Financial Analysis

Commitments and Contingencies Operating Lease Commitments For discussion regarding the Companys operating lease commitments, see Note 16. Leases. Loan Repurchase Obligations The Company is generally required to repurchase loans or interests therein from marketplace investors in cases of (i) confirmed identity theft or certain other types of fraud on the part of the borrower or a service provider; (ii) certain failures of loans to comply with the investors purchase order or as an investor accommodation; or (iii) confirmed material breach of representations made with respect to such loans that result in a material adverse effect on such loan. The Company believes such provisions are customary and consistent with institutional loan and securitization market standards. Unfunded Lending Commitments As of June 30, 2026 and December 31, 2025, the contractual amount of unfunded lending commitments totaled $122.6 million and $98.2 million, respectively, of which $35.2 million and $52.0 million, respectively, are commitments for loans (at amortized cost) to be funded. See Note 4. Loans for additional detail related to the reserve for unfunded lending commitments. Legal The Company is subject to various claims brought in a litigation or regulatory context. These include lawsuits and regulatory exams, investigations, or inquiries. In accordance with applicable accounting standards, the Company accrues for costs related to contingencies when a loss from such claims is probable and the amo …

CommitmentsAndContingenciesDisclosureTextBlock · excerpt; the full note is in the filing

Equity Share Repurchases On November 4, 2025, the Companys Board of Directors approved a program to repurchase and acquire up to $100 million of the Companys common stock through December 31, 2026. During the six months ended June 30, 2026, the Company repurchased 1,221,938 shares of Happen, Inc. common stock on the open market at an average price of $16.68 per share and retired those shares upon repurchase. Employee Incentive Plans The Companys equity incentive plans provide for granting awards, including restricted stock units (RSUs), performance-based restricted stock units (PBRSUs), cash awards and stock options to employees, officers and directors. Stock-based Compensation Stock-based compensation expense, included in Compensation and benefits expense on the Income Statement, was as follows for the periods presented: Three Months Ended June 30, Six Months Ended June 30, 2026 2025 2026 2025 RSUs $ 6,708 $ 9,236 $ 14,237 $ 18,310 PBRSUs 1,258 1,270 2,263 2,117 Stock-based compensation expense, gross 7,966 10,506 16,500 20,427 Less: Capitalized stock-based compensation expense 1,012 1,441 1,972 2,843 Stock-based compensation expense, net $ 6,954 $ 9,065 $ 14,528 $ 17,584 Restricted Stock Units The following table summarizes the Companys RSU activity: Number of Units Weighted- Average Grant Date Fair Value Unvested at December 31, 2025 4,278,687 $ 10.73 Granted 1,979,722 $ 15.58 Vested (1,867,714) $ 9.50 Forfeited (510,128) $ 12.72 Unvested at June 30, 2026 3,880,567 $ 13.53 …

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Borrowings The Company did not have any debt outstanding as of June 30, 2026 or December 31, 2025. Borrowing Capacity The following table summarizes the Companys available borrowing capacity and the related pledged collateral: June 30, 2026 December 31, 2025 Available Borrowing Capacity Pledged Collateral (1) Available Borrowing Capacity Pledged Collateral (2) FRB Discount Window $ 3,446,444 $ 4,489,394 $ 3,294,827 $ 4,245,845 FHLB of Des Moines 672,819 843,283 679,361 861,913 Total $ 4,119,263 $ 5,332,677 $ 3,974,188 $ 5,107,758 (1) As of June 30, 2026, the Company had $4.5 billion in loans pledged under the Federal Reserve System (FRB) Discount Window, and $467.7 million in loans and $375.6 million in securities available for sale at fair value pledged to the Federal Home Loan Bank ( FHLB) of Des Moines. (2) As of December 31, 2025, the Company had $4.2 billion in loans pledged under the FRB Discount Window, and $486.2 million in loans and $375.7 million in securities available for sale at fair value pledged to the FHLB of Des Moines. …

