capital Mortgage (“Wyndham”), a leading fintech mortgage lender.
See Note 2. Business Combinations to the Notes to Condensed Consolidated Financial Statements within Part I, Item 1. for additional information on our business combinations.
CAUTIONARY STATEMENT REGARDING FORWARD-LOOKING STATEMENTS
This Quarterly Report on Form 10-Q contains statements that are forward-looking and as such are not historical facts. This includes, without limitation, statements regarding the financial position, business strategy and the plans and objectives of management for our future operations; anticipated trends and prospects in the industries in which our business operates; new products, services and related strategies; anticipated actions by governmental authorities; and macroeconomic conditions. These statements constitute projections, forecasts and forward-looking statements, and are not guarantees of performance. Such statements can be identified by the fact that they do not relate strictly to historical or current facts. When used in this Quarterly Report on Form 10-Q, words such as “aim”, “allow”, “anticipate”, “believe”, “can”, “continue”, “could”, “estimate”, “expect”, “if”, “intend”, “likely”, “may”, “might”, “opportunity”, “plan”, “possible”, “potential”, “predict”, “project”, “should”, “strive”, “will”, “would” and similar expressions may identify forward-looking statements, but the absence of these words does not mean that a statement is not forward-looking.
Forward-looking statements are subject to risks, uncertainties, and other factors described in Part II, Item 1A. “Risk Factors” and elsewhere in this Quarterly Report on Form 10-Q and our other filings with the Securities and Exchange Commission (“SEC”) and include, among other things:
our ability to achieve and maintain profitability in the future;
the impact on our business of the regulatory environment and complexities with compliance;
the effect and impact of evolving laws, rules, regulations and government enforcement policies, including any federal or state loan forgiveness programs;
the impact of adverse developments affecting the U.S. or global banking industry, including bank failures and liquidity concerns, which could cause economic and market volatility, and regulatory responses thereto;
our ability to manage our growth effectively and our expectations regarding the development and expansion of our business;
our ability to continue to originate and sell loans to third parties, and the impact of the performance of loans held on our balance sheet;
our ability to access sources of capital on favorable terms, if at all, including debt financing, deposits and other sources of capital to finance operations and growth;
the impact of and our ability to respond to general economic conditions and other macroeconomic and geopolitical factors, such as elevated and fluctuating interest rates, inflationary pressures, counterparty risk, changing customer demand, capital markets volatility, instability in the financial services industry, the possibility of a recession, and domestic or international conflicts or disputes;

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the success of our marketing efforts and our ability to expand our member base;
our ability to grow market share in existing markets or any new markets we may enter;
our ability to develop new products, features and functionality that are competitive and meet market needs;
our ability to diversify our business and broaden our suite of financial services offerings;
our ability to realize the benefits of our strategy, including what we refer to as our Financial Services Productivity Loop, and achieve scale in our Financial Services segment;
our ability to successfully operate as a bank holding company, and to operate SoFi Bank;
our ability to make accurate credit and pricing decisions or effectively forecast our loss rates;
our ability to establish and maintain an effective system of internal controls over financial reporting;
our ability to maintain the listing of our securities on The Nasdaq Global Select Market (“Nasdaq”);
our ability to realize the anticipated benefits of the Bank Merger, the Technisys Merger, our acquisition of Wyndham, and any other acquisitions we undertake, including our expectations with regards to such acquisitions;
our ability to successfully expand our operations into foreign jurisdictions, including compliance with a variety of foreign laws; and
the outcome of any legal or governmental proceedings that may be instituted against us.
Forward-looking statements are based on information available as of the date of this Quarterly Report on Form 10-Q and reflect current expectations, forecasts and assumptions, and involve a number of judgments, risks and uncertainties. New risks and uncertainties emerge from time to time, and it is not possible for us to predict all risks and uncertainties that could have an impact on the forward-looking statements contained in this Quarterly Report on Form 10-Q. The results, events, and circumstances reflected in the forward-looking statements may not be achieved or occur, and actual results, events, or circumstances could differ materially from those described in the forward-looking statements. Accordingly, forward-looking statements should not be relied upon as representing our views as of any subsequent date, and we do not undertake any obligation to update forward-looking statements to reflect events or circumstances after the date they were made, whether as a result of new information, future events or otherwise, except as may be required under applicable securities laws.
TRADEMARKS
This document contains references to trademarks, service marks and trade names owned by us or belonging to other entities. Solely for convenience, trademarks, service marks and trade names referred to in this document may appear without the ® or ™ symbols, but such references are not intended to indicate, in any way, that we or the applicable licensor will not assert, to the fullest extent under applicable law, our or its rights to these trademarks, service marks and trade names. SoFi Technologies does not intend its use or display of other companies’ trademarks, service marks or trade names to imply a relationship with, or endorsement or sponsorship of it by, any other companies. All trademarks, service marks and trade names included in this document are the property of their respective owners.

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PART I – FINANCIAL INFORMATION
Item 1. Financial Statements
SoFi Technologies, Inc.
Condensed Consolidated Balance Sheets
(Unaudited)
(In Thousands, Except for Share Data)
June 30,
2023
December 31,
2022
Assets
Cash and cash equivalents$3,015,652 $1,421,907 
Restricted cash and restricted cash equivalents485,476 424,395 
Investment securities (includes available-for-sale securities of $382,782 and $195,438 at fair value with associated amortized cost of $387,815 and $203,418, as of June 30, 2023 and December 31, 2022, respectively)
548,232 396,769 
Loans held for sale, at fair value18,213,667 13,557,074 
Loans held for investment (less allowance for credit losses on loans at amortized cost of $41,227 and $40,788, as of June 30, 2023 and December 31, 2022, respectively)
347,551 307,957 
Servicing rights145,663 149,854 
Property, equipment and software191,352 170,104 
Goodwill1,640,679 1,622,991 
Intangible assets412,099 442,155 
Operating lease right-of-use assets94,523 97,135 
Other assets (less allowance for credit losses of $1,937 and $2,785, as of June 30, 2023 and December 31, 2022, respectively)
466,555 417,334 
Total assets$25,561,449 $19,007,675 
Liabilities, temporary equity and permanent equity
Liabilities:
Deposits:
Interest-bearing deposits$12,672,392 $7,265,792 
Noninterest-bearing deposits67,681 76,504 
Total deposits12,740,073 7,342,296 
Accounts payable, accruals and other liabilities
632,459 516,215 
Operating lease liabilities
115,224 117,758 
Debt 6,484,326 5,485,882 
Residual interests classified as debt 11,332 17,048 
Total liabilities19,983,414 13,479,199 
Commitments, guarantees, concentrations and contingencies (Note 15)
Temporary equity(1):
Redeemable preferred stock, $0.00 par value: 100,000,000 and 100,000,000 shares authorized; 3,234,000 and 3,234,000 shares issued and outstanding, as of June 30, 2023 and December 31, 2022, respectively
320,374 320,374 
Permanent equity:
Common stock, $0.00 par value: 3,100,000,000 and 3,100,000,000 shares authorized; 948,912,761 and 933,896,120 shares issued and outstanding, as of June 30, 2023 and December 31, 2022, respectively(2)
94 93 
Additional paid-in capital6,848,178 6,719,826 
Accumulated other comprehensive loss(5,119)(8,296)
Accumulated deficit(1,585,492)(1,503,521)
Total permanent equity5,257,661 5,208,102 
Total liabilities, temporary equity and permanent equity$25,561,449 $19,007,675 
______________
(1)Redemption amount is $323,400 as of June 30, 2023 and December 31, 2022.
(2)Includes 100,000,000 non-voting common shares authorized and no non-voting common shares issued and outstanding as of June 30, 2023 and December 31, 2022. See Note 10. Equity for additional information.


The accompanying notes are an integral part of these condensed consolidated financial statements.
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SoFi Technologies, Inc.
Condensed Consolidated Balance Sheets (Continued)
(Unaudited)
(In Thousands, Except for Share Data)
The following table presents the assets and liabilities of consolidated variable interest entities (“VIEs”) which are included in our condensed consolidated balance sheets. The assets in the below table may only be used to settle obligations of consolidated VIEs and are in excess of those obligations as of the dates presented. Additionally, the assets and liabilities in the table below exclude intercompany balances, which eliminate upon consolidation.
June 30,
2023
December 31,
2022
Assets
Restricted cash and restricted cash equivalents$75,932 $68,151 
Loans held for sale, at fair value1,065,741 931,701 
Total assets
$1,141,673 $999,852 
Liabilities
Accounts payable, accruals and other liabilities$1,111 $3,053 
Debt 803,285 771,454 
Residual interests classified as debt 11,332 17,048 
Total liabilities
$815,728 $791,555 





