Slides
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Second Quarter 2026 ResultsJuly 2026 Formerly
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Confidential2 DisclaimerSome of the statements in this presentation, including statements regarding our competitive advantages, loan and financial performance, business outlook, implications of the Fair Value Option accounting methodology, and demand for our loan programs, are “forward-looking statements. ” The words “anticipate, ” “believe, ” “estimate, ” “expect, ” “intend, ” “may, ” “outlook, ” “plan, ” “predict, ” “project, ” “will, ” “would” and similar expressions may identify forward-looking statements, although not all forward-looking statements contain these identifying words. Factors that could cause actual results to differ materially from those contemplated by these forward-looking statements include: our ability to continue to attract new and retain existing borrowers and platform investors; competition; overall economic conditions; the interest rate environment; the regulatory environment; default rates and those factors set forth in the section titled “Risk Factors” in our most recent Annual Report on Form 10-K as filed with the Securities and Exchange Commission, as well as in our subsequent filings with the Securities and Exchange Commission. Actual results or events could differ materially from the plans, intentions and expectations disclosed in forward-looking statements, and you should not place undue reliance on forward-looking statements. We do not assume any obligation to update any forward-looking statements, whether as a result of new information, future events or otherwise, except as required by law.This presentation contains non-GAAP financial measures relating to our performance – Risk-Adjusted Revenue, Return on Invested Capital, Tangible Book Value Per Common Share and Return on Tangible Common Equity. Our non-GAAP financial measures have limitations as analytical tools, are not prepared under any comprehensive set of accounting rules or principles and should not be considered in isolation or as a substitute for our results under accounting principles generally accepted in the United States (GAAP). We believe these non-GAAP financial measures provide management and investors with useful supplemental information about the financial performance of our business, enable comparison of financial results between periods where certain items may vary independent of business performance, and enable comparison of our financial results with other public companies. You can find the reconciliation of these non-GAAP financial measures to the most directly comparable GAAP measures on pages 5, 12, 18, and 19, as applicable, of this presentation.Happen, Inc. (Nasdaq: HAPN) is the parent company of Happen Bank, National Association, Member FDIC.
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Confidential3 2Q26 Highlights: Exceeded Financial T argets 1.Beginning in the first quarter of 2026, includes all loans originated during the respective periods (unsecured consumer loans, auto loans and small business loans). Previously this included unsecured consumer loans and auto loans only. In the second quarter of 2026, this update included $38 million of small business loan originations. TOTAL ORIGINATIONSDILUTED EARNINGS PER SHARE (EPS)Guidance: $3.0 to $3.1BGuidance: $0.40 to $0.45$3.15BDriven by channel expansion and product optimization:•Home Improvement launched in the quarter•Scaled paid direct marketing channels with improved efficiency•Leveraged AI to drive record production efficiency and >90% automation rate for issued loans•All consumer businesses growing$0.50Strong outperformance, overcoming rate headwinds:•Higher Net Interest Income from a larger portfolio of interest-earning assets•Credit outperformance and continued strong asset returns•Risk-adjusted-revenue growth outpacing expenses, driving higher pre-tax margin +29% Year over year +52% Year over year1
