SoFi Technologies, Inc.SOFI
SoFi Technologies, Inc. Fair Value Disclosure
Note 15. 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 consolidated balance sheets:
| December 31, 2025 | December 31, 2024 | ||||||||||||||||||||||||||||||||||||||||||||||
| Fair Value | Fair Value | ||||||||||||||||||||||||||||||||||||||||||||||
| Level 1 | Level 2 | Level 3 | Total | Level 1 | Level 2 | Level 3 | Total | ||||||||||||||||||||||||||||||||||||||||
| Assets | |||||||||||||||||||||||||||||||||||||||||||||||
U.S. Treasury securities | $ | 75,356 | $ | — | $ | — | $ | 75,356 | $ | 273,652 | $ | — | $ | — | $ | 273,652 | |||||||||||||||||||||||||||||||
Agency mortgage-backed securities(1) | — | 2,354,606 | — | 2,354,606 | — | 1,526,394 | — | 1,526,394 | |||||||||||||||||||||||||||||||||||||||
Corporate bonds(1) | — | 185 | — | 185 | — | 3,217 | — | 3,217 | |||||||||||||||||||||||||||||||||||||||
Other(1) | — | 833 | — | 833 | — | 780 | — | 780 | |||||||||||||||||||||||||||||||||||||||
Asset-backed bonds(2) | — | 113,272 | — | 113,272 | — | 66,252 | — | 66,252 | |||||||||||||||||||||||||||||||||||||||
Residual investments(2) | — | — | 31,355 | 31,355 | — | — | 25,394 | 25,394 | |||||||||||||||||||||||||||||||||||||||
Investment securities(3) | 75,356 | 2,468,896 | 31,355 | 2,575,607 | 273,652 | 1,596,643 | 25,394 | 1,895,689 | |||||||||||||||||||||||||||||||||||||||
Loans at fair value(4) | — | 204,133 | 36,199,228 | 36,403,361 | — | 66,928 | 26,215,332 | 26,282,260 | |||||||||||||||||||||||||||||||||||||||
| Servicing rights | — | — | 378,178 | 378,178 | — | — | 342,128 | 342,128 | |||||||||||||||||||||||||||||||||||||||
Third party warrants(5)(6) | — | — | 540 | 540 | — | — | 540 | 540 | |||||||||||||||||||||||||||||||||||||||
Derivative assets(5)(7)(8) | — | 61,583 | — | 61,583 | — | 288,990 | — | 288,990 | |||||||||||||||||||||||||||||||||||||||
IRLCs(5)(9) | — | — | 9,971 | 9,971 | — | — | 1,227 | 1,227 | |||||||||||||||||||||||||||||||||||||||
Student loan commitments(5)(9) | — | — | 28,779 | 28,779 | — | — | 6,042 | 6,042 | |||||||||||||||||||||||||||||||||||||||
Total assets (11) | $ | 75,356 | $ | 2,734,612 | $ | 36,648,051 | $ | 39,458,019 | $ | 273,652 | $ | 1,952,561 | $ | 26,590,663 | $ | 28,816,876 | |||||||||||||||||||||||||||||||
| Liabilities | |||||||||||||||||||||||||||||||||||||||||||||||
Debt(10) | $ | — | $ | 54,107 | $ | — | $ | 54,107 | $ | — | $ | 80,878 | $ | — | $ | 80,878 | |||||||||||||||||||||||||||||||
| Residual interests classified as debt | — | — | 520 | 520 | — | — | 609 | 609 | |||||||||||||||||||||||||||||||||||||||
Derivative liabilities(5)(7)(8) | — | 4,680 | — | 4,680 | — | 43 | — | 43 | |||||||||||||||||||||||||||||||||||||||
| Total liabilities | $ | — | $ | 58,787 | $ | 520 | $ | 59,307 | $ | — | $ | 80,921 | $ | 609 | $ | 81,530 | |||||||||||||||||||||||||||||||
(1)Investments in debt securities that were classified as Level 2 rely upon observable inputs other than quoted prices, dealer quotes in markets that are not active and implied pricing derived from new issuances of similar securities. See Note 6. Investment Securities for additional information.
