Happen, Inc. (LC)

Item 2. Management’s Discussion and Analysis of Financial Condition and Results of Operations

The following discussion and analysis of our financial condition and results of operations should be read in conjunction with the condensed consolidated financial statements and related notes that appear in this Quarterly Report on Form 10-Q (Report). In addition to historical condensed consolidated financial information, the following discussion contains forward-looking statements that reflect our plans, estimates and beliefs. Our actual results could differ materially from those discussed in the forward-looking statements. Factors that could cause or contribute to these differences include those discussed below and elsewhere in this Report, and in “Part I – Item 1A. Risk Factors” in the Company’s Annual Report on Form 10-K for the year ended December 31, 2025 (Annual Report) and, if applicable, as modified by “Part II – Item 1A. Risk Factors” in this Report. The forward-looking statements included in this Report are made only as of the date hereof and 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.

59

HAPPEN, INC.

Management’s Discussion and Analysis of Financial Condition and Results of Operations

(Tabular Amounts in Thousands, Except Share and Per Share Data and Ratios, or as Noted)

Overview

On June 22, 2026, we changed our corporate name from LendingClub Corporation to Happen, Inc., and the name of our wholly-owned banking subsidiary from LendingClub Bank, National Association to Happen Bank, National Association (Happen Bank). Happen, Inc. 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 our 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.

Election of Fair Value Option

Effective January 1, 2026, we elected the fair value option to account for held for investment (HFI) loans that were originated on or after that date (fair value option election). Prior to this election, loans that were originated as HFI were, and will continue to be, accounted for at amortized cost, which required the initial recognition of a CECL allowance for lifetime expected credit losses. We believe that applying the fair value option, rather than amortized cost accounting with the CECL methodology, to HFI loans more accurately reflects the in-period economic performance of the loans by better aligning the value of the loan to its then fair value. Under the fair value option, origination fee revenue and marketing costs are recognized in earnings at the time of loan origination, rather than being deferred. Fair value adjustments on loans are recognized in current period earnings within “Net fair value adjustments” and include the impact of credit losses that previously would have been recorded as a provision expense under CECL. Further, by applying the fair value option to HFI loans, we are applying the same accounting methodology to all loans we originate on or after January 1, 2026, as both HFI and held for sale (HFS) loans are now measured at fair value.

Financial Highlights

We delivered several financial achievements in the second quarter of 2026, including total net revenue of $262.9 million, an increase of 6% compared to the same period in the prior year. This growth was primarily driven by an increase in loan origination volume, an increase in loan sales and loan sale pricing, as well as higher net interest income due to an increase in total interest-earning assets. Net income grew to $58.1 million, with diluted EPS of $0.50, compared to $38.2 million, with diluted EPS of $0.33, in the prior year.

The following tables summarize our selected financial data:

60

HAPPEN, INC.

Management’s Discussion and Analysis of Financial Condition and Results of Operations

(Tabular Amounts in Thousands, Except Share and Per Share Data and Ratios, or as Noted)

(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. Prior periods have been reclassified to conform to the current period presentation. See “Non-Interest Income” for additional information.

(2)    Reflects loans serviced on our platform, which includes unsecured consumer loans and auto loans serviced for others for which servicing rights are retained by the Company.

(3)    Calculated as the ratio of income before income tax expense to total net revenue.

(4)    Calculated as annualized net income divided by average equity for the period presented.

(5)    Calculated as annualized net income divided by average tangible common equity for the period presented.

(6)    Represents a non-GAAP financial measure. See “Non-GAAP Financial Measures” for additional information.

(7)    Calculated as annualized net income divided by average total assets for the period presented.

(8)    Beginning in the first quarter of 2026, the net charge-off ratio is calculated as annualized net charge-offs for total loans and leases held for investment (at amortized cost and fair value) divided by average total outstanding loans and leases held for investment during the period. Prior to the first quarter of 2026, this was calculated based on loans and leases held for investment at amortized cost only. Prior period amounts have been reclassified to conform to the current period presentation.

(1)    As of June 30, 2026, Federal Deposit Insurance Corporation (FDIC)-insured deposits represent approximately 88% of total deposits.

61

HAPPEN, INC.

Management’s Discussion and Analysis of Financial Condition and Results of Operations

(Tabular Amounts in Thousands, Except Share and Per Share Data and Ratios, or as Noted)

Credit Quality Indicators

We evaluate the credit quality of our loan and leases held for investment based on delinquency status and payment activity. The following tables present loans and leases held for investment (at amortized cost and fair value) by delinquency status:

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Item 7. Management’s Discussion and Analysis of Financial Condition and Results of Operations

The following discussion and analysis of our financial condition and results of operations should be read in conjunction with the consolidated financial statements and related notes that appear in this Annual Report. In addition to historical consolidated financial information, the following discussion contains forward-looking statements that reflect our plans, estimates and beliefs. Our actual results could differ materially from those discussed in the forward-looking statements. Factors that could cause or contribute to these differences include those discussed below and in this Annual Report, particularly in “Part I – Item 1A. Risk Factors.” The forward-looking statements included in this Report are made only as of the date hereof and 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.

Overview

LendingClub 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 our members.