The accompanying notes are an integral part of these condensed consolidated financial statements.
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SoFi Technologies, Inc.
Condensed Consolidated Statements of Operations and Comprehensive Loss
(Unaudited)
(In Thousands, Except for Share and Per Share Data)
Three Months Ended June 30,Six Months Ended June 30,
2023202220232022
Interest income
Loans
$442,187 $145,337 $799,529 $259,722 
Securitizations
2,659 2,567 5,713 5,325 
Other
25,150 1,608 36,318 2,877 
Total interest income469,996 149,512 841,560 267,924 
Interest expense
Securitizations and warehouses
63,060 18,599 117,384 38,505 
Deposits106,529 4,543 179,645 4,974 
Corporate borrowings9,167 3,450 17,167 6,099 
Other
114 191 228 684 
Total interest expense178,870 26,783 314,424 50,262 
Net interest income291,126 122,729 527,136 217,662 
Noninterest income
Loan origination and sales
103,064 144,414 229,575 302,118 
Securitizations
(12,900)(11,737)(16,077)(23,018)
Servicing
9,052 10,471 21,794 22,707 
Technology products and solutions
82,289 81,670 155,090 141,527 
Other
25,387 14,980 52,658 31,875 
Total noninterest income206,892 239,798 443,040 475,209 
Total net revenue498,018 362,527 970,176 692,871 
Noninterest expense
Technology and product development
126,845 99,366 243,904 181,274 
Sales and marketing
182,822 143,854 357,976 281,992 
Cost of operations
93,885 79,091 177,793 149,528 
General and administrative
131,180 125,829 254,869 262,334 
Provision for credit losses12,615 10,103 21,022 23,064 
Total noninterest expense547,347 458,243 1,055,564 898,192 
Loss before income taxes(49,329)(95,716)(85,388)(205,321)
Income tax benefit (expense)
1,780 (119)3,417 (871)
Net loss$(47,549)$(95,835)$(81,971)$(206,192)
Other comprehensive income (loss)
Unrealized gains (losses) on available-for-sale securities, net830 (1,991)3,078 (6,446)
Foreign currency translation adjustments, net392 (56)99 (94)
Total other comprehensive income (loss)1,222 (2,047)3,177 (6,540)
Comprehensive loss$(46,327)$(97,882)$(78,794)$(212,732)
Loss per share (Note 16)
Loss per share – basic$(0.06)$(0.12)$(0.11)$(0.26)
Loss per share – diluted$(0.06)$(0.12)$(0.11)$(0.26)
Weighted average common stock outstanding – basic936,569,420 910,046,750 932,926,222 881,608,165 
Weighted average common stock outstanding – diluted936,569,420 910,046,750 932,926,222 881,608,165 


The accompanying notes are an integral part of these condensed consolidated financial statements.
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SoFi Technologies, Inc.
Condensed Consolidated Statements of Changes in Temporary Equity and Permanent Equity
(Unaudited)
(In Thousands, Except for Share Data)

Common Stock
Additional Paid-In CapitalAccumulated Other Comprehensive LossAccumulated DeficitPermanent EquityTemporary Equity
Shares
Amount
SharesAmount
Balance at March 31, 2023940,338,835 $94 $6,778,262 $(6,341)$(1,537,943)$5,234,072 3,234,000 $320,374 
Share-based compensation expense— — 84,208 — — 84,208 — — 
Vesting of RSUs8,962,137 — — — — — — — 
Stock withheld related to taxes on vested RSUs(470,998)— (4,630)— — (4,630)— — 
Exercise of common stock options91,080 — 417 — — 417 — — 
Common stock retired(8,293)— — — — — — — 
Redeemable preferred stock dividends— — (10,079)— — (10,079)— — 
Net loss— — — — (47,549)(47,549)— — 
Other comprehensive income, net of taxes— — — 1,222 — 1,222 — — 
Balance at June 30, 2023948,912,761 $94 $6,848,178 $(5,119)$(1,585,492)$5,257,661 3,234,000 $320,374 
Common StockAdditional Paid-In CapitalAccumulated Other Comprehensive LossAccumulated DeficitPermanent EquityTemporary Equity
SharesAmountSharesAmount
Balance at January 1, 2023933,896,120 $93 $6,719,826 $(8,296)$(1,503,521)$5,208,102 3,234,000 $320,374 
Share-based compensation expense— — 154,861 — — 154,861 — — 
Vesting of RSUs15,699,311 (1)— — — — — 
Stock withheld related to taxes on vested RSUs(926,688)— (7,046)— — (7,046)— — 
Exercise of common stock options252,311 — 585 — — 585 — — 
Common stock retired(8,293)— — — — — — — 
Redeemable preferred stock dividends— — (20,047)— — (20,047)— — 
Net loss— — — — (81,971)(81,971)— — 
Other comprehensive income, net of taxes— — — 3,177 — 3,177 — — 
Balance at June 30, 2023948,912,761 $94 $6,848,178 $(5,119)$(1,585,492)$5,257,661 3,234,000 $320,374 


The accompanying notes are an integral part of these condensed consolidated financial statements.
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SoFi Technologies, Inc.
Condensed Consolidated Statements of Changes in Temporary Equity and Permanent Equity (Continued)
(Unaudited)
(In Thousands, Except for Share Data)
Common Stock
Additional Paid-In CapitalAccumulated Other Comprehensive LossAccumulated DeficitPermanent EquityTemporary Equity
Shares
Amount
SharesAmount
Balance at March 31, 2022915,673,855 $91 $6,509,643 $(5,964)$(1,293,471)$5,210,299 3,234,000 $320,374 
Share-based compensation expense
— — 85,902 — — 85,902 — — 
Vesting of RSUs
6,360,894 (1)— — — — — 
Stock withheld related to taxes on vested RSUs
(318,764)— (2,253)— — (2,253)— — 
Exercise of common stock options
387,115 — 193 — — 193 — — 
Redeemable preferred stock dividends
— — (10,079)— — (10,079)— — 
Net loss— — — — (95,835)(95,835)— — 
Other comprehensive loss, net of taxes— — — (2,047)— (2,047)— — 
Balance at June 30, 2022922,103,100 $92 $6,583,405 $(8,011)$(1,389,306)$5,186,180 3,234,000 $320,374 
Common StockAdditional Paid-In CapitalAccumulated Other Comprehensive LossAccumulated DeficitPermanent EquityTemporary Equity
SharesAmountSharesAmount
Balance at January 1, 2022828,154,462 $83 $5,561,831 $(1,471)$(1,183,114)$4,377,329 3,234,000 $320,374 
Share-based compensation expense— — 167,519 — — 167,519 — — 
Vesting of RSUs11,312,098 (1)— — — — — 
Stock withheld related to taxes on vested RSUs(662,462)— (5,846)— — (5,846)— — 
Exercise of common stock options1,442,890 — 2,060 — — 2,060 — — 
Issuance of common stock in acquisition81,856,112 875,034 — — 875,042 — — 
Vested awards assumed in acquisition— — 2,855 — — 2,855 — — 
Redeemable preferred stock dividends— — (20,047)— — (20,047)— — 
Net loss— — — — (206,192)(206,192)— — 
Other comprehensive loss, net of taxes— — — (6,540)— (6,540)— — 
Balance at June 30, 2022922,103,100 $92 $6,583,405 $(8,011)$(1,389,306)$5,186,180 3,234,000 $320,374 









The accompanying notes are an integral part of these condensed consolidated financial statements.
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SoFi Technologies, Inc.
Condensed Consolidated Statements of Cash Flows
(Unaudited)
(In Thousands)
Six Months Ended June 30,
20232022
Operating activities
Net loss$(81,971)$(206,192)
Adjustments to reconcile net loss to net cash used in operating activities:
Share-based compensation expense140,104 157,163 
Depreciation and amortization95,451 68,754 
Deferred debt issuance and discount expense10,559 8,118 
Provision for credit losses21,022 23,064 
Deferred income taxes(5,446)(2,319)
Fair value changes in residual interests classified as debt(513)5,625 
Fair value changes in securitization investments1,537 9,981 
Other(3,236)6,865 
Changes in operating assets and liabilities:
Changes in loans held for sale, net(4,535,374)(2,006,410)
Servicing assets3,201 (8,705)
Other assets40,974 (49,569)
Accounts payable, accruals and other liabilities21,013 36,902 
Net cash used in operating activities$(4,292,679)$(1,956,723)
Investing activities
Purchases of property, equipment and software$(49,071)$(47,017)
Capitalized software development costs(5,060)(3,011)
Purchases of available-for-sale investments(452,340)(44,974)
Proceeds from sales of available-for-sale investments265,634 23,497 
Proceeds from maturities and paydowns of available-for-sale investments52,337 13,906 
Changes in loans held for investment, net(62,043)(81,850)
Proceeds from securitization investments29,020 75,991 
Proceeds from non-securitization investments2,720 — 
Purchases of non-securitization investments(16,722)— 
Acquisition of businesses, net of cash acquired(72,301)58,540 
Net cash used in investing activities
$(307,826)$(4,918)
The accompanying notes are an integral part of these condensed consolidated financial statements.
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SoFi Technologies, Inc.
Condensed Consolidated Statements of Cash Flows (Continued)
(Unaudited)
(In Thousands)
Six Months Ended June 30,
20232022
Financing activities
Net change in deposits$5,392,521 $2,496,253 
Net change in debt facilities964,898 (75,452)
Proceeds from other debt issuances339,995 — 
Repayment of other debt(407,715)(200,520)
Payment of debt issuance costs(7,707)(3,976)
Taxes paid related to net share settlement of share-based awards(7,046)(5,846)
Proceeds from stock option exercises585 2,060 
Payment of redeemable preferred stock dividends(20,047)(20,047)
Finance lease principal payments(252)(241)
Net cash provided by financing activities$6,255,232 $2,192,231 
Effect of exchange rates on cash and cash equivalents
99 (94)
Net increase in cash, cash equivalents, restricted cash and restricted cash equivalents$1,654,826 $230,496 
Cash, cash equivalents, restricted cash and restricted cash equivalents at beginning of period
1,846,302 768,437 
Cash, cash equivalents, restricted cash and restricted cash equivalents at end of period
$3,501,128 $998,933 
Reconciliation to amounts on condensed consolidated balance sheets (as of period end)
Cash and cash equivalents
$3,015,652 $707,302 
Restricted cash and restricted cash equivalents
485,476 291,631 
Total cash, cash equivalents, restricted cash and restricted cash equivalents
$3,501,128 $998,933 
Supplemental non-cash investing and financing activities
Available-for-sale securities purchased but unpaid$47,553 $— 
Derecognition of securitization investments5,325 — 
Loans held for investment received in acquisition— 84,485 
Available-for-sale securities received in acquisition— 10,014 
Deconsolidation of securitization and residual debt92,914 — 
Deposits credited but not yet received in cash53,353 57,995 
Share-based compensation capitalized related to internally-developed software14,757 10,356 
Deposits assumed in acquisition— 158,016 


The accompanying notes are an integral part of these condensed consolidated financial statements.
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SoFi Technologies, Inc.
Notes to Condensed Consolidated Financial Statements
(Unaudited)
(In Thousands, Unless Otherwise Stated and Except for Share and Per Share Data)