(2)These assets represent the carrying value of our holdings in VIEs wherein we were not deemed the primary beneficiary. See Note 7. Securitization and Variable Interest Entities for additional information. We classify asset-backed bonds as Level 2 due to the use of quoted prices for similar assets in markets that are not active, as well as certain factors specific to us. The key inputs used to value the asset-backed bonds include the discount rate and conditional prepayment rate. The fair value of our asset-backed bonds was not materially impacted by default assumptions on the underlying securitization loans, as the subordinate residual interests are expected to absorb all estimated losses based on our default assumptions for the period. We classify the residual investments as Level 3 due to the reliance on significant unobservable valuation inputs. See Note 6. Investment Securities for additional information on the asset-backed bonds and residual investments included herein which are classified as available for sale.
(3)These assets are presented within investment securities in the consolidated balance sheets.
(4)Home loans classified as Level 2 have observable pricing sources utilized by management. Personal loans, student loans and home loans classified as Level 3 do not trade in an active market with readily observable prices. Personal loans and home loans are presented within loans held for sale, and student loans are presented within loans held for investment, at fair value.
(5)These assets and liabilities are presented within other assets and accounts payable, accruals and other liabilities, respectively, in the consolidated balance sheets.
(6)The key unobservable assumption used in the fair value measurement of the third party warrants was the price of the stock underlying the warrants. The fair value was measured as the difference between the stock price and the strike price of the warrants. As the strike price was insignificant, we concluded that the impact of time value on the fair value measure was immaterial.
(7)For certain derivative instruments for which an enforceable master netting agreement exists, we elected to net derivative assets and derivative liabilities by counterparty. These instruments are presented on a gross basis herein. See Note 1. Organization, Summary of Significant Accounting Policies and New Accounting Standards and Note 14. Derivative Financial Instruments for additional information.
(8)Home loan pipeline hedges represent TBAs used as economic hedges of loan fair values and are classified as Level 2, as we rely on quoted market prices from similar loan pools that transact in the marketplace. Interest rate swaps are classified as Level 2, because these financial instruments do not trade in active markets with observable prices, but rely on observable inputs other than quoted prices. As of December 31, 2025 and 2024, interest rate swaps were valued using the overnight SOFR curve and the implied volatilities suggested by the SOFR rate curve. These were determined to be observable inputs from active markets.
(9)IRLCs and student loan commitments (which include in-school loan and student loan refinancing commitments) are classified as Level 3 because of our reliance on assumed loan funding probabilities. The assumed probabilities are based on our internal historical experience with home loans and student loans similar to those in the funding pipelines on the measurement date.
(10)The fair value of our securitization debt was classified as Level 2 and valued using a discounted cash flow model, with key inputs relating to the underlying contractual coupons, terms, discount rate and expectations for defaults and prepayments. As of December 31, 2025 and 2024, the unpaid principal related to debt measured at fair value was $56,255 and $85,160, respectively. For the years ended December 31, 2025, 2024 and 2023, losses from changes in fair value were $2,097, $4,696 and $2,969, respectively. The estimated amounts of gains (losses) included in earnings attributable to changes in instrument-specific credit risk, which were derived principally from observable changes in credit spread as observed in the bond market and default assumptions, were immaterial for the years ended December 31, 2025, 2024 and 2023.
(11)During the fourth quarter of 2025, the Company launched SoFi Crypto which provides our members the ability to buy, sell and hold digital assets. To facilitate these member transactions, we maintain an incidental inventory of crypto assets for operational purposes. As of December 31, 2025, the fair value of our crypto assets were immaterial. These assets are presented within other assets and categorized as Level 1 as of December 31, 2025.
Level 3 Recurring Fair Value Rollforward
The following tables present the changes in our assets and liabilities measured at fair value on a recurring basis using significant unobservable inputs (Level 3). We did not have any transfers into or out of Level 3 during the periods presented.