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15%12%11%30%36%35%28%26%28%27%26%26%$2,433 $2,669 $3,145 2Q25 1Q26 2Q26Confidential4 29% Annual Originations GrowthFunding channels scaling with origination volumes 1.Beginning in the first quarter of 2026, includes all loans originated during the respective periods (unsecured consumer loans, auto loans and small business loans). Previously this included unsecured consumer loans and auto loans only. This update included small business loan originations of $15 million in Q1 2026 and $38 million in Q2 2026 . Prior periods have been reclassified to conform to the current period presentation. 2.5% vertical slice retained from both the rated structured certificates and standard structured certificates.T otal Loan Originations1($ in millions)+29%YoYWhole Loan & Rated Structured Certificates2Retained HFIStandard Structured Certificates Program (A-Note retained)2Extended Seasoning HFS
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$154.2$176.2$179.0$94.2$76.0$83.8$248.4 $252.3 $262.9 2Q251Q262Q26Confidential5 Revenue Growth of 6% Reflects Transition to FV AccountingRisk-adjusted revenue up 31% year-over-year , in line with originations growthTotal Net Revenue2($ in millions)NET INTEREST INCOME16% year-over-year increase driven by balance sheet growth and continued funding cost optimizationNON-INTEREST INCOME11% year-over-year decline driven by the election of the fair value option for newly originated held-for-investment loans and by higher benchmark rates, partially offset by growth in origination volumesNet Interest IncomeNon-Interest IncomeRisk-Adjusted Revenue1 RISK-ADJUSTED REVENUE131% year-over-year increase driven by revenue growth and provision benefit reflecting the election of fair value option and by credit outperformanceProvision for Credit Losses+6%1.Risk-Adjusted Revenue is a non-GAAP financial measure and is equal to Total Net Revenue less Provision for Credit Losses, as reflected and reconciled above to Total Net Revenue (the most directly comparable GAAP measure).We believe Risk-Adjusted Revenue is an important measure reflecting the credit risk-adjusted financial performance of our business operations.2.There may be differences between the sum of the quarterly results due to rounding.$208.7 $273.8$251.9($39.7) $10.9($0.4)
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1.0%1.0%1.0%2.1%1.8%1.6%0%1%2%3%4%5%6%7%1.1%1.5%1.4%2.6%2.6%2.3%0%1%2%3%4%5%6%7%2.5%2.5%2.4%4.8%5.0%4.5%0%1%2%3%4%5%6%7% Confidential6 5+ Years of Outperformance Across Credit SegmentsHappen BankCompetitive SetFICO 660-719 FICO 720-779 FICO 780-8501) This data is provided by dv01 to be used for informational purposes only. dv01 is not liable for use of this data. The data is the property and confidential information of dv01. Distribution outside of this presentation is prohibited.. 2) Delinquencies include 30+ day delinquencies for each respective quarterly vintage at month on book 9, including loans that are actively in hardship plans. 3) Numbers quoted are an average of the most recent 3 quarterly vintages. 4) There may be differences in the outperformance calculations due to rounding. 5) Competitor set includes information with respect to marketplace lenders and direct competitors as reported by dv01's Marketplace Personal Loan benchmarking data as of end-of-month May 2026 . 6) Data for historical periods may be updated periodically by dv01.48%46%45%Happen Bank vs. Competitive Set: 30-day+ Delinquencies & Hardships at Month on Book 9 by Quarterly Vintage
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Confidential7 Growing Balance Sheet with Attractive Net Interest Margin of 6.1%Average YieldAverage Balances3 2Q261Q264Q253Q252Q252Q261Q264Q253Q252Q253.60%3.56%3.90%4.23%4.19%$825$775$905$604$680Cash and Other Interest-Earning Assets1 5.68%5.82%6.06%6.31%6.49%$3,881$3,737$3,696$3,565$3,411Securities Available for Sale13.84%13.51%13.33%12.56%12.24%$1,851$1,910$1,531$1,199$1,062Loans HFS at Fair Value11.16%12.62%10.80%11.08%10.94%$1,668$807$455$553$723Loans HFI at Fair Value11.14%11.02%11.36%11.64%11.72%$3,441$3,990$4,312$4,338$4,177Loans and Leases HFI at Amortized Cost13.26%12.92%13.13%13.48%13.57%$2,438$2,935$3,252$3,268$3,177Unsecured Consumer Loans5.98%5.74%5.96%6.01%5.83%$1,003$1,056$1,060$1,070$999Commercial and Secured Consumer Loans9.22%9.31%9.20%9.43%9.44%$11,665 $11,220$10,900$10,258$10,052Total Interest-Earning Assets3.60%3.60%3.75%3.80%3.87%$10,024 $9,577$9,276$8,713$8,577 Total Interest-Bearing Deposits & Liabilities2 6.14%6.28%5.98%6.18%6.14%Net Interest Margin1.Includes cash, cash equivalents, restricted cash and all other interest-earning assets.2.Primarily consists of interest-bearing deposits for each of the periods presented.3.There may be differences between the sum of the quarterly results due to rounding.~$190M Marketplace sale from extended seasoning portfolio to a new bank investorInterest earning assets up 16% YoY