Note 1. Organization, Summary of Significant Accounting Policies and New Accounting Standards
Organization
SoFi is a financial services platform that was founded in 2011 to offer an innovative approach to the private student loan market by providing student loan refinancing options. The Company conducts its business through three reportable segments: Lending, Technology Platform and Financial Services. Since its founding, SoFi has expanded its lending and financial services strategy to offer personal loans, home loans and credit cards. The Company also developed additional financial products, such as money management and investment product offerings, and has also leveraged its financial services platform to empower other businesses. The Company has continued to expand its product offerings through strategic acquisitions. During 2020, the Company expanded its investment product offerings into Hong Kong through the acquisition of 8 Limited, and also began to operate as a platform-as-a-service for a variety of financial service providers, providing the infrastructure to facilitate core client-facing and back-end capabilities, such as account setup, account funding, direct deposit, authorizations and processing, payments functionality and check account balance features through the acquisition of Galileo. During 2022, the Company became a bank holding company and began operating SoFi Bank, National Association, through the Bank Merger, and expanded its platform to include a cloud-native digital and core banking platform with customers in Latin America through the Technisys Merger, allowing the Company to expand its technology platform services to a broader international market. For additional information on our recent business combinations, see Note 2. Business Combinations. For additional information on our reportable segments, see Note 17. Business Segment Information.
Summary of Significant Accounting Policies
Basis of Presentation
The condensed consolidated financial statements include the accounts of the Company, its wholly-owned and majority-owned subsidiaries and certain consolidated VIEs. All intercompany accounts are eliminated in consolidation. The condensed consolidated financial statements are prepared in conformity with accounting principles generally accepted in the United States (“GAAP”) and in accordance with the rules and regulations of the SEC. We condensed or omitted certain notes and other financial information from the interim financial statements presented herein.
These condensed consolidated financial statements should be read in conjunction with the consolidated statements included in our annual filing on Form 10-K filed with the SEC on March 1, 2023 (“Form 10-K”). In the opinion of management, the condensed consolidated financial statements reflect all adjustments, which are of a normal recurring nature, necessary for a fair statement of the Company’s financial condition and results of operations and cash flows for the interim periods presented. The results for the three and six months ended June 30, 2023 are not necessarily indicative of the results to be expected for the full year ending December 31, 2023.
Use of Judgments, Assumptions and Estimates
The preparation of our condensed consolidated financial statements and related disclosures in conformity with GAAP requires management to make assumptions and estimates that affect the reported amounts of assets, liabilities, revenue, expenses, and the disclosures of contingent assets and liabilities. These estimates and assumptions are inherently subjective in nature and, therefore, actual results may differ from our estimates and assumptions, and the differences could be material. Management bases its estimates on historical experience and on various other factors it believes to be reasonable under the circumstances. These assumptions and estimates include, but are not limited to, the following: (i) fair value measurements; (ii) business combinations; and (iii) goodwill.
Restructuring
During the six months ended June 30, 2023, we recognized restructuring charges of $4,953 within noninterest expense in the condensed consolidated statements of operations and comprehensive income (loss) associated with a small reduction in headcount in the Technology Platform segment in the first quarter of 2023, which primarily included employee-related wages, benefits and severance.
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Notes to Condensed Consolidated Financial Statements (Continued)
(Unaudited)
(In Thousands, Unless Otherwise Stated and Except for Share and Per Share Data)
Recently Adopted Accounting Standards
Troubled Debt Restructurings and Vintage Disclosures
In March 2022, the FASB issued Accounting Standards Update (“ASU”) 2022-02, Financial Instruments — Credit Losses (Topic 326): Troubled Debt Restructurings and Vintage Disclosures. The ASU addresses two topics: (i) troubled debt restructuring (“TDR”) by creditors, and (ii) vintage disclosures for gross write offs. Under the TDR provisions, the ASU eliminates the recognition and measurement guidance under ASC 310-40, Receivables — Troubled Debt Restructurings by Creditors, and instead requires that an entity evaluate whether the modification represents a new loan or a continuation of an existing loan, consistent with the accounting for other loan modifications. Additionally, the ASU enhances existing disclosure requirements around TDRs and introduces new requirements related to certain modifications of receivables made to borrowers experiencing financial difficulty. Under the vintage disclosure provisions, the ASU requires the entity to disclose current period gross write offs by year of origination for financing receivables and net investments in leases within the scope of ASC 326-20, Financial Instruments — Credit Losses — Measured at Amortized Cost. The standard should be applied prospectively; however, for the TDR provisions, an entity has the option to apply a modified retrospective transition method. We adopted the standard effective January 1, 2023. The adoption of this standard did not have a material impact on our consolidated financial statements.
Note 2. Business Combinations
Acquisition of Wyndham Capital Mortgage
On April 3, 2023, we acquired all of the outstanding equity interests in Wyndham for cash consideration. With the acquisition of Wyndham, a leading fintech mortgage lender, we broadened our suite of home loan products and now manage the technology for a digitized mortgage experience. The acquisition is being accounted for as a business combination. The purchase consideration is being allocated to the tangible and intangible assets acquired and liabilities assumed based on the estimated fair values as of the acquisition date. The excess of the total purchase consideration over the fair value of the net assets acquired is allocated to goodwill, which is expected to be deductible for tax purposes. The fair value estimates are subject to change for up to one year after the acquisition date as additional information becomes available. The acquisition was not determined to be a significant acquisition.
Acquisition of Technisys S.A.
During the six months ended June 30, 2023, we made payments of $17,946 related to settlements of vested employee performance awards, which was a component of the purchase consideration in the Technisys Merger. There were 6,305,595 shares issued in the acquisition that were held in escrow. During the second quarter of 2023, we released 6,244,450 of the escrow shares. The remaining 61,145 shares continue to be held in escrow pending resolution of outstanding indemnification claims by SoFi.
Acquisition of Golden Pacific Bancorp, Inc.
As of June 30, 2023, a portion of the total cash purchase consideration ($3.3 million) related to our acquisition of Golden Pacific remained held back, representing an amount payable to a dissenting Golden Pacific shareholder pending resolution of the shareholder’s dissenter’s rights appraisal claim, which could possibly result in a lower or higher amount paid to the dissenting shareholder once a ruling is made regarding the appraisal claim.
Goodwill and Intangible Assets
As of June 30, 2023 and December 31, 2022, goodwill was $1,640,679 and $1,622,991, respectively. As of June 30, 2023, goodwill attributable to the Lending, Technology Platform and Financial Services reportable segments was $17,688, $1,585,832 and $37,159, respectively. Management does not believe that the goodwill in any of the reporting units is impaired as of June 30, 2023.

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Notes to Condensed Consolidated Financial Statements (Continued)
(Unaudited)
(In Thousands, Unless Otherwise Stated and Except for Share and Per Share Data)
Note 3. Revenue
In each of our revenue arrangements, revenue is recognized when control of the promised goods or services is transferred to the customer in an amount that reflects our expected consideration in exchange for those goods or services. Our arrangements are discussed in our Annual Report on Form 10-K, with notable updates provided herein.
Disaggregated Revenue
The table below presents revenue from contracts with customers disaggregated by type of service, which best depicts how the revenue and cash flows are affected by economic factors, and by the reportable segment to which each revenue stream relates, as well as a reconciliation of total revenue from contracts with customers to total noninterest income. Revenue from contracts with customers is presented within noninterest income—technology products and solutions and noninterest income—other in the condensed consolidated statements of operations and comprehensive income (loss). There were no revenues from contracts with customers attributable to our Lending segment for the periods presented.
Three Months Ended June 30,Six Months Ended June 30,
2023202220232022
Financial Services
Referrals
$8,223 $8,805 $17,849 $16,573 
Interchange
8,663 3,007 15,932 7,293 
Brokerage
5,225 4,156 10,103 8,886 
Other(1)
348 225 835 428 
Total financial services
22,459 16,193 44,719 33,180 
Technology Platform(2)
Technology services
80,328 81,111 152,457 140,268 
Software licenses1,961 558 2,633 1,258 
Other(1)
(55)558 366 736 
Total technology platform
82,234 82,227 155,456 142,262 
Total revenue from contracts with customers
104,693 98,420 200,175 175,442 
Other Sources of Revenue
Loan origination and sales103,064 144,414 229,575 302,118 
Securitizations(12,900)(11,737)(16,077)(23,018)
Servicing9,052 10,471 21,794 22,707 
Other2,983 (1,770)7,573 (2,040)
Total other sources of revenue
102,199 141,378 242,865 299,767 
Total noninterest income$206,892 $239,798 $443,040 $475,209 
_____________________
(1) In Financial Services, includes revenues from enterprise services. In Technology Platform, includes payment network fees for serving as a transaction card program manager for enterprise customers that are the program marketers for separate card programs.
(2) Related to these technology products and solutions arrangements, we had deferred revenues of $6,823 and $10,028 as of June 30, 2023 and December 31, 2022, respectively, which are presented within accounts payable, accruals and other liabilities in the condensed consolidated balance sheets. We recognized revenue of $2,444 and $1,989 during the three months ended June 30, 2023 and 2022, respectively, and $4,784 and $2,774 during the six months ended June 30, 2023 and 2022, respectively, associated with deferred revenues within noninterest income—technology products and solutions in the condensed consolidated statements of operations and comprehensive income (loss).
Contract Balances
As of June 30, 2023 and December 31, 2022, accounts receivable, net associated with revenue from contracts with customers was $59,056 and $61,226, respectively, which were reported within other assets in the condensed consolidated balance sheets.
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Notes to Condensed Consolidated Financial Statements (Continued)
(Unaudited)
(In Thousands, Unless Otherwise Stated and Except for Share and Per Share Data)
Note 4. Loans
As of June 30, 2023, our loan portfolio consisted of loans held for sale, including personal loans, student loans and home loans, which are measured at fair value under the fair value option, and loans held for investment, including credit cards, and commercial and consumer banking loans, which are measured at amortized cost. Below is a disaggregated presentation of our loans, inclusive of fair market value adjustments and accrued interest income and net of the allowance for credit losses, as applicable:
June 30,
2023
December 31,
2022
Loans held for sale
Personal loans(1)
$12,751,163 $8,610,434 
Student loans(2)
5,383,921 4,877,177 
Home loans
78,583 69,463 
Total loans held for sale, at fair value18,213,667 13,557,074 
Loans held for investment(3)
Credit card(4)
238,285 209,164 
Commercial and consumer banking:
Commercial real estate99,945 88,652 
Commercial and industrial6,016 7,179 
Residential real estate and other consumer3,305 2,962 
Total commercial and consumer banking109,266 98,793 
Total loans held for investment, at amortized cost347,551 307,957 
Total loans
$18,561,218 $13,865,031 
_____________________
(1) Includes $780,120 and $663,004 of personal loans in consolidated VIEs as of June 30, 2023 and December 31, 2022, respectively.
(2) Includes $285,621 and $268,697 of student loans in consolidated VIEs as of June 30, 2023 and December 31, 2022, respectively.
(3) See Note 5. Allowance for Credit Losses for additional information on our loans at amortized cost as it pertains to the allowance for credit losses.
(4) For credit cards, loan origination costs are expensed as incurred primarily within noninterest expense—sales and marketing in the condensed consolidated statements of operations and comprehensive income (loss).