| Fair Value at | Fair Value at | |||||||||||||||||||||||||
| January 1, 2025 | Impact on Earnings | Purchases | Sales | Issuances | Settlements | Other Changes | December 31, 2025 | |||||||||||||||||||
| Assets | ||||||||||||||||||||||||||
| Personal loans | $ | 17,532,396 | $ | (320,341) | $ | 117,982 | $ | (1,940,165) | $ | 16,461,114 | $ | (10,316,825) | $ | 6,507 | $ | 21,540,668 | ||||||||||
| Student loans | 8,597,368 | 315,280 | 2,079,655 | (376,545) | 5,537,934 | (2,506,005) | 9,891 | 13,657,578 | ||||||||||||||||||
| Home loans | 85,568 | 66,859 | — | (266,469) | 1,143,666 | (28,642) | — | 1,000,982 | ||||||||||||||||||
Loans at fair value(1) | 26,215,332 | 61,798 | 2,197,637 | (2,583,179) | 23,142,714 | (12,851,472) | 16,398 | 36,199,228 | ||||||||||||||||||
Servicing rights(2) | 342,128 | (23,628) | 11,933 | (20,330) | 233,324 | (165,249) | — | 378,178 | ||||||||||||||||||
Residual investments(3) | 25,394 | 1,677 | 13,019 | (624) | — | (8,111) | — | 31,355 | ||||||||||||||||||
IRLCs(4) | 1,227 | 39,414 | — | — | — | (30,670) | — | 9,971 | ||||||||||||||||||
Student loan commitments(4) | 6,042 | 42,352 | — | — | — | (19,615) | — | 28,779 | ||||||||||||||||||
Third party warrants(5) | 540 | — | — | — | — | — | — | 540 | ||||||||||||||||||
| Liabilities | ||||||||||||||||||||||||||
Residual interests classified as debt(3) | (609) | (70) | — | — | — | 159 | — | (520) | ||||||||||||||||||
| Net impact on earnings | $ | 121,543 | ||||||||||||||||||||||||
| Fair Value at | Fair Value at | |||||||||||||||||||||||||
| January 1, 2024 | Impact on Earnings | Purchases | Sales | Issuances | Settlements | Other Changes | December 31, 2024 | |||||||||||||||||||
| Assets | ||||||||||||||||||||||||||
| Personal loans | $ | 15,330,573 | $ | (554,796) | $ | 168,114 | $ | (4,483,253) | $ | 15,499,773 | $ | (8,415,255) | $ | (12,760) | $ | 17,532,396 | ||||||||||
| Student loans | 6,725,484 | 48,209 | 2,053 | (294,187) | 3,780,752 | (1,672,333) | 7,390 | 8,597,368 | ||||||||||||||||||
| Home loans | — | 2,090 | — | — | 83,610 | (210) | 78 | 85,568 | ||||||||||||||||||
Loans at fair value(1) | 22,056,057 | (504,497) | 170,167 | (4,777,440) | 19,364,135 | (10,087,798) | (5,292) | 26,215,332 | ||||||||||||||||||
Servicing rights(2) | 180,469 | 6,280 | 6,316 | (867) | 281,006 | (131,076) | — | 342,128 | ||||||||||||||||||
Residual investments(3) | 35,920 | 1,390 | 2,668 | — | — | (14,584) | — | 25,394 | ||||||||||||||||||
IRLCs(4) | 2,155 | 8,766 | — | — | — | (9,694) | — | 1,227 | ||||||||||||||||||
Student loan commitments(4) | 5,465 | 16,459 | — | — | — | (15,882) | — | 6,042 | ||||||||||||||||||
Third party warrants(5) | 630 | (90) | — | — | — | — | — | 540 | ||||||||||||||||||
| Liabilities | ||||||||||||||||||||||||||
Residual interests classified as debt(3) | (7,396) | (108) | — | — | — | 6,895 | — | (609) | ||||||||||||||||||
| Net impact on earnings | $ | (471,800) | ||||||||||||||||||||||||
(1)For loans at fair value, purchases reflect unpaid principal balance and relate to previously transferred loans. Purchase activity included elective repurchases of $1.7 billion and $165.3 million during the years ended December 31, 2025 and 2024, respectively, and securitization clean-up calls of $426.9 million during the year ended December 31, 2025. There were no securitization clean-up calls during the year ended December 31, 2024. The remaining purchases during the periods presented related to standard representations and warranties pursuant to our various loan sale agreements. Issuances represent the principal balance of loans originated during the period. Settlements represent principal payments made on loans during the period. Other changes represent fair value adjustments that impact the balance sheet primarily associated with whole loan strategic repurchases, clean up calls and consolidated securitizations. Impacts on earnings for loans at fair value are recorded within interest income—loans and securitizations, within noninterest income—loan origination, sales, securitizations and servicing, and within noninterest expense—general and administrative in the consolidated statements of operations and comprehensive income (loss).