DebtDisclosureTextBlock · excerpt; the full note is in the filing

Fair Value Measurements For a description of the fair value hierarchy and the Companys fair value methodologies, see Part II Item 8. Financial Statements and Supplementary Data Note 1. Summary of Significant Accounting Policies in the Annual Report. The Company records certain assets and liabilities at fair value as listed in the following tables. Recurring Fair Value Measurements The following tables present, by level within the fair value hierarchy, the Companys assets and liabilities measured at fair value on a recurring basis: June 30, 2026 Level 1 Level 2 Level 3 Balance at Fair Value Assets: Loans held for sale at fair value $ $ $ 1,773,052 $ 1,773,052 Loans held for investment at fair value 2,085,066 2,085,066 Securities available for sale: Senior asset-backed securities related to Structured Program transactions 3,394,054 3,394,054 Other asset-backed securities related to Structured Program transactions 257,820 257,820 U.S. agency residential mortgage-backed securities 243,375 243,375 U.S. agency securities 70,282 70,282 Mortgage-backed securities 53,806 53,806 Municipal securities 2,678 2,678 Other securities 14,359 10,387 24,746 Total securities available for sale 384,500 3,662,261 4,046,761 Servicing assets 72,974 72,974 Other assets 10,820 10,820 Total assets $ $ 395,320 $ 7,593,353 $ 7,988,673 Liabilities: Other liabilities $ $ 1,845 $ $ 1,845 Total liabilities $ $ 1,845 $ $ 1,845 December 31, 2025 Level 1 Level 2 Level 3 Balance at Fair Value Assets: Loans held …

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Goodwill and Intangible Assets Goodwill The Companys goodwill balance was $75.7 million as of both June 30, 2026 and December 31, 2025. The Company did not record any goodwill impairment expense during the second quarters and first halves of 2026 and 2025. Goodwill is not amortized, but is subject to annual impairment tests that are performed in the fourth quarter of each calendar year. For additional detail, see Part II Item 8. Financial Statements and Supplementary Data Note 1. Summary of Significant Accounting Policies in the Annual Report. Intangible Assets Intangible assets consist primarily of customer relationships. These intangible assets are amortized on an accelerated basis from ten to fourteen years. Intangible assets, net of accumulated amortization, are included in Other assets on the Balance Sheet. The gross and net carrying values and accumulated amortization were as follows: June 30, 2026 December 31, 2025 Gross carrying value $ 56,490 $ 56,490 Accumulated amortization (50,457) (49,071) Net carrying value $ 6,033 $ 7,419 Amortization expense associated with intangible assets for the second quarter and first half of 2026 was $0.6 million and $1.4 million, respectively. Amortization expense associated with intangible assets for the second quarter and first half of 2025 was $0.7 million and $1.5 million, respectively. There was no impairment loss for the second quarters and first halves of 2026 and 2025. The expected future amortization expense for intangible ass …

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Income Taxes For the second quarter and first half of 2026, the Company recorded an income tax expense of $17.5 million and $33.2 million, respectively, representing an effective tax rate of 23.1% and 23.2%, respectively. For the second quarter and first half of 2025, the Company recorded an income tax expense of $15.8 million and $19.8 million, respectively, representing an effective tax rate of 29.3% and 28.5%, respectively. The effective tax rate differs from the federal statutory rate primarily due to state taxes, the favorable impact of recurring items such as tax credits, the unfavorable impact of the non-deductible portions of executive compensation, and the net discrete impact of stock-based compensation. The decrease in the effective tax rate period over period was primarily driven by the discrete tax expense recognized in the second quarter of 2025 related to the revaluation of the Companys deferred tax assets following the enactment of California Senate Bill 132 on June 27, 2025, and the reduction in the overall effective state tax rate resulting from the laws requirement that banks and financial companies use a single-sales-factor apportionment formula, effective for tax years beginning in 2025. The following table summarizes the Companys net deferred tax assets: June 30, 2026 December 31, 2025 Deferred tax assets, net of liabilities $ 139,730 $ 144,206 Valuation allowance (48,047) (48,047) Deferred tax assets, net of valuation allowance $ 91,683 $ 96,159 …