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Notes to Condensed Consolidated Financial Statements (Continued)
(Unaudited)
(In Thousands, Unless Otherwise Stated and Except for Share and Per Share Data)
Loans Held for Sale
The following table summarizes the aggregate fair value of our loans held for sale, for which we elected the fair value option. See Note 12. Fair Value Measurements for the assumptions used in our fair value model.
Personal Loans
Student Loans
Home Loans
Total
June 30, 2023
Unpaid principal
$12,171,935 $5,262,975 $87,928 $17,522,838 
Accumulated interest
82,868 21,164 150 104,182 
Cumulative fair value adjustments(1)
496,360 99,782 (9,495)586,647 
Total fair value of loans(2)
$12,751,163 $5,383,921 $78,583 $18,213,667 
December 31, 2022
Unpaid principal
$8,283,400 $4,794,517 $77,705 $13,155,622 
Accumulated interest
55,673 19,433 151 75,257 
Cumulative fair value adjustments(1)
271,361 63,227 (8,393)326,195 
Total fair value of loans(2)
$8,610,434 $4,877,177 $69,463 $13,557,074 
__________________
(1) During the six months ended June 30, 2023, the cumulative fair value adjustments for personal loans were primarily impacted by higher origination volume and higher coupon rates, partially offset by higher benchmark rates, which resulted in higher fair value marks. The cumulative fair value adjustments for student loans were primarily impacted by a lower prepayment rate assumption and higher coupon rates, partially offset by higher benchmark rates, which resulted in higher fair value marks.
(2) Each component of the fair value of loans is impacted by charge-offs during the period. Our fair value assumption for annual default rate incorporates fair value markdowns on loans beginning when they are 10 days or more delinquent, with additional markdowns at 30, 60 and 90 days past due.
The following table summarizes the aggregate fair value of loans 90 days or more delinquent. As delinquent personal loans and student loans are charged off after 120 days of delinquency, amounts presented below represent the fair value of loans that are 90 to 120 days delinquent.
Personal Loans
Student Loans
Home Loans
Total
June 30, 2023
Unpaid principal balance
$49,097 $6,579 $213 $55,889 
Accumulated interest
2,299 328 — 2,627 
Cumulative fair value adjustments(1)
(44,552)(3,926)(140)(48,618)
Fair value of loans 90 days or more delinquent$6,844 $2,981 $73 $9,898 
December 31, 2022
Unpaid principal balance$27,989 $6,435 $— $34,424 
Accumulated interest1,207 304 — 1,511 
Cumulative fair value adjustments(1)
(25,022)(3,332)— (28,354)
Fair value of loans 90 days or more delinquent$4,174 $3,407 $— $7,581 
__________________
(1) Our fair value assumption for annual default rate incorporates fair value markdowns on loans beginning when they are 10 days or more delinquent, with additional markdowns at 30, 60 and 90 days past due.
Transfers of Financial Assets
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. When a transfer of financial assets qualifies as a sale, in many instances we have continuing involvement as the servicer of those financial assets. As we expect the benefits of servicing to be more than just adequate, we recognize a servicing asset. Further, in the case of securitization-related transfers that qualify as sales, we have additional continuing involvement as an investor, albeit at insignificant levels relative to the expected gains and losses of the securitization. In instances where a transfer is accounted for as a secured borrowing, we perform servicing (but we do not recognize a servicing asset) and typically maintain a significant investment relative to the expected gains and losses of the
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Notes to Condensed Consolidated Financial Statements (Continued)
(Unaudited)
(In Thousands, Unless Otherwise Stated and Except for Share and Per Share Data)
securitization. In whole loan sales, we do not have a residual financial interest in the loans, nor do we have any other power over the loans that would constrain us from recognizing a sale. Additionally, we generally have no repurchase requirements related to transfers of personal loans, student loans and non-government-sponsored enterprise home loans other than standard origination representations and warranties, for which we record a liability based on expected repurchase obligations. For government-sponsored enterprise (“GSE”) home loans, we have customary GSE repurchase requirements, which do not constrain sale treatment but result in a liability for the expected repurchase requirement.
There were no loan securitization transfers qualifying for sale accounting treatment during the six months ended June 30, 2023 and 2022.
Deconsolidation of debt reflects the impacts of previously consolidated VIEs that became deconsolidated during the period because we no longer hold a significant financial interest in the underlying securitization entity, which can fluctuate from period to period. Gains and losses on deconsolidations are presented within noninterest income—securitizations in the condensed consolidated statements of operations and comprehensive income (loss). During the three and six months ended June 30, 2023, we had deconsolidation of debt on student loans of $45.9 million. The impact on earnings from the deconsolidation was immaterial. During the three and six months ended June 30, 2022, we did not have any deconsolidations of debt.
The following table summarizes our whole loan sales:
Three Months Ended June 30,Six Months Ended June 30,
2023202220232022
Personal loans
Fair value of consideration received:
Cash$51,473 $1,163,029 $51,473 $2,181,718 
Servicing assets recognized888 7,659 888 14,083 
Repurchase liabilities recognized(360)(2,789)(360)(5,087)
Total consideration received
52,001 1,167,899 52,001 2,190,714 
Aggregate unpaid principal balance and accrued interest of loans sold
50,322 1,129,237 50,322 2,111,092 
Gain from loan sales$1,679 $38,662 $1,679 $79,622 
Sale execution(1)
104.1 %103.7 %104.1 %104.0 %
Student loans
Fair value of consideration received:
Cash$98,624 $257,859 $98,624 $806,770 
Servicing assets recognized2,792 2,991 2,792 8,815 
Repurchase liabilities recognized(16)(41)(16)(121)
Total consideration101,400 260,809 101,400 815,464 
Aggregate unpaid principal balance and accrued interest of loans sold
99,916 261,324 99,916 807,611 
Gain (loss) from loan sales$1,484 $(515)$1,484 $7,853 
Sale execution(1)
101.5 %99.8 %101.5 %101.0 %
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Notes to Condensed Consolidated Financial Statements (Continued)
(Unaudited)
(In Thousands, Unless Otherwise Stated and Except for Share and Per Share Data)
Three Months Ended June 30,Six Months Ended June 30,
2023202220232022
Home loans
Fair value of consideration received:
Cash$267,052 $322,219 $344,871 $681,919 
Servicing assets recognized2,803 4,482 3,757 8,720 
Repurchase liabilities recognized(751)(315)(847)(735)
Total consideration
269,104 326,386 347,781 689,904 
Aggregate unpaid principal balance and accrued interest of loans sold
266,634 342,952 344,610 708,512 
Gain (loss) from loan sales$2,470 $(16,566)$3,171 $(18,608)
Sale execution(1)
101.2 %95.3 %101.2 %97.5 %
_____________________
(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.
For certain transferred loans that qualified for sale accounting and are, therefore, off-balance sheet, we have continuing involvement through our servicing agreements. For such loans, our exposure to loss is generally limited to the extent we would be required to repurchase such a loan due to a breach of representations and warranties associated with the loan transfer or servicing contract.
The following table presents information about the unpaid principal balances of loans originated by us and subsequently transferred, but with which we have continuing involvement:
Personal Loans
Student Loans
Home Loans
Total
June 30, 2023
Loans in delinquency (10-29 days past due)$42,820 $56,932 $— $99,752 
Loans in delinquency (30+ days past due)
59,620 51,255 22,538 133,413 
Total loans in delinquency102,440 108,187 22,538 233,165 
Total transferred loans serviced(1)
$2,088,650 $6,799,935 $5,274,899 $14,163,484 
December 31, 2022
Loans in delinquency (10-29 days past due)$44,337 $68,832 $— $113,169 
Loans in delinquency (30+ days past due)
64,654 46,986 16,510 128,150 
Total loans in delinquency108,991 115,818 16,510 241,319 
Total transferred loans serviced(1)
$2,995,601 $7,586,031 $5,134,306 $15,715,938 
_____________________
(1)Total transferred loans serviced includes loans in delinquency, as well as loans in repayment, loans in-school/grace period/deferment (related to student loans), and loans in forbearance. The vast majority of total transferred loans serviced represent loans in repayment as of the dates indicated.