(2)For servicing rights, impacts on earnings are recorded within noninterest income—loan origination, sales, securitizations and servicing in the consolidated statements of operations and comprehensive income (loss).
(3)For residual investments, sales include the derecognition of investments associated with securitization clean up calls. The estimated amounts of gains and losses for residual investments included in earnings attributable to changes in instrument-specific credit risk were immaterial during the periods presented. For residual investments and residual interests classified as debt, impacts on earnings are recorded within noninterest income—loan origination, sales, securitizations and servicing in the consolidated statements of operations and comprehensive income (loss), a portion of which is subsequently reclassified to interest expense—securitizations and warehouses for residual interests classified as debt and to interest income—loans and securitizations for residual investments, but does not impact the liability or asset balance, respectively.
(4)For IRLCs and student loan commitments, settlements reflect funded and unfunded adjustments representing the unpaid principal balance of funded and unfunded loans during the quarter multiplied by the IRLC or student loan commitment price in effect at the beginning of the quarter. For year-to-date periods, amounts represent the summation of the per-quarter effects. For IRLCs and student loan commitments, impacts on earnings are recorded within noninterest income—loan origination, sales, securitizations and servicing in the consolidated statements of operations and comprehensive income (loss).
(5)For third party warrants, impacts on earnings are recorded within noninterest income—other in the consolidated statements of operations and comprehensive income (loss).
Loans at Fair Value
Gains and losses recognized in earnings include changes in accumulated interest and fair value adjustments on loans originated during the period and on loans held at the balance sheet date, as well as loan charge-offs. Changes in fair value are primarily impacted by valuation assumption changes as well as sales price execution. The estimated amount of gains (losses) included in earnings attributable to changes in instrument-specific credit risk was $106.1 million, $73.3 million and $(26.6) million during the years ended December 31, 2025, 2024 and 2023, respectively. The gains (losses) attributable to instrument-specific credit risk were estimated by incorporating our current default and loss severity assumptions for the loans. These assumptions are based on historical performance, market trends and performance expectations over the term of the underlying instrument.
Level 3 Significant Inputs
Fair value is defined as the price that would be received for an asset or paid to transfer a liability (an exit price) in the principal or most advantageous market for the asset or liability in an orderly transaction between market participants on the measurement date. Level 3 fair value measurements include unobservable inputs for assets or liabilities for which there is little
or no market data, which requires us to develop our own assumptions. These unobservable assumptions reflect estimates of inputs that market participants would use in pricing the asset or liability. Valuation techniques include the use of option pricing models, discounted cash flow models, or similar techniques, which incorporate management’s own estimates of assumptions that market participants would use in pricing the asset or liability.
Loans
The following key unobservable assumptions were used in the fair value measurement of our loans:
| December 31, 2025 | December 31, 2024 | ||||||||||||||||||||||
| Range | Weighted Average | Range | Weighted Average | ||||||||||||||||||||
| Personal loans | |||||||||||||||||||||||
| Conditional prepayment rate | 18.3% – 30.7% | 26.9% | 20.9% – 32.2% | 26.0% | |||||||||||||||||||
| Annual default rate | 3.7% – 37.9% | 4.5% | 4.4% – 51.2% | 4.5% | |||||||||||||||||||
| Discount rate | 4.4% – 6.6% | 4.5% | 5.3% – 7.4% | 5.3% | |||||||||||||||||||
| Student loans | |||||||||||||||||||||||
| Conditional prepayment rate | 9.6% – 12.9% | 11.2% | 8.6% – 11.9% | 11.0% | |||||||||||||||||||
| Annual default rate | 0.4% – 6.4% | 0.7% | 0.4% – 7.1% | 0.7% | |||||||||||||||||||
| Discount rate | 3.7% – 8.2% | 3.9% | 4.2% – 8.2% | 4.4% | |||||||||||||||||||
Home loans | |||||||||||||||||||||||
| Conditional prepayment rate | 6.2% – 20.7% | 13.6% | 6.7% – 23.6% | 14.8% | |||||||||||||||||||
| Annual default rate | 0.1% – 7.4% | 0.6% | 0.1% – 3.5% | 0.6% | |||||||||||||||||||
| Discount rate | 4.9% – 8.5% | 5.9% | 5.0% – 9.2% | 7.5% | |||||||||||||||||||
The key assumptions are defined as follows:
•Conditional prepayment rate — The monthly annualized proportion of the principal of a pool of loans that is assumed to be paid off prematurely in each period. An increase in the conditional prepayment rate, in isolation, would result in a decrease in a fair value measurement. The weighted average assumption was weighted based on relative fair value.