Election of Fair Value Option

Effective January 1, 2026, we elected the fair value option to account for held for investment (HFI) loans that were originated on or after that date. Prior to this election, loans that were originated as HFI were, and we expect will continue to be, accounted for at amortized cost, which required the initial recognition of an allowance for lifetime expected credit losses under the CECL methodology, recognized within “Provision for credit losses” on the Income Statement. We believe that applying the fair value option, rather than the CECL methodology, to HFI loans more accurately reflects the in-period economic performance of the loans by better aligning the value of the loan to its then fair value. Under the fair value option, origination fee revenue and marketing costs are recognized in earnings at the time of loan origination, rather than being deferred, and changes in fair value of loans are recognized in current period earnings within “Net fair value adjustments” on the Income Statement. Further, by applying the fair value option to HFI loans, we are applying the same accounting methodology to all loans we originate after January 1, 2026, as both HFI and held for sale (HFS) loans will be measured at fair value.

Executive Summary

The following is a summary of our results for the year ended December 31, 2025 compared to the same period in 2024, reflecting growth in loan originations, total net revenue and net income.

•Loan originations: Loan originations increased $2.4 billion, or 33%, for the year ended December 31, 2025 compared to the same period in 2024. The increase was driven by an increase in unsecured personal loan origination volume.

◦Marketplace loan originations increased $1.7 billion, or 30%, for the year ended December 31, 2025 compared to the same period in 2024, driven by a higher retention of HFS loans and an increase in marketplace investor demand. Loan originations HFS as a percentage of loan originations was 74% and 76% for the years ended December 31, 2025 and 2024, respectively.

◦Loan originations HFI at amortized cost increased $719.3 million, or 41%, for the year ended December 31, 2025 compared to the same period in 2024. Loan originations HFI at amortized cost as a percentage of loan originations was 26% and 24% for the years ended December 31, 2025 and 2024, respectively.

•Total net revenue: Total net revenue increased $211.8 million, or 27%, for the year ended December 31, 2025 compared to the same period in 2024.

56

LENDINGCLUB CORPORATION

Management’s Discussion and Analysis of Financial Condition and Results of Operations

(Tabular Amounts in Thousands, Except Share and Per Share Data and Ratios, or as Noted)

◦Marketplace revenue: Marketplace revenue increased $113.2 million, or 47%, for the year ended December 31, 2025 compared to the same period in 2024. The increase was primarily due to higher origination volume of marketplace loans and improved loan sales prices.

◦Net interest income: Net interest income increased $91.6 million, or 17%, for the year ended December 31, 2025 compared to the same period in 2024. The increase was primarily due to an increase in total interest-earning assets and lower deposit funding costs.

◦Net interest margin: Net interest margin for the year ended December 31, 2025 was 6.07%, increasing from 5.62% in the prior year.

•Provision for credit losses: Provision for credit losses increased $13.1 million, or 7%, for the year ended December 31, 2025 compared to the same period in 2024. The increase was primarily driven by a higher volume of originated loans retained as HFI at amortized cost, partially offset by a shift in the mix of loans toward types with lower expected credit losses and the impact of an $8.0 million provision recognized in 2024 related to one legacy office loan within our commercial real estate (CRE) portfolio.

•Total non-interest expense: Total non-interest expense increased $86.9 million, or 16%, for the year ended December 31, 2025 compared to the same period in 2024. The increase was primarily due to an increase in marketing expense based on higher origination volume and the resumption of certain marketing initiatives, as well as increases in professional services expense and compensation and benefit expense.

•Net income: Net income increased $84.3 million, or 164%, for the year ended December 31, 2025 compared to the same period in 2024.

•Diluted earnings per share (EPS): Diluted EPS increased to $1.16 for the year ended December 31, 2025, compared to $0.45 for the prior year.

•Pre-provision net revenue (PPNR): PPNR for the year ended December 31, 2025 increased $124.9 million, or 51%, compared to the same period in 2024, driven by an increase in total net revenue, partially offset by an increase in non-interest expense.

•Total assets: Total assets were $11.6 billion as of December 31, 2025 compared to $10.6 billion in the prior year. Total assets increased year-over-year primarily driven by an increase in loans on our balance sheet.

•Deposits: Total deposits were $9.8 billion as of December 31, 2025 compared to $9.1 billion in the prior year. The increase was primarily due to growth in our high-yield savings deposits.

◦Federal Deposit Insurance Corporation (FDIC)-insured deposits represent approximately 88% of total deposits as of December 31, 2025.

The above summary should be read in conjunction with this Management’s Discussion and Analysis of Financial Condition and Results of Operations in its entirety. For additional discussion related to our operating segments, see “Segment Information.”

57

LENDINGCLUB CORPORATION

Management’s Discussion and Analysis of Financial Condition and Results of Operations

(Tabular Amounts in Thousands, Except Share and Per Share Data and Ratios, or as Noted)

Financial Highlights

We regularly review several metrics to evaluate our business, measure our performance, identify trends, formulate financial projections and make strategic decisions. The following presents our select financial metrics for the periods presented:

(1)    Represents a non-GAAP financial measure. See “Non-GAAP Financial Measures” for additional information.

(2)    Calculated as the ratio of non-interest expense to total net revenue.

(3)    Includes unsecured personal loans and auto loans only.

(4)    Assets under management (AUM) reflects loans serviced on our platform, which includes outstanding balances of unsecured personal loans and auto refinance loans serviced for others and retained by the Company as of the end of the periods presented.

58

LENDINGCLUB CORPORATION

Management’s Discussion and Analysis of Financial Condition and Results of Operations

(Tabular Amounts in Thousands, Except Share and Per Share Data and Ratios, or as Noted)

(1)    Represents the allowanc

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