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Notes to Condensed Consolidated Financial Statements (Continued)
(Unaudited)
(In Thousands, Unless Otherwise Stated and Except for Share and Per Share Data)
The following table presents additional information about the servicing cash flows received and net charge-offs related to loans originated by us and subsequently transferred, but with which we have continuing involvement:
Three Months Ended June 30,Six Months Ended June 30,
2023202220232022
Personal loans
Servicing fees collected from transferred loans
$4,870 $8,457 $11,047 $16,825 
Charge-offs, net of recoveries, of transferred loans(1)
41,411 21,977 87,526 38,662 
Student loans
Servicing fees collected from transferred loans
6,402 11,045 15,592 20,213 
Charge-offs, net of recoveries, of transferred loans(1)
10,005 9,192 19,158 17,412 
Home loans
Servicing fees collected from transferred loans
3,659 2,930 6,819 5,566 
Total
Servicing fees collected from transferred loans
$14,931 $22,432 $33,458 $42,604 
Charge-offs, net of recoveries, of transferred loans(1)
51,416 31,169 106,684 56,074 
_____________________
(1)Personal loan and student loan charge-offs, net of recoveries, are impacted by the timing of charge-off sales performed on behalf of the purchasers of our loans, which lower the net amount disclosed.
Loans Held for Investment
Loan Portfolio Composition and Aging
The following table presents the amortized cost basis of our credit card and commercial and consumer banking portfolios (excluding accrued interest and before the allowance for credit losses) by either current status or delinquency status:
Delinquent Loans
Current30–59 Days60–89 Days
≥ 90 Days(1)
Total Delinquent Loans
Total Loans(2)
June 30, 2023
Credit card$254,089 $4,547 $3,821 $10,421 $18,789 $272,878 
Commercial and consumer banking:
Commercial real estate100,911 — — — — 100,911 
Commercial and industrial5,785 788 — 791 6,576 
Residential real estate and other consumer(3)
3,303 — — — — 3,303 
Total commercial and consumer banking109,999 788 — 791 110,790 
Total loans
$364,088 $4,550 $4,609 $10,421 $19,580 $383,668 
December 31, 2022
Credit card$225,165 $4,670 $3,626 $10,498 $18,794 $243,959 
Commercial and consumer banking:
Commercial real estate89,544 — — — — 89,544 
Commercial and industrial7,636 — — 7,637 
Residential real estate and other consumer(3)
2,966 — — — — 2,966 
Total commercial and consumer banking100,146 — — 100,147 
Total loans$325,311 $4,670 $3,627 $10,498 $18,795 $344,106 
______________
(1)All of the credit cards ≥ 90 days past due continued to accrue interest. As of the dates indicated, there were no credit cards on nonaccrual status. As of the dates indicated, commercial and consumer banking loans on nonaccrual status were immaterial, and there were no loans that were 90 days or more past due.
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(Unaudited)
(In Thousands, Unless Otherwise Stated and Except for Share and Per Share Data)
(2)For credit card, the balance is presented before allowance for credit losses of $39,361 and $39,110 as of June 30, 2023 and December 31, 2022, respectively, and accrued interest of $4,768 and $4,315, respectively. For commercial and consumer banking, the balance is presented before allowance for credit losses of $1,866 and $1,678, respectively, and accrued interest of $342 and $324, respectively.
(3)Primarily includes residential real estate loans acquired in the Bank Merger, for which we did not elect the fair value option.
Credit Quality Indicators
Credit Card
The following table presents the amortized cost basis of our credit card portfolio (excluding accrued interest and before the allowance for credit losses) based on FICO scores, which are obtained at origination of the account and are refreshed monthly thereafter. The pools estimate the likelihood of borrowers with similar FICO scores to pay credit obligations based on aggregate credit performance data.
FICOJune 30, 2023December 31, 2022
≥ 800$20,779 $14,421 
780 – 79914,348 11,327 
760 – 77916,138 12,179 
740 – 75918,265 14,501 
720 – 73923,189 19,343 
700 – 71928,989 26,239 
680 – 69934,564 31,543 
660 – 67933,366 31,958 
640 – 65924,636 25,959 
620 – 63914,712 15,566 
600 – 6199,132 8,968 
≤ 59934,760 31,955 
Total credit card$272,878 $243,959 
Commercial and Consumer Banking
We analyze loans in our commercial and consumer banking portfolio by classification based on their associated credit risk, and perform an analysis on an ongoing basis as new information is obtained. Risk rating classifications are further described below. Loans with a lower expectation of credit losses are classified as Pass, while loans with a higher expectation of credit losses are classified as Substandard.
Pass Loans that management believes will fully repay in accordance with the contractual loan terms.
Watch Loans that management believes will fully repay in accordance with the contractual loan terms, but for which certain credit attributes have changed from origination and warrant further monitoring.
Special mention Loans with a potential weakness or weaknesses that deserves management’s close attention. If left uncorrected, the potential weaknesses may result in deterioration of the repayment prospects for the loan or our credit position at some future date.
SubstandardLoans that are inadequately protected by the current net worth and paying capacity of the obligor or of the collateral pledged, if any. Loans so classified have a well-defined weakness or weaknesses that jeopardize the full repayment. They are characterized by the distinct possibility that we will sustain some loss if the deficiencies are not corrected.
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Notes to Condensed Consolidated Financial Statements (Continued)
(Unaudited)
(In Thousands, Unless Otherwise Stated and Except for Share and Per Share Data)
The following table presents the amortized cost basis of our commercial and consumer banking portfolio (excluding accrued interest and before the allowance for credit losses) by origination year and credit quality indicator:
Term Loans by Origination Year
June 30, 202320232022202120202019PriorTotal Term LoansRevolving Loans
Commercial real estate
Pass$14,825 $34,213 $5,696 $4,601 $9,564 $19,037 $87,936 $193 
Watch1,242 4,627 1,668 — 220 2,774 10,531 — 
Special mention— — — — — 1,586 1,586 — 
Substandard— — — — — 665 665 — 
Total commercial real estate16,067 38,840 7,364 4,601 9,784 24,062 100,718 193 
Commercial and industrial
Pass59 — — 71 104 5,049 5,283 47 
Watch— — — — 19 19 38 — 
Substandard— — — — — 1,208 1,208 — 
Total commercial and industrial59 — — 71 123 6,276 6,529 47 
Residential real estate and other consumer
Pass660 — — — — 2,505 3,165 97 
Watch— — — — — 41 41 — 
Total residential real estate and other consumer660 — — — — 2,546 3,206 97 
Total commercial and consumer banking
$16,786 $38,840 $7,364 $4,672 $9,907 $32,884 $110,453 $337 

Note 5. Allowance for Credit Losses
Our allowance for credit losses represents our current estimate of expected credit losses over the remaining contractual life of certain financial assets, including credit cards as well as commercial and consumer banking loans acquired in the Bank Merger, which relate to our Financial Services segment, and accounts receivables primarily related to our Technology Platform segment. Given our methods of collecting funds on servicing receivables, our historical experience of infrequent write offs, and that we have not observed meaningful changes in our counterparties’ abilities to pay, we determined that the future exposure to credit losses on servicing related receivables was immaterial.
In estimating expected credit losses for credit cards, we segment loans based on credit quality indicators and reassess our pools periodically to confirm that all loans within each pool continue to share similar risk characteristics. We establish an allowance within each pool utilizing a proprietary risk model that relies on assumptions such as average annual percentage rate, payment rate, utilization, delinquency status and default probability. The model may then be adjusted for current conditions and reasonable and supportable forecasts of future conditions, including economic conditions. We apply the aforementioned assumptions to the drawn balance of credit cards within each pool to estimate the lifetime expected credit losses within each pool, which are then aggregated to determine the allowance for credit losses.
We further consider an evaluation of overall portfolio credit quality based on indicators such as changes in our credit decisioning process, underwriting and collection management policies; the effects of external factors, such as regulatory requirements; general economic conditions; and inherent uncertainties in applying the methodology. When a credit card balance is charged off, we record a reduction to the allowance and the credit card balance.
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Notes to Condensed Consolidated Financial Statements (Continued)
(Unaudited)
(In Thousands, Unless Otherwise Stated and Except for Share and Per Share Data)
The following table presents changes in our allowance for credit losses:
Credit Card(1)
Commercial and Consumer Banking(1)
Accounts Receivable(1)
Three Months Ended June 30, 2023
Balance at March 31, 2023
$37,089 $1,848 $1,645 
Provision for credit losses(2)
12,600 15 1,096 
Write-offs charged against the allowance(3)
(10,328)(804)
Balance at June 30, 2023
$39,361 $1,866 $1,937 
Three Months Ended June 30, 2022
Balance at March 31, 2022
$16,500 $1,366 $1,652 
Provision for credit losses(2)
10,265 (162)1,112 
Write-offs charged against the allowance
(4,791)— (44)
Balance at June 30, 2022
$21,974 $1,204 $2,720 
Six Months Ended June 30, 2023
Balance at December 31, 2022$39,110 $1,678 $2,785 
Provision for credit losses(2)
20,837 185 242 
Write-offs charged against the allowance(3)
(20,586)(1,090)
Balance at June 30, 2023
$39,361 $1,866 $1,937 
Six Months Ended June 30, 2022
Balance at December 31, 2021$7,037 $— $2,292 
Provision for credit losses(2)
22,242 822 521 
Allowance for PCD loans(4)
— 382 — 
Write-offs charged against the allowance
(7,305)— (93)
Balance at June 30, 2022
$21,974 $1,204 $2,720 
_____________________
(1)Credit cards and commercial and consumer banking loans measured at amortized cost, net of allowance for credit losses, are presented within loans held for investment in the condensed consolidated balance sheets. Accounts receivable balances, net of allowance for credit losses, are presented within other assets in the condensed consolidated balance sheets.
(2)The provision for credit losses on credit cards and commercial and consumer banking loans is presented within noninterest expense—provision for credit losses in the condensed consolidated statements of operations and comprehensive income (loss). There were immaterial recoveries of amounts previously reserved related to credit cards and commercial and consumer banking loans during the three and six months ended June 30, 2023 and 2022. The provision for credit losses on accounts receivable is presented within noninterest expense—general and administrative in the condensed consolidated statements of operations and comprehensive income (loss). During the three and six months ended June 30, 2023, recoveries of amounts previously reserved related to accounts receivable were $18 and $1,179, respectively. During the three and six months ended June 30, 2022, recoveries of amounts previously reserved related to accounts receivable were $368 and $1,760, respectively.
(3)The increases in credit card write-offs charged against the allowance during the three and six months ended June 30, 2023 relative to the corresponding periods in 2022 were primarily related to our maturing portfolio.
(4)In connection with the Bank Merger, we obtained purchased credit deteriorated (“PCD”) loans, for which we measured an allowance, with a corresponding increase to the amortized cost basis as of the acquisition date. Therefore, recognition of the initial allowance for credit losses did not impact earnings.