•Annual default rate — The annualized rate of borrowers who do not make loan payments on time. An increase in the annual default rate, in isolation, would result in a decrease in a fair value measurement. The weighted average assumption was weighted based on relative fair value.
•Discount rate — The weighted average rate at which the expected cash flows are discounted to arrive at the net present value of the loans. The discount rate is primarily determined based on an underlying benchmark rate, curve and spread(s), the latter of which is determined based on factors including, but not limited to, weighted average coupon rate, prepayment rate, default rate and resulting expected duration of the assets. An increase in the discount rate, in isolation, would result in a decrease in a fair value measurement. The weighted average assumption was weighted based on relative fair value.
See Note 4. Loans for additional loan fair value disclosures.
Servicing Rights
Servicing rights for personal loans and student loans do not trade in an active market with readily observable prices. Similarly, home loan servicing rights infrequently trade in an active market. At the time of the underlying loan sale or the assumption of servicing rights, the fair value of servicing rights is determined using a discounted cash flow methodology based on observable and unobservable inputs. Management classifies servicing rights as Level 3 due to the use of significant unobservable inputs in the fair value measurement.
The following key unobservable inputs were used in the fair value measurement of our classes of servicing rights:
| December 31, 2025 | December 31, 2024 | ||||||||||||||||||||||
| Range | Weighted Average | Range | Weighted Average | ||||||||||||||||||||
| Personal loans | |||||||||||||||||||||||
| Market servicing costs | 0.1% – 1.1% | 0.3% | 0.1% – 1.6% | 0.2% | |||||||||||||||||||
| Conditional prepayment rate | 15.0% – 39.4% | 24.3% | 7.5% – 36.7% | 25.4% | |||||||||||||||||||
| Annual default rate | 1.0% – 18.0% | 5.0% | 3.0% – 18.0% | 4.5% | |||||||||||||||||||
| Discount rate | 8.5% – 19.0% | 10.1% | 8.5% – 18.5% | 9.4% | |||||||||||||||||||
| Student loans | |||||||||||||||||||||||
| Market servicing costs | 0.1% – 0.3% | 0.2% | 0.1% – 0.3% | 0.1% | |||||||||||||||||||
| Conditional prepayment rate | 6.4% – 15.1% | 12.5% | 7.6% – 18.1% | 11.9% | |||||||||||||||||||
| Annual default rate | 0.3% – 3.7% | 0.9% | 0.3% – 3.7% | 0.8% | |||||||||||||||||||
| Discount rate | 8.5% – 8.5% | 8.5% | 8.5% – 8.5% | 8.5% | |||||||||||||||||||
| Home loans | |||||||||||||||||||||||
| Market servicing costs | 0.1% – 0.2% | 0.1% | 0.1% – 0.2% | 0.1% | |||||||||||||||||||
| Conditional prepayment rate | 4.7% – 21.5% | 8.7% | 5.0% – 25.0% | 6.9% | |||||||||||||||||||
| Annual default rate | 0.0% – 0.1% | 0.0% | 0.0% – 0.1% | 0.1% | |||||||||||||||||||
| Discount rate | 9.3% – 10.0% | 9.3% | 9.3% – 10.0% | 9.3% | |||||||||||||||||||
The key assumptions are defined as follows:
•Market servicing costs — The fee a willing market participant, which we validate through actual third-party bids for our servicing, would require for the servicing of personal loans, student loans and home loans with similar characteristics as those in our serviced portfolio. An increase in the market servicing cost, in isolation, would result in a decrease in a fair value measurement. The weighted average assumption was weighted based on relative fair value.