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Leases Lessee Arrangements Following the expiration of its prior headquarters lease, the Company relocated its headquarters in April 2026 to an office building in San Francisco, California. The Company has various operating leases for office space in the Salt Lake City, Utah area, Boston, Massachusetts, and New York, New York, with remaining lease terms ranging from approximately two to three years as of June 30, 2026. Balance sheet information related to leases was as follows: ROU Assets and Lease Liabilities Balance Sheet Classification June 30, 2026 December 31, 2025 Operating lease assets Other assets $ 9,403 $ 12,942 Operating lease liabilities Other liabilities $ 11,369 $ 15,826 Net lease costs were $1.6 million and $4.4 million during the second quarter and first half of 2026, respectively. Such costs are recorded within Occupancy expense on the Income Statement. Net lease costs were $2.7 million and $5.5 million during the second quarter and first half of 2025, respectively. The Companys future minimum undiscounted lease payments under operating leases as of June 30, 2026 were as follows: Operating Lease Payments 2026 $ 2,471 2027 5,010 2028 4,046 2029 909 Total lease payments $ 12,436 Discount effect (1,067) Present value of future minimum lease payments $ 11,369 The weighted-average remaining lease term and discount rate used in the calculation of the Companys operating lease assets and liabilities were as follows: Lease Term and Discount Rate June 30, 2026 December …

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Adoption of New Accounting Standards The Company did not adopt new accounting standards during the six months ended June 30, 2026. New Accounting Standards Not Yet Adopted In December 2025, the FASB issued ASU 2025-12, Codification Improvements, which makes incremental improvements to GAAP. The updates cover a broad range of topics arising from technical corrections, unintended applications of the codification, and other minor improvements. The new standard is effective for annual reporting periods beginning after December 15, 2026 and interim reporting periods within those annual reporting periods. The standard can be applied prospectively or retrospectively on a topic by topic basis. Early adoption is also permitted on a topic by topic basis. The Company is evaluating the impact of this ASU but does not expect it to be material. In December 2025, the FASB issued ASU 2025-11, Interim Reporting (Topic 270) Narrow-Scope Improvements, which improves the navigability of the required interim disclosures and clarifies when the guidance is applicable. The amendments also provide guidance on what disclosures are required during the interim reporting periods. Additionally, the amendments also include a disclosure principle that requires entities to disclose events since the end of the last reporting period that have a material impact. The amendments of this standard are effective for interim reporting periods beginning after December 15, 2027. The amendments can be applied either pro …

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Segment Reporting Reportable Segments The Company defines operating segments to be components of the Company for which discrete financial information is evaluated regularly by the Chief Operating Decision Maker (CODM) to allocate resources and evaluate financial performance. The measure of segment profit used by the CODM in this evaluation is net income. The CODM consists of the Companys Chief Executive Officer and Chief Financial Officer. This information is reviewed according to the legal organizational structure of the Companys operations with products and services presented separately for the parent bank holding company and its wholly-owned subsidiary, Happen Bank, which are both considered reportable segments. Income taxes are recorded on a separate entity basis whereby each operating segment determines income tax expense or benefit as if it filed a separate tax return. Happen Bank The Happen Bank operating segment represents the national bank legal entity and reflects operating activities after its formation. This segment provides a full complement of financial products and solutions, including loans and deposits. It originates loans to individuals and businesses, retains loans for investment, sells loans to marketplace investors and manages relationships with deposit holders. Happen, Inc. (Parent Only) The Happen, Inc. (Parent only) operating segment represents the holding company legal entity and predominately reflects the operations of the Company prior to the format …

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Summary of Significant Accounting Policies Basis of Presentation On June 22, 2026, LendingClub Corporation changed its corporate name to Happen, Inc., and changed the name of its wholly-owned banking subsidiary from LendingClub Bank, National Association to Happen Bank, National Association (Happen Bank). The Company was founded in 2006 and operates a leading, nationally chartered, digital marketplace bank that leverages data and technology to increase access to credit, reduce borrowing costs, and improve returns on savings for its members. Happen, Inc. is registered as a bank holding company and operates the vast majority of its business through its wholly-owned subsidiary, Happen Bank. All intercompany balances and transactions have been eliminated in consolidation. These condensed consolidated financial statements have been prepared in conformity with accounting principles generally accepted in the United States of America (GAAP) for interim financial information and, in the opinion of management, contain all adjustments, including normal recurring adjustments, necessary for the fair statement of the results and financial position for the periods presented. These accounting principles require management to make certain estimates and assumptions that affect the amounts in the accompanying financial statements. These estimates and assumptions are inherently subjective in nature and actual results may differ from these estimates and assumptions, and the differences could be m …

SignificantAccountingPoliciesTextBlock · excerpt; the full note is in the filing