Credit card: Accrued interest receivables written off by reversing interest income were immaterial during the three and six months ended June 30, 2023 and 2022.
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Notes to Condensed Consolidated Financial Statements (Continued)
(Unaudited)
(In Thousands, Unless Otherwise Stated and Except for Share and Per Share Data)
Note 6. Investment Securities
Investments in AFS Debt Securities
The following table presents our investments in available-for-sale (“AFS”) debt securities:
Amortized CostAccrued InterestGross Unrealized Gains
Gross Unrealized Losses(1)
Fair Value
June 30, 2023
U.S. Treasury securities$315,698 $123 $155 $(1,725)$314,251 
Multinational securities(2)
15,654 106 — (335)15,425 
Corporate bonds36,920 227 — (2,082)35,065 
Agency mortgage-backed securities8,348 20 — (1,009)7,359 
Other asset-backed securities9,071 — (362)8,714 
Other(3)
2,124 22 — (178)1,968 
Total investments in AFS debt securities$387,815 $503 $155 $(5,691)$382,782 
December 31, 2022
U.S. Treasury securities$121,282 $217 $— $(3,510)$117,989 
Multinational securities(2)
19,658 109 — (724)19,043 
Corporate bonds41,890 257 — (2,644)39,503 
Agency mortgage-backed securities8,899 22 — (991)7,930 
Other asset-backed securities9,556 — (514)9,047 
Other(3)
2,133 21 — (228)1,926 
Total investments in AFS debt securities$203,418 $631 $— $(8,611)$195,438 
_____________________
(1) As of June 30, 2023 and December 31, 2022, we concluded that there was no credit loss attributable to securities in unrealized loss positions, as (i) 85% and 67% of the amortized cost basis of our investments as of June 30, 2023 and December 31, 2022, respectively, was composed of U.S. Treasury securities, agency mortgage-backed securities and sovereign foreign bonds, which are of high credit quality and have no risk of credit-related impairment due to the nature of the counterparties and history of no credit losses, and (ii) we have not identified factors indicating credit-related impairment for the remaining investments and expect that the contractual principal and interest payments will be received. Additionally, we do not intend to sell the securities in loss positions nor is it more likely than not that we will be required to sell the securities prior to recovery of the amortized cost basis.
(2) Includes sovereign foreign and supranational bonds.
(3) Includes state and city municipal bond securities.

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Notes to Condensed Consolidated Financial Statements (Continued)
(Unaudited)
(In Thousands, Unless Otherwise Stated and Except for Share and Per Share Data)
The following table presents information about our investments in AFS debt securities with gross unrealized losses and the length of time that individual securities have been in a continuous unrealized loss position as of June 30, 2023 and December 31, 2022.
Less than 12 Months12 Months or LongerTotal
Fair ValueGross Unrealized LossesFair ValueGross Unrealized LossesFair ValueGross Unrealized Losses
June 30, 2023
U.S. Treasury securities$239,421 $(20)$74,830 $(1,705)$314,251 $(1,725)
Multinational securities— — 15,425 (335)15,425 (335)
Corporate bonds— — 35,065 (2,082)35,065 (2,082)
Agency mortgage-backed securities— — 7,359 (1,009)7,359 (1,009)
Other asset-backed securities— — 8,714 (362)8,714 (362)
Other— — 1,968 (178)1,968 (178)
Total investments in AFS debt securities$239,421 $(20)$143,361 $(5,671)$382,782 $(5,691)
December 31, 2022
U.S. Treasury securities$27,759 $(1,171)$90,230 $(2,339)$117,989 $(3,510)
Multinational securities— — 19,043 (724)19,043 (724)
Corporate bonds4,480 (313)35,023 (2,331)39,503 (2,644)
Agency mortgage-backed securities6,448 (814)1,482 (177)7,930 (991)
Other asset-backed securities— — 9,047 (514)9,047 (514)
Other745 (200)1,181 (28)1,926 (228)
Total investments in AFS debt securities$39,432 $(2,498)$156,006 $(6,113)$195,438 $(8,611)
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Notes to Condensed Consolidated Financial Statements (Continued)
(Unaudited)
(In Thousands, Unless Otherwise Stated and Except for Share and Per Share Data)
The following table presents the amortized cost and fair value of our investments in AFS debt securities by contractual maturity:
Due Within One YearDue After One Year Through Five YearsDue After Five Years Through Ten YearsDue After Ten YearsTotal
June 30, 2023
Investments in AFS debt securities—Amortized cost:
U.S. Treasury securities$297,623 $18,075 $— $— $315,698 
Multinational securities15,654 — — — 15,654 
Corporate bonds12,479 21,118 3,323 — 36,920 
Agency mortgage-backed securities— 164 761 7,423 8,348 
Other asset-backed securities— 7,142 1,929 — 9,071 
Other1,185 — — 939 2,124 
Total investments in AFS debt securities$326,941 $46,499 $6,013 $8,362 $387,815 
Weighted average yield for investments in AFS debt securities(1)
1.23 %3.28 %(3.01)%2.54 %1.44 %
Investments in AFS debt securities—Fair value(2):
U.S. Treasury securities$296,898 $17,230 $— $— $314,128 
Multinational securities15,319 — — — 15,319 
Corporate bonds12,104 19,903 2,831 — 34,838 
Agency mortgage-backed securities— 154 691 6,494 7,339 
Other asset-backed securities— 6,833 1,876 — 8,709 
Other1,179 — — 767 1,946 
Total investments in AFS debt securities$325,500 $44,120 $5,398 $7,261 $382,279 
_____________________
(1) The weighted average yield represents the effective yield for the investment securities and is computed based on the amortized cost of each security.
(2) Presentation of fair values of our investments in AFS debt securities by contractual maturity excludes total accrued interest of $503 as of June 30, 2023.
There were no realized gains and losses on our investments in AFS debt securities during the three months ended June 30, 2023. Gross realized gains and losses on our investments in AFS debt securities were $3,356 and $509, respectively, during the six months ended June 30, 2023, and were immaterial during the three and six months ended June 30, 2022. During the three and six months ended June 30, 2023 and 2022, there were no transfers between classifications of our investments in AFS debt securities. See Note 10. Equity for unrealized gains and losses on our investments in AFS debt securities and amounts reclassified out of accumulated other comprehensive income (loss) (“AOCI”).
Securitization Investments
The following table presents the aggregate outstanding value of asset-backed bonds and residual interests owned by the Company in nonconsolidated VIEs, which are presented within investment securities in the condensed consolidated balance sheets:
June 30,
2023
December 31,
2022
Personal loans
$12,149 $20,172 
Student loans
153,301 181,159 
Securitization investments
$165,450 $201,331 
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SoFi Technologies, Inc.
Notes to Condensed Consolidated Financial Statements (Continued)
(Unaudited)
(In Thousands, Unless Otherwise Stated and Except for Share and Per Share Data)
Note 7. Securitization and Variable Interest Entities
Consolidated VIEs
We consolidate certain securitization trusts in which we have a variable interest and are deemed to be the primary beneficiary.
The VIEs are special purpose entities (“SPEs”) with portfolio loans securing debt obligations. The SPEs were created and designed to transfer credit and interest rate risk associated with consumer loans through the issuance of collateralized notes and trust certificates. We make standard representations and warranties to repurchase or replace qualified portfolio loans. Aside from these representations, the holders of the asset-backed debt obligations have no recourse to the Company if the cash flows from the underlying portfolio loans securing such debt obligations are not sufficient to pay all principal and interest on the asset-backed debt obligations. We hold a significant interest in these financing transactions through our ownership of a portion of the residual interest in certain VIEs. In addition, in some cases, we invest in the debt obligations issued by the VIE. Our investments in consolidated VIEs eliminate in consolidation. The residual interest is the first VIE interest to absorb losses should the loans securing the debt obligations not provide adequate cash flows to satisfy more senior claims and is the interest that we expect to absorb the expected gains and losses of the VIE. Our exposure to credit risk in sponsoring SPEs is limited to our investment in the VIE. VIE creditors have no recourse against our general credit.
As of June 30, 2023 and December 31, 2022, we had seven and six consolidated VIEs, respectively, on our condensed consolidated balance sheets. During the six months ended June 30, 2023, we established two consolidated VIEs, and exercised a securitization clean up call related to one consolidated VIE. The assets of consolidated VIEs that were included in our condensed consolidated balance sheets may only be used to settle obligations of consolidated VIEs and were in excess of those obligations as of June 30, 2023 and December 31, 2022. Intercompany balances are eliminated upon consolidation.
Nonconsolidated VIEs
We have created and designed personal loan and student loan trusts to transfer associated credit and interest rate risk associated with the loans through the issuance of collateralized notes and residual certificates. We have a variable interest in the nonconsolidated loan trusts, as we own collateralized notes and residual certificates in the loan trusts that absorb variability. We also have continuing, non-controlling involvement with the trusts as the servicer. As servicer, we have the power to perform the activities which most impact the economic performance of the VIE, but since we hold an insignificant financial interest in the trusts, we are not the primary beneficiary. This financial interest represents the equity ownership interest in the loan trusts, wherein there is an obligation to absorb losses and the right to receive benefits from residual certificate ownership. The maximum exposure to loss as a result of our involvement with the nonconsolidated VIEs is limited to our investment. We did not provide financial support to any nonconsolidated VIEs beyond our initial equity investment. There are no liquidity arrangements, guarantees or other commitments by third parties that may affect the fair value or risk of our variable interests in nonconsolidated VIEs.
As of June 30, 2023 and December 31, 2022, we had investments in 21 and 23 nonconsolidated VIEs, respectively. During the six months ended June 30, 2023, we exercised a securitization clean up call on one nonconsolidated VIE and collapsed the associated trust, as well as consolidated one previously nonconsolidated VIE.
Note 8. Deposits
We offer deposit accounts (referred to as “checking and savings” accounts within SoFi Money) to our members through SoFi Bank, which include interest-bearing deposits and noninterest-bearing deposits.
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Notes to Condensed Consolidated Financial Statements (Continued)
(Unaudited)
(In Thousands, Unless Otherwise Stated and Except for Share and Per Share Data)
The following table presents a detail of interest-bearing deposits:
June 30, 2023December 31, 2022
Savings deposits$8,291,062 $4,383,953 
Demand deposits(1)
2,369,568 1,912,452 
Time deposits(1)(2)
2,011,762 969,387 
Total interest-bearing deposits $12,672,392 $7,265,792 
_____________________
(1) As of June 30, 2023 and December 31, 2022, includes brokered deposits of $2,167,036 and $1,026,400, respectively, of which $1,980,253 and $940,000, respectively, are time deposits and $186,783 and $86,400, respectively, are demand deposits.
(2) As of June 30, 2023 and December 31, 2022, the amount of time deposits that exceeded the insured limit (referred to as “uninsured deposits”) totaled $21,153 and $20,842, respectively.
As of June 30, 2023, future maturities of our total time deposits were as follows:
Remainder of 2023$1,076,837 
2024933,773 
2025562 
2026290 
2027— 
Thereafter300 
Total$2,011,762 
Note 9. Debt
The following table summarizes the components of our debt:
Borrowing Description
June 30, 2023