•Conditional prepayment rate — The monthly annualized proportion of the principal of a pool of loans that is assumed to be paid off prematurely in each period. An increase in the conditional prepayment rate, in isolation, would result in a decrease in a fair value measurement. The weighted average assumption was weighted based on relative fair value.
•Annual default rate — The annualized rate of default within the total serviced loan balance. An increase in the annual default rate, in isolation, would result in a decrease in a fair value measurement. The weighted average assumption was weighted based on relative fair value.
•Discount rate — The weighted average rate at which the expected cash flows are discounted to arrive at the net present value of the servicing rights. An increase in the discount rate, in isolation, would result in a decrease in a fair value measurement. The weighted average assumption was weighted based on relative fair value.
The following table presents the estimated decrease to the fair value of our servicing rights if the key assumptions had each of the below adverse changes:
| December 31, | |||||||||||
| 2025 | 2024 | ||||||||||
| Market servicing costs | |||||||||||
| 2.5 basis points increase | $ | (8,825) | $ | (6,485) | |||||||
| 5.0 basis points increase | (17,675) | (13,014) | |||||||||
| Conditional prepayment rate | |||||||||||
| 10% increase | $ | (11,650) | $ | (8,344) | |||||||
| 20% increase | (22,653) | (16,255) | |||||||||
| Annual default rate | |||||||||||
| 10% increase | $ | (1,015) | $ | (662) | |||||||
| 20% increase | (2,020) | (1,319) | |||||||||
| Discount rate | |||||||||||
| 100 basis points increase | $ | (6,646) | $ | (6,370) | |||||||
| 200 basis points increase | (12,925) | (12,344) | |||||||||
The sensitivity calculations above are hypothetical and should not be considered to be predictive of future performance. The effect on fair value of a variation in assumptions generally cannot be determined because the relationship of the change in assumptions to the fair value may not be linear. Additionally, the effect of an adverse variation in a particular assumption on the fair value of our servicing rights is calculated while holding the other assumptions constant. In reality, changes in one factor may lead to changes in other factors, which could impact the above hypothetical effects.
Residual Investments and Residual Interests Classified as Debt
Residual investments and residual interests classified as debt do not trade in active markets with readily observable prices, and there is limited observable market data for reference. The fair values of residual investments and residual interests classified as debt are determined using a discounted cash flow methodology. Management classifies residual investments and residual interests classified as debt as Level 3 due to the use of significant unobservable inputs in the fair value measurements.
The following key unobservable inputs were used in the fair value measurements of our residual investments and residual interests classified as debt:
| December 31, 2025 | December 31, 2024 | ||||||||||||||||||||||
| Range | Weighted Average | Range | Weighted Average | ||||||||||||||||||||
| Residual investments | |||||||||||||||||||||||
| Conditional prepayment rate | 11.9% – 36.5% | 21.2% | 11.0% – 32.7% | 16.0% | |||||||||||||||||||
| Annual default rate | 0.7% – 8.6% | 3.5% | 0.5% – 7.8% | 1.8% | |||||||||||||||||||
| Discount rate | 5.1% – 30.0% | 11.9% | 5.5% – 30.0% | 8.6% | |||||||||||||||||||
| Residual interests classified as debt | |||||||||||||||||||||||
| Conditional prepayment rate | 12.0% – 12.0% | 12.0% | 11.9% – 11.9% | 11.9% | |||||||||||||||||||
| Annual default rate | 1.1% – 1.1% | 1.1% | 1.0% – 1.0% | 1.0% | |||||||||||||||||||
| Discount rate | 9.5% – 9.5% | 9.5% | 10.3% – 10.3% | 10.3% | |||||||||||||||||||
The key assumptions are defined as follows:
•Conditional prepayment rate — The monthly annualized proportion of the principal of a pool of loans that is assumed to be paid off prematurely in each period for the pool of loans in the securitization. An increase in the conditional prepayment rate, in isolation, would result in a decrease in a fair value measurement. The weighted average assumption was weighted based on relative fair value.
•Annual default rate — The annualized rate of borrowers who fail to remain current on their loans for the pool of loans in the securitization. An increase in the annual default rate, in isolation, would result in a decrease in a fair value measurement. The weighted average assumption was weighted based on relative fair value.