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$59.1$63.6$67.3$33.6$55.4$62.6$62.0$65.5$68.2$154.7$184.5$198.121.7%26.7%28.8%-20.0 %-10.0 %0.0 %10 .0%20 .0%30 .0%40 .0%50 .0%60 .0% $0 .0$5 0.0$1 00.0$1 50.0$2 00.0$2 50.0$3 00.0$3 50.0$4 00.0 2Q25 1Q26 2Q26Confidential8 Expanding Profit Margin While Investing for GrowthTotal Non-Interest Expense1& Profit Margin($ in millions)1.There may be differences between the sum of the quarterly results due to rounding.2.Profit margin (pre-tax) is calculated as income before income tax expense divided by total net revenue.Marketing ExpensesCompensation & BenefitsOther Non-Interest ExpensesMARKETING EXPENSESEfficiency improved sequentially to 2% of originations. 86% year-over-year increase reflects volume growth and full recognition of marketing costs under fair value accountingCOMPENSATION & BENEFITS Increased 10% year-over-year to support originations growth and launch of Home ImprovementOTHER NON-INTEREST EXPENSESIncreased 14% year-over-year increase led by investments in technology, infrastructure, rebrand related activities, and other volume-related costsProfit Margin % (pre-tax) 2
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$0.33 $0.44 $0.50 2Q25 1Q26 2Q26$38.2 $51.6 $58.1 2Q25 1Q26 2Q26Confidential9 52% Diluted EPS Growth Y ear-Over-Y earReturn on T angible Common Equity (ROTCE) approaching 16%, up from 11.8% a year ago($ in millions)GAAP Net Income2+52%Diluted EPS$75.7$67.3 $54.0 Income before income tax expense($17.5)($15.7)($15.8)Income Tax Expense23.1%23.4%29.3%Effective Tax Rate$13.58$13.19$12.25Book Value Per Common Share$12.89$12.49$11.53Tangible Book ValuePer Common Share1 15.1%13.7%11.1%Return on Average Equity15.9%14.5%11.8%Return on Tangible Common Equity1+52%1. Tangible Book Value per Common Share and Return on Tangible Common Equity are non-GAAP financial measures. Please see pages 2, 18, and 19 for additional information on our use of non-GAAP financial measures and a reconciliation of such measures to the nearest GAAP measures.2. There may be differences between the sum of the quarterly results due to rounding.
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Confidential10 Third Quarter & Full Y ear 2026 GuidanceRaising full year Diluted EPS guidance to $1.80-$1.90 FY 2026Q3 2026$12.2B to $12.6BPrior: $11.6B to $12.6B$3.20B to $3.35BTOTAL ORIGINATIONS$1.80 to $1.90Prior: $1.65 to $1.80$0.43 to $0.48DILUTED EPS•Tightening FY26 originations guidance toward high end given performance YTD, reflecting 25% to 29% growth YoY•Raising FY Diluted EPS Guidance to $1.80-$1.90 from $1.65-$1.80•Guidance assumes stable consumer and interest rate environment
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Understanding Fair Value OptionConfidential 11
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Confidential12 Simplifying Our FinancialsFair V alue Option Makes Sense for a Digital Marketplace BankBenefits of Fair Value Option•Better aligns timing of revenue recognition with timing of losses•Creates consistency of marketplace and bank financialsAll newly-originated loans as of January 2026, are being accounted for using Fair Value OptionD1 Y1 Y2 Y3 Y4 Y5Cumulative Timing of Earnings RecognitionCECL vs. FVOCECLFair Value OptionDay 1$0For the same loans, Fair Value Option generates a +50% higher return on invested capitalReturn on Invested Capital (ROIC)is a non-GAAP financial measure calculated by dividing net operating profit by invested capital. We do not provide a reconciliation of forward-looking ROIC to the most directly comparable GAAP reported financial measure on a forward-looking basis because we are unable to predict future invested capital with reasonable certainty without unreasonable effort. Please see page 2, for additional information on our use of non-GAAP financial measures .
