Key Highlights

  • Diluted EPS reached USD 0.50 in Q3 2026, up 35% from USD 0.37 a year earlier.
  • Loan originations totaled USD 3.3 billion, rising 26% as personal loans, auto refinance and home improvement grew.
  • Pre-tax income hit a record USD 76.8 million, lifting return on tangible common equity to 15.8%.
  • Full-year 2026 diluted EPS guidance moved to USD 1.87 to USD 1.92 from USD 1.80 to USD 1.90.

Happen, Inc. (NASDAQ:HAPN), the digital bank formerly known as LendingClub, reported third-quarter 2026 diluted EPS of USD 0.50, above a consensus estimate of USD 0.46 and up from USD 0.37 in the same quarter of 2025. Total net revenue was USD 263.2 million, below a consensus estimate of USD 271.9 million and slightly under the USD 266.2 million booked a year earlier.

Net income rose 34% to USD 59.3 million. The year-over-year revenue decline traces to the company's 2026 election of fair value accounting for all new originations, which moves credit costs out of the provision line and into non-interest income. Risk-adjusted revenue, defined as net revenue less provision, reached USD 279.1 million, up 27%.

Fair Value Accounting Reshapes the Income Statement

Net interest income grew 16% to USD 183.1 million, and net interest margin stood at 6.05%. Non-interest income fell 26% to USD 80.1 million. The company explained that origination fees are now recognized upfront and totaled USD 173 million, up 64%, while initial fair value marks and later valuation changes run through the same line. Fair value markdowns were USD 131 million, compared with USD 121 million in the second quarter, during a period when benchmark rates climbed roughly 60 basis points.

The provision line swung to a benefit of USD 15.9 million from an expense of USD 46.3 million a year earlier. The net charge-off ratio on held-for-investment loans improved to 3.1% from 3.4%. Non-interest expense rose 24% to USD 202.3 million, while management said compensation expense grew 6% against the 26% rise in originations, crediting automation and AI tools.

Guidance and Balance Sheet Position

For the fourth quarter, the company guided to loan originations of USD 3.1 billion to USD 3.2 billion and diluted EPS of USD 0.43 to USD 0.48. Full-year originations are guided to USD 12.3 billion to USD 12.4 billion, a narrowed range implying 26% to 27% growth, and full-year EPS now sits at USD 1.87 to USD 1.92. The outlook assumes a stable consumer and a 25 basis point increase in the Fed funds rate in December.

Total assets reached USD 13.3 billion, up 20%, and deposits were USD 11.5 billion, up 22%, with 89% FDIC-insured. The CET1 ratio was 15.7% and the Tier 1 leverage ratio 12.0%. Available liquidity was USD 4.2 billion. Tangible book value per share was USD 13.11, against USD 11.95 a year earlier.

Details Behind the Next Update

Four items frame the coming quarter. The first is the fourth-quarter EPS range of USD 0.43 to USD 0.48, which compares with USD 0.50 delivered in the third quarter. The second is net interest margin, which management anticipates near 6% after printing 6.05%. The third is the CET1 ratio, which has moved from 18.0% a year ago to 15.7%. The fourth is home improvement lending, which produced over USD 100 million of volume in its first full quarter, with several additional partners targeted for the fourth quarter. A home equity product is scheduled to launch in the second half of 2027.