•Discount rate — The weighted average rate at which the expected cash flows are discounted to arrive at the net present value of the residual investments and residual interests classified as debt. An increase in the discount rate, in isolation, would result in a decrease in a fair value measurement. The weighted average assumption was weighted based on relative fair value.
Loan Commitments
We classify student loan commitments as Level 3 because the assets do not trade in an active market with readily observable prices and, as such, our valuations utilize significant unobservable inputs. Additionally, we classify IRLCs as Level 3, as our IRLCs are inherently uncertain and unobservable given that a home loan origination is contingent on a variety of factors. The following key unobservable inputs were used in the fair value measurements of our IRLCs and student loan commitments:
| December 31, 2025 | December 31, 2024 | ||||||||||||||||||||||
| Range | Weighted Average | Range | Weighted Average | ||||||||||||||||||||
| IRLCs | |||||||||||||||||||||||
Loan funding probability(1) | 58.6% – 75.6% | 69.7% | 58.1% – 79.7% | 71.8% | |||||||||||||||||||
| Student loan commitments | |||||||||||||||||||||||
Loan funding probability(1) | 89.0% – 99.0% | 94.5% | 95.0% - 95.0% | 95.0% | |||||||||||||||||||
(1)The aggregate amount of student loans we committed to fund was $437,470 and $149,402 as of December 31, 2025 and 2024, respectively. See Note 14. Derivative Financial Instruments for the aggregate notional amount associated with IRLCs.
The key assumption is defined as follows:
•Loan funding probability — Our expectation of the percentage of IRLCs or student loan commitments which will become funded loans. A significant difference between the actual funded rate and the assumed funded rate at the measurement date could result in a significantly higher or lower fair value measurement of our IRLCs and student loan commitments. An increase in the loan funding probabilities, in isolation, would result in an increase in a fair value measurement. The weighted average assumptions were weighted based on relative fair values.
Financial Instruments Not Measured at Fair Value
The following table summarizes the carrying values and estimated fair values, by level within the fair value hierarchy, of our assets and liabilities that are not measured at fair value on a recurring basis in the consolidated balance sheets:
| Fair Value | |||||||||||||||||||||||||||||
| Carrying Value | Level 1 | Level 2 | Level 3 | Total | |||||||||||||||||||||||||
| December 31, 2025 | |||||||||||||||||||||||||||||
| Assets | |||||||||||||||||||||||||||||
Cash and cash equivalents(1) | $ | 4,929,452 | $ | 4,929,452 | $ | — | $ | — | $ | 4,929,452 | |||||||||||||||||||
Restricted cash and restricted cash equivalents(1) | 427,321 | 427,321 | — | — | 427,321 | ||||||||||||||||||||||||
Loans(2) | 1,633,702 | — | — | 1,670,391 | 1,670,391 | ||||||||||||||||||||||||
Other investments(3) | 146,204 | — | 146,204 | — | 146,204 | ||||||||||||||||||||||||
Total assets | $ | 7,136,679 | $ | 5,356,773 | $ | 146,204 | $ | 1,670,391 | $ | 7,173,368 | |||||||||||||||||||
Liabilities | |||||||||||||||||||||||||||||
Deposits(4) | $ | 37,505,395 | $ | — | $ | 37,506,689 | $ | — | $ | 37,506,689 | |||||||||||||||||||
Debt(5) | 1,761,055 | 2,997,347 | 486,000 | — | 3,483,347 | ||||||||||||||||||||||||
Total liabilities | $ | 39,266,450 | $ | 2,997,347 | $ | 37,992,689 | $ | — | $ | 40,990,036 | |||||||||||||||||||
| December 31, 2024 | |||||||||||||||||||||||||||||
Assets | |||||||||||||||||||||||||||||
Cash and cash equivalents(1) | $ | 2,538,293 | $ | 2,538,293 | $ | — | $ | — | $ | 2,538,293 | |||||||||||||||||||
Restricted cash and restricted cash equivalents(1) | 171,067 | 171,067 | — | — | 171,067 | ||||||||||||||||||||||||
Loans(2) | 1,246,458 | — | — | 1,274,080 | 1,274,080 | ||||||||||||||||||||||||
Other investments(3) | 109,417 | — | 109,417 | — | 109,417 | ||||||||||||||||||||||||
Total assets | $ | 4,065,235 | $ | 2,709,360 | $ | 109,417 | $ | 1,274,080 | $ | 4,092,857 | |||||||||||||||||||
Liabilities | |||||||||||||||||||||||||||||
Deposits(4) | $ | 25,978,204 | $ | — | $ | 25,979,896 | $ | — | $ | 25,979,896 | |||||||||||||||||||
Debt(5) | 3,011,814 | 1,994,381 | 1,742,884 | — | 3,737,265 | ||||||||||||||||||||||||
Total liabilities | $ | 28,990,018 | $ | 1,994,381 | $ | 27,722,780 | $ | — | $ | 29,717,161 | |||||||||||||||||||
(1)The carrying amounts of our cash and cash equivalents and restricted cash and restricted cash equivalents approximate their fair values due to the short-term maturities and highly liquid nature of these accounts.