December 31, 2022
Total Collateral(1)
Stated Interest Rate(2)
Termination/
Maturity(3)
Total Capacity
Total Outstanding(4)
Total Outstanding
Debt Facilities






Personal loan warehouse facilities

$1,858,290 

5.33% – 7.10%

January 2024 – January 2032

$4,725,000 

$1,574,227 

$1,452,085 
Student loan warehouse facilities

2,890,940 

5.64% – 6.91%

July 2023 – June 2026

3,470,000 

2,361,766 

1,504,926 
Credit card warehouse facility

— 

6.62%

November 2024

100,000 

— 

— 
Risk retention warehouse facilities(5)

108,744 

5.26% – 7.24%

January 2024 – October 2027

200,000 

87,879 

101,964 
Revolving credit facility(6)


6.74%

April 2028

645,000 

486,000 

486,000 
Other Debt












Convertible senior notes(7)



—%

October 2026


1,200,000 

1,200,000 
Other financing(8)

97,160 



136,371 

— 

— 
Securitizations







Personal loan securitizations

778,620 

0.49% – 6.21%

September 2030 – May 2031


542,642 

529,132 
Student loan securitizations

303,066 

1.83% – 9.65%

March 2040 – August 2048


264,378 

246,856 













Total, before unamortized debt issuance costs, premiums and discounts





$6,516,892 

$5,520,963 
Less: unamortized debt issuance costs, premiums and discounts





(32,566)