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Confidential13 CECL vs. Fair Value Option: 2026 P&L ImpactsUnder Fair V alue Option, credit cost moves from provision to non-interest incomeResult under FVO Under Fair Value Option Under CECL Day 1: Recognized at origination through non-interest incomeDay 1: Deferred at origination Day 2: Amortized over the life of the loan through interest incomeOrigination Fee (non-interest income)Day 1: Fair value adjustment at origination reflects the difference between the expected loan yield relative to the discount rate1Day 2: Interest income is offset by fair value adjustments (including net charge-offs) in non-interest income, resulting in a revenue yield equal to the discount rate Changes to discount rate or loan cash flows to be reflected in additional fair value adjustments over the life of the loanNoneFair Value Adjustment (non-interest income)Interest from loan couponInterest from loan coupon plus amortization of origination fee and marketing expense deferrals Interest IncomeNoneDay 1: provision for lifetime net losses recognized at origination on a discounted basisDay 2: discounting impacts and changes in loss expectationsProvision for Loan LossesDay 1: Recognized at origination through marketing expenseDay 1: Deferred at origination Day 2: Amortized over the life of the loan through interest incomeMarketing Expense2026 Pre-tax Net Incomewill grow faster under fair value option compared to CECL, with modestly lower revenue due to fair value adjustments, more than offset by the lack of provision for loan losses Revenue declines1. The discount rate is the market required return for each loan type
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Confidential14 Four Key Inputs for Fair Value Option AccountingAll fair value adjustments will directly impact the carrying value of loans DAY 1: MARKFair value adjustment at the time of origination reflects the difference between the expected loan yield relative to the discount rate1DAY 2: REVENUE YIELD = DISCOUNT RATEInterest income is offset by fair value adjustments (including net charge-offs) in Non-interest income, resulting in a revenue yield equal to the discount rate CHANGES TO DISCOUNT RATEAs benchmark rates and spreads move in any given period, the loan portfolio will be marked (via a fair value adjustment) to reflect the new discount rate; the portfolio revenue yield will then reflect the new discount rateCHANGES TO EXPECTED CASH FLOWS If there are changes to expected future cash flows, the portfolio’s fair value will be adjusted to reflect the new cash flow estimates OTHER 1. The discount rate is the market required return for each loan type
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Confidential15 Understanding Fair Value Option(illustrative for a single hypothetical loan vintage1)Day-2 revenue yield should equal the discount rate throughout the life of the loan TotalYear 4+Year 3Year 2Year 1 (ex. Day-1)Day-1MetricUnpaid Principal BalanceNA$0.0$10.6$33.2$65.2$100Ending BalanceEnding Balance net of Fair Value AdjustmentsNA$0.0$10.3$31.9$62.1$99.0Carrying ValueCarrying Value as a percentage of Ending Balance--100.0%97.9%96.1%95.3%99.0%Carrying Value %Origination fee recognized on Day-1$5.0$5.0Origination FeeInterest Rate (12%) x Average Balance$19.1$0.6 $2.6 $5.9 $9.9 -Interest IncomeDay-1 Impact = reflects the difference between the expected loan yield relative to the discount rateDay-2 Impact = (Discount Rate 7.3% - Interest Rate 12%) x Avg. Carrying Value($8.7)($0.3)($1.1)($2.5)($4.0)($1.0)FV AdjustmentsReflects market-clearing loan sales price; in this example, 99% of UPB($1.0)----($1.0)Day-1 MarkBalancing the timing of loan losses to achieve a constant yield over time, Total Fair Value “rolldown” over life + Day-1 Mark = 0$1.0$0.3 $1.1 $1.8 ($2.1)-Fair Value “Rolldown”Real credit losses net of recoveries($8.7)($0.5)($2.1)($4.3)($1.9)-Net Charge-Offs$15.4$0.4 $1.5 $3.5 $5.9 $4.0Total RevenueFor illustrative purposes, we have assumed a constant discount rate; actual changes to the discount rate will result in changes in revenue and portfolio fair value adjustments--7.3%7.3%7.3%7.3%--Revenue Yield = Discount Rate1.Day-1 Mark: Fair value adjustment at the time of origination reflects the difference between the expected loan yield relative to the discount rate2.Day-2: Revenue