(2)The fair value of our credit cards was determined using a discounted cash flow model with key inputs relating to weighted average lives, expected lifetime loss rates and discount rate. The fair value of our commercial and consumer banking, loans held at lower of amortized cost or fair value and secured loans was determined using a discounted cash flow model with key inputs relating to the underlying contractual coupons, terms, discount rate and expectations for defaults.
(3)Other investments include FRB stock and FHLB stock, which are presented within other assets in the consolidated balance sheets.
(4)The fair values of our deposits without contractually defined maturities (such as demand and savings deposits) and our noninterest-bearing deposits approximate their carrying values. The fair value of our time-based deposits was determined using a discounted cash flow model based on interest rates currently offered for deposits of similar remaining maturities.
(5)The carrying value of our debt is net of unamortized discounts and debt issuance costs. The fair value of our convertible notes was classified as Level 1, as it was based on an observable market quote. The estimated fair value of our 2026 convertible notes was $554.1 million and $453.5 million as of December 31, 2025 and 2024, respectively. The estimated fair value of our 2029 convertible notes was $2.4 billion and $1.5 billion as of December 31, 2025 and 2024, respectively. The fair values of our warehouse facility debt and revolving credit facility debt were classified as Level 2 based on market factors and credit factors specific to these financial instruments. The fair value of our securitization debt was classified as Level 2 and valued using a discounted cash flow model, with key inputs relating to the underlying contractual coupons, terms, discount rate and expectations for defaults and prepayments.
Nonrecurring Fair Value Measurements
Investments in equity securities of $51,083 and $29,500 as of December 31, 2025 and 2024, respectively, which are presented within other assets in the consolidated balance sheets, include investments for which fair values are not readily determinable, which we elect to measure using the measurement alternative method of accounting. The fair value measurements are classified within Level 3 of the fair value hierarchy due to the use of unobservable inputs in the fair value measurements. The balances were primarily composed of a $27,500 investment, as of both December 31, 2025 and 2024, as well as a $20,000 investment as of December 31, 2025, that are valued under the measurement alternative method.
Historical Timeline
| Fiscal Year | Filed | |
|---|---|---|
| 2025 | Feb 17, 2026 | Showing above |
| 2024 | Feb 24, 2025 | |
| 2023 | Feb 27, 2024 | |
| 2022 | Mar 1, 2023 | |
| 2021 | Mar 1, 2022 | |
| 2020 | Mar 17, 2021 | |
About Fair Value Disclosures
Fair value disclosures classify all assets and liabilities measured at fair value into a three-level hierarchy: Level 1 (quoted market prices), Level 2 (observable inputs like yield curves), and Level 3 (unobservable inputs requiring management estimates). The proportion of Level 3 assets directly reflects how much of the balance sheet depends on internal models rather than market evidence.
Key signals: a growing Level 3 balance relative to total fair-value assets increases valuation uncertainty and earnings volatility risk. Watch for transfers between levels — assets moving from Level 2 to Level 3 often signal deteriorating market liquidity. Unrealized gains and losses on Level 3 positions flow through earnings or other comprehensive income, so large swings deserve scrutiny. For financial institutions, examine the sensitivity disclosures that show how Level 3 valuations change under alternative assumptions. Compare the fair value of debt against its carrying amount to gauge hidden leverage.