(35,081)
Total debt





$6,484,326 

$5,485,882 
_________________
(1)As of June 30, 2023, represents the total of the unpaid principal balances within each debt category, with the exception of the risk retention warehouse facilities, which include securitization-related investments carried at fair value. In addition, certain securitization interests that eliminate in consolidation are pledged to risk retention warehouse facilities. Collateral balances relative to debt balances may vary period to period due to the timing of the next scheduled payment to the warehouse facility.
(2)For variable-rate debt, the ranges of stated interest rates are based on the interest rates in effect as of June 30, 2023. The interest on our variable-rate debt is typically designed as a reference rate plus a spread. Reference rates as of June 30, 2023 included overnight Secured Overnight Financing Rate
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SoFi Technologies, Inc.
Notes to Condensed Consolidated Financial Statements (Continued)
(Unaudited)
(In Thousands, Unless Otherwise Stated and Except for Share and Per Share Data)
(“SOFR”), one-month SOFR, three-month SOFR, one-month London Inter-Bank Offered Rate (“LIBOR”), prime rate and commercial paper rates determined by the facility lenders. As debt arrangements are renewed, the reference rate and/or spread are subject to change. Unused commitment fees ranging from 0 to 65 basis points (“bps”) on our various warehouse facilities are recognized within noninterest expense—general and administrative in our condensed consolidated statements of operations and comprehensive income (loss).
(3)For securitization debt, the maturity of the notes issued by the various trusts occurs upon either the maturity of the loan collateral or full payment of the loan collateral held in the trusts. Our maturity date represents the legal maturity of the last class of maturing notes. Securitization debt matures as loan collateral payments are made.
(4)There were no debt discounts or premiums issued during the six months ended June 30, 2023.
(5)For risk retention warehouse facilities, we only state capacity amounts for facilities wherein we can pledge additional asset-backed bonds and residual investments as of the balance sheet date.
(6)As of June 30, 2023, $6.0 million of the revolving credit facility total capacity was not available for general borrowing purposes because it was utilized to secure a letter of credit. Refer to our letter of credit disclosures in Note 15. Commitments, Guarantees, Concentrations and Contingencies for more details. Additionally, the interest rate presented is the interest rate on standard withdrawals on our revolving credit facility, while same-day withdrawals incur interest based on the prime rate.
(7)The original issue discount and debt issuance costs related to the convertible senior notes are amortized into interest expense—corporate borrowings in the condensed consolidated statements of operations and comprehensive income (loss) using the effective interest method over the contractual term of the notes. For the three and six months ended June 30, 2023, total interest expense on the convertible notes was $1,273 and $2,545, respectively. For the three and six months ended June 30, 2022, total interest expense on the convertible notes was $1,268 and $2,535, respectively. For all periods, interest expense was related to amortization of debt discount and issuance costs, and the effective interest rate was 0.42%. As of June 30, 2023 and December 31, 2022, unamortized debt discount and issuance costs were $16.9 million and $19.4 million, respectively, and the net carrying amount was $1.18 billion and $1.18 billion, respectively.
(8)Includes $27.5 million of loans and $69.7 million of investment securities pledged as collateral to secure $86.4 million of available borrowing capacity with the Federal Home Loan Bank (“FHLB”), of which $13.7 million was not available as it was utilized to secure letters of credit. Refer to our letter of credit disclosures in Note 15. Commitments, Guarantees, Concentrations and Contingencies for more details. Also includes unsecured available borrowing capacity of $50.0 million with correspondent banks.
Material Changes to Debt Arrangements
On April 28, 2023, we entered into an Amended and Restated Revolving Credit Agreement (“Amended and Restated Credit Agreement”), which amended and restated the Revolving Credit Agreement (“Original Credit Agreement”), dated as of September 27, 2018, among Social Finance, Inc., the lenders party thereto, the issuing banks party thereto and Goldman Sachs Bank USA, as administrative agent. The Amended and Restated Credit Agreement amended and restated the Original Credit Agreement to, among other things, (i) increase the initial aggregate commitment to $645 million, (ii) extend the maturity date of the revolving credit facility to the date that is five years after the closing date, (iii) change the borrower entity under the revolving credit facility to SoFi Technologies, Inc., (iv) replace LIBOR as the term benchmark rate applicable to revolving loans denominated in U.S. dollars with a benchmark rate equal to Term SOFR plus a credit spread adjustment of 0.10%, and (v) effect certain other changes. The Amended and Restated Credit Agreement also contains financial covenants that require the Company to maintain a certain amount of unrestricted cash and cash equivalents and to meet certain risk-based capital ratios and a leverage ratio.
During the six months ended June 30, 2023, we opened two personal loan warehouse facilities with an aggregate maximum available capacity of $1.0 billion, and closed one risk retention warehouse facility.
Our warehouse and securitization debt is secured by a continuing lien and security interest in the loans financed by the proceeds. Within each of our debt facilities, we must comply with certain operating and financial covenants. These financial covenants include, but are not limited to, maintaining: (i) a certain minimum tangible net worth, (ii) minimum unrestricted cash and cash equivalents, (iii) a maximum leverage ratio of total debt to tangible net worth, and (iv) minimum risk-based capital and leverage ratios. Our debt covenants can lead to restricted cash classifications in our condensed consolidated balance sheets. Our subsidiaries are restricted in the amount that can be distributed to the parent company only to the extent that such distributions would cause the financial covenants to not be met. We were in compliance with all financial covenants.
We act as a guarantor for our wholly-owned subsidiaries in several arrangements in the case of default. As of June 30, 2023, we have not identified any risks of nonpayment by our wholly-owned subsidiaries.
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Notes to Condensed Consolidated Financial Statements (Continued)
(Unaudited)
(In Thousands, Unless Otherwise Stated and Except for Share and Per Share Data)
Maturities of Borrowings
Future maturities of our outstanding debt with scheduled payments, which included our revolving credit facility and convertible notes, were as follows:
June 30, 2023
Remainder of 2023$— 
2024— 
2025— 
20261,200,000 
2027— 
Thereafter486,000 
Total$1,686,000 
Note 10. Equity
Temporary Equity
Pursuant to SoFi Technologies’ Certificate of Incorporation dated May 28, 2021, the Company is authorized to issue 100,000,000 shares of preferred stock having a par value of $0.0001 per share (“SoFi Technologies Preferred Stock”) and 100,000,000 shares of redeemable preferred stock having a par value of $0.0000025 per share (“SoFi Technologies Redeemable Preferred Stock”). The Company’s Board of Directors has the authority to issue SoFi Technologies Preferred Stock and SoFi Technologies Redeemable Preferred Stock and to determine the rights, preferences, privileges and restrictions, including voting rights, of those shares. The authorized shares of SoFi Technologies Redeemable Preferred Stock is inclusive of 4,500,000 shares of Series 1 redeemable preferred stock (“Series 1 Redeemable Preferred Stock”), which reflect the conversion on a one-for-one basis of shares of Social Finance Series 1 preferred stock in conjunction with the Business Combination. Shares of SoFi Technologies Series 1 Redeemable Preferred Stock that are redeemed, purchased or otherwise acquired by the Company will be canceled and may not be reissued by the Company. The Series 1 Redeemable Preferred Stock remains classified as temporary equity because the Series 1 Redeemable Preferred Stock is not fully controlled by the issuer, SoFi Technologies.
As of June 30, 2023, there were 3,234,000 shares of Series 1 Redeemable Preferred Stock issued and outstanding, which had an original issuance price of $100.00.
Dividends
During each of the three months ended June 30, 2023 and 2022 and each of the six months ended June 30, 2023 and 2022, the Series 1 preferred stockholders were entitled to dividends of $10,079 and $20,047, respectively. There were no dividends payable as of June 30, 2023 and December 31, 2022.
Permanent Equity
On June 1, 2021, the Company’s common stock began trading on the Nasdaq Global Select Market under the ticker symbol “SOFI”. Pursuant to SoFi Technologies’ Certificate of Incorporation, the Company is authorized to issue 3,000,000,000 shares of common stock, with a par value of $0.0001 per share, and 100,000,000 shares of non-voting common stock, with a par value of $0.0001 per share. As of June 30, 2023, the Company had 948,912,761 shares of common stock and no shares of non-voting common stock issued and outstanding.
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Notes to Condensed Consolidated Financial Statements (Continued)
(Unaudited)
(In Thousands, Unless Otherwise Stated and Except for Share and Per Share Data)
The Company reserved the following common stock for future issuance:
June 30,
2023
December 31,
2022
Outstanding stock options, restricted stock units and performance stock units
116,599,656 107,851,565 
Outstanding common stock warrants12,170,990 12,170,990 
Conversion of convertible notes(1)
53,538,000 53,538,000 
Possible future issuance under stock plans
46,651,639 26,434,957 
Total common stock reserved for future issuance
228,960,285 199,995,512 
____________________
(1)Represents the number of common stock issuable upon conversion of all convertible notes at the conversion rate in effect at the balance sheet date.
Dividends
Common stockholders and non-voting common stockholders are entitled to dividends when and if declared by the Board of Directors and subject to government regulation over banks and bank holding companies. There were no dividends declared or paid to common stockholders during the six months ended June 30, 2023 and 2022.
Accumulated Other Comprehensive Income (Loss)
AOCI primarily consists of accumulated net unrealized gains or losses associated with our investments in AFS debt securities and foreign currency translation adjustments. The following table presents the rollforward of AOCI, inclusive of the changes in the components of other comprehensive income (loss):
AFS Debt SecuritiesForeign Currency Translation AdjustmentsTotal
Three Months Ended June 30, 2023
AOCI, beginning balance$(6,363)$22 $(6,341)
Other comprehensive income before reclassifications830 392 1,222 
Net current-period other comprehensive income(1)(2)
830 392 1,222 
AOCI, ending balance$(5,533)$414 $(5,119)
Three Months Ended June 30, 2022
AOCI, beginning balance$(5,806)$(158)$(5,964)
Other comprehensive loss before reclassifications(2,115)(56)(2,171)
Amounts reclassified from AOCI into earnings124 — 124 
Net current-period other comprehensive loss(1)(2)
(1,991)(56)(2,047)
AOCI, ending balance$(7,797)$(214)$(8,011)
Six Months Ended June 30, 2023
AOCI, beginning balance$(8,611)$315 $(8,296)
Other comprehensive income before reclassifications2,906 99 3,005 
Amounts reclassified from AOCI into earnings172 — 172 
Net current-period other comprehensive income(1)(2)
3,078 99 3,177 
AOCI, ending balance$(5,533)$414 $(5,119)
Six Months Ended June 30, 2022
AOCI, beginning balance$(1,351)$(120)$(1,471)
Other comprehensive loss before reclassifications(6,731)(94)(6,825)
Amounts reclassified from AOCI into earnings285 — 285 
Net current-period other comprehensive loss(1)(2)
(6,446)(94)(6,540)
AOCI, ending balance$(7,797)$(214)$(8,011)
____________________
(1)Gross realized gains and losses from sales of our investments in AFS debt securities that were reclassified from AOCI to earnings are recorded within noninterest income—other in the condensed consolidated statements of operations and comprehensive income (loss). There were no reclassifications related to foreign currency translation adjustments during the three and six months ended June 30, 2023 and 2022.
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SoFi Technologies, Inc.
Notes to Condensed Consolidated Financial Statements (Continued)
(Unaudited)
(In Thousands, Unless Otherwise Stated and Except for Share and Per Share Data)
(2)There were no material tax impacts during the periods presented due to reserves against deferred tax assets in jurisdictions where other comprehensive loss activity was generated.
Note 11. Derivative Financial Instruments
The following table presents the gains (losses) recognized on our derivative instruments:
Three Months Ended June 30,Six Months Ended June 30,
2023202220232022
Interest rate swaps(1)
$114,341 $53,419 $85,885 $187,933 
Interest rate caps(1)
328 867 (1,367)3,490 
Home loan pipeline hedges(1)
2,061 15,249 984 38,719 
Derivative contracts to manage future loan sale execution risk116,730 69,535 85,502 230,142 
Interest rate swaps(2)
3,292 2,749 2,184 9,068 
Interest rate lock commitments (“IRLCs”)(1)
355 4,159 773 (2,639)
Interest rate caps(1)
(290)(903)1,481 (3,027)
Purchase price earn-out(1)(3)
— 211 1,042 
Third-party warrants(4)
54 (244)78 (169)
Total
$120,141 $75,507 $90,027 $234,417 
_____________________
(1) Recorded within noninterest income—loan origination and sales in the condensed consolidated statements of operations and comprehensive income (loss).
(2) Represents derivative contracts to manage securitization investment interest rate risk, which are recorded within noninterest income—securitizations in the condensed consolidated statements of operations and comprehensive income (loss).
(3) In conjunction with a loan sale agreement, we are entitled to receive payments from the buyer of the loans underlying the agreement if the internal rate of return (as defined in the loan sale agreement) on such loans exceeds a specified hurdle, subject to a dollar cap.
(4) Includes amounts recorded within noninterest income—other, noninterest expense—cost of operations and noninterest expense—general and administrative in the condensed consolidated statements of operations and comprehensive income (loss), the latter of which represents the amortization of a deferred liability recognized at the initial fair value of the third party warrants acquired, as we are also a customer of the third party.
Certain derivative instruments are subject to enforceable master netting arrangements. Accordingly, we present our net asset or liability position by counterparty in the condensed consolidated balance sheets. Additionally, since our cash collateral balances do not approximate the fair value of the derivative position, we do not offset our right to reclaim cash collateral or obligation to return cash collateral against recognized derivative assets or liabilities. The following table presents information about derivative instruments subject to enforceable master netting arrangements:
June 30, 2023December 31, 2022
Gross Derivative AssetsGross Derivative LiabilitiesGross Derivative AssetsGross Derivative Liabilities
Interest rate swaps$1,429 $(313)$23,128 $— 
Interest rate caps— (7,770)— (9,251)
Home loan pipeline hedges683 (43)1,484 (80)
Total, gross2,112 (8,126)24,612 (9,331)
Derivative netting(356)356 (80)80 
Total, net(1)
$1,756 $(7,770)$24,532 $(9,251)
_____________________
(1) We did not have a cash collateral requirement related to these instruments as of June 30, 2023 and December 31, 2022.
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Notes to Condensed Consolidated Financial Statements (Continued)
(Unaudited)
(In Thousands, Unless Otherwise Stated and Except for Share and Per Share Data)
The following table presents the notional amount of derivative contracts outstanding:
June 30, 2023December 31, 2022
Derivative contracts to manage future loan sale execution risk:
Interest rate swaps$6,372,000 $5,638,177 
Interest rate caps405,000 405,000 
Home loan pipeline hedges216,000 126,000 
Interest rate caps(1)
405,000 405,000 
Interest rate swaps(2)
198,000 171,823 
IRLCs(3)
142,049 82,335 
Total
$7,738,049 $6,828,335 
_____________________
(1) We sold an interest rate cap that was subject to master netting to offset an interest rate cap purchase made in conjunction with a contract to manage future loan sale execution risk.
(2) Represents interest rate swaps utilized to manage interest rate risk associated with certain of our securitization investments.
(3) Amounts correspond with home loan funding commitments subject to IRLC agreements.
While the notional amounts of derivative instruments give an indication of the volume of our derivative activity, they do not necessarily represent amounts exchanged by parties and are not a direct measure of our financial exposure. See Note 12. Fair Value Measurements for additional information on our derivative assets and liabilities.
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SoFi Technologies, Inc.
Notes to Condensed Consolidated Financial Statements (Continued)
(Unaudited)
(In Thousands, Unless Otherwise Stated and Except for Share and Per Share Data)
Note 12. Fair Value Measurements
Recurring Fair Value Measurements
The following table summarizes, by level within the fair value hierarchy, the estimated fair values of our assets and liabilities measured at fair value on a recurring basis in the condensed consolidated balance sheets:
June 30, 2023December 31, 2022
Fair ValueFair Value
Level 1Level 2Level 3TotalLevel 1Level 2Level 3Total
Assets
Investments in AFS debt securities(1)(2)
$329,676 $53,106 $— $382,782 $137,032 $58,406 $— $195,438 
Asset-backed bonds(2)(3)
— 127,061 — 127,061 — 155,093 — 155,093 
Residual investments(2)(3)
— — 38,389 38,389 — — 46,238 46,238 
Loans at fair value— — 18,213,667 18,213,667 — — 13,557,074 13,557,074 
Servicing rights— — 145,663 145,663 — — 149,854 149,854 
Third party warrants(4)(5)
— — 630 630 — — 630 630 
Derivative assets(4)(6)(7)
— 2,112 — 2,112 — 24,612 — 24,612 
Purchase price earn-out(4)(8)
— — — — — — 54 54 
IRLCs