Yield = Discount Rate: Interest Income offset by fair value adjustments (including net charge-offs) in Non-interest Income, resulting in a revenue yield equal to the discount rate 3.Revenue Yield = Discount Rate4.Illustration assumes other factors remain constant (i.e., constant discount rate with no changes to expected cash flows); changes in either of these items will result in additional fair value adjustments and corresponding changes in carrying value1234 Key Drivers5.0%Origination fee12.0%Loan Coupon7.3%Discount Rate6.7%Loan IRR1.5Duration1. Illustrative of a hypothetical personal loan and may not be representative of the composition or performance of the Company's loan portfolio, which may vary materially from the illustration. Estimates assume a stable credit and interest rate environment
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Confidential16 Fair Value Adjustment: Historical IllustrationFor the three months endedMarch 31, 2026June 30, 2026In millions, except percentages3 $ 2,306$ 3,214Average balance of loans held at fair value1 13.0%12.4%Average yield2 7.2%7.3%Discount rate2 $ (33)$ (41)Approximate Day-2 fair value adjustment$ (89)$ (121)Total Fair Value Adjustments (reconciliation to total)$ (56)$ (80)Approximate Day-1 fair value adjustment & other adjustments$ (33)$ (41)Approximate Day-2 fair value adjustmentThe following table approximates the Day-1 fair value and other adjustments and the Day-2 fair value adjustment with respect to loans held at fair value on the Company's balance sheet.Note that Interest Income is offset by the Day-2 fair value adjustments in Non-interest Income, resulting in a revenue yield equal to the discount rate. 1. Figures exclude purchased unsecured personal loan portfolio of $305M and $411M average balances as of June 30,2026 and March 31, 2026, respectively.2. Discount rate and yield are weighted average for the loan portfolios excluding the purchased portfolio referenced in footnote 13. There may be differences between the sum of the quarterly results due to rounding.
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Financial ReconciliationsConfidential 17
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Confidential18 Reconciliation of GAAP to Non-GAAP Measures:T angible Book Value Per Common Share1 June 30, 2025March 31, 2026June 30, 2026In thousands, except share and per share dataTangible Common Equity:$1,406,035$1,523,528$1,567,465GAAP Common Equity($75,717)($75,717)($75,717)Less: Goodwill($7,068)($5,039)($4,492)Less: Customer Relationship Intangible Assets$1,323,250$1,442,772$1,487,256Tangible Common EquityBook Value Per Common Share:$1,406,035$1,523,528$1,567,465GAAP Common Equity114,740,147115,497,890115,407,464Common Shares Issued And Outstanding$12.25$13.19$13.58Book Value Per Common ShareTangible Book Value Per Common Share:$1,323,250$1,442,772$1,487,256Tangible Common Equity114,740,147115,497,890115,407,464Common Shares Issued And Outstanding$11.53$12.49$12.89Tangible Book Value Per Common Share1.We believe Tangible Book Value (TBV) Per Common Share is an important measure used to evaluate the company's use of equity.
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Confidential19 Reconciliation of GAAP to Non-GAAP Measures:Return on T angible Common Equity1For the three months endedJune 30, 2025March 31, 2026June 30, 2026In thousands, except ratiosAverage Tangible Common Equity:$1,381,199$1,507,711$1,544,238Average GAAP Common Equity($75,717)($75,717)($75,717)Less: Average Goodwill($7,423)($5,362)($4,766)Less: Average Customer Relationship Intangible Assets$1,298,059$1,426,632$1,463,755Average Tangible Common EquityReturn On Average Equity:$152,712$206,412$232,592Annualized GAAP Net Income$1,381,199$1,507,711$1,544,238Average GAAP Common Equity11.1%13.7%15.1%Return On Average EquityReturn On Tangible Common Equity:$152,712$206,412$232,592Annualized GAAP Net Income$1,298,059$1,426,632$1,463,755Average Tangible Common Equity11.8%14.5%15.9%Return On Tangible Common Equity1.We believe Return on Tangible Common Equity (ROTCE) is an important measure because it reflects the company's ability to generate income from its core assets.
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Contact Investor Relations: IR@Happen.comVisit us at www .Happen.comLearn more about our new brand at www .MeetHappen